Dr. Housing Bubble diagnoses the real estate fever as starting to cool down. For our edification, he compiled two hilarious and foreboding lists of symptoms:
and
My personal favorite of the 15 real deals advertised above is a 432 square foot rambler south of San Diego going for $299,900. Anyone want to buy my living room and kitchen for that great low price?
Subprime's bubble is popping from Wall Street to Main Street. The newest worry is over money market funds that hold the short-term debt (commercial paper) of collateralized debt obligations heavy in subprime mortgages. Money market funds are supposed to be conservative alternatives to bank accounts. Instead, managers have attempted to increase risk and thus investor yield through deceptively rated junk.
Who knew that following an economic disaster could be so fun? Don't classify my amusement as schadenfreude, because I'm not laughing at lenders with poor credit ratings, or foreign owners of America's credit garbage, or Moody's stockholders, or hedge fund managers. I am instead receiving a first-rate lesson in finance and economics at their expense. The subprime meltdown seems to be spreading to all corners of finance and the globe, drawing the observer's attention to America's gilded age gluttony and imminent eclipse as sole superpower.
Better stop writing. Time to go and purchase one of those limited-offer SoCal mansions with a scarce subprime mortgage!
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