One reason you may be in debt is because your part of the country was involved in a major mortgage scam: A study of home purchases during the real estate boom years in Chicago shows how one ethically murky–and sometimes illegal–tactic used to sell homes may have contributed to the housing crash.
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We recently told you which cities in the world are most likely to be destroyed by an asteroid impact. While congress argues about tax and spending cuts, we can now tell you which US metro region is most likely to come out of the current ECONOMIC impact relatively unscathed.
Believe it or not, despite all the Congressional wailing about budget cuts, Washington, DC is a very good place to be. Other major cities like Baltimore, Philadelphia, Boston, Seattle and Pittsburgh also fare well on the list–but Los Angeles, Miami and Las Vegas do not. Rochester, Minnesota, tops the list. However, College Station-Bryan, Texas, would not be so lucky.
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The US banking system is in very serious trouble. In fact, as an institution, American banking is probably broke. The reason is incompetent management of foreclosures. Two things have gone wrong. First, banks have carried foreclosed properties at unrealistic valuations. Second, millions of titles have been thrown into uncertainty by flawed foreclosure procedures and illegal foreclosures.
In fact, just as the original mortgages were worthless when bundled into securities because there was no way to determine their actual value, the foreclosed properties are worthless because there is no way to determine whether or not they have clear titles. So the inflated valuations cannot simply be lowered to more realistic levels. There is no realistic level.
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When economists talk about the crash, they usually blame subprime mortgages and profligate lending by the banks. However, our financial problems are only a side-effect of the real issue, which is that, last summer, we experienced our first taste of what it is like to butt up against the limits of the earth’s ability to sustain our growth.
Things have changed so much that it is almost impossible to look back to those days and remember what it was like, and yet it’s only a few months ago.
Starting in early 2007 and peaking last summer, commodities prices shot up massively across the board, culminating last August when oil reach $149.00 a barrel, and gasoline prices around the world shot up by as much as two hundred percent in some countries.
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