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Just say no

By Owen Paine on Monday December 14, 2009 03:36 PM

In the soap opera of petty commercial matters, if the Wall Street Journal covers it, then something has long since become so widespread it can't be ignored any longer. Note this headline:

American Dream 2: Default, Then Rent

"Analysts at Deutsche Bank Securities expect 21 million U.S. households to end up owing more on their mortgages than their homes are worth by the end of 2010. If one in five of those households defaults, the losses to banks and investors could exceed $400 billion. As a proportion of the economy, that's roughly equivalent to the losses suffered in the savings-and-loan debacle of the late 1980s and early 1990s.

The flip side of those losses, though, is massive debt relief that can help offset the pain of rising unemployment and put cash in consumers' pockets.

For the 4.8 million U.S. households that data provider LPS Applied Analytics estimates haven't paid their mortgages in at least three months, the added cash flow could amount to about $5 billion a month...."

Lovely, eh? And how 'bout this brilliant touch for a stinger:
"... an injection that in the long term could be worth more than the tax breaks in the Obama administration's economic-stimulus package."

Comments (2)

Hey, I've always relied on the WSJ to deliver timely news at a fair price.

Son of Uncle Sam:

My friends on the fire dept always say,"It's easy to prove it's arson, just not easy to prove who did it!
If one out five- out of the 1 in 5- did that, could we finally stop giving away money and see real economic disaster? As insurance companies would feel the bulge in the cheeks.

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