Tuesday, August 19, 2008

They still don't get it

The Countrywide written and paid for housing idiot "owner" bailout bill contains what appears to be a $7500 tax credit for new buyers. Anyone with an IQ over 70 can tell it's not a tax credit at all, but a loan that has to be paid back. So if I understand this correctly, the housing crash is occurring because people borrowed too much money to buy houses they could never afford. So the solution to the housing crash is for the government to lend even more money to people. Yep, that makes a hell of a lot of sense.

At least it's nice to see the MSM is finally, after about 3 years, starting to catch on. The housing crash is nowhere near finished. Gimmicks like a $7500 loan will not to anything. They haven't fully caught on though. They still talk about a "soft" housing market. And talk about ideas that will "jump start" the housing market. What they still refuse to accept is that the housing market will continue to crash until prices get down to historical norms. That means home prices at 3 to 4 times income. Right now that ratio is still around 5 to 6 times which means prices have a long way to go before the bottom is reached.

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