Wednesday, March 4, 2009

US Housing Crisis 'Exaggerated'

So much for the Doom and Gloomers from this administration who have constantly lied. Yes, I use lied because "stretched the truth" would be to gentle and I am not in a gentle mood.
I wrote some weeks ago about the fact that we are constantly being told that we are in recession and on the brink of depression because of the housing crisis and I called it as it was at that point a pile of barnyard bovine excrement which shall in the future just be called a pile of pelosi since she is as responsible for these lies as the Occupier in Chief and I believe it to be fitting and not insulting to our bovine friends.

Today's blaring headlines , at least on- line , at saying that the new spending will help 9 million homeowners to stay in their homes. I have yet to see the numbers presented in any realistic fashion by this administration. The tax dodging head man,Treasury Secretary Timothy Geithner said in a statement : "It is imperative that we continue to move with speed to help make housing more affordable and help arrest the damaging spiral in our housing markets," What spiral? As you will see in the following paragraphs that spiral is not a nationwide problem but yet the doom and gloomers of this administration continue to use scare tactics to push this country further down the road into total socialism. They need to SHUT UP about how bad it is and do as Reagan did and talk about the ingenuity of the American people to pull the country out of recession through hard word, less government interference and more money in their pockets.

The next headline was 1 in 5 US mortgage borrowers are underwater. I will give this article credit for presenting the same facts that I found in the Australian News this morning.

So far I have heard nothing in the LSM (Lame Stream Media) that gives the full overview as does this article. Of course they are in the tank with the administration and only report what they are told to report and that is doom and gloom. It keeps the Chief Occupiers poll numbers looking good which otherwise would be tanking as fast as Wall Street every time he opens his mouth or passes another useless spending bill.

Here is the article. Judge for yourself and you will see that the American people are being constantly lied to about the so called housing crisis in this country in order to advance the socialistic agenda of this administration.

US housing crisis 'exaggerated', focused on only four states

Geoff Elliott, Washington correspondent | March 05, 2009
Article from: The Australian

THE breadth of the US housing crisis for the average American is being overstated, according to a study released yesterday.

While foreclosures have booted millions of Americans from their homes, the study from the University of Virginia shows the trouble is mostly focused on four states -- California, Florida, Arizona and Nevada -- where home prices were the most overheated in the US housing boom.

Although there are pockets of substantial declines,claims that overall housing values have plummeted nationwide are exaggerated, they say. "In the Washington, DC metropolitan area, for example, prices have barely changed," the authors wrote.

In the University of Virginia study of 50 states, 35 metropolitan areas and 236 counties, the analysis indicated that "66 per cent of potential housing value losses in 2008 and subsequent years may be in California".

Then there was another 21 per cent in Florida, Nevada and Arizona -- meaning those four states made up about 87 per cent of national declines.

"California had only 10 per cent of the nation's housing units, but it had 34 per cent of foreclosures in 2008," say the report's authors, William Lucy and Jeff Herlitz. They say California was vulnerable to foreclosures because the median value of owner-occupied housing in 2007 was 8.3 times the median family income, while the 2007 national average was only 3.2 times higher than median family income.

Another vulnerability to foreclosures was seen in the Los Angeles metropolitan area, where over 20 per cent of mortgage-holders in each county were paying at least 50 per cent of their income in housing-related costs.

They add that the number of foreclosures usually were lower in central cities than in some suburban counties, probably due to less demand in those suburbs.

The study notes the huge run-up in housing prices in California created opportunities for large gains for home buyers if price increases continued. "Thus, more households may have been attracted to potential gains, worried, perhaps, that they would be priced out of the home buying market if they did not act quickly," they said of the speculative bubble that emerged. They added that lenders such as former US mortgage giant Countrywide, which specialised in no-principal, interest-only and no-income check loans, got their start in California and focused there.

"But even in California, enormous variations existed among jurisdictions, such as in the San Francisco area, where (the outlying) Solano County had 3.69 per cent of housing units in foreclosure in November 2008, while only 0.24 per cent of housing units were in foreclosure in the City of San Francisco -- a 15 to 1 difference," Lucy and Herlitz say.

And of the financial crisis, the authors note that potential losses in housing values from 2008 foreclosures in all 50 states -- if values decline to 2000 levels -- were less than one-third of the $US350 billion provided to banks and insurance companies to cope with losses in mortgage-backed securities, Lucy and Herlitz add.

"Damage to the balance sheets of large banks and (insurer) AIG occurred not mainly from losses on foreclosed residential mortgages, but because of borrowing short-range to buy long-range derivatives and from selling credit default swaps insuring derivatives backed by mortgage payments," they write. "These financial manipulations had high-speed forward gears, but when the housing bubble burst, the banks and AIG discovered they had neglected to create a reverse gear with which they could separate foreclosed properties from some forms of mortgage-backed securities."

