Archive for March 6, 2008

Hillbama and taxes

Mark Perry has some advise for Hillbama.

Bernanke’s principal

The Fed tells bankers to create more losses.

Some mortgages should fail

This WSJ opinion begins:

Most of the recent housing-related initiatives have focused on keeping people in their homes. But lawmakers would actually help the housing market stabilize more quickly if they took action to dislodge those borrowers who don’t have the desire and financial ability to stay.

Declining housing prices and the fear of further declines are the root causes of many of our problems. As a result of falling prices, homebuyers delay purchases, thus decreasing housing demand. Some homeowners stop making payments, especially if they believe that their homes are worth less than the mortgage balance. Foreclosures increase, adding to the supply of homes for sale. Lenders also tighten underwriting guidelines, which further dampens demand by locking out some potential homebuyers.

This cycle will be difficult to break. But as we saw in California in 1996, buyers will flock to the market once a bottom is reached.

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