I was a Real Estate Appraiser until very recently. What I saw, and passed on to the mortgage companies I worked for, was that most home equity lines were not being used to upgrade their homes or pay for a child’s education. The loans were used for new cars, big screen TVs and to have money to pay their mortgage loans! I saw too many homes bought with no money down i.e. they received a standard 80% mortgage and at the same time took out a 2nd mortgage for the balance. Now they are in foreclosure – do I feel sorry for them? NO!
The real problem started when Greenspan lowered interest rates to historical lows. The simple math of this action allowed a person who could afford a $200,000 mortgage at 8% now being able to afford a $400,000 home with a 3% adjustable rate mortgage.
I believe one solution would be as follows:
• First and foremost the homeowner should not be allowed to ‘walk away’ without any penalty.
• The ‘first’ mortgage holder should become an equity partner with the homeowner. This is done by establishing the current home value ( which is probably less than the mortgage balance) and rewriting the mortgage to reflect that value. When the home is sold 50% of amount above the original 1st mortgage should go to the holder of the 1st mortgage. The holder of the 2nd should get 25% the rest to the homeowner. The holder of the 2nd mortgage would not be paid anything until the home is sold. This mortgage co., the holder of the 2nd, was STUPID and GREEDY!
• This would allow the homeowner to have a reason to maintain their home with the hope that values increase over time. The 1st mortgage holder would not need to write off the mortgage and the 2nd mortgage holder would essentially have a non-performing loan until the market rebounds.
The other point I would like to make is that increasing the dollar amount of loans that Freddie Mac and Fannie Mae can guarantee should NOT be increased. These GSES were created to help the lower end of the market not to guarantee $700,000 mortgages.

I’d like to know if there was any growth in the past eight years if you remove the housing bubble. Borrowing against inflated home equity fueled consumer spending despite stagnant or decling wages. Now that the equity value is dropping, a lot of folks have lost what they thought was their security.

It says that people are spoiled, and the economy is taking a big hit because of it. Every generation gets more handed to them without having to work for it. When kids grow up they refuse to settle for less than what their parents had, so they buy more house than what they can afford. People think about what they want right now, and then accept a bad deal with a floating interest rate, not giving any thought to what might happen later. Instead of having some financial discipline, and saving for a decent down payment, they sign on with any company that will take them on. The last wave of home buyers have bitten off more than they can chew, and now they are facing forclosure. The market is now flooded,and property values are taking a dive. If the Government steps in a bails everbody out, then there won`t be any lessons learned, and I for one don`t want to help pay for someone elses selfishness.

Jack,

Fear not! Our fearless leader, President Bush, tells us this is just a slow down. Never mind we’re continuing to bleed jobs, loose our houses or our equity in them, that we’re paying more for everything than at any time in history and have a earning power that’s falling. There’s that little medical care problem, too. Was that the stock market I heard going down again?

But, don’t worry! He’s giving us some money! Never mind that it’s really our own money borrowed against next year’s tax refunds…if we get one. Yes, that will fix it.

Golly, I just feel so good I think I’ll adopt a puppy.

it means the housing market very well could crash like the stock market did in 1929 and for the same reason. TOO MUCH LEVERAGE!!! these crazy no money down interest only adjustable rate scam loans means that people have NO financial incentive to hold on to their house they will SELL or DEFAULT and WALK AWAY which dumps more and more property on an already depressed market.

over the last decade the house became the Tulip Bulb of the 1600’s. people thought you COULDN’T LOSE buying houses and now, like ALL artificially inflated markets, that excess is correcting.

This is a good example of how much President Bush has hurt the average American. During the last 7 years, the rich and large businesses have profitted and everyone else has been losing ground.

Does Pres. Hoover ring a bell?
Melvin
La Junta,Co

I think that it says that alot of people were living beyond their means, and it finally caught up with them. The economy always drags during a war. Imagine how bad the economy would have been with a Gore or Kerry in office. It will become worse with an Obama or Hillary at the wheel. Maybe if we tightened our belts a little like folks had to do during WWII, we would have nothing to whine about. We make about $50,000 a year, and have a mortgage. Other than prices being higher than we would like, we are doing just fine. Maybe we should write a book on how to live within ones means Jack?

That GW Bush has done just as good of a job with the economy as he has with everything else for the last 7 years.

Jack: It means that Bush’s economic policies have shown up for what they are – a complete failure. It also shows what happens when you eliminate at least a reasonable level of government oversight and regulation of business and industry not only financial, but also food, drugs, toys, etc. as has been recently demonstrated.

Jim
Hoffman Estates, IL

It says we are taking care of everyone else’s business but our own. Our nation has NO strategy to position ourselves, competitively, in the evolving global economy. By allowing manufacturing jobs to abruptly migrate off shore vs. a staged migration, we’ve created a HUGE gap between worker skill sets and job openings in emerging markets. You cannot retrain a work force overnight.

It’s simpel Jack. It means too many years of Bush and his dumb Republican party messing things up for middel class. Cliton May not of been the best President but things were a lot better and oil was $28.00

Larry
Gilbert AZ.

Jack isn’t it obvious? Can you ask a better question next time please. Even a first grader would know the answer for this. Wait. still, I think this is a good question for Bush right ?

Nuwan from Houston, Texas

All we have to do is pour another few hundred billion dollars down that rat hole called Iraq and let the US infrastructure rot away for a few more years; then the International Bankers won’t even have to twist our arms when they tell us we’re going to be part of The North American Union and exchanging our dollars for amero’s. There’s a lot of money to be made out of economic instability! KA-CHING

extend right arm , raise middle finger and say goodbye.

“What does it say about the state of our economy when home equity is at its lowest point since World War II?”

That says precisely that we urgently need clear solutions and actions to solve the issues Americans are confronting with!!!
In every household women are the ones bringing ideas & solutions to everyday life. This country needs a woman as President during these challenging times.
All women have hopes, but they do not wait for “hopeful” men to see their dreams transformed into reality. They simply take action!

Senator Clinton will always bring way, way more to the table than Senator Obama. It’s just a fact! Let’s all wake up from dreaming and get to find the best solutions to be converted into actions!

Mr. Cafferty you started your CNN collaboration only after 28 years of prior experience in your field of expertise. I am surprised that you are such a fan of the idea of having an inexperienced candidate for the highest position – The President of the United States of America, at a time when we need all the experience that we can gather to solve the immense problems this country is confronting with.

We Need Real Solutions and Actions for Americans. Really Fast!

Hello Jack,
this is a horroble time for the americans which lost their home and must now live on the street. But, when someone (63,000) lose his job and can not pay for his lovely home. What shout he do? We he or she has not enough money in his pocked?

