‘Unsustainable Housing Bubble Is Inflating’
by Wolf Richter
In pointing out the basic reality of the present economic condition Wolf Richter clearly is stating the obvious of our present greedy fiat economic system. It is UNSUSTAINABLE. “The home loan environment has bifurcated. Six million homeowners in the U.S. are still underwater on their mortgages, with the average negative equity a whopping 33%. Yet with home prices soaring in many cities, total homeowner equity in the U.S. is at its highest level since late 2007. That doesn’t feel like a healthy, sustainable growth situation. No wonder many lenders in both Canada and the U.S. are concerned about the risk in residential mortgages.”
Fed heads refuse to see the housing bubble, though they could see it if they just opened their eyes, and they could hear about it from mortgage bankers if they asked, just like FICO did. But the Fed isn’t in the business of looking for bubbles, and it certainly isn’t in the business of pricking them, if it accidentally stumbles into them and can’t deny them any longer. It’s in the business of creating them. And it’s good at it. This time, it only took them about six years, which must be a record.
This isn’t the first time that this sort of thing bubbled up. Just yesterday, I reported that senior bankers are “privately warning” that the record bank lending binge “should not be seen as evidence of an economic recovery.” Instead, they’re fretting about the greatest credit bubble in history. Read…. Senior Bankers Warn: ‘It’s Crazy, It’s a Boom, It’s a Gold Rush’