Housing bubble about to burst

The buzz is growing on the declining housing industry, on which Bush's entire house of cards economic boom rests. "The deepest housing decline in 16 years is about to get worse."

As many as 1.5 million more Americans may lose their homes, another 100,000 people in housing-related industries could be fired, and an estimated 100 additional subprime mortgage companies that lend money to people with bad or limited credit may go under, according to realtors, economists, analysts and a Federal Reserve governor. Financial stocks also could extend their declines over mortgage default worries.

The spring buying season, when more than half of all U.S. home sales are made, has been so disappointing that the National Association of Home Builders in Washington now expects purchases to fall for the sixth consecutive quarter after it predicted a gain just last month.

All the signs of a crash are there. Defaults and late payments are up and all those tricksy mortgages that allowed people to buy homes they really couldn't afford are beginning to take their toll as the default provisions kick in. Wall Street is already responding by beginning a selloff that looks likely to become a major dumping of housing related investments.

The ultimate result of course, as happened in the early 90s is that people will be sitting on rising mortgages that greatly exceed the declining value of their homes. Refi's will dry up and new sales will slow to a trickle as lenders tighten their eligibility requirements. Any way you look at it, it's going to be a bumpy ride back to reality.

The only upside I can see is at least the Bush administration won't be able to forestall it until Bush skulks out of town and the Ponzi scheme they tried to pass off as economic planning will be exposed for the fraud it is, and always was.