Stefan
Dessau-Rosslau, Germany

It sucks!! Washington is too busy laying blame then to actually do anything about it.

It shows that we need to move the billions of dollars being funneled to fuel the wars and bring that money home. We cannot slow down too much further economically, or soon we will be backing up.

We need to truly stimulate the economy, use funding to rebuild the nations infrastructure and focus our energy on solid issues we currently face at home as opposed to spending our resources to chase windmills abroad.

It says nothing about the economy, but it does say a lot about personal responsibility – there is none. We go out and buy whatever we want with plastic and then hope no one asks us to pay the credit card bill when it comes.

It means that George W. Bush’s economic policies have failed us miserably. Giving rich people tax cuts doesn’t work and the evidence is out there. Because the rich won’t part with their money and give it folks like us and this free trade nonsense doesn’t benefit us one bit. It is time to get out of these free trade agreements such as NAFTA, CAFTA and the agreement with Peru. To the advocates of free trade, how do you sleep at night knowing that you have contributed to the decline of good paying jobs in this country and the rise of greedy, corruptible sleazebag executives and CEOs.

It’s not surprising since our representatives have been allowed to spend our taxes and borrowed money at will, until the Repubs were ousted.

1-No money to the Iraqi government without results, as they promised.

2-The bulk of our taxes should go to education and roads, not taxing businesses and individuals on things we have already paid taxes on, and make sure that Americans have first choice for every job. Where can they post a job for only $3 that would be accessible Nationwide?

I have that answer, if anybody really cares. What about you, Jack? Help us, please!!

Mary Steele
Yorktown Va

Our economy is the worst I have ever seen it, and I lived thru the great depression.

Jack; It says our economy is in trouble; deep trouble; not only nationally but personally… Just a couple years ago we all were using our increased equity like money in the bank…. we were all short sighted. and of course, hind sight is 20/20… It could create a domino affect when, as you say, combined with continued job loss across all areas of our economy. And to add insult to injury the Pentagon awards a billion dollar contract to rebuild our aging air tanker fleet to a company in France which is subsidized by the French government… Now what is THAT all about, huh? Is our government bent on destroying our country? It sure looks like it from our point of view…. Mary from sarasota, FL.

Our economy proves that the Bush pyramid scheme only makes the top 10% richer and the rest of us wondering if we’ll be sleeping on the street tomorrow. We went through the same thing in the early 1990s under his daddy. It’s time to stop electing Bushs and start beating them in the election booth, starting with McCain, a Bush wannabe. Plus, there is a quick fix for our economy: pay-for-view impeachment trial and imprisonment of George W. Bush for his lies and crimes. But I doubt Pelosi has the guts to try it. Financially, she’s not hurting like the rest of America, so what does she care?

Well Jack, it tells me that this administration is: 1) In total denial of our economic situation 2) Does not have a clue of what to do 3) Does not care 4) All of the above

It says our economy is in trouble. For the last 5 or so years our economy has been funded by consumers spending the equity in their homes. Now that equity is tapped out. I work for a large lender and see first hand the trouble that borrowers are in. Any extra money is going to paying down debt, not purchasing goods and services. We are in dire straights if another ‘bubble’ isn’t on the horizon.

Jack, what is says about the state of our economy is that it is horrific. It also says we need to not put the same players, who created NAFTA, back in the White House.

We need to take this government back from the special interests and put it back in the interests of the American people. Our economy, our schools, our healthcare, and our jobs are a shambles. And should we trust candidates beholded to special interests to make us promises again that they don’t keep? No, we need to turn this economy around and get out jobs back now.

it reminds us that B U S H, is a four letter word whose administartion has caused us all the economic woes we have and why he will go down as the worst president in history. it won’t matter to him or dick cheney. both of them are wealthy and care nothing for anyone but themselves.

If you ask Bush we are doing just fine it is just a slow down. I think where he lives it is ALL just fine but he is in a make believe world. The ordinary people are not stupid they are living this mess out.

Chalk this one up to another failue of the Bush admin. They care nothing about the American people. John McCain will make things even worse.

Values will come back up, they always do! It may take a couple of years, but they will come come back up. That isn’t much comfort to those losing their homes, but if they can hang on they’ll be better off for it. We have Bush to thank for this economy and the downfall of our nation. He runs the country as badly as he tap dances and with as much arrogance.

What it tells me is that I can’t buy a house. Oh, sure house prices are starting to come back down to realistic levels but nobody is financing anyone but those with the best of credit scores. Before I couldn’t buy a house because I couldn’t afford it. Now that I can afford it I can’t get the financing to buy one. Just another example of how the poor get poorer these days. I have to throw away good money every month so that someone else can build equity in the house I live in.

Let’s see. Everyone has been telling our fearless leader for months that we are sinking and he stands straight and says no but people are loosing their jobs, houses and prices are going through the roof. IT tells me we need a new leader PDQ. Can they start tomorrow?

It says a lot of people who shouldn’t have qualified for home loans were given them and the lenders knew it ahead of time. Now look at the mess, and some of our candidates want to bail them out! Personally, I would look at this as a lesson learned. Don’t buy what you cannot afford and avoid interest-only loans.

As far as the rest of the economy is concerned, gas and food costs are my only real worries. Home prices have dropped drastically which is a good thing for a first time home buyer. FHA is 3% down and low to no points!

The greed of the “I want it now” generation has finally caught up with us. Now we have to pay the price for the few mega-millionaires and billionaires that have sucked the life blood out of this nation. We also have to pay the price for a dimwitted POTUS that is splurging $3 billion a week on a useless and winless war in Iraq. Now we, our children, our grandchildren and our great-grandchildren will be paying the price to clean up the mess that was left by those that made millions and don’t care about what they have done.

What does it say about the state of our economy when home equity is at its lowest point since World War II?

It says that George W. Bush is the worse president in American history.

Remember the 80’s. Reagan and the democrat congress started with a 1 trillion dollar deficit and spent like there was no tomorrow. Most of that money came back into the economy.

Our current deficit shows the government can’t help. The consumer has lost the easy cash of refinancing in an upward market. Local governments are going to have to cut back on services, to stay within budget. There is no rainy day fund, anywhere.

The only chance we have, is if the President and Congress, together, step in to stop the rampant oil speculation, caused by hedge funds trying to unwind their positions in the speculative mortgage industry.
Oil would fall back to about $70 a barrel, where it should be. This would seriously ease inflation and provide a 1.8% boost to our economy, to go along with the stimulus plan which will have about 1%. It would require something other than complete unbridled free market.

That leads to the question… What IS the responsibility of the government to it’s citizens??

Harry
Carlisle, Ky.

