Jim Kunstler has an excellent post about the coming crash that US is facing. He talks about the complete lack of any kind of discipline that the hipocritical replubican hacks running this country are demonstrating. If you are sitting a variable rate interest only mortgage right now and you have the potential to grab any profit compared to the purchase price of your house, SELL NOW and take your profit. Put the money away and start renting. DON’T WAIT!. Before long interest rates are going to be going through the roof, and the price of houses is going to collapse. At that point you won’t be able to recover your purchase price even if you can sell. Then you will be in the hole to the bank and with recently enacted “bankruptcy reform” bill, you won’t be able to escape your debts by declaring bankruptcy.
For another prime example of the fiscal irresponsibility of the republican congress and whitehouse check out this item from Salon.com
A mess of thorny devil’s club and salmonberries, along with an old chicken coop, surrounds the 40-year-old cabin where Mike Sallee grew up and still lives part time on southeast Alaska’s Gravina Island. Sallee’s cabin is the very definition of remote. Deer routinely visit his front porch, and black bears and wolves live in the woods out back. The 20-mile-long island, home to fewer than 50 people, has no stores, no restaurants and no paved roads. An airport on the island hosts fewer than 10 commercial flights a day.
“I can take off from the homestead and walk the beach for several miles before I get to any other habitation,” says Sallee, a fisherman who also operates a small lumber mill. “There’s two main mountain ranges on the island and a big valley of forest and muskeg.”
Yet due to funds in a new transportation bill, which President Bush is scheduled to sign Wednesday, Sallee and his neighbors may soon receive a bridge nearly as long as the Golden Gate Bridge and 80 feet taller than the Brooklyn Bridge. With a $223 million check from the federal government, the bridge will connect Gravina to the bustling Alaskan metropolis of Ketchikan, pop. 8,000.
All this is happening while we have squandered $300 billion in Iraq, with no end in sight.
Economists have been worrying about this for years now. Have you heard about Fannie Mae’s current financial condition? They are at risk of being de-listed by the NYSE, but the consensus is the NYSE can’t, b/c the bubble will burst if they do. Fannie Mae is in the process of restating earnings for the past several years, and the acct’g is so bad they can’t even say when they’ll be done. Their not even sure how much cash is on hand right now. They may have overstated by as much as $11 Billion. Yes, that’s a B at the beginning of that word.
BTW, I have a Fannie Mae loan on my house from my construction project!
The only real question is when, not if. Will it be months, years, or decades before the market goes belly up?
I am guessing 12-24 months tops. Fortunately we have a fixed rate 30 year mortgage witha fairly low rate on out house and I have been making extra principal payments every months. At least in that respect we are in pretty good shape. Even though I will probably never be able to fully retire, I should have the house paid off by my mid fifties and get that out of the way.
Jim Kunstler is about a lot more than the housing crash.
Have you read “The Long Emergency?”
Housing collapse is only one symptom of a much larger issue.