A jumbo mortgage is required for any amount above $417,000. Most any home in one of the real estate bubble areas would need a jumbo.

Interest rates on jumbos have just gone psychotic. Why? Because no one wants the risk and thus are pricing them high.

Today Countrywide published their new matrix of mortgage quotes. Suppose you are a successful doctor with solid income, huge pension account and almost maximum credit score. You want to buy a new primary residence for, say, $800k (which would be very, very modest 3 bedroom home in my area). You are putting 20% down and can show 2 months worth of payments on your checking account. Obviously you document your income, this is a full-doc loan.

What is your rate? It will be 7.9% for 5/25 ARM loan.

Now the real estate game is over, whatever happened before today was just a preparation for what will happen next.

When an investment banker set out to buy a $1.5 million home on Long Island last month, his mortgage broker quoted an interest rate of 8 percent. Three days later, when the buyer said he would take the loan, the mortgage banker had bad news: the new rate was 13 percent.

The difference between those two rates, assuming 20% down, is $60,000 a year or $5,000 a month. The reason for such insane interest increases is not so much greed as it is fear. The credit markets are currently slamming shut.

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I sense a trend…

US life expectancy now 42nd among nations.

Hartford Courant journalist Helen Ubiñas on her thirteen years covering Hartford.

When I first got here, there was no shortage of powerhouse community groups, relentless activists who held city officials accountable, who expected more. No, demanded more.

Now, even when a grandmother is shot dead in the middle of the day, about the only person to register any outrage is the Rev. Henry Brown. And his protests usually attract a grand total of one.

Can’t-Do Nation

But the bridge disaster also reflects a broader and more troubling problem. The United States seems to have become the superpower that can’t tie its own shoelaces. America is a nation of vast ingenuity and technological capabilities. Its bridges shouldn’t fall down.

The government is becoming hollowed-out, and increasingly unable to provide basic services and support. As mentioned yesterday, when a major hospital in L.A. closes after years of everyone trying to save it, then something has gone seriously wrong.

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Thousands of activists are gathering near Heathrow Airport now at the Camp for Climate Action for eight days to protest “the lunacy of the government’s airport expansion plans.” They plan a week of actions; including protest, training, education, direct action, and civil disobedience. It took a court injunction to finally allow them to the right to protest, given the government fought them every inch on the way.

Events like this are the next big step forward for climate and antiwar organizing, multi-day events with numerous activities organized by a multitude of groups.

On Sept. 15, there will be a week of antiwar action in DC. Multiple groups will organize a mass march, direct action, lobbying, a march inside Congress, and more.

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Lenders are foreclosing homes in southern California much faster than they can sell them, leading to an oversupply that will, sooner probably than later, force substantial price drops. Falling prices will then trigger more foreclosures.

Right now, lenders don’t want to drop prices because that means they’ll have to mark down all their properties. But the first to sell at reduced prices will probably get the highest prices, wait too long to sell and prices may be sharply down, not just a little.

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Stories and rumors about the subprime contagion are flying around the net. If you hear a story or rumor, more than ever, check the facts and confirm the sources.

I just did this on an apocalyptic bank meltdown story supposedly out of Europe that a blog commenter mentioned. Googling the names involved produced just one hit, and that was from a seriously crackpot and fringe website. They are the apparent (and only) source for the story. The Financial Times, BBC, Independent, and Guardian had nothing on it, and if a major European bank was collapsing, it would certainly be news and impossible to conceal.

Thus, the story is bogus. In these financially tumultuous times, confirming the validity and source of a story is crucial.

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