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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: John Chen who wrote (93299)	10/29/2007 10:56:22 PM
From: ChanceIs	Read Replies (2) \| Respond to of 306849

>>>Printing money is the only way, or surrender.<<< There are reasons not to do that: 1) moral hazzard, 2) send crude oil through the roof - induce recession, 3) Tank dollar - start investment flight - induce recession, 4) send long term treasury rates through the roof - induce recession. How will lower rates save things if: 1) people lied or did the "stated income" thing to begin with, 2) they took out reasonable loans but the house price dropped and they can't take cash to the refi, 3) if credit is shrinking - and it is - the loan money won't be availble even if the government drops rates. In Japan it sat in the bank vaults collecting dust, From Christopher Whalen's address to the AEI: Conclusions • The subprime mortgage bust stems primarily from a deliberate public policy decision in Washington to expand access to “affordable housing.” Consumers responded, taking $9 trillion out of real estate over past decade. (3) • Efforts by the Congress to reduce the rate of mortgage defaults and foreclosures, or encourage private loan modification, are futile at best and may actually worsen the adverse effects on borrowers, bank safety and soundness, and the US economy. aei.org