What is the downside of issuing bad loans and offering credit cards to people with no income if you are not personally responsible for making up the losses? The last I checked, the people who got rich on the Mortgage Bubble are still rich, just like the people who walked away with all the money when the Savings and Loans all went tits-up in the eighties. Every time one of these bubbles bursts, a tiny class of very wealthy people walk away with not only the profits they made in the process of gaming the economy and precipitating these disasters, but pocketfuls of government bailouts and golden parachutes as well.

It is all part of a massive wealth transfer that is effectively bringing about the end to the middle class.

Happy with the REgressive tax structure our DEMOCRATIC political cabal in this State/City slapped on us over the past 20 years? You shouldn't be.

One thing that's never really been addressed is that the houses in mostly coastal US cities have appreciated far beyond the ability of most people to afford them anyway.

Traditionally, people can afford a house that's 3-4 times their gross household income. Even now with falling prices, the cost of houses in places like Hell-LAy, SF, Seattle, etc is more like 8-10 times average gross household income. In that case, it doesn't matter if fixed mortgage rates are 5.875 or 6.25 because most people will never be able to afford a mega-mortgage anyway and first-time homebuyers are locked out of the market.

Prices are going to have to fall further to bring them back into balance with most Americans reduced buying power.

We keep hearing over and over that house prices need to stabilize, but has anyone addressed that aspect of the housing crisis?

But not with America-hating Republicans.

Especially Dino Stalin Rossi and Karl Marx Rove, advisor to Commissar McCain and Reichsmarshall Palin.

And there followed another angel, saying, Babylon is fallen, is fallen, that great city, because she made all nations drink of the wine of the wrath of her fornication.
----------------> Revelation 14:8

On deck: WaMu
Economic dominoes.
See them fall!

switch to a credit union, SMCU for example. better rates, much lower risk, local ownership (the members).

Back in the early aughts, the Argentina bank runs were started when the cash machines one after another stopped putting out bills. But that was when unemployment there was up in the 30% range, not the *yikes* 6% range we currently have. If those living month-to-month paychecks stop due to layoffs and downsizing... well, I guess unemployment checks need cashing someplace too. unless, if after 7 months, even those checks stop arriving, then things will be different. Bottom line... if unemployment doesn't grow, if the month-to-month wage earner keeps earning a wage, if there is money to spend, and cash withdrawals happen from a reasonable number of atms, then all will be good.