"It's going to be a bloodbath this year."

posted by Bill Arnett @ 1:37 PM Permalink

Aside from the reasons we allegedly went to Iraq the biggest lie told by this maladministration is that "our economy is strong." I guess it is strong if you're a millionaire that has gotten hundreds of thousands of dollars in tax breaks. If I remember correctly president bush himself has saved a couple hundred thousand each year since the tax cuts and the cheney's even more; a pretty powerful incentive to try and make tax breaks permanent.

But for the rest of us who once believed in a middle class, Reuters is reporting a coming "bloodbath" in home foreclosures It is a rather long article I recommend you read in its entirety, but the salient quotes, in my opinion are:

Renae Gorney sees the human side of the slumping U.S. housing market, the people whose homes are part of the $1 trillion worth of unconventional mortgages that are about to get more expensive.…Gorney, director of loss mitigation at Freedom Foreclosure Prevention Services in Mesa, Arizona, receives more than 300 applications a month from people facing foreclosure, and has little faith in forecasters who say the worst of the housing market downturn is over.…"It's going to be a bloodbath this year," she said.…Foreclosures last year were up 42 percent from 2005 levels, and will likely rise another 20 percent to 25 percent this year, real estate information service RealtyTrac Inc. says.…Christopher Cagan, director of research and analytics at First American CoreLogic, estimates that adjustable-rate mortgage resets will trigger some 1.1 million foreclosures over the next 5 or 6 years, wiping out $110 billion in equity.…That may sound like a lot.…"It's less than we spend on alcoholic beverages," he said.…"They've been sold the American dream and now there is no way to go forward," she [Gorney] said.

Aside from Mr Cagan's claim that wiping out $110 billion in equity through some 1.1 million foreclosures is "less than we spend on our alcoholic beverages" I believe that will be small comfort to the millions of people from the middle class that are going to lose their homes in the upcoming "bloodbath."

Our economy is strong. It has a very strong stench of millions more people joining the ranks of those who cannot afford housing or who will wind up like the "average" American and paying more than fifty percent of their income on housing alone.

"They've been sold the American dream and now there is no way to go forward,"…only downward. The American Dream has suffered an ignominious death and isn't even going to receive a decent burial.

Labels: Economy