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Strategies & Market Trends : Mish's Global Economic Trend Analysis
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To: mishedlo who wrote (6628)5/18/2004 2:58:55 PM
From: Wyätt Gwyön  Read Replies (1) of 116555
 
Low interest rates and dumbed down lending requirements now mean that anyone who can still fog a mirror can qualify for a loan.

i read an anecdote about the Great Depression--a man went into a nice restaurant and had a steak dinner with all the trimmings and dessert. then he told them to call the cops because he couldn't pay. just wanted to have a nice meal before going to jail.

so in the Depression, the "fog the mirror" standard meant somebody could get a meal with no money down, and the price was a trip to jail. nowadays, it seems the fog the mirror standard lets near-bankrupt people buy a luxury home, and the penalty is a bankruptcy filing, which might have been advisable or inevitable anyway.

if i was on the verge of bankruptcy, i could think of worse things to do than buy a nice place with a 125% interest-only loan and hope the housing bubble blows a bit further.

it just sounds like this credit bubble is going to wring the last decent credit out of the market before utterly imploding.
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