You seemed to have conveniently forgot the fact that the main street lags the Wall street by 6 months. Anyway, keep this useless maxim handy in case you find your ass on fire: "The market can stay irrational longer than you can stay solvent."
People can be lot more happy if they start facing life with fortitude and courage instead of fear and worry. Come recession, come hell and high water we can make it. With that winning attitude and a right frame of mind you can be very successful in life. Never ever back down from an adversary or adversity.
You are right lenders do not make loans to get your property. They have made many many loans without due dilligence..why? Becasue they knew they would not keep these loans on thier books but instead package them and sell them (all with a nice AAA ribbon) now they have no risk anymore, they sell their debt, make their money and someone else can worry about if those loans can really be paid. But no one knew this...then loans get bought and sold...then finally the defaults start no money coming in...someone holding the bag is not getting paid...banks think they have more collateral than they do...they want to sell their debt but now everyone is starting to understand how risky it is and no buyers for those debts....now big banks won't lend other banks money because their balance sheets are starting to show bad papaer..... defaults of loans made by bad lending practices are what broguht down the price of houses. These homes cannot keep their inflated value because no one is paying the bill to keep them at those high prices. Foreclosre time. Homes go down.
Loans selling has its recourses, if you sell bad paper you would have to eat it, provisions are in place. The basic problem underneath this turmoil is simple: degraded collateral valuations. These CDOs are not backed by the valuations they once held and hence they are being sold at discounts. In an industry that has no sales for over 2.5 years and non activity what do you think will happen? US consumers ( you and me ) stopped buying real estate and that led to the collapse of the mortgage industry, investment banking and now the stock markets. Unless this fearful, greedy, speculative idiot brains of a consumer starts buying nothing will change. Unless activity levels rise collateral will decline.
The economy ran on credit. Credit went kaput. Idiot consumer has a negative networth(all debt). Consumption goes kaput. Its basic math. Your solution is to spend, but there's nothing to spend with. The system needs to be purged before it is restored. Hasn't happened yet.
The 'fearful, greedy, speculative idiot brains of a consumer' is already buying housing, just not quickly enough to eat into the enormous inventory that has created the worst housing environment in the US since the Great Depression. And it's getting worse as more houses are being made available than are being bought, which leads to falling prices and more foreclosures. I thought you knew about housing and economics, ha ha.
Nobody is buying anything. Real Estate the best wealth building tool is like a Millstone around the neck. Its shunned with a disdainful attitude. People are living in one bed room cages and children playing on the streets and dodging passing cars... they can't have a puppy this year.. Its not easy to buy real estate now. You need 10% down payment or you are not setting foot in that house you had waited for 2 years to go cheap. There are no iffs and butts. The rules of the game have changed and you could be living in that house had you bought it when FINANCING was easy... and you could have doubled that "price" in 10 years giving you a luxurious place to raise you kids.. Who should I call stupid here?
Nobody is buying anything because A) nobody can afford nothing B) nobody can get loans for nothing Use your fucking head, numbnuts...what does this tell you?