Jack, The Republicans led this Nation down the primrose path & if we elect them again this will not get any better. Republicans=moralist/money grubbers. I’m done with that Party forever.

To be blunt Jack this whole mess means that our country is screwed. The rest of the world will eventually feel the same effects. Reality is that across the board the economic status of America was over inflated all in the name of making more money and pure greed. Some where it needs to stop. Unfortunately, I think it all just needs to melt down to what ever level it goes to with out any bail outs and then pick up the pieces after wards. Personally it sounds like a major economic depression is on the horizon, and personally or professionally no matter how it is spun.. we as Americans can not afford to keep putting a bandaid on it. All those exported jobs need to come back into our borders and unfortunately taxes need to go up slightly. Then we need to clean house, stop all that pork money and most importantly we need to hold our elected officials accountable. If we fail to balance our check book it is called fraud or attempt to defraud, the same rules need to be applied to our elected officials.

Jack;

The loss of home equity simply indicates that consumption and investment spending will decrease at an increasing rate, which will of course slow down GDP growth and cause higher unemployment.

Obviously, house prices were severely inflated, and now they are crashing. I am relieved that I managed to sell my house in January, as I feared just this scenario – I got out just in time. Even here in Asheville, where many want to live, prices are falling because people moving here from other places got far less equity there, and thus less money to spend on a house here.

Tax cuts, borrow and spend, a $9 trillion national debt racing to $10 trillion, the dollar sinking against other currencies, all to satisfy the bottomless pit called the stock market is this mess maker. When the corporate realtor’s, decided to come into my neighborhood and take my fifteen thousand dollar, (1960’s price) house and elevate the value to over a quarter of a million dollars, it was the end of the American dream that has turned into a nightmare. With millions of our jobs exported and no new good paying jobs in sight, the debt will remain higher than the equity.
I wonder if we can ever put Humpty Dumpty back together again, this is on hell of a fall.

It says we need new leadership. Not only are we dealing with a home mortgage and value crisis but also the gas prices have tripled in the last 3 years with no sign of slowing down. The administration doesnt seem to have a clue whats going on. The entire government has the lowest approval rating of all time. They find it important enough to drag in baseball players to testify before congress, but not important enough to hold hearings on whats important to the people. In the immortal words of comedian Bill Hicks
“DONT RE-ELECT ANYBODY”

Morgatge Company CEO’s making 100s of millions and record high foreclosures. Record profits for Oil Companies and gas at 3+ dollars a gallon. It’s clear that our country is in the hands of a small but powerful minority of greed-heads. Does anyone else think it is enlightening that Chelsea Clinton works for a hedge-fund as a financial adviser. This young woman was born as close to royalty as you can get in this country, given every advantage, she could have chosen to do ANYTHING in this life she wanted; and she chooses to work in the financial industry. What does that tell us about the values the Clinton’s taught their child? Keep making the same choices and you keep getting the same results. Simple.

The Corporate Giants took advantage of the “housing booming era” by granting mortgages to all and any….the greed factor. Now the tide has turned and their return on their investments has come full circle to “bite” them in rear. Corporate greed has caused America’s economy to begin to crumble; gas prices; food cost; health insurance; fail retirements plans; and it is the working class who is now going to pay the price for their poor judgements and business practices. It is going to get worst before it gets better and only time will tell. Doesn’t look really optimistic for the next generation.

Just think, after WWII we made about 50% of all the worlds goods.
Now, due the Greedy Global Corporate Economy we are sunk.
If we would have kept our manufacturing open here, made our own goods and kept good paying jobs, we would have not been in this mess. After all, who buys all the goods these Corporate Greed Masters make….the now dissappearing Middle Class…They would have made plenty of money but they want more, more, more…
Also companies should have remained private and offered company stock to employees that made the company. Me thinks I see the second coming of Rome!

Timothy
Nocona, Texas

This problem was caused by people taking out exotic mortgages to buy homes that they couldn’t afford. The remainder of the problem is caused by people refinancing all of their equity out of their homes thinking that there home was an ATM machine.

The current problems were caused by irresponsible people making irresponsible decisions.

It says that Bush has been telling us some more of those stories. Like there are weapon of mass destruction in Iraq, And the tax cuts to the very rich is going to help our economy, Our only hope is that it only a little over 300 days till this night mare is over

Good question Jack, and a scary one. After watching the congressional hearings on CEOs excessive compensation and the shameless behavior of congressmen Darrell Issa of California and Chris Cannon of Utah, my question is: How many of these people (the CEOs, their lawyers and their “for sale” politicians) do you think will end up their days playing golf, and proud owners their “devalued” mansions, paid for by the now homeless little guy. The answer is ALL!

Jack,
Ask any middle class American and the answer is simple, we’re in deep doo doo. But ask George Bush and you might find a more upbeat answer as he dances on door step of the White House.

It means that America needs an administration that respects ALL of our citizens and knows what it’s doing.

Jack,what it says is that Greed has caught up with the American Dream of owning one’s home! Some people want to have things(car,home)Now whether they can afford it or not!

I hate to be bearer of bad news, but it’s gonna get worse, much worse. Bush’s rebate is like fighting a forest fire with a water pistol, a typical Bush reaction: too little, too late.

Ray Kinserlow
Lubbock, Texas

“What?” Did you say home equity is at the lowest point since WWII? “I hadn’t heard that. I do know that gas prices are pretty high though.”

It is really easy to blame the current President. Sure he is in the “Twilight Zone” in regards to what is going on outside of Iraq, but he didn’t sign the papers with an arm rate. Our society is based on we want more, more, more. There is a perfect saying for this; “You did it to yourself”. Our economy is exactly where it needs to be to wake up America.

Does Depression come into mind ?

It says that we are a nation of consumers and not doers. People have refinaced ther homes to have “the car,the vacation,the right school and the right clothes. Whatever happened to living within your means and protecting the equity in your home ,no matter what the sacrifice. Now everyone wants the government to bail out the home owners , which is really a bailout for the short-sighted financial institutions. Just goes to show you that the government doesn’t make wise decisions and they don’t expect the people to either.

I have never seen our nation’s economy as far out of balance as it has now become. When the federal government spends far more money than it has any hope of collecting or earning, is it such a big surprise that the people do the same? After all, we were told during September, 2001 that the best thing we could do to support the war on terrorism was to go shopping. Interest rates were cut to the bone to support our spending spree.

Just like most of us could never afford those inflated housing prices with fancy dressed up adjustable mortgage rates, we can’t afford a war that has no limit, no budget, and no reasonable payment plan. Who do we think is going to bail us out when that bill becomes due?

It says more about American spending. Who would have thought that taking out a second mortgage to buy bigger fancier cars and take multiple vacations could be a bad idea.

