The final bell for America's speculative economy: Here come the foreclosures

As I have been saying for quite some time, real estate has to take a hit at some point soon. As this article notes: http://biz.yahoo.com/ap/070313/late_mortgages.html?.v=11, that time has come.

It seems now that the other shoe has dropped. A deficit crazy government, selling off manufacturing capabilities, leaning on a real estate market and new construction for its economic bread and butter was bound for disaster. If it continues to slide there goes the whole enchilada. Imagine all the services that people in those homes keep afloat. All the landscapers, maids, nannies, and other associated service people out of work not to mention the indebted losers applying for bankruptcy. All of whom will be spending little due to their hardships. First comes a stock sell off in speculation and then as the foreclosures come in a bigger stock sell off, and banks closing. Once the banks close the Federal government will have to insure the money for all those in the bank and then pass some restrictive laws to stop the bleeding. Meanwhile more people go on unemployment, crime rises and the seams of society start to burst. Businesses close, etc.

As a member of Gen X that hasn't totally sold out or turned my life into a total working nightmare, the prospects of owning a home on my earnings has been far fetched to say the least, but it seems that didn't stop a great many people who thought it would be Ok to get any adjusted rate mortgage or sub prime rate to finance their dream home. "Credit problems, don't worry" the ads say welcoming any idiot not cleared to balance their own check book, much less handle a mortgage on their own.

In short the people in trouble were sold a bill of goods by banks that can't regulate themselves, and frankly were encouraged to lend to people who spend too much. One comment by Jeffrey Kirsch, chief executive at American Residential Equities, who said: "Once politicians get involved, it will take out a lot of home buyers and affect people's ability to refinance." says it all as far as banks and fronts like ARE say to thwart intervention that would save the systems he says in danger from looming government oversight. What's in danger is their profit plain and simple. What needs to end is the availability of credit to ruin people's credit history in the first place, and then they wouldn't have to borrow at sub prime rates. Many say that it is the individual's failure to act responsibly in these cases and I disagree. I think banks prey on the weak or inexperienced as the IMF and the WTO prey on weak countries. They give them loans at based ridiculous terms and then start to get the individual or the country into a position of servitude. The only problem is when they gave too much out to losers and irresponsibles and then the whole house of cards come tumbling down.

Really what is happening that is well reported in the current stories in the Financial Times or Yahoo! Financial is the rising cost of living that is exasperating these home owners, an issue that is only really being discussed by Congressional leaders like Jim Webb of Virginia, Ron Paul of Texas, and Chuck Hagel of Nebraska. The foreclosures are just a symptom and a red flag of tough times ahead, the real problem is the fleckless, shallow, cardboard domestic economy we have created, an economy that runs on surplus goods and immigrant labor. One that also uses subliminal advertising to entice people to buy things they cannot afford. And as we keep off shoring professional jobs who's going to contribute the consumer economy? No one. We'll all have nothing soon, and maybe it's about time. With the government extolling the virtues of an over zealous and callous free market system abroad maybe it's time for a wake up call for America, in fact I know it's one.