"The Villain Of Our Era"
Peter Eavis over at TheStreet is worried about the housing bubble. "The housing market has gone from nerve-wracking to downright horrifying. It's got to the point where there is simply no defense left for skyrocketing house prices." Welcome to the party Mr. Eavis.
"Mortgages are eating up the biggest proportion of income since the early '90s. The market value of residential real estate is at a record high in relation to after-tax income. The market value of real estate is close to 200% of disposable income now. That ratio's previous high was in the late '80s, when it climbed close to 160%. A ratio close to 200% cannot last more than a few months. It is the equivalent of Nasdaq trading over 5000."
"Borrowers are still borrowing on their homes' equity to pay down more expensive credit card debt. But when house prices cool off in the very near future, the luxury of cheap home-secured credit won't exist."
"When the history books get written, the corporate crooks of the '90s will have a certain lasting notoriety, and deservedly so. But the villain of our era will most certainly be the man who created and then sustained the biggest bubble the U.S. economy has ever had to deal with Fed Chairman Alan Greenspan."