So now in tribute to the passing of a great man and news journalist, Paul Harvey, Now you know the rest of the story.


Anonymous said...


What he says may be true but far worse is " The Helping Families Save their Home Act" . It is an obamanation.

Here is a study on it by the Heritage Foundadtion.
Problems with Cramdowns

Oh and courtesy of the Tennessee GOP

Honk If You're Paying My Mortgage


Brenda Bowers said...

Now the MSM is using the word Depression to describe what is happening. It was as bad in the 1980's and I didn't hear or read any of this kind of talk. In the Tampa Bay area people bought homes that were so overpriced one had to gasp as the audacity of the builders asking these prices. The the bottom fell out and people could not sell their homes for anywhere near enough to pay off the mortgages. there were streets of a literally abandoned newer homes!

The difference now is the joyride with derivatives the financial sector took with the mortgages. And the American auto industry has finally taken it's last breath which is not a surprise since it has been coming for decades when as arrogant Americans they refused to change to the consumers wants. All that had to be done was to allow all these businesses and their investors to take their lumps.

Nothing but more and more bad news. BB

Mustang said...

While making my rounds today in the blogosphere, I came across an interesting dialogue, which included one individual writing, “I resent the remark ‘Obama won because of hype and nothing more,’ because it insults my intelligence. I, in fact, did a lot of research on the guy, his plans, and his record. You may not like the decision I came to, but it was hardly hype that swayed me.”

Naturally, I’m wondering what Obama record could have possibly persuaded her. Moreover, what possible Obama plan could possibly inspire anyone but a devout communist?

We cannot be surprised by Mr. Eliott’s revelation, particularly when Ram Emanuel’s recent revelation that “We should exploit every crisis,” combined with the easily observable fact that the comment comes from a page out of the socialist/anarchist writings of Saul Alinsky, who believed that political success come form creating a serious social crisis, and then capitalizing on it.

This country will remain in grave jeopardy for as long as most Americans remain pathetically under-educated.

Z said...

If we don't finally get a really good dose of OPTIMISM and WE CAN DO THIS type of talk, America's economy will never recover.

I can only speak for California, but I will say the housing prices were SO inflated for the last few years that that in itself might be prompting the down market...HERE.
The chickens are coming home to roost. Plus, a LOT of short loans with balloons, etc.

I believe it was Glenn Beck who said "You want to see the market go up 1000 points in a day, say "no cap gains, we're lowering taxes, leaving deductions in (a secret even Obama lovers will HATE is that a lot of our deductions are going...hence the MIddle Class WILL pay higher taxes, it's just not billed that way!),..etc." So far, that's not happening...they think GLOOM/DOOM is the way to go so they can drive us so far down we'll be screaming for REDISTRIBUTION and FREE HEALTH CARE>
Sorry for the's just so upsetting.

Thanks for your piece..I believe you're right about the housing market....

Ticker said...

Z, I would love to present more optimism but each time I do the Occupier in Chief does something else stupid. I just try to present some facts that will shed some light into the gloom pasted upon us by "the One" and his minions.
Until the people wake up and throw this impostor out the gloom will continue and the doom may arrive dressed in the suit called Change, the change however that we can all do without.

The Logistician said...

According to USA Today, 50% of the housing problems are in 35 counties. Here's the link to the article:

Non-political and non-government types claim that the housing problem is a relatively small part of the problem. They point to three basic things which led to the current situation:

(1) overleveraging. Not 1:2. or 1:3, but getting up to 1:13 and 1:20. The wealth just wasn't there to gamble with, but people were gambling with it and the intermediaries were making money ON THE TRANSACTIONS;

(2) the unrealistic ratings of companies by the ratings agencies. Some suggest that only 6 - 10 US companies legitimately deserved the ratings that they received, not the 500 with high ratings which existed; and

(3) a third factor which requires a little explanation, because I did not previously understand it. Banks regularly borrow from other banks back and forth on a short term basis. They generally know that the other bank will be good for it. Once credit freezes, then banks stop lending to one another, and consequently stop lending to consumers and businesses, due to uncertainty. Everyone now is in a Mexican stand-off. Credit needs to be fluid.

This whole house of cards, going back roughly 30 years, collapsed. This country (households, government, and companies) lived beyond its means for a long time, and other countries were willing to finance that because they wanted to be in the boat with the US.

This created a credit bubble (too much money chasing too few assets which resulted in an unrealistic and dramatic increase in price). When it unraveled, the economic meltdown occurred. The DOW and the NASDAQ never should have been at the levels they reached. It was all "fictional" and not based on real assets.

Everyone just kept ignoring the thin ice, and kept walking on the frozen lake hoping that the ice would not crack under them. The ice finally cracked.