Thursday, August 18, 2005

Up to your eyeball in debt.

Another interesting AP article. It examines the first time home "buyer" in California, and the degree of leverage they are undertaking to get into the home "buying" game. A realtor is quoted as saying that "these people have seen that anybody who bought real estate in the last 10 years has made a lot of money". Half of these poor people have taken an "exotic" mortgage. I just don't understand why they don't see the dangers. I am sure the government thought they could control this bubble much better than they could control the stock bubble, but the lesson is the same. A little bit of greed is good, but once you let the genie out of the bottle, you can really open up a Pandora's box. How is this going to be reconciled? It's obvious that a lot of people, a lot of young families, are going to be hurt. Is it really worth it. We could of just bit the bullet a few years ago, have our recession and come out of it guns ablazing. Instead the government chose this path. Well we will see how this all shakes out. I cannot see a senario in which this will end without trajedy.


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