Prognostications, Pundits and Poo

Prognostications, Pundits and Poo

Bill Hitchcock

 

We all know that we are in an “interesting” real estate environment. The fact is-It’s terrible. But where do we go from here?

Personally, I think prognostications from most pundits is purely poo. Most of the reasons as to why and how we got in this situation would have been impossible to predict anyway.

Did we as end users know that Freddie & Fannie were lowering the standards for loan approval?

Did we as end users know that they were bundling these unqualified loans into mortgage backed securities and selling them?

Did we as end users know that these unqulaified, bundled and sold securities were being resold at a higher price using a method of valuation known as mark to market?

No, we as end users did not know this. But the practices mentioned above (and others) are what drove the real estate market over the cliff.

And now that the federal government is/will be infusing trillions and trillions of dollars into the system to correct what it wrought. This artificial infusion of funds into the free market is analagous to beating a mud puddle with a stick and wondering why the water doesn’t clear up.

HHhhmmmmm……………