Will this one be Clinton's fault too? It always is.
Posted by goose1 at March 16, 2007 10:34 AMBut, but, but - housing prices have stabilized!
(Said with enough whine to get 3 Fransicans and a parish secretary ripping drunk.)
Posted by idiosynchronic at March 16, 2007 10:42 AMConventional wisdom says "recession", but it's more like a couple of skips straight into "depression" late this year or early next year.
MBG Informations Services says wages fell again.
So, as Inspector Renault said,
"shocked, shocked I say".
Greenspan did not have a clue. He is good riddance. It's unbelievable how much damage this quack caused.
Posted by JohnT at March 16, 2007 11:59 AMDems may end up owning this yet because they won't do anything.
It's strange. Anywhere else in the real world, incompetence would be shown the door and people that can't do what they're hired to do, would be fired.
But. That's the real world I was dreaming about. We're in the Scary Door / Twilight Zone.
Posted by Alex at March 16, 2007 12:02 PMThat's what happens during speculative manias. We saw it in 1999-2000 with stocks and in 2004-2005 with houses. The mania generates so much excitement, that the speculation begins. And it always ends up badly. We know this, don't we?
But here we have people who shouldn't be buying homes in the first place. They have poor credit. Yet, some companies out there were dumb enough to loan money to these people. How were these folks going to make their payments? What happened if housing prices fell?
But sub prime loans are a small percentage of the market. It's already factored into the slower GDP growth. I don't see it "causing" a recession. And there have already been ramifications in the lending business, as now it is difficult to borrow with no money down.
Posted by muckdog at March 17, 2007 06:16 PMJohnT, I think Greenspan had a clue and knew what he was creating, but most people don't have clue about how the system works (or doesn't work for people in general) and so they will be burned.
muckdog, I agree that some people shouldn't have bought a home, but the companies who origninated the loan in the majority of cases aren't exposed to the risk because they passed it off.
I think you might find what is written here Signs Economic Commentary interesting because one of the articles commented on describes how the failing sub-prime market connects to what will be bad going to worse overall economic situation via the unwinding of derivatives.
Posted by Pat at March 19, 2007 03:39 PM