Greenspan doesn't ask for much...

I can't believe Greenspan is saying everything is OK because "the vast majority of homeowners have an equity surplus." JEEZ. That's a pretty damn low standard considering how much equity the average homeowner put in. Even new homeowners, who are usually the most leveraged, average something like a 20% down-payment. Can you imagine if the average homeowner was in the red? Of course the whole point of a bubble is that it's a bubble till it pops. Homeowners actually have a growing equity surplus BECAUSE it's a bubble. It's like saying there's no danger from a bubble because the bubble is big. Is Greenspan so timid about tweaking the markets that he actually has to say junk like this? He says only 5% of owners are more than 90% leveraged. If that's the best sounding stat he can come up with, we're in some deep shit.
The thing is, even after the bubble pops, history seems to show there won't be really good (cheap) buying opportunities for about 3-6 years (liquidity will vanish, but prices will take time to drop).
That's because it's tough to sell when you have very low or negative equity. Most people don't have that kind of cash (or they wouldn't have borrowed so much in the first place). It's easier to make a mortgage payment than it is to make the lump payment of remaining principal your house sale can't cover.

Tech Tags: economics housing bubble debt greenspan

Fox News Can't Make Reality Match Agenda

I was flipping around watching hurricane news and was surprised what I saw on Fox. It's a strange trend with this disaster that the cable news channels are all continuing their regular personality shows (Oreilly, Hannity, Scarborough...) except those personalities are acting as MCs, interviewing the actual field reporters. The idea seems to be that the MC tells people how to interpret the raw images and reports.
On Fox, Hannity is one of their conservative (aren't they all?) talking heads. He was interviewing one of their prettyboy reporters at the NO convention center or superdome (?). The reporter was pretty broken down and when Hannity tried to say, "but let's have some perspective on this..." the reporter shouted him down (clearly knowing he was risking his career) and said (pretty close)
"There is NO PERSPECTIVE. There is NO PERSPECTIVE EXCEPT THESE PEOPLE ARE DYING!. We've been showing them and telling the world to get them out of here and get them food and medicine for days. The same people are still dying on the floor with NOTHING! Something is going wrong. This isn't about democrats or republicans. This is just wrong."
Hannity continued to whitewash, but the reporter interrupted him and shouted him down.
Even when Hannity cut to Geraldo who was doing his usual grandstanding (holding up crying babies and shouting into the camera), he was clearly tired and altered by the whole experience and also started shouting down Hannity - explaining that the people at the convention center have been locked in. If they try to walk out on the highway - walking maybe ten miles would get them to food and water. But the national guard keeps saying help is coming (same story for days) and won't let them walk. Geraldo was cut off when he just started shouting at the camera (to the government) LET THEM WALK - LET THEM OUT OF HERE - JUST LET THEM GO.
And that was FOX news.