How is it the economy’s fault that people bought interest only loans and didn’t pay on the principle on their homes?

Jack, I am not sure what it says about our economy, but it must be something that makes Bush happy enough to “dance a jig” on the White House steps and John McCain accept his endorsement a few moments later (with hugs and kisses). They sure are happy. It does not seem like they are worried about the Republicans losing a (white) HOUSE in the near future and they sure do love war, so how much better can it get.

Jack

I don’t think I could answer your question as I only have
a college education and still learning how to press ” 1″
for English.

Jerry
Roselle, Illinois

It says that corporate America is made up of a whole bunch of greedy bastards!

Jack, This should to tell us all that we are in trouble and that until we elect someone who has told us all that we need change in the worst way it sure wont get any better, and besides that why in heavens name should we listen to a man who cant complete a sentence!!!!!!!

It means we’re in that recession that “I didn’t know anything about 4 dollar a gallon gas” Bush keeps saying we’re not in.

Jack, why can’t U.S congress do something about these predatory lenders who sweet talk people into buying houses they fully know they can’t afford. If no penalties are meted out to them, I don’t see this problem going away soon. This present congress & presidency may go down in history as the worst ever.
Atlanta, GA

The answer is simple Jack. We are taught, encouraged and cajoled into spend spend spend from the time we enter school. Our value system in this country is based on He with the most and most expensive toys wins the girl, the big house and the envy of those that dont have it. Just as in the 1920’s, excess is about to bring things to another 1930’s crash, or at least the hyperinflation of Carter and Reagan administrations. So lets all pull together an WIN one for the Gipper. WIN=whip inflation now. Our troubles are in the early stages with much worsw yet to come. Blame Congress, the Bush administration, the greedy businessman and ourselves.

It says that banks loaned out more money than they should have. It says that the real estate agents and brokers did not exhibit self control. All they saw were dollar signs. It also says that too many people didn’t take the time to crunch the numbers before they signed on the dotted line. Don’t the schools teach economics anymore? Greed caused all of this. I’m less concerned about the state of the economy than I am about the state of our principles and collective IQ. If those two aspects nosedive, the economy and everything else is sure to follow.

How can people pay for their homes without jobs, the Bush policies of the last seven years have only enriched Bush and his billionaire friends, in the meantime in the richest!! country in the world millions go to bed hungry every night.

Equity just went out the backdoor jack, the Fed saw fit to let the U.S. Dollar Free Fall and a corrupt administration feed it’s capitalist swine at the sub-prime trough. is it any wonder to you that home equity is al it’s all time low ? Stupid is as Stupid does…

Malcom Orbes , Fortune’s 5 Hundred , D.C.

The state of this failed economy makes one wonder if they are citizens of the U.S.A who has worked and invested in the American dream only to face job loss and home foreclosure.

it show’s how stupid people really are when they can’t tell the difference between a liar and b.s.(er)! it amazes me that people after my 30 years of listening to politicians talk and they still can’t decipher the lying double talk they all do; ron paul and mitt romney spoke the truth about the economy and they are both out and who’s left except the three worst candidates!

WAKE UP YOU FOOLS!

Jack
We shot ourselves in the foot on this one. People went out and purchased homes they could not afford thinking everything would be roses for ever. No one ever considered what would happen if the bottom fell out of the housing market and the country went into a recession. Oh I forgot President Bush has said he doesnt believe we are in a recession.

If you would spend half as much time beefing about our economy as you do picking on Hillary Clinton I think that CNN would have a better rating. Just remember Jack, women out number us, and best you not forget it. Besides who crowned you the wizard of all ? If you were so damn smart you wouldn’t have to ask questions for us to answer just to have them “cherry picked” to fit your own view. I myself cannot respect anyone who disrespects womanhood.

Yo, jack;

It’s not how much money you make…. it’s how much money you get to keep ! take Hillary Clinton and her husband slick willie they got more money than King Midas. but on paper they look like Neo Cons.

Vinnie Boom Batz , Sandy Hook , NJ

There has been no long-term economic plan in place that has factored in Americans, as a whole, living beyond their means, out-of-control illegal immigration, poor foreign relations for decades (especially with oil-producing countries), and lack of intent research for alternative fuel resources. It’s a hard lesson to learn, but the dropping value of our properties is an indicator of our lack of respect for proper planning in our individual and our country’s long-term operating plan.

Who cares, Jack? Does anybody, including you, care about the plight of working class people? Politicians, Business leaders, Media leaders, Entertainment leaders, Criminal leaders and their surrogates all enjoy the good life and could care less about how much its costs for gas,food,heat,clothes etc. So don’t ask such a stupid question, Jack. Even Obama doesn’t care!

It says that the Reaganesque philosophy of shovel our tax money at the rich is stupid. What is good for business is NOT good for America.

Lee Lawler fought and nearly died in the Pacific not for the rich, but for America. He says he worries about the future for his grandchildren. The opportunities he had of home ownership and a middle class life he fears are lost to his greandchildren.

What is says is that we had Bush in office for 8 years. He was dancing while Americans struggled.

Why do we need 20 million illegals not paying taxes and sucking the system dry. If the ACLU, LaRaza, SPLC and the rest want to help the lawbreakers let them support them.

Jack, it don’t say much about how we care for other?, all I hear is billions of dollor going here going there..(campain here campain there) but happens to the ones that make $8.50 an hour? or even $10? well you can’t live out here. Who ever was on ‘watch post’ should had been fire a long time ago..,10 months left is 10 month to many!

Jack I think it says we have made some big mistakes when questions like that are asked. I remember my father who went through the great depression telling me, son live within your means. Save your money for the things that you want to buy like a home. Don’t try to keep up with the Jones because they will destroy you. He never a owned a credit card and never had no desire to have one even when they became readily available. Now you have people with at least five credit cards or more people buying homes that would have been impossible for them to get years ago and spending money that they don’t have. But what makes this much worse it is our gov’t encourages it and passes laws in favor of the loan sharks be cause they have lobbyists in Washington. If we don’t soon turn this around we will destroy the working class, then you will see rich people jumping off of buildings. My father said don’t believe it when you are told there can never be another depression. He said people are so used to living out of their means, that it will be twice as hard, the next time around.

That the great god of republican greed, Ronald Reagen was wrong about the trickle down theory of economic extortion,except the part about the really rich really makin out.

It says that George Bush and his “corporate mentality” has run this country in the ground. When we lose 63000 jobs in a month that usually doesn’t add up to good things elsewhere in the economy. We need to stop letting people with horrible credit get credit with 30% interest rates knowing full well they’ll never be able to pay it back. The whole system is set up to keep people in debt and on the ropes.

