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classic time bomb

“The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” Kevin Katari of Watershed Asset Management, told The New York Times.

This new year will be a clean slate for many but not for the USA. There they have way too much baggage (ie. debt). To say that the new year comes with much hope as the old year passed would be irrational because the US has way too much debt still pending. Indeed, 12 trillion dollar debts are not so easily swept under rugs. Obama did not do the right thing when he took the path to deny the problems. Instead, he should have let the natural fallout happen to the companies involved.

For some reason he thought that he had to support the rich and elite who admitedly funnel most of the money used to run elections in the USA. He basically caved into his own need for money. He made a lot of speeches and then did exactly the opposite of what he promised he would do in his election platforms. He has been a real loser in this and it will stick to him and will not help him get elected a second term. This is said because by the time elections come around the world will have laid waste to the great US dollar and the lifestyles of the people there will take a huge hit. Where now we see things cheaper in the USA they soon wil have to climb much higher.

Oil prices, for example, will be very much higher, and if the Euro displaces the USD as the currency used to set prices, then the USD will fall the way of the dinosaur. It will not be the end of the world but if you remember when the Canadian loonie was at near 60 cents, all the Canadians had to face reality and pay more for things. That is what is going to happen in the USA in the next 2-3 years and it will all be just in time for the next elections for president. Now we all know this will be a great blow to the USA. If you can see to the future with some imagination, you wil see the next phase of this playing out the way those rich elitist want it to and that is “blame the black guy” for ruining the economy and doing such a bad job.

Shiller, Case: Prime Mortgages Are Next Time Bomb

Thursday, 07 Jan 2010 By: Dan Weil

Real estate gurus Robert Shiller and Karl Case say the mortgage crisis will now spread even to homeowners with strong credit scores. [Video]

The two co-founded the S&P/Case-Shiller Home Price Index. Shiller teaches at Yale and Case at Wellesley College.

“There will be continuing foreclosures, and not just subprime, it will be prime mortgages,” Shiller told Bloomberg.

“This is creating a huge shadow inventory of homes that are still owned, but they’re going to be on the market in the next year or so.”

Already, the amount of prime mortgages overdue by at least 60 more than doubled in the third quarter from a year earlier, according to government data.

Unemployment, now at 10 percent, will lead to more defaults, the two experts say.

“Unemployment is not respecting income boundaries,” Case told Bloomberg.

“It’s affecting rich people, poor people and middle-income people, and they all have mortgages.”

To be sure, Case isn’t completely pessimistic about the housing market.

He sees a good chance that last year’s rebound will continue.

Home resales have surged, while new home supply has plunged.

“That’s taking some of the pressure off,” Case said.

Others are more pessimistic, saying the Obama administration’s mortgage relief program will make things worse.

“The choice we appear to be making is trying to modify our way out of this, which has the effect of lengthening the crisis,” Kevin Katari of Watershed Asset Management, told The New York Times.

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