The Church of the Fed: Praying for Rate Cuts and SoCal Short Sales
As many of you are now aware, the economy slowed to a dismal forth quarter edging up only 0.6%. Of course the technicality of being in a recession has been played down by many well doers that seem to have a Kevlar vest protecting them from the real issues that many Americans face. The Fed is walking a very fine line and each and every rate cut that they propose, only makes them seem more and more like a tool of Wall Street and are at the behest of serving power brokers. Major banks say jump and the Fed says how high. However if it has not becoming glaringly obvious to you, these cuts are working less and less each and every time. Each vague hint that the Fed gives about cutting rates and injecting liquidity quickly dissipates like a junky high. First, the market rallies thinking this will be the HGH that will boost housing into super stardom. After a brief moment of ecstasy, the reality sets in that we have spent way beyond our means and a correction is simply necessary. It is odd this avoidance of reality. Debt does not equal wealth.
Case and point. Foreclosures jumped an amazing 75 percent in 2007. More than 2.2 million foreclosure filings occurred on 1.3 million individual properties. This number is simply staggering given that in 2006, 0.58 of all households found themselves in foreclosure while in 2007 the rate doubled with over 1 percent of households now reporting some stage of foreclosure. When last year, all eyes were heavily fixated on the amount of rates resetting we have suddenly gone into a housing free for all where rates are being slashed haphazardly, credit shenanigans are exposed on a weekly basis, and Real Homes of Genius are still popping up everywhere. Let us take a look at the mortgage reset chart:
http://www.doctorhousingbubble.com/the-church-of-the-fed-praying-for-rate-cuts-and-socal-short-sales/