THE SURGE: MORTGAGE DEFAULT

Who is going to buy the houses being vacated by current record breaking rates of foreclosure??-- A blizzard of headlines delineating the rising crisis in the sub-prime mortgage market cast a wide net of massive anxiety across the media-sphere's morning editions and the weekend editions as well-- Waking up to the distinct if not tangible possibility of major cataclysm not only in the sub-prime arena but the larger economy as well is not a pleasant prospect but the smell of acute fear emanating from mainstream investors, lenders and ubiquitous Wall Street Bankers and Housing Market insiders in the form of hedged/camouflaged optimism spells unmistakable trouble-- Tuesday's Dow dropped nearly 250 points-- The reason given....sub-prime default --

What will a rising tide of default-- a surge, if you will-- do to all boats??-- Sorry, mocking the canard of a shallow and pandering cliche overused by toadying economic and financial pundits everywhere to defend the moral vagaries of reckless greed is probably cold comfort for those forced to watch their dreams run aground-- Entire neighborhoods in some regions are caving in to foreclosure-- The Mortgage Bankers Association sound more alarms when delinquency rate in the top prime-loan category reached its highest level in four years running at a clip of 2.5% for payments at least 30 days late-- Gasoline, technically not categorized as a flammable but rather as an explosive, suddenly priced at $3/gal adds fuel(pun intended) to the downward spiral--Retail sales in February barely climbed off the schneid to rise1/10th of a percent with sales of gasoline and autos included-- Even with volatile oil prices tumbling back into the $58/barrel region gasoline prices continue their upward surge--Whose monthly commuting expenses just dropped low enough to consider buying a new shirt much less a new housing upgrade??--

Once so cavalierly unnecessary in the irrational exuberance of alternative/experimental sub-prime loans and their relative ilk the virtues of which were once extolled by none other than Mr. Greenspan from his astute table at the helm of the Federal Reserve, income verification like closing the barn after the horse turns up missing, is now suddenly in spellbinding vogue-- If the sub-prime homeowner defaults he cannot get another loan-- not even if he claims monthly income of fifteen grand from his job as a parking valet-- to buy a second tier home-- Nooses as well as belts are tightening across the board -- Goldman Sachs the worlds largest mortgage securities firm by market value lost stock value Tuesday even after reporting 34% uptick in profits

Bubble speculators who profited quite handsomely during the housing price escalation-- surge if you will-- dump thousands of deposits as well as the multiple luxury houses they intended to purchase onto a market already leadening under the weight of rampant foreclosure -- The inventory of available houses has been defined as having a half-life of anywhere from 6 to 9 months-- Sub-primers cannot qualify for new purchase thereby preventing the second tier house-owner from selling his house in order to buy an available upgrade which then deprives a third tier house-owner of a buyer that would allow him to upgrade and so on up the food chain-- This is not a sellers' market, neither is it a buyers' market --A rising tide of default can indeed lift all boats into the shallows of despair-- It could easily become a squatters' market-- The potential economic impact (The market for mortgage backed securities is larger than the US Bond market) of this unraveling is as absolutely dramatic as the surprising shock accorded observers overwhelmed by the apparent speed of it--

How to instantaneously re-flate falling prices in time for Spring home sale season baffles with false hope even the best of all the major players-- Warnings unheeded for too long reap the proverbial feast of consequences-- Downgraded mortgage securities could lead a stampede for the exits on Wall Street while failure to downgrade deserving mortgages opens the possibilities of fraud-- Disintegration, it hardly needs to be mentioned, always occurs when integrity is loosed of its moorings-- In between damned if you do and damned if you don't; and in between a rock and a hard place is a fleeting moment of paralytic splendor and mental peace-- a stop-frame that cannot last-- Decisions will have to be made despite their difficulty-- Faking it is not an option-- Miraculous intercession will not avail itself--As D.R. Horton CEO Don Tomnitz bluntly stated to a Citigroup conference eager to hear his assessment of the luxury home business, “2007 is going to suck.”

Still IED's from angry home owners foreclosed upon have yet to surge in San Diego-- It could easily be worse-- It could be Iraq, but before that....The Dollar............