Mortgage brokers New Century Financial and Ameriquest, both based in Orange County, California have cratered spectacularly and have laid off thousands of workers. But the pain goes way beyond just them. Multiple other businesses like car dealers and restaurants are reporting drastically less income, condo prices in the area are down 17% since June, and office vacancy rates will double this year.
“It’s a huge engine that has been shut off,” McDermott said. “I don’t know where the new influx of jobs are if you take the lending market out of the equation.”
So, lots of people who weren’t even involved in subslime mortgages are getting hurt by this latest example of the boom-bust cycle of capitalism.
As anyone who has survived an industry downturn or destruction, for example the timber industry here in Cascadia, would know, should know, it’s the only trickle-down economic model that actually works.
We should remember that the alleged recovery from Bush’s recession was almost entirely fueled by the hosing market. (Or did I mean housing?). Like everything else the man has done, he did it on credit. Indeed, he used all the usual Kenesian tools (credit, big spending, tax cuts, and war). But Keynesian economic liberalism was discredited in the 1970s, and it isn’t working now either. Should we be surprised that Greenspan is warning that another recession is imminent? (See http://www.truthdig.com/eartotheground/item/20070226_greenspan_forecasts_recession/)
After jumps from $1600 per month to $2500 per montgh we were just informed that our ARM will got to $2900 per month… We have been living the losing end of this nightmare the last couple of years and are throwing in the towel.
We were gold until we went to refinance our ARM and Countrywide Mortgages played games with us. They fucked us over BIG time. And add to that the slide, we just can’t keep up with the increases.
Live and learn…
What we are seeing is a deliberate transfer of wealth from the poor and middle class to the wealthy.
Subprime mortgages started and encouraged by Wall Street
Please keep blogging ConnecticutMan, you are needed. Everyone else, check out his blog