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Tom Coburn is a Big Fat Jerk


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Home of the Barking Moonbat


 

Thursday, June 02, 2005

Yoikes!

If your tastes run to scary roller coaster rides, take a gander at these graphs of the current housing bubble.

And the embedded links in the article are must-reads.

Via Seeing the Forest.

4 Comments:

At 10:21 PM, Blogger Hometown said...

If it bursts it's going to hurt everyone. Current lending practices will be blamed. Lots of pain to go around. Hopefully we'll get lucky and it won't happen.

 
At 10:34 AM, Blogger Cookie said...

Is that you, Ron? Hi, Ron!

Yes, it's just crazy. I think, if the bubble bursts, that people holding onto reasonably priced real estate will be okay. But speculators and people who've taken on unreasonable mortgages --- or who have ONLY the real estate (in a bubble area) will be hurting.

If you notice, it seems like foreclosures have been skyrocketing the past few months. This seems to me to be the beginnings of a correction (course what do I know :=D ). But it's been kind of silent --- that is, it hasn't seemed to generate shockwaves throughout the economy, which I'm taking as a sign that there probably won't be some kind of catastrophic crash.

 
At 1:54 PM, Blogger Leila M. said...

I don't quite "get" the first two graphs, but the 2nd set looks scary as hell. Am I reading them right, it showing that people have far more debt than assets the last 5 years? Is that from mortgages?

 
At 2:19 PM, Blogger Cookie said...

My understanding is that people have gone into debt in order to acquire physical assets. In other words, people's wealth is now in assets, like homes, cars, jacuzzis ( :=D ), etc.

There's a lot of problems with this, the least of which is that a number of people have taken out mortgages on outrageously priced homes, and are: 1. paying only the interest on the mortgages; or, 2. have adjustable rate mortgages --- which is okay, as long as interest rates stay low, but a problem if interest rates rise.

In addition, most people no longer have cash in the form of a savings account or whatever. Instead, they have physical assets. AND they're using credit cards and equity from their homes to acquire these assets.

Does that make sense? I didn't go look at the charts when I wrote this because I'm mowing --- okay, I'm taking a break from mowing. But i'll go look at them later and see if I can connect the dots more clearly.

 

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