Cleveland, once a giant now has the dubious distinction of being the US leader in home foreclosures. The storm was thought to be over when a couple weeks ago a number of banks came "clean" on the staggering nature of the liabilities but it seems they are not out of the woods yet in the strange world of derivatives and such. 1 trillion alone in the Duetche Bank mess! This is real money.
And even the Supermodels don't want the greenback any more.
2 comments:
Coverage of the foreclosure crisis has this weird elitist edge--how dare the Fed keep interest rates low enough so that poor people can borrow money! But then I remind myself that the real problem is these teaser mortgages that aren't good for anybody. They are this weird way of mortgaging your soul cheaply for a few years and then the grim reaper swoops in for the kill.
People shouldn't consider loans like that, but they also shouldn't even be legal. That's why things like usury laws exist and why those payday loan shops should be shut down with extreme vengeance. Better regulation of these loans should be put in place. I'm sure economists see this as a natural market correction, but that's their theoretical way of describing misery for real people.
TF
No question, huge mess. But, the US speculators were smart. They packaged and sold much of this rotten debt to the Germans and Chinese. Take that!
It will get much worse. The peak of the sub-prime chicanery was in 2006, which means these loans reset in 2008. Duck and cover. We better go to St. Pete this summer, because after that the weak dollar will not permit affordable foreign travel!
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