We used to ignore bubbles, explaining them away because they were scary. Now we see them as a clearer conduit to clarity when illustrating a point related to mortgages. Not housing. Remember, we experienced a mortgage bubble from 2003-2007, not a housing bubble. Housing was merely a way to keep score.
James Hagarty at WSJ talks about the First American CoreLogic report with the following results:
The problem is most acute in Nevada, where the percentage is 55%, followed by Michigan (40%), Arizona (32%), Florida (30%) and California (30%). Stripping out those five hard-hit states, the national percentage is about 14%. In New York State, the tally is just 4.7%.
BBC News uses bubbles to illustrate the Stim plans.
“Remember, we experienced a mortgage bubble from 2003-2007, not a housing bubble. Housing was merely a way to keep score.” Thanks again for coining a phrase that is apt. “Mortgage Bubble.” The evidence is certainly pointing us that way, and that housing was a response not a source. Has anybody come up with any kind of a plan to take the bubble blowers out of lending?
I agree with Mr Gillespie – thank you – maybe the public should start to look at who we elect – they are the ones that make the laws and regs – remember the S&L fiasco of the 1990’s?
I warned my family and friends that the banks were next – sorry I was correct. It was too easy to predict – the politicians are the ones who control the banking and lending!
There is $500 billion in Option ARM’s that will be resetting interest rates and/or reached 125% cap on loan to value ratio very soon. I believe that we will see some severe declines in housing values in next 12 months…the pain is looming…
Thanks Edd, for directing us to this link. 30 year NM Appraiser is correct it was really, really easy to predict (I sold my individual stock holdings in 2007… caught CitiBank near it’s top). So, the real question is, why didn’t the geniuses at the Fed see it coming… it’s only the largest asset bubble in history.
Too true. How could Tim Geithner NOT seen it coming? Appraisers saw it coming BEFORE 2005….To speculate on why, I suggest we go back to 1929 when a group of economists from Harvard had predicted disaster for months…only to capitulate during the summer of 1929 and say, “maybe we were wrong and the economy really is that strong…” A lot of us saw this coming, when it kept building and building we had to be a little concerned and self-doubt took over. By October of 2006, you could see the cracks in the system and the leaks…in my market which started blowing off steam months ahead of Owen’s 80 miles north of me….