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Politics : Foreign Affairs Discussion Group

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To: jttmab who wrote (186127)	5/4/2006 2:33:50 PM
From: geode00	Read Replies (1) of 281500

Wages haven't kept up with inflation since Dubyette came into office. The housing bubble has popped from what I can see. There have been articles for over a year in places like Denver and Michigan and (OMG) even Marin County about a housing slow down. They don't get much attention though. Some people have bought new homes in sunny areas but can't even get buyers to look at their older homes in snowy ones. They're carrying double mortgages which has got to hurt big time. A new home builder in Marin had to throw in perks like granite countertops for free in order to entice buyers. The bubble may be deflating slowly but, IMO, it's deflating. Even without a turndown in the economy, I can see all of those 750% of income (JEEPERS) interest only, negative amortization (JEEPERS) mortgages coming due with owners unable to flip them quickly enough. In a few years, the principle payments start coming due and someone at that much over income isn't going to be able to make the interest payments much less the principle without increasing wages. People are always hugely optimistic about housing but prices popped before and houses in California went begging for 1/3rd of their value in this boom. I remember LA going down 40% during the last bubble and friends considering leaving the keys to the bank since their mortgage was bigger than the market value of their home. Those mobile homes are yet another transfer of wealth from the hard working middle class American taxpayer to Republican cronies. It's theft and nothing more. The Dubyettes would love to buy them at premium prices (which they did) way above market and have them rot somewhere. They will then clamor for more of the same. It's not quite like blowing up FEMA trailers with bombs (see Iraq) but it's almost as good.

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