deleveraging could be good for those who survive

[jeffex]

As the values of homes adjust down and a new strata of home prices emerges so will the rest of the economy. Jobs , business', investments , etc al aspects of an economy were artifically puffed up in value. As things try and find a level it CAN be a chance for people to take advantage of the down markets. Goods and aervices will all relect the new markets.
Housing had gotten to the point where most households needed 2 and 3 incomes to keep up. As the dust settles some who maintained their incomes my be able to go back to a 1 income situation and thrive. Some may find that the unexpected loss of job created cuts in spending that in the end were just wasteful any way.
I think the thing that may guard against record INflation after this period of DEflation is that the rest of the world in in the same recession.

[Kemmer]

Deleveraging is beyond just good--it's necessry.

Right now, the bureaucrats are frantically devaluing the currency, so we can all pretend our bubblish home values were true and just.

Trouble with their plan is, keeping the "pretend values" of housing stock high means everyone who's NOT on the hook with an Option-Arm mortgage in some upscale development will have to pay WAAAY more for a sack of potatoes.

When Central Bankers gather together, it's all about whom they choose to hurt. (Hint: they don't worry too much about the damage they do to the lower classes. To paraphrase Scrooge: "Are there no food stamps? Is there no medicaid?")

[UTAH RAVEN]

They kept the value of the houses high. The tax revenue is more for the government, and good for the home owner. The problem now is people can not sell because of the inflated prices. This happens when people rely to much on the value of their homes as an investment .
Here in Utah they only build new homes that start in the 350Gs. They no longer can get this price, and I am hoping it levels off more, and that they build houses that people can afford, and not as a stock investment.

[jeffex]

The TARP program was supposed to buy up troubled assets. There hope was to lessen the crash of housing prices . In fact they have not bought up those assets. Market forces are slowly working on their own. Forclosures are up and necessary for the severe cases of people who's home is not worth what they paid for it and or they have a adjustable rate they can't refinance . they will go back to being renters like before the culprit in all this the sub-prome market..was developed. The market is responding slowly with the mortgage rates in the high 4% ti 5% range. this is faze one . By spring we will see 4% for a 30 yr fixed. This will be the silver bullet to stabalize the housing market. The process will take the rest of 2009 but the housing market will find a level . The jobs numbers will be bad . In an economy the jobs number in the last to respond. I can only hope that once things begin to stabalize the Obama stimulus package has a target of producing jobs and investment that targets growth . Our dependancy on consumer spending has to be addressed along with our energy program(or lack of one). Our bailout dollars should be invested in things we can market to the rest of the world too. New technologies and innovative methods of production used to be our forte. Obama is a good speaker and he needs some concrete very specific plans that he can comunicate on TV to AMerica as his vision. Electric cars won't be the answer with a nationwide ele. grid that is a dinasaur. I hope they rebuild that first .
For those of us who aren't riding the debt wave like the big cahuna at Maui we can take advantage of the necessary re-evaluation of goods and services this country has to go through. Restore the confidence in our economy so long term investment in the stock market and purchase of cars and homes will look sound again