Busted: Bankers and The Global Economy

January 15, 2009

Housing Correction Undermined by Foreclosures

Rapidly rising unemployment and a shortage of mortgage credit to new buyers is seen driving future declines in prices. Another factor that is being largely ignored should have government policy makers shaking in their economic boots.

housing-correctionUnemployment is going to soar in the course of this year and it’s going to increase into the first quarter or even into the second quarter of 2010. The housing market is going to see a tough year through 2010. A commonly overlooked factor is the continuation of rising foreclosures. Continued foreclosures and lack of government response will make economic matters worse by undermining the housing market and the pricing correction underway. The latest theory is that bailout of the foreclosure crisis is essential to avoid continued contraction and freefalling housing prices. They aren’t half wrong. ~ E. Manning

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