Regular readers know that I have been harping on the likely collapse in housing since this blog began. At this point I am hardly an outlier in being concerned, which means now the politicians and experts are ready to ride to the rescue. Proposals to increase regulation, bailout mortgage insurers, banks and even homeowners are being floated. Alan Blinder wants to bring back the 1930’s era state owned mortgage business.
Most of these proposals ignore that the real problem isn’t falling prices, or non credit worthy borrowers, but that housing needs to fall in price in many areas. Thus plans to stabilize the housing market, and cost estimates assuming such a stabilization, are likely doomed to be disasters, not to mention how bad it would be if they were successful longer term. We may be buying an expensive method of merely stretching the pain out. The cure to this crisis is falling prices. Politicians however, don’t like the medicine.
Anyway, to catch up on all these proposals, the state of the market now, and various amusing aspects of this whole mess, I have a large roundup of links, observations, and plenty of visual data for the curious.
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