The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: BWAC who wrote (181104)	2/1/2009 6:20:52 PM
From: MulhollandDrive	Read Replies (2) of 306849

can't be done....you are pushing on a string how do you 'target velocity'? first of all, the banks are insolvent... they aren't loaning because they have to raise their reserve capital (a moving target because existing bad loans are getting more and more impaired while new bad 'assets' are floating to the surface) and even should they achieve the necessary reserve capital requirements by shunting off their toxic assets onto a 'bad bank' courtesy of the taxpayer they will not lend money according to the type of lending standards (used loosely) that fueled the asset expansion (the bubble which has begun it's collapse) because "it's the borrower ,stupid" demand is drying up and the marginal borrowers will have very limited access to loans, iow we pushed forward today's demand years ago during the boom and the overhang of debt has two outcomes, either pay it down or default

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