Found this great site for the latest info. It will be interesting to see how this simmers over the weekend. Things to watch:
- Inflation – they keep pumping money in
- Construction slow downs – what effect will this have on the immigration debate?
- Global Markets – France and Australia are hurting…the top 200 aussie companies lost 53 billion in worth….ouch!
And finally, think about the number of homes that will be on the market and then think about the number of people who will actually be approved now under the tightening rules. Now, think about how many of those don’t already have homes…doesn’t leave a lot of buyers out there.
There is a very good article up on Bloomberg about the situation. It’s brief but has some good quotes in there like:
Bernanke told Congress on March 28 that subprime defaults were “likely to be contained.” The Fed chief, who declined to comment for this story, changed his assessment last month.
On July 18, he told Congress that “rising delinquencies and foreclosures are creating personal, economic and social distress for many homeowners and communities — problems that likely will get worse before they get better.”
Paulson said June 20 that subprime fallout “will not affect the economy overall.”
This week on CNBC, he provided a less definitive assessment, saying that markets have been “unsettled largely because of disruption in the subprime space.”
“We’ve had a major correction in that housing sector,” Paulson said. “It will take a while for the impact of that to ripple through the economy as mortgages reset.”
O’Neal on June 27 called subprime defaults “reasonably well contained.” Merrill spokeswoman Jessica Oppenheim said this week that the company is confident his words accurately reflected the market at the time. O’Neal declined to comment.