Tech Rob
06-24-2012, 04:39 PM
Economic malaise and stagnation in the US will continue until the negative equity problem is gone. The equity most people had in their homes was absorbed by the system, and now the banks are squatting on it. The surplus of foreclosed and distressed properties is driving down the value of everyones' homes.
Jobs are created by consumer demand. Consumer demand is created by consumers who are confident in their financial standing. There is no confidence because there is no equity. That equity means security for most people. We are in a holding pattern until the equity comes back or the banks forgive the negative equity. They'll never do this unless they are forced to.
One positive thing is that the Fed is holding interest rates down in the interest of making home-ownership look more attractive to people who would otherwise be renting. However, we are still not buying because we are worried that the market has not hit the bottom yet. There is no confidence that the market is on an upward tick, so keeping interest rates low is not having the effect that everyone would like.
The people are enslaved by mortgages with negative equity and their only alternative is to short-sell and basically give their credit back to the bank in exchange for freedom to move.
This is the heart of our economic problems in the US. Don't believe any politician that says "I have experience in the private sector and I know what it takes to create jobs", or says "I have created jobs in the last X number of years". IT IS A LIE. Nothing they do can affect employment positively without addressing the issue of NEGATIVE EQUITY. PERIOD.
That money you had in your home is now in someone else's bank account, and they are just using it to make more money for themselves. Nothing will change unless the government is willing to take it from them and give it back to the people. The government will not do it unless the people DEMAND IT.
Jobs are created by consumer demand. Consumer demand is created by consumers who are confident in their financial standing. There is no confidence because there is no equity. That equity means security for most people. We are in a holding pattern until the equity comes back or the banks forgive the negative equity. They'll never do this unless they are forced to.
One positive thing is that the Fed is holding interest rates down in the interest of making home-ownership look more attractive to people who would otherwise be renting. However, we are still not buying because we are worried that the market has not hit the bottom yet. There is no confidence that the market is on an upward tick, so keeping interest rates low is not having the effect that everyone would like.
The people are enslaved by mortgages with negative equity and their only alternative is to short-sell and basically give their credit back to the bank in exchange for freedom to move.
This is the heart of our economic problems in the US. Don't believe any politician that says "I have experience in the private sector and I know what it takes to create jobs", or says "I have created jobs in the last X number of years". IT IS A LIE. Nothing they do can affect employment positively without addressing the issue of NEGATIVE EQUITY. PERIOD.
That money you had in your home is now in someone else's bank account, and they are just using it to make more money for themselves. Nothing will change unless the government is willing to take it from them and give it back to the people. The government will not do it unless the people DEMAND IT.