It means who we vote for in this primary season and in the general election should be a very well thought out decision by each and every voter in America. We need to look at our candidates as to who has what it will take to turn our economy around and our foreign affairs have a big play on our economy.

We should not be voting based on a popularity contest, look what popularity got us in 2000 and 2004

It tells me George W. Bush will be leaving his current job just like all his previous endeavors which were failures. And to make matters worse, he doesn’t care. The next president cannot undo this one.

Jack, Congress voted in predatory interest rates and have outsourced millions, of American jobs. Our jobs have been wiped out, in the name of corporate greed. Now the stuff is striking the whirling blades, from decades, of outrageous trade policies and NAFTA. Don’t just blame the republicans. Both parties have led us down the Primrose Trail and failed America. I hope voters remember this come November and vote every incumbant out of office.

Obviously the Bush delusions don’t produce prosperity.

I think it’s obvious – we’re in trouble. Bush’s proclamation last week that we’re not headed toward a recession seems to fly in the face of the facts. Bush should talk with the people whose homes are going into foreclosure and tell them to their faces that we’re not headed toward a recession. Does the economy jump when he says jump?

To quote your book, Jack, “It’s getting ugly out there.”

Bob L.
Philadelphia, PA

It is precisely as I expected. That’s why our mortgage is tiny. I used to watch people running around in huge SUV’s, chatting on their cell phones, and using credit cards to buy botox treatments. We put all the money we could into paying off our mortgage, and saving $500 a month for a rainy day on $65,000 a year, driving a 6 cylinder car and pick up truck, and staying home. Eating out is a rare treat. Do I feel sorry for these people? Yes, but when I think of how they are the ones responsible for all of us loosing value in our homes, I forget about the pity. Shame on us, what goes up will surely come down, and the higher it goes, the further it falls. Just a fact of life. Welcome to the real world.

Our economy is in serious trouble — after allowing manufacturing jobs to go offshore (or to Mexico), based on the argument that we could be a service economy (which I never understood), and then allowing service jobs to go offshore, we don’t seem to be left with any jobs (imagine that). It is obvious that financial institutions and multi-nationals have too much power, and it is open season on the American consumer. Our jobs are gone, we are prayed upon by the unethical practices of credit card and mortgage companies, we are too reliant on oil, we export wood and import lumber, we import products which are down right dangerous, and no one in our government seems to care (just as long as they get their palms greased). If we are careful, and if the government doesn’t step in to exert appropriate controls, things could get much worse (some how I don’t think those rebate checks are going to do the trick).

Where is Greenspan when you need him?

Buy the Chinese Goverment Bonds,
They seem to have more cash that every one else, the Bush administration pimp-out WE THE PEOPLE to the whole world
and we are here with all the ills and plague.
Going to your dentist is more fun right now, as lease you get pair killers.
Thank whom ever, Sen Obama is offering us some dignity.

Jack, there’s no doubt that the economy is in trouble, but consider the fact that the average size of an American home back in 1950 was 983 sq. ft, and in 2004 the average home was 2,349 sq. ft (Nat’l Association of Home Builders – Housing Facts, Figures and Trends for March 2006). With houses more than double in size, it’s no surprise that our equity in them is only half! I’m not fortunate enough to own a house yet, but with the way the market is correcting itself, maybe I will soon. On the other hand, if I lose my job because of the weak economy, I won’t be able to afford a mortgage either.

Our economy was just coming out of the Great Depression at the time. It’s pretty scary to think that our economy might be heading in that direction.

As a working slob who still hasn’t recovered from the last recession, let me point out that Clueless George is the first president in history to have TWO recessions on his watch. He is Herbert Hoover doubled. Like the dotcom bubble, greedy opportunists have taken advantage of an industry left unchecked and as a result have plundered it into the ground. And like locusts they will move on the the next feeding frenzy. The so-called “conservatives” in DC have allowed this to happen. You can’t hang this on the Clintons anymore. While you were out trumpeting flag burning and stem-cell research and demonizing your opponents you ignored the business of government. Now we have a huge mess to clean up. I’m counting down the days until this administration leaves office.

I don’t think there is a question as to the current Recession in this country. Its denial to think otherwise, or just ignorance based on the size of your pocketbook. The more important question is: How close are we to Depression?

A few years ago when all the house prices shot up due to stupid investors and Houseflippers, and the banks going along with inflated appraisals then handing out (or begging people to take) the money….I told my friends…what goes up comes down and it’s going to be a mess when the market comes down. It was an artificial rise in home prices at the time.

Houses are worth less now, the market has corrected itself and they’re worth what they should be. It’s the banks fault, no one elses. Gee…and it only took 2 economics courses to predict this a couple years ago.

Jack,

Yesterday’s Fed report also indicates that aggregate home equity in 2003 amounted to $8.1 trillion and at the end of 2007 it amounted to $9.6 trillion — so it grew by about 18.5% in 4 years. During this time the number of homeowners also increased and the mortgage debt increased faster than equity. In the past year, however, equity has been dropping due to lower housing prices and debt has still soared. Nevertheless, as a nation we are still ahead of where we were in 2003 — not that long ago.

Sen Clinton is the one with the best plan to stop this forclosure problem and to help the housing problem the most, Remember the 90’s when you had more equity than debt, That’s why it’s sad to hear Obama completely dismiss the Clinton presidency as same old, when low incom and middle class famillies were getting richer, instead he put pres. Clinton with Nixon and praised Reagan as the best president of recent times. Why do dems like this guy at all is a mystery. Between dems that was cruel thing to say

Jack:
I purchased my home 20 years ago and was required to pay a down payment on my FHA loan. A down payment I saved for years to achieve. Every month I send in a minimum of $75.00 over what’s required towards the principal. Sure I too could have purchased another house in which I’d now wonder how I’m going to make the payments. My priorities are very different than many people I know. I sleep very well every night, knowing that I’ve accumulated a tidy sum called equity. Our lending needs to be fine-tuned to the extent that everyone isn’t a good candidate for home ownership and go back to lending practices that make sense. People need to understand it’s less costly to hire a good attorney to look at all documents, than sign on to a bad loan.

As that great orator and statesman Samuel Irvin once said during the Watergate Hearings… A BILLION HERE , AND A BILLION THERE, WHY PRETTY SOON YOU ARE TALKIN REAL MONEY…!!!

