U.S. homeowner woes felt around world

[rodeodance]

Source: ap




U.S. homeowner woes felt around world

By MATT MOORE, AP Business Writer Sun Aug 12, 4:45 PM ET

FRANKFURT, Germany - The latest crisis in financial markets has once again served as a reminder of how vital and interconnected the health of the U.S. economy is to that of the rest of the world.

From New York to Frankfurt to Tokyo, markets were jolted in the past week by fears that Americans are failing to keep up with their mortgage payments and the ripple effects that could have on the global banking and financial system.

The fallout could further depress U.S. housing prices by making it harder to find buyers for a glut of foreclosed homes. That, coupled with a drop in the value of investments, could leave U.S. consumers feeling poorer and less likely to spend on domestic and imported goods.

"The sharp falls in global stock markets obviously affect consumer wealth, which again could dampen spending," said Howard Archer, chief British and European economist at Global Insight.

Read more: http://news.yahoo.com/s/ap/20070812/ap_on_bi_ge/global_contagion;_ylt=AhEUoidoCWjSCfRpgGI.M.Gs0NUE

[rodeodance]

1. its embarressing

[Xenotime]

8. exactly...we are supposed to be the "best" country in the world...

and our own citizens can't even afford homes...

[Speck Tater]

2. If I were a European financier...

I'd be looking for ways to cut the European economy free of any dependence on the US economy. If the US economy keeps on violating the trust other nations have put in it, the US economy will become irrelevant as more of the worlds other economies untie the strings that bind them to us and set us free to sink into economic oblivion.

[Deja Q]

3. Yet they will still deal with the same corporations that are appearingly hurting us...

That makes as much sense as "We hate you America, but we love your jobs - thank you very much for them!!"

We're a global economy. Like it lump it.

:shrug:

[sam sarrha]

4. So... what special deregulation was done after some campaign contributions..RICO !!! BRIBES .. Inves

Investigate convict stop this Mafia Bu$h BULL $hit

[JDPriestly]

5. Does this remind you of the S&L crisis?

Same scenario. Fool around with interest rates. Create certain expectations in the housing market. Pull a sudden switch in the rates, and watch the consumers and the lenders at the lowest level of the lending food chain cave. Then, of course, the government steps in and sells bundles of properties at low cost to the lending institutions at the top of that food chain. Just you wait, there will be guys like Neil Bush who end up carting away millions. But the real winners will be companies who buy the carcases of the low level lenders -- the lenders who bought and sold the foreclosed mortgages and who will have to choose between being eaten by the big lenders or going bankrupt and being the equivalent of foreclosed themselves.

I have asked myself many times whether the S&L crisis was a set-up. This one may turn out to have a more limited effect, but some will end up very, very rich while others will end in ruins. Similar scenario. The details of the two crises are very different. But the end result, the general flow of the events and the inevitable result -- very similar. The rich will get richer; the poor will get poorer. And the Bushies like it like that.

[MissWaverly]

6. Kenny Boy economics

create a strategy that is basically ripping off large numbers of people, make millions while those who have invested in you
lose everything, oh, and lie a lot. Wasn't Kenny boy the one that championed the deregulation of the utility companies.

[JDPriestly]

7. It is the same game over and over. We little guys have no control.

We are pawns. And the fools vote for the idea of deregulation. As if the promise of less government would help the Republican fools at the lower end of the economic scale when they get their parking tickets or try to run their businesses in competition with the Walmarts of the world.

Hopefully, we will get a real Democrat as president the next time around -- Edwards is my favorite. He would have no fear of enforcing regulatory laws.

[MissWaverly]

10. Utilities should be regulated

there was a study done by several states 2 years ago that proved that there was no natural gas shortgage, consumers
were bilked out of thousands of dollars on winter fuel bills.

[slackmaster]

11. Sort of - Don't forget the provisions of the Tax Reform Act of 1986

- Top tax rate was lowered from 50% to 28%

- Bottom rate was raised from 11% to 15%

- Deductibility of consumer loan interest phased out over a 3-year period

- Income averaging (to smooth out tax burden for people who had seen unexpectedly large increases in income) was eliminated

- Home mortgage interest deduction was increased

- Investment incentives for rental housing were phased out

- Many tax shelters for passive activity were removed or reduced

The package helped set the stage for the S&L crisis, which I experienced personally. During the late '80s it was mainly high interest rates that kept me from buying a home. Now (if not for the fact that I already own one) I couldn't afford to because of the prices.

The rich will get richer; the poor will get poorer.

Yes, and real wealth seems ever farther away to working schmucks stuck in the middle like me.

[David__77]

9. I hope the prices "collapse."

It's the only solution. I know that it's distressing to those who want to to view their homes as a shorter-term investment, but it's more important that the integrity of the housing stock be assured. The current situation is not sustainable. There is no match between supply and demand at current prices, which is why there is such a large inventory of properties accumulating; but, surely enough, equilibrium will ultimately be restored per the "invisible hand."