I don’t follow the economic scene very closely, so the NYT report on prospects of a second, far larger American wave of home mortgage defaults came out as complete surprise to me, and a disturbing one too. I remember watching the housing boom helping the US economy ride out the aftereffects of 9.11 and arguably put George Bush over the top in 2004. I used to wonder how long capital gains for homeowners could continue to outstrip economic performance. The bet turned out badly for the sub-prime market; now, the horror show is coming to the rest of the home loans market.
Are we in for an even bigger shock to the financial market?
4 comments:
The answers to your questions are:
1) Yes
2) Nouriel Roubini of NYU and others
3) Yes
Is that why your hands are clasped in prayer? I'm almost sorry I asked.
On the bright side, it may not be worse than the 1930's.
Now that's reassuring.
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