What about all the people priced out of the market particularily young people who should be first time homebuyers but cannot afford $300,000 condos or $400,000 townhouses or $600,000 single family homes?? Where's the outrage there? Those are the asking prices in Maryland and Northern Virginia. Few can afford these without ARMS or interest only loans. Why not have prices of homes be within reach for the majority of Americans and not into some gambling ursury game?

As of today, all mortgages will be canceled and clear title will be given to all homeowners. (Sigh...)

The starling propoganda victory is the idea of the American Dream, as if owning a place to live is something to imagine and hope for instead of a basic right for all Americans.
It's insane, BMWs whiz by on Rt 28 while house after house is foreclosed in Sterling, VA. The American reality of the haves and the screwed.

Watching CNN's nearly endless coverage of the wildfires in California today I can not help but notice the complete lack of questioning of if these houses should have been built in environments subject to high risk of fires. Also the development of ocean front housing on barrier islands in hurricane territory is another expensive disaster waiting to happen.

Environmentalists have been warning against over development in fragile or hostile environments for four decades but it seems that the developers always get the permits somehow.

And how is it that a fire in Malibu is so much more important than a tornado in Nappanee Indiana? CNN couldn't even be bothered to correct the spelling of Nappanee on their graphic. Of course the images of shattered factories and RV's and vacation trailers scattered like matchboxes did indicate that the people affected were lowly labors instead of the privileged residents of Malibu.

In the post industrial towns of America's Midwest houses routinely sell at Sheriff's auctions for $30,000.00 but finding a job that pays over $8.00 an hour is a challenge. This shift has all happened since NAFTA, in the early 1990's Indiana had a large and thriving Antiques business that catered almost entirely to the Middle Class, today there are less than half of the shops that existed in 1995. The Antique business here in the Midwest was funded entirely by discretionary spending and as the Middle Class lost income so did their spending on luxuries.

The economic policies of the NeoCons seek to transfer the wealth of the Middle Class and working poor to the elite, since the biggest investment of most of the Middle Class is their home the value of that investment had to be destroyed. The housing bubble and the loan policies that created the bubble have succeeded at destroying the value of millions of Americans largest investment.

There has to be an underlying economic explanation for this event.

I have informed that there was a lot of free cash floating in the market in the early 2000s. Was this purely because of Greenspan's low interest rate? I don't understand it. Did the Government just print more notes? Where is the wealth coming from? yesterday we I read (on this web site, I think) that there were 184 new billionaires in this country and a lot more poor. How did this people get so rich? Were they just doing what they were doing? Launching a new enterprise? Who bought their goods to make them rich?

I moved from an area where I could buy a gallon of milk for $ 1.77 on average, to one where the same gallon is never less than 4.50.

I was told that it is what the market can afford.

Did the specualtors at Pulte figure out that they should price the houses they make at $400,000 because that is what the market can afford? Come on!! When did the price of labor and materials get so out of whack?

ezflyer: I wouldnt' like that, since I bought responsibly within my means, a fixer-upper in rough shape and a much longer work commute than I would have liked. If I'd have known the government would bail me out, I should have bought in way over my head, in a more desirable location, better house condition, etc.

There will be no easy fix here, since the damage has been a decade or more in the making. They'll need do lots of things. Strict regulation on the usury industries and speculators being first and foremost.

"The starling propoganda victory is the idea of the American Dream, as if owning a place to live is something to imagine and hope for instead of a basic right for all Americans."

Just curious, in what world was home ownership ever a right.

www.patrick.net an excellent housing bubble resource!

The mainstream media has recently been passing on Bushco propaganda (press releases) on a daily basis keeping us all up to date on the "Subprime mortgage crisis". They never question the term or the concept. They just keep passing it along as fact. Groupthink at its finest.

Although subprime mortgage defaults make a great boogeyman and scapegoat, they are actually just one of the many symptoms of the real problem...devaluation of the US dollar.

By understating inflation and thereby justifying very low interest rates during the past six years, Bushco and the Federal Reserve set the US dollar into downward spiral that assures the US will rapidly acquire more characteristics of a third world nation.

