David Westerfield

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Tag: mortgage


Paper: Nearly One-Third Of All Mortgages Are Underwater

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On August 17, 2009

In Economics

Apparently, we have not yet come to the end of the foreclosure mayhem, and therefore, the stress on banks, and therefore the rest of the economy, including the Fed, government and taxpayers. On top of the potential landslide of commercial real estate foreclosures expected this fall, it now appears that about one-third of all mortgages in the U.S. are now underwater (meaning they are on the path to foreclosure or are in the process). Many of the things Peter Schiff and Gerald Celente were saying earlier this year are now coming to fruition. And as Biden said that they “misread how bad the economy was,” well, that appears to be exactly the case. What we have been seeing in the markets since March or so has been a bear market rally it appears.

If Celente’s and Schiff’s predictions hold up, we have years to go before it gets any better in the economy. Just as in the Great Depression, government intervention didn’t fix the problem, it just prolonged it and kept us from a solid recovery. The only thing that got us out of the depression was production and savings, brought on by a massive war, which in Europe was greatly a product of the logical end of eugenics. History repeats itself in strange ways sometimes. This time around, we have economic calamity (like the depression), climate change (like eugenics), and an unstable Middle East (like Europe).

How Did the Economic House of Cards Fall? (MP3’s)

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On February 17, 2009

In Audio, Business, Economics, Events, History, Reviews

These two three four five six radio programs on This American Life do an excellent job of giving an on-the-street perspective from the Wall Street investors to the lenders all the way down to the individual home-buyers and finally the results of the recession in everyday life. In addition, there is a very good explanation of how banks work and why they are becoming insolvent. If you haven’t dug in to understand how we have gotten into this mess, you must listen to these programs. Excellent journalism.

More in-depth economic analysis can be found here:

(Update: 9.28.2009 – Though they don’t come to this conclusion in these shows, after much investigation and personal reflection on the events of the last two years, I have come to the conclusion that the Federal Reserve is ultimately at fault for meddling in markets, making money super cheap to obtain, and promoting an environment of pure moral hazard. Certainly, all those who took the bait, everyone from lenders, to consumers, to those on Wall Street, are all responsible in some manner. But ultimate responsibility for the over-arching cause of the crisis is the reckless policy decisions of our central bank over the last 30 years, starting with Paul Volcker (as I understand it), who is oddly one of Obama’s economic advisor’s. It is unfathomable to me that the same people who promoted reckless macro-economic policies are supposed to be the same people to get us out of this mess … by spending us even further in the hole. Unbelievable. And contrary to the assumption that “no one saw this coming,” think again … watch below.)

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