Robert Gentel wrote:
...I'm all for pushing the real estate to rock bottom as fast as we can ...
but wouldn't that just keep the problem rolling? then you have even more people paying for a house that's worth less than the purchase price.
Seems like you'd have a few cycles of foreclosures and resales. People will lose their equity and banks will lose money until the prices hit their floor.
right. and the problem is that you buy a house for 850k. today it's worth 650k. if the thing keeps falling apart, you could wind up on the hook for 850k while living in a house that's eventually worth 450k.
since a lot of people have bought a house with the long term goal of selling it at retirement, moving to a smaller home and using the profit as retirement, in the long run there'd be a lot of folks who did nothing wrong paying out the ear for it.
don't see how that's helpful.
luckily, we bought low at the end of the bush sr. financial stinker. we'd have to have a total failure of the system to get bit. however i just inherited a nice house back east. i have it rented, but my plan was to sell next year. that seems unlikely right now.
it just seems to me that some people here are seeing letting it go up in flames as a way to punish the cigar chompers. but in reality, those guys are always landing on their feet. it's not just the poor that will have their situation worsen; a lot of middle class people who have worked hard all of their lives have been takin' it in the neck for a few years now with the loss of pensions, health benes and such. letting the banks fall apart will only serve to blow away whatever security those people have left. not that it would be easy to get an equity loan. umm, maybe it is, i dunno.
there's no denying that the problem is spooky. part of the spookiness is that as usual, bushy has waited till the last possible second to pay attention; this is when he always suddenly jumps up and starts yelling "we have to fix it now! now! now!". that's part of how we got in this mess to start with.
barack has a more measured view that we shouldn't jump out of the pan into the fire. we do need to stop the dominoes, but we will be better off if we actually stop the bike and get off before trying to fix the tire this time.
sorry for the metaphor bananza.