Credit Crisis-Simplistic but well done

[byrontx]

http://themoderatevoice.com/26612/the-crisis-of-credit-visualized/

It's refreshing to see something that doesn't have a spin to it but, on the other hand, it doesn't propose a solution. I don't think we can fix the finance system without stabilizing housing first. We have to dance with who brung us.

[Nbadan]

It is one of those chicken and egg scenarios, huh? Blah, there will be plenty of potential new home-buyers if the banks loosen up spending (under tighter lender standards, of course) and the govt just helps them deal with their current credit situations (i.e. deferments on student loans, and interest rates on credit cards and help with money down, which is a big part of the current bail-out law)...but if there's no money to borrow without huge money down you can forget any quick recovery in the housing market....

[Wild Cobra]

We have to stop fighting the natural market forces. The housing market will never work until supply and demand pricing stabilization is achieved. Speculative buying (flipping) etc. drove up prices way past what was reasonable and with empty houses, more were built. Now we have an excessive over supply of houses.

One solution would be to bulldoze down empty houses, stabilizing supply to demand. Otherwise, we just have to live with the fact that until we populate the empty houses, pricing will remain low.

This is not just about owner occupied houses. There are rentals too. It doesn't hurt the market as a whole that people rent rather than buy. We should not be putting any money into it. Let the banks and people lose their homes and the market will fix itself. Cannot afford to buy, there's a rental out there somewhere.

[byrontx]

True that. The build quality of some of these houses is such that bulldozing is a mercy killing.

[Nbadan]

Bulldozing is idiotic...