The Subprime Mess is Just the Beginning of the Credit Crunch
Quote:
I hate to be the bearer of bad news, but the subprime flood—which has been declared contained over and over again—isn't contained yet. Newsweek's Daniel McGinn ably explains why the rate freeze is far from a panacea for all subprime borrowers. And a flood of new data indicate that the subprime woes may be a symptom—rather than a cause—of a broader economic malady. That awful smell in Midtown isn't from the horse-drawn carriages carrying tourists around. It's the distinctive odor of debt going bad.
I see it going down like this:
1 ) Massive mortgage defaults and attempt by the government to stanch the bleeding by printing more money
2 ) More devaluation of the dollar and the cascade from mortgage defaults to credit card defaults
3 ) Recession - 40% drop in home prices and another 25% drop in value of dollar
4 ) OPEC countries and china drop pegs to dollar, dollar drops another 30-40%
4 ) I move in with euros and buy a house on the beach in southern california for 100k euros
Okay, maybe it'll be a bit more than 100k euros, but not too much more
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US Home Forclosures Nearly Double
Excerpt:
Foreclosure filings across the U.S. nearly doubled last month compared with September 2006, as financially strapped homeowners already behind on mortgage payments defaulted on their loans or came closer to losing their homes to foreclosure, a real estate information company said Thursday. A total of 223,538 foreclosure filings were reported in September, up from 112,210 in the same month a year ago, according to Irvine-based RealtyTrac Inc.
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