Sunday, September 21, 2008

Two Coasts Three Perspectives on the Mortgage Meltdown

About five years ago my friend Steve and I were talking about the real estate market (in San Francisco). He remarked how absurd it is that home values can go up 20% or more year over year while actual salaries were not going up much at all. Somebody was obviously making money in real estate boom, but it was (and still is) impossible to find the actual value of the homes we were looking at.

Here are THREE articles today from the New York Times and LA Times. One about Banks and another about the people on the receiving end of our unsustainable housing market. And one about the European perspective on our financial meltdown.

The People:
The golden years have lost their glow
With home values down, costs up and their 401(k)s declining, some seniors have had to rethink retirement.

The Banks:
A $700 Billion Rescue Plan for Wall St., but Will It Work?
... The financial crisis gripping the United States is the direct outgrowth of the speculative orgy in real estate that began early this decade. Once home values began falling two years ago, the financial institutions that had poured capital into real estate confronted a very big problem.

Those pesky Europeans:
Europeans on left and right ridicule U.S. money meltdown
"Greenspan was considered a master," Tremonti declared. "Now we must ask ourselves whether he is not, after [Osama] bin Laden, the man who hurt America the most. . . . It is clear that what is happening is a disease. It is not the failure of a bank, but the failure of a system. Until a few days ago, very few were willing to realize the intensity and the dramatic nature of the crisis." - Italy's finance minister Giulio Tremonti

I kind of agree with the Euros on this one.

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