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Caligirl43
Posts:133
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| 10/04/2008 5:23 PM |
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I copied the article below as I just shook my head. These people analyze this stuff to death and why or why not this bailout will or won't work but they miss the basic most simple point of all when they say "home prices must stop falling" in order for the bailout to work - Hello morons, home prices are still way too high nationwide even today after the 5000% increase they took a few years back and most household incomes still cannot support today's home prices. It's not that hard to figure out people. People have lost their jobs, their stocks and bonds, their health benefits, food costs are through the roof, and gas is still ridiculously expensive. The only thing that will turn this economy around is for prices for everything to go back down to what the average American can afford. No amount of bailout money from the government can fix what's wrong with our economy unless the things I mentioned happen.
For Bailout To Work, Housing Market Must Mend
Housing Seen As Key To True Turnaround
POSTED: 9:09 am PDT October 4, 2008
UPDATED: 4:20 pm PDT October 4, 2008
WASHINGTON -- The financial bailout plan is intended to get credit flowing again, but experts say one more thing needs to happen -- home prices must stop falling. That would send a signal to banks that the worst is over and it's safe to start lending money again.
Bailout Passes: Now What?
At the moment, mortgage loans are tough to come by for everyone except those with the best credit. That's led to a glut of houses on the market, either built when times looked better or available because of foreclosure. And that brings things full circle, since the glut is keeping home prices down.
So, the equation is this: the lending freeze makes mortgage loans difficult to get, the lack of loans leads to a glut of housing, the glut keeps prices down and that makes banks wary of lending.
With about one in eight jobs in the country tied to housing, one senior economist at Wachovia said housing will be critical for a sustained economic recovery.
Bush: Rescue Plan 'Not Quick Fix'
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wilson
Posts:541
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| 10/04/2008 5:38 PM |
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A wee bit of exaggeration: past 5000% increase of housing prices. To get back base value (100%) would be 100/5000, or prices should fall to 2% of peak.
Ooooops. |
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wilson
Posts:541
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| 10/04/2008 5:45 PM |
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| To put it another way, a $1,000,000 peak house should sell for $20,000 if you rolled back a 5000% increase. |
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Caligirl43
Posts:133
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| 10/04/2008 5:54 PM |
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| Uh, gee Wilson, I think I knew I was exaggerating - wow, lets miss the point of the post, k. |
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Caligirl43
Posts:133
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| 10/04/2008 5:55 PM |
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| I guess those who overanalyze just cannot help themselves from overanalyzing, even when something's an obvious exaggeration. |
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Joke4Today
Posts:50
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| 10/04/2008 7:10 PM |
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| You were exaggerating? I just thought you flunked math. |
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wilson
Posts:541
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| 10/04/2008 8:27 PM |
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Exagerration undermines the veracity and credibility of the post.
If you wat to make a point, make it. |
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jakob
Posts:473
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| 10/04/2008 8:52 PM |
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I agree with you Cali. These politicians were saying houses were too expensive in 2004 so they pushed fannie and freddie to extend loans with little down and no income documentation to poor people, which only made things worse.
Artificially propping up asset values by buying mortgages and delaying foreclosures is exactly the wrong move. It will only extend the duration of the decline before we ultimately hit bottom. |
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Caligirl43
Posts:133
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| 10/04/2008 9:30 PM |
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| Exactly, Jakob. |
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