Slow Crash is a Myth
The fact that bankers and large investment firms have lost huge volumes of money in the recent housing decline, indicates that this crash was a surprise for everyone.
Just as there is often little time to react prior to a car or other vehicle’s crash, the latest financial trouble has left the country severely injured and unprepared.
Even the Fed is unsure how to react, with their daze being mentioned in article by Eric Janszen:
If slashing the discount rate half a percent ten days after hoping that the markets might self-correct appears flip floppy, remember that the Fed considered rate hikes as recently as May when inflation remained the Fed’s predominant concern. Investors have reason to worry that this Fed does not know how to apply, now that the fire is burning, what it learned during the drills.
With the crash comes the question many homeowners are asking: “What Now?” Receiving a 2nd mortgage is now difficult to accomplish, and will likely get increasingly so as more lenders close, rates increase, and the few lenders that remain tighten their belts to avoid ever being hurt again.
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