Jim Garrison , New Orleans , La

Jack,
I think we are going to be in for turbulent times for the next two or three years. I think that the high gas prices is directly impacting the slow down ,whether or not the politicians won’t to admit it or not, it’s the truth. If Bush doesn’t do something about it now and not wait til the next president gets into office we are going to be in trouble. I know I been wearing this out alot, but I don’t think anybody’s hearing it or if they are it’s being ignored. I really beleive if the Fair Tax was made law alot of things in this train wrecked economy would be greatly improved. I am not saying it would fix everything, but it would boom the economy. I just wonder how many folks even know what the fair tax is? When I mention it to people they act like they have no clue as to what the fair tax is. Help me out Jack and give me your take on this.
Thanks Eric

It’s real sad that the President gets on TV and say that we got a few problems with the economy and is doing what he can to help while the Defense Department is outsourcing the contracts to build planes for the Air Force to a foreign company. I’ve been in this world 60 plus years and I have never seen our government so messed up as it is now. Seems like no one in this government cares about the working middle class. That is the President and Congress. I don’t really see any difference thats going to be made in the election of a new President. Sure is sad Jack.

All I can say is thank you Mr. President!

Hi Jack:

The message it is sending is: That our economy is in: “final approach” to a “CRASH LANDING”

Ron K. San Diego

Jack-

It’s called a depression. Too much spending and the Fed’s policy of printing money out of thin air has helped to debase our currency and the value of our dollar. Ron Paul was right and he is one of the only members of Congress and the only presidental candidate to speak out about these insane monetary policies we embrace.

Taylor
Hartland, Wisconsin

I do not know Jack! What were people paying for a 750 square foot house back then, I believe that represented an average home. Today people don’t want average homes.Then again so much was different and with millions of veterans returning from overseas, no one in Congress was going to throw them peanuts like the ww1 veterans.
They received wonderful benefits from our nation after ww2, now living in America benefits very few.

It tells me that we need provide a copy of the book “Common Sense Economics 101″ to all our government officials until we can vote them out of office.

I think it means we got a hellva great country here… listen, when you can buy more house than you can afford with worthless money, at a rate below the Prime Lending Rate what did you expect the property to be worth…? do the Math jack… Nuthin from Nuthin leaves Nuthin.. Billy Preston said it so well… in his song Outta Limits…

Otto Schmedlapp , Kookamonga , Calif

Weren’t the so called Significantly Experienced Senators sitting on the side line watching while this situation developed? However, they would like us to think that they will get us out? Why now? Why not speak up prior? Is this not Poor Performance? Didn’t these subprime loans come on the scene several years ago? Why did the significantly experienced Senators Prevent this situation? Now they want us to reward Poor Performance? Trust them to fix the problem! Isn’t is fair to ask why didn’t they fix it before it crippled hard working Americans. Is this not what we pay them for? Didn’t they get rasises when hard working Americans did not? Americans should not reward bad behavior and Poor Performance.

Jack:
I didn’t think you would ever side with the self-serving politicians when they voted to take away the rights of citizens to have their vo tes counted. AND, when are you guys going to discover that we live in a Republic — a Nation of Laws. We are “NOT” a Democracy. Pretending to be a Democracy allows the Majority to vote against our laws and make our laws sterile.

Art

I wonder why I wasted 18 months in the Pacific during WW 2. You are allowing the Gooks in Washington to make a mockery of our country.

It says that our economy is the result of “politics of the past”. Even more of a reason to at least try to “CHANGE” America. The state of our economy definately says we need to vote out all the numbskulls that are glued to the chairs in Washingon saying they are for the people!! Someone should ask them “Are they for the people in this country?” We might actually be surprized by the answer!

Our economy seems to be the verge of a disaster of Great Depression dimensions. The value of our homes, stocks and currency is falling, while the amount of our debt and the cost of essential consumer goods increases. If the Federal Reserve Board decreases interest rates to help with the real estate catastrophe then inflation will worsen. If it increases rates to ease inflation then the housing market continues to decline and the ratio of debt to equity in homes slides further in the wrong direction. Meanwhile, our elected government officials, after careful and sober deliberation of about two days, decide the problem can be solved by giving everyone a $600 tax rebate. Never mind that the government has to borrow the money to pay the rebates and that it requires a great deal of wishful thinking to believe giving people a little pocket change will turn the economy around. I’m afraid things may get a whole lot worse. I hope I am wrong.

It says that once again, the lack of deregulation of many industries does not benefit the citizenry of this country as the Republicans would have you believe when they rail against “big government”. Of course, none of us has ever seen a ‘bigger’ government than the big spending group in Washington at this very moment- but they insist that they are the fiscally responsible ones. When will the people get it that the Repubs only care about me,me,me and mine,mine,mine meaning theirs,theirs,theirs? They don’t give two hoots in Hell about any of the rest of us and both of them already hooted! As long as they and their cronies get rich and richer, they will continue to lift any governing controls from every business genre they can to pad their pockets. They are the only beneficiaries- not the people nor the country. This only one example of the total failure of Bush and his pack of greedy creeps.

That it may be getting a lot uglier out there, and soon. Our jobs are disappearing, our homes are disappearing, gas will be hitting $4 a gallon soon, goods and food prices are skyrocketing, and we’re out there pumping $8B a week into wars where we’re fighting an enemy we can’t even find. What could that $8B be doing for us?

It’s going to get very bad. Hopefully it will level off before we start making comparisons to the 1930’s. And that is my more optimistic feeling of what’s ahead of us.

Well, Jack, the Piper our Grandparents and some of our parents warned us about is here to be paid. We have been drunk on credit for for the last 30 to 40 years, sunk ourselves in foreign debt and stripped our nation’s health care system and educational systems to pay for all the nonsense our elected morons have approved and, in most cases, personally profited from. Time is up. We need to throw ALL the bums out this year and every year henceforth until we can get a batch who actually believe in what this country purports to stand for.

What does it say about the state of our economy when home equity is at its lowest point since World War II?

It says “Grab a hold of something that floats, because we are all going down the big swirl.”

The economy of Duabai is what you should be looking at. That where the field commanders of Bush’s war on the middle class will celebrating their victory.

It says that we’ve once again been duped by those (the banks, mortgage lenders) who professed to have our best interests at heart. That’s in no small thanks to the current administration and their willingly, almost gleefully , turning their backs on the lenders as they gouged millions of borrowers. The lenders who obviously made loans to those who could not afford them, especially when the adjustable loans went to higher rates, should be required to refinance the homes with a 30yr mortgage at the original loan rate, the lowest loan rate, and just eat the loss. It’s either do that or be ready to be even more awash in red ink and foreclosed homes that noone will be able to afford to buy. And even if some could afford to buy them they won’t be able to get a mortgage because of the tightening credit policies of lenders. It’s a vicious cycle, and I have an ugly feeling that we’re just at the beginning of it.

