Posts

Showing posts from July, 2009

Wells Fargo Is Stealing Me Blind! (or just blindly stealing?)

This little diatribe is about an economic fact of life that's been bugging me for some time now as a result of the mortgage crisis. Let me describe this a bit and see if it might bug you too...right where it hurts, in your wallet...
Here's the simple logic, step by step: (a) the mortgage boom (which happened for whatever reasons, however nefarious) caused housing prices to rise to unforeseen heights during the Nineties and into the first years of the 21st century, causing (b) an asset bubble. This meant that many (most?) homes purchased in this period were at (historically) inflated prices. (It made no difference why the home was bought, for speculation or occupation, of course.) However, (c) the boom ultimately crashes due to the financial crisis, initiating the biggest recession since the Great Depression (which has a long time to yet play out), with consequent unemployment, causing (d) a wide and prolonged rise in foreclosures across the country, more intensely in some areas…