See if you can keep your home (while the rich clean up and billions go to wars):
"Reports Suggest Broader Losses From Mortgages" by VIKAS BAJAJ and EDMUND L. ANDREWS
Every time economists and Wall Street executives think they have acknowledged the full extent of the losses from the meltdown in real estate mortgages, more bad news turns up.
[That's why I don't read the business pages much: they lie, too!]
Merrill Lynch said yesterday that it would take a charge for mortgage-related securities on its books that is $3 billion more than the $5 billion it expected just two weeks ago. And a report from the National Association of Realtors showed that sales of existing homes in September fell twice as much as economists had expected, to their lowest level in nearly 10 years.
Stocks fell sharply early yesterday on the news. Investors bid up Treasuries as they sought the safety of government-backed debt.
[What makes them think the government is good for it?
The way they are spending money?]
At this juncture, economists say the troubles in the mortgage market could, all told, cost financial firms and investors up to $400 billion.
[HOLY SHIT!]
That is far more than the roughly $240 billion cost, adjusted for inflation, of the savings and loan crisis of the early 1990s, according to estimates of the combined financial toll of that crisis on both the federal government and private sector. The loss in total real estate wealth is expected to range from $2 trillion to $4 trillion, depending on how far home prices fall, according to several economists.
[We are in a FREE-FALL, aren't we, even though the Wall-Street whores won't say it?]
That would be significantly less than the losses suffered by investors in the stock market collapse earlier this decade, which erased more than $7 trillion, or about 40 percent, of market value.
[So it's O.K., huh?]
Experts caution that these estimates are preliminary and the total costs could get bigger still. They also note that the loss of real estate wealth could prove more damaging for the general public than falling stock values because more American families own homes than own stock.
[Translation: YOUR FUCKED, Amurkn!!!!!]
Jane Caron, chief economic strategist at Dwight Asset Management:
“There [are] a lot people using their home as a piggy bank.”
[Just broke it!]
In a new report to be issued today, the Joint Economic Committee of Congress predicts about two million foreclosures by the end of next year on homes purchased with subprime mortgages. That estimate is far higher than the Bush administration’s prediction in September of 500,000 foreclosures, which in itself would be a tidal wave compared with recent years.
The Joint Economic Committee estimates that the lost of real estate wealth just from foreclosures on subprime loans will be about $71 billion. An additional $32 billion would be lost because foreclosed homes tend to drive down the prices of other houses in the neighborhood.
Those figures would cause a decline of $917 million in lost property tax revenue to state and local governments, which will also have to spend more on policing neighborhoods with vacant homes. The states most likely to be hard hit fall into two categories: those where prices had been rising fastest, like California and Florida, and Midwest states with weak economies, like Michigan and Ohio, where people with low or moderate incomes made heavy use of subprime loans to become homeowners and consolidate debts.
Senator Charles E. Schumer, Democrat of New York and the chairman of the Joint Economic Committee:
“State by state, the economic costs from the subprime debacle are shockingly high. From New York to California, we are headed for billions in lost wealth, property values and tax revenues.”
House prices decline slowly, because many potential sellers simply stay in their current homes when they think prices are too low. But that becomes more difficult as people have to move either because of job changes or, increasingly, because their monthly payments are rising sharply.
Inventories of unsold existing homes rose last month to their highest level in almost 20 years.
[The bubble has burst!]
Nigel Gault, chief domestic economist at Global Insight, said he assumes that consumers reduce their spending by about 6 cents for every dollar of lost wealth.
In the last several years, Americans have increased spending faster than their incomes by borrowing against the rising value of their homes.
The housing bust has also led to job losses. Since March 2006 the housing business has shed 383,000 jobs.
Jan Hatzius, chief United States economist at Goldman Sachs, said the small decline in housing employment thus far is surprising and suggests more layoffs are ahead:
“You still have a million jobs that aren’t really needed anymore due to the downturn in housing.”
[So it is GOING to get WORSE before it gets better!]
On Wall Street, which fueled the housing boom by lending to mortgage companies and packaging and selling home loans, banks are writing off billions of dollars in bad loans and are setting aside billions more for the expected surge in defaults.
Late yesterday afternoon, Bank of America said it would lay off 3,000 people across the company and has replaced the head of its investment banking division."
[Sort of a RIPPLING EFFECT, huh?
So make your choice, Americans: Shelter, Heat or Food.
You can only have one, so which will it be?