It says people mad bad decisions. End of Story. Perhaps they shouldn’t have bought those new cars or cell phones for the whole family or Video games and high dollar sneakers for their kid. Perhaps they need to stop playing golf and going out at night and staying home with their family and do some free things like read a book they check out from the library. Get rid of the satellite dish and go back to rabbit ears. People are in the mess they are in because of themselves. A few lost their jobs and might just have to do some menial labor instead of sitting behind a desk all day chewing Rolaids. We all live just at or just beyond our means. Perhaps we need to get back to the basics. People change and the economy will change. Trying to find blame at this juncture is irrelevant.

I believe that the economy is in poor condition because of the housing market, not the other way around. For several years now, in many areas the housing market has been increasing by 10% or more, which is about 3 times inflation. This causes the home owners to tighten there wallets to make mortgage payments. Which means less spending, resulting in a weaker dollar, no wage raises, and a poor economy.

It means that some of these spoiled people are going to have to learn a lesson. It is to tighten their belt and learn that this generation of “I want such and such now!!!!” is going to have to learn to do with out all the fancy toys like their grand parents and great grand parents did. To bad someone can’t go and revoke and take away all these obscene bonus’ and special perks these people (even the layed off or fired ones) have gotten with the crooked loans.

It says that home prices are high and that people chose to buy houses that they couldn’t afford.

It says that greed has its consequences. Whether one looks at irresponsible borrowers or at Predatory lending practices as the culprit, the truth is that both are responsible, and the common factor is Greed. Decades of worship of the almighty dollar and “Keeping up with the Jones’” are running head on into the reality that this Nation is no longer committed to producing Real wealth. A service sector economy does not produce wealth, it consumes it. Only a Re-commitment to innovation and Manufacture of Real Products can turn our economy around.

Is it just coincidence, or did the economy start it’s slide since the Democrats took over full control of Congress?

Heck if I care, Jack! I bought my first fixer-upper, used it to raise our kids, and now am using it for my retirement home. In between that, we raised our 4 children, and found space to use it as an “In Home Short Term Juvenile Delinquency Shelter,” for 500 kids. Who needs a 200,000 dollar home, any way! Avarice and greed are both addictions.

How little we learn from the lessons of history. At this rate, and with all the Alice in Wonderland denial in DC, the economy will soon be in far worse shape than recession. Just click your heels together three times and chant “there’s no place like home”….that is, assuming the banks haven’t foreclosed on it.

So, when will we start talking about the “D” word (Depression) as opposed to the politically correct term recession?

It is a symptom of a larger culture shift. Corporations as profit machines with no responsibilties as citizens. Perhaps the Reagan Revolution had some unintended consequences. Corporate tax breaks and subsidies, deregulation and phony regulation. And all that was required in return was campaign contributions. Slowly, but surely, it has left the bottom 90 percent out in the cold. The tax policy and spending of the Bush years have taken their toll. I hope the Neocons are happy. They are leaving us in a giant hole in Iraq, and another giant hole here at home.
Jesse Ventura stood outside my office a few weeks ago, and expounded on his view of politicians. He suggested that what is needed here is a revolution. Not a violent or bloody revolution, but a political revolution. If the Democrats don’t step up and change the landscape, then who is left? Lets hope for an Obama revolution.

What it says about our economy is that the same mentality used in Government spending has trickled down to households across America. My parents are WWll era folks who taught ALL of their children the value of money. We did not get fancy gadgets or toys simply because “everyone else” had them. Our character was more valuable than any material possession.

I am truly shocked by the way most people I know handle their finances. They treated their homes like an ATM to pay credit card debt and buy new cars.

Those checks that start arriving in May?? Most people have them spent already and that is exactly what the Government wants us to do.

I just can not make sense of any of this. We have people in great need of a financial education and they best our Government can come up with is a stimulus package encouraging people to spend more. In the long run, how in the world does this help anyone??

Home equity was the average America’s only source to finance their growing Debit. Why is everyone trying to do forensic deep-dive about this? The fact that Money doesn’t come with a set of instructions and the Banking industry wasn’t regulated in this area, it was simply only a matter of time before things collpased. Next wave will be when China & Japan come calling to collect on what we owe them.

Mark
Michigan

The US economy is very volatile and turbulent but has an upward consistent trend. Our economy is suffering from the fallout of globalized depreciation of the US dollar, the fallout from oil dependency, and the fallout from predatory lenders.

We need the green collar jobs, a new market, and a new economy to rise above all of this Bush neglected misery of an economy.

Why wasn’t there any government intervention when the prices of homes rose to impossible highs? This is what created the mortgage crisis in the first place. The only way to pay for these homes that were normally priced three years before was through creative financing.

What about the people who are paying their mortgages at fixed rates that are not great rates? Will the government help the responsible?

Jack,

Don’t you remember that this administration promised us a grand, eternally expanding “Ownership Society”?

Oh wait … they didn’t say WHO would own it, did they?

Lenders knew this crisis was forthcoming consider the bankruptcy laws.
Folks who owe more than their house is worth can’t just walk away.

Perhaps what it says is that “American thrift” has become an oxymoron. What ever happened to living within our means?

Jack–
We all understand the everything runs in cycles. Maybe today the cycles are bigger because our nation is plugged into a much larger world economy with its cycles. Housing was a bubble, and it helped the homeowners. Now, it is a buyers’ market. Shouldn’t we be worried about them, too?

Jack,

It means this country is in a whole lot of trouble my mortgage payment in 2005 was $500 now it’s $854 I’m struggling to make it my gas bill is $300 for 1 month I’m afraid I’m going to be 1 of the 9 million going to lose their home

When are people going to face the fact that the biggest problem with the economy these days can be identified by looking in the mirror. Buying houses they couldn’t really afford, using home equity to purchase “stuff” they most likely didn’t need, being unwilling to say “no” to having more and more and more…Give me a break. It’s not any politicians job to put a muzzle on the voracious appetites of the American people. We’re all too fat in one way or another.

I simply don’t understand how it is anyone’s fault but the person who signed on the dotted line. No Republican, Democrat, or banker has anything to do with a moron biting off more than they could chew. If it sounds to good to be true it usually is. The government simply can’t protect stupid people from themselves.

How do we expect American’s to make sound financial decisions when very few have little clue about financial responsibility. I work with young adults – most who think a credit card is a toy and few who even know how to work a check book. It is no wonder many individuals took out mortgages that are now floundering – they were uneducated, and also taken advantage of. I purchased a home during the sub prime lending boom, and I almost bit at the opportunity to take out an ARM at a really low rate, at the recommendation of a mortgage broker. My Aunt, a financial analyst, warned and pleaded against it. I thank her regularly that I still own my home, and can afford my payments. Too bad we all didn’t have someone who really cared looking over our shoulders when we made such critical financial decisions.

