Quote from gnome:
The downside of leverage is a BITCH. We often lose sight of that for a while.
The banks never lose sight of this.
All we have seen so far is the first shake of the tree.
The most secure properties are freehold and the weakest link is the subprime.
Gradually the banking system will work it's way through the subprimes and then the alt A in order to shake out the weak.
Those who can hold on and meet the outgoings will not enjoy the ride and that includes freehold purchased years ago.
The problem is that housing has been turned from a dwelling into a tradeable commodity and so you reap as you sow.
Do not expect this puppy to turn around any time soon and do not anticipate geographical immunity.
Already you have seen the banks spread this load around the globe, so do'nt expect that your little corner of the world is immune.
Once the shakeout is half done you can confidently look forward to rising interest rates and an ever increasing cost of living.
Economic health in the US is not the measure that it once was, simply because the jobs are being exported as the corporate profits are being booked.
The old rules no longer apply.
