Cartoon: Subprime

1 in 8 Mortgages are Behind

Prime loans, however, accounted for 58% of foreclosure starts, up from 44% last year. Meanwhile, subprime mortgages accounted for 33% of foreclosure starts, down from 49%. Prime fixed-rate mortgages, usually considered among the safest of all loan types, accounted for one in three foreclosure starts, up from one in five.

read the WSJ article

US Mortgage Market

source

Cartoon: Subprime Mortgages

Karl Denninger Calls Out Press Secretary Gibbs

Rick Santelli is perhaps starting a grassroots revolt.

http://chicagoteaparty.com/


My thoughts: Gibbs might need to stay around. If is really the job of the press secretary to spin, distort and lie to the American people. He appears to be off to a great start.

Crisis of 2008: A Summary

In summary, the essence of the subprime crisis is that money was lent (often through the agency of questionable mortgage brokers) at very low interest rates (courtesy of the Fed) to hundreds of thousands of people (all they needed was a credit score and a pulse) who could not afford to pay it back; and it was backed by collateral (a house) that was not properly valued. Such assets, accurately described as "liar loans," were then packaged into opaque securities, known as structured-investment vehicles (sponsored but not guaranteed by a respected and well-known name), which very few people understood. They were sold on to pension funds, banks, and others whose gullible investment managers also did not understand them and failed to carry out the rigorous analysis that their clients had a right to expect.

read the entire essay

My thoughts: One of the best explanations of the crisis that I have seen.

WSJ on the Mortgage Crisis and Financial Crisis

But Washington is as deeply implicated in this meltdown as anyone on Wall Street or at Countrywide Financial. Going back decades, but especially in the past 15 or so years, our politicians have promoted housing and easy credit with a variety of subsidies and policies that helped to create and feed the mania.


read the article

Financial Crisis and Subprime Loans

Real good summary of the origins of the current economic "crisis". The last minute is a pure political ad.

Cartoon: Subprime Crisis

Cartoon: Wall Street Crisis

Cartoon: Financial Crisis

Mortgage Bailout

A government bailout of the housing market is both fiscally and morally irresponsible; it is an unfair subsidy being paid to the wealthy (bankers), the greedy (mortgage brokers, flippers, and yes some homeowners), and the incautious (some homeowners), with no benefit to those paying the bill (taypayers).

Why should responsible Americans be forced to pay for the mistakes of others?

from: Stop the Mortgage Bailout

The Costs of "Fixing" the Sub-Prime Mess

"The Fed is supposed to make sure the entire economy, and not just the credit markets, run smoothly.

But Fed chairman Ben Bernanke risks fixing the credit crunch at the expense of inflation and the retirement accounts of many hard-working consumers that didn't go out and get some exotic adjustable-rate mortgage to buy a home that cost far more than they could afford."

from CNN

Jim Rogers is right. The Fed has failed. They create moral hazard, bail-out stupidity, and "solve" problems by de-basing the currency and promoting inflation.

The Subprime Market in Perspective

more great charts from Carpe Diem

Cartoon: Trojan Horse

from the Big Picture

More Sub-Prime Housing Crisis

Paul Krugman on the housing crisis

Sub-Prime Housing Crisis

"As for the idiots who lent (often without down payments or documents) to the idiots who bought speculative homes, they deserve to lose. People must understand this simple fact."

from: "Making Sense of the Current Capital Markets Disarray"


"Our pressing danger is not that many folks will go broke, but rather that opportunistic politicians will bail them out and insulate them from past and future folly."

from: "House of Pain: Why Failure is Important"

Sub-Prime Mortgage Fallout

It is going to get worse.