It means too many people have been using their home equity to fund what they couldn’t otherwise afford.

I was raised that savings accounts and home equity were for emergencies, and was also taught the difference between wants and needs. Unfortunately, a lot of the people who are now upside down on their homes are from the Church of Instant Gratification; they see equity and they have to spend it.

Even after the recent drop in price, my house is worth about 3x what I paid for it 10 years ago. I haven’t tapped my equity, and therefore, my equity is still there.

Jack,

We are in a slow down, but why do you and other media outlets keep blaming Bush for the housing issue… If you buy more house than you can afford than guess what…It’s called over extending yourself or making poor financial decisions and somethings our poor decisions catch up to us. Builders built too many homes and people made bad financial decisions to try and keep up the the “Jones”, not the governments issue and I shouldn’t have to pay for a bailout… The market will correct itself.

Jack,

When you look at the foreclosed house pictures displayed in the news it’s clear the builders share some of the blame along with the lenders. The lenders lend money based on square footage to builders. The builders build 3, 4, 5000 sq ft homes. The lenders lend Zero down to home owners. The lenders default. The builder has already been paid and is on to the next job. Where are the 2000 square foot starter homes??

Paul

Jack,
Apparently the old axiom about something being to good to be true has finally arrived in the nation’s housing market as well. How could people acually believe that their “adjustable mortgage rate” would actually hold steady or “possibly go lower” in any economy showing any growth?
In the American tradition of “keeping up with the Jones” we were all encouraged by the credit industry to over extend ourselves on the basis of “future increased earnings”. Questions like “why settle for less when you can get so much more house for your money with an adjustable rate mortgage?” Well, now we are getting the answer.
My heart goes out to every one of those persons led down the path of “more is better”. There is a lot to be said for living a bit below your means for the “long haul”. But your typical real estate agent or your lender won’t tell you that.

Respectfully,

John A. Lawson

The mess we are seeing today in the real estate market is the result of a myriad of causes, some of which the consumer is responsible, some the credit/mortgage industries, and some the lack of oversight by our government.

We had a mania in the housing market, with a belief that prices were going to keep skyrocketing. Many people withdrew equity from their homes to finance bloated lifestles. Others took on morgages they couldn’t afford believing that rising equity would protect them. The government turned a blind eye to bad practices and the financial industry had a bonanza selling our paper to investors around the world.

We are now reaping the effects of consuming more then we could afford. Last year the average american spent more than they made. My prediction is that we will start seeing massive defaults on credit card balances, as this recession (yes I believe we are in one) progresses.

I think we need to take the bitter medicine. I don’t believe we can afford to bail out everyone who made committments they cannot honor. Our dollar is falling around the world, and if we don’t take our losses and allow the value of houses to fall to market levels, we will just prolong the misery and lose our purchasing power, as we now are doint. Look at Japan, whose stock market hasn’t yet recovered from their collapse in 1989. Banks didn’t want to write down the bad debt, and their feds have depressed interest rates until this day.

It’s complicated, it’s a mess, and it will take someone really smart to guide us out of this mess.

Home equity might be rather low, but it should be expected considering that home ownership has been at record highs in recent years and credit has been readily (and foolishly) available. Lets home that some equilibrium is reached soon.

As unpleasant as it might be, people need to realize that what goes up must come down. The US has enjoyed significant economic growth over that last 15 years and a minor downturn should be expected. Here is hoping that downturn/recession is brief and non-lethal.

Jack,
Home equity statistics are skewed. While it is true that a bedrock of our economy is in a more tenuous, leveraged position than yesteryear, it was only a few decades ago that ALL interest was deductable. Now it is not ergo big ticket items get put on HELOC’s to deduct their interest. Beyond that ,as you mention, zero down mortgages allowed many first time buyers to own there own home, a situation that would otherwise be out of reach back in the old days. The only thing that really killed the golden goose was unregulated, preatory loan practices combining severly relaxed credit requirements with zero down balloon interest rates……………….
Thanks, Rob, Hummelstown,Pa.

Jack there had to have been some headsup somewhere that the credit crisis was looming. I suspect that way before the mortgages went sour the banking industry lobbied for change the bankruptcy laws to pin people with their debt,and then kept handing money in a way that can only be described as irresponsible. Responsiblity need not be part of their business model when government is willing to bail that industry out with taxpayers dollars and then say that it would be poor policy to use the very same taxpayers dollars to bail out the taxpayers in trouble.

what it means is people payed to much for overpriced houses using loans with 0 down. people also borrowed against their homes to buy new cars ,boats etc, things they could not afford. it means there is alot of idiots out there. a big part of the problem falls squarely on the home owners shoulders.

It says that people have been using mostly mortgage debt to keep spending more than they are making and to bring forward from the future enough demand to keep deflation from happening.

These lenders are idiots. They have mislead and teased people into these subprime faulty appraised loans with the hope of an increased real estate market. Now that it is all falling apart they would rather take a 30% loss in their loan balances than a small loss of interest income on the payments. Do the math. Government should force them to work with homeowners and avoid a housing deppression.

To me it says that people have emulated their government. Bush has caused the largest deficit ever, doesn’t include the funding for the occupation of Iraq in his budget then borrows money to stimulate the economy! What gives? The middle class, thats what!

One year before Greenspan was replaced he said the current housing boom cannot be sustained and that the overinflation was due to FRAUDELENT ACTIVITIES on the local level. In other words, realtors pushed the prices up and appraisors played along and banks baited their hooks with interest only loans and home equity credit lines.

Only in retirement cities like Carmel and Marcos Island will property values stay above the reach of the middle class, everywhere else it has to come down and it is coming down.

The banks will be the biggest losers, because they take the biggest hit when the owners walk away from their houses and go back to renting. There will be a boom of boarding houses (like in the 50s) because builders built unsellable 8 bedroom homes.

It just says that people are buying houses that they can’t afford on terms that they don’t comprehend. I’m not sure it says anything about the economy other than most Americans doen’t understand personal finance very well and that they need to hire an attorney more often.

It says reality eventually triumphs over Peter Pan and Never-Never land. People in this country have been living beyond their means and getting paid more than they’re worth for decades. Welcome to the real world!

It tells me that the Congress should take their share of the responsibility for this mess. It was the Democratic leadership, including Kennedy, who demanded that mortgage lenders give mortgages to unqualified borrowers…the rest of the responsibility goes to the borrowers themselves for taking on debt they knew they couldn’t pay back. This mess has caused all of us to pay for this via lower CD rates etc. The government is not in the homes business and should stay out and let this work itself out…the results will be far better!