"By understating inflation"

How exactly did they do that?

jakenewton,

Home ownership was a right for basically all human societies prior to their conquest by a warlord (proto-capitalist) or Emperor (proto-statist). If an outside entity tried to force you off the land, you fought back. That was the basic human pact in place everywhere.

Watch Akira Kurosawa's "Seven Samurai".

"Home ownership was a right for basically all human societies prior to their conquest "

Maybe I misunderstand you, are you saying these people were able to own a home even if they could not pay for it then I say BS.

You do misunderstand me. Pay isn't really required when construction was simple, and people were not denied raw materials as they are today. The Amish generally raise a barn today without what you call "pay."

As for owning it, but not being able to "pay", then you must be in agreement with me -- that the great majority of Americans and Europeans owns squat. Until you make that last payment on a mortgage, the bank owns it.

"You do misunderstand me."

Well, you did use the term "right".

"The Amish generally raise a barn today without what you call "pay.""

I live in Amish country, you may be surprised to know that the Amish are some of the biggest champions of Capitalism going.

Owning your own home is way overrated anyway.

Paul said:
"ezflyer: I wouldnt' like that, since I bought responsibly within my means, a fixer-upper in rough shape and a much longer work commute than I would have liked. If I'd have known the government would bail me out, I should have bought in way over my head, in a more desirable location, better house condition, etc."

If they can give hundreds of billions in handouts and bailouts to banks and corporations, why not give a few to We the People whom they legally represent?

ezflyer: Then it should be equalized by some fair yardstick, not based on how foolish one was.

I busted my ass to rebuild my junker home. If someone who borrowed insanely gets a big bailout, then give one to me also. He can bail out the speculated value of his real estate and avoid foreclosure. I'll buy a new boat with mine, and pay cash outright.

"If they can give hundreds of billions in handouts and bailouts to banks and corporations, "

If you are reffering to the injections of liquididty as a "bailout", I don't see how that singles out any one business.

The message we're getting from power is that the poor don't benefit from housing at all, they don't deserve it, nor health insurance. Low income shouldn't own.
Dogs are sometimes housed better. Indifference today doesn't compare favorably to the towering concrete complexes of the 60s, it's hard to see any improvement has been made, the poor now are under even greater attack. The poor can be usefully exploited with loan sharking, business has always boomed around shark like debt, with blame being pushed back onto the victim, as is always the case.

No jobs,No education, No insurance, No house, No retirement.
That is the preferred status of the poor and now the middle class by this administration. Ok for your kids to go fight their war though.

Paul B. said:

"ezflyer: Then it should be equalized by some fair yardstick, not based on how foolish one was."

Certainly. Though it seems the more foolish the bank or corporation, the more bailouts and handouts it gets.

"Though it seems the more foolish the bank or corporation, the more bailouts and handouts it gets."

What specific bailout/handout are you reffering to?

jakenewton: The writing is probably on the wall that whoever is "allowed" to get elected in '08 must be the one to write an S&L style bailout check to the FIRE industries (finance, insurance, real estate).

Either a crime was committed with the lending/usury economy or not. If there was no crime, the government shouldn't do anything at all: basic market dynamics coupled with foolish buyers. Let the market adjust itself. But if there were crimes committed, people should serve jail time and bank assets should be siezed.

I'm really unsure how "bailout" fits into the picture. Clearly, though, government was asleep at the regulatory wheel. So the first crime was probably one committed in D.C. through negligence.

"The writing is probably on the wall that whoever is "allowed" to get elected in '08 must be the one to write an S&L style bailout check to the FIRE industries "

Not sure I agree with that but interesting.

"If there was no crime, the government shouldn't do anything at all: basic market dynamics coupled with foolish buyers. Let the market adjust itself. But if there were crimes committed, people should serve jail time and bank assets should be siezed."

Of course, on both scenarios.

I bet that whoever comes to the White House in '08 will be issuing a huge check to the FIRE industries, courtesy of the US taxpayer -- another orchestrated failure (not at all accidental) like the S&L's. They nail us coming and going.