Some Would Argue That Things Are Not That Bad!

The facts speak loud and clear…The questions floating around- Is the US Housing market going to spiral out of control and destroy the US economy? What are the long term effects of the misguided leaders of the subprime lending industry? Will the “Credit Crunch” force the US into a major recession?… and on and on.

Let me give you my short version of the answer- NO, NO, NO, NO, NO

The Long Version… The US Housing market is still robust- 2007 will close out at approximately the same level as we saw in 2002 (which was a record setting year). When put in perspective, it’s not that bad. We are simply seeing a market correction and shrinkage to levels that we should have been operating within.

HUD released figures in November so that we can really see how bad the subprime collapse really was. Figures show that that subprime mortgages make up about 15% of all mortgages, and out of that 15% of mortgages, only about 12% will result in “full foreclosure”—- That’s only 2% of all the mortgages in the US. Another point of interest is that most of those foreclosures have been isolated to Florida, California, Nevada, and New England— The price of real estate in these areas was grossly inflated in recent years.

The Fed stated on 08/07/07 that “there is no recession”… and, ironically, we are seeing a labor shortage in the US. Corporate Profits are setting new record levels each day, and the Fed and other foreign governments are ready to infuse the Us economy with another $300 billion if the economy shows signs of stumbling again.

 Sounds to me like we are in pretty good shape as a whole… but, you know that good news doesn’t make for as flashy of a headline. That’s why I rely on the facts rather than the news (and all of it’s hidden agendas). I’ll close with a quote from one of the few intelligent members of the media… Ben Stein.

Mr Stein said on August 12, 2007: “Some smart, brave people will make a fortune buying in these days and then we’ll all wonder what the scare was about, in the first place?”

We are not facing our doom, we are simply on the edge of change.

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