Daily News Flashes

What a day!

First, there is news that the subprime market crash is not going to spill over to other economic areas. Whew! What a relief...unless, of course, that assessment proves wrong. Here's the highlight of this article:

"It's the latest episode of housing hysteria," Snaith said. "It's a small segment of the overall mortgage market and its problems are not akin to a currency crisis where there is some contagion that just ripples through an economy."

By contrast, some argue that a systemic problem is in the making and government action is needed. A week after a coalition of civil rights groups called for a six-month halt to foreclosures on subprime borrowers, several Democrats in Washington called on Wednesday for the federal government to bail out troubled subprime mortgage holders.

Full article here: http://www.reuters.com/article/reutersEdge/idUSN1159729020070411

Then there's the NAR reporting that 2007 should result in a DROP in home prices for existing homes and a significant decline in new home sales (but a slight rise in new home prices...go figure). Here's that article: http://www.forbes.com/feeds/ap/2007/04/11/ap3602520.html

And then, this shocking news: RISKY LOANS ARE ALIVE AND WELL! Yikes! This report states that those rascally loans that have contributed (arguably) to increased rates of default and increased foreclosures are still available. They go buy "no-doc" loans (aka "liar loans") and "option ARMs." Full article: http://money.cnn.com/2007/04/10/real_estate/alta_alive.moneymag/index.htm?postversion=2007041016?cnn=yes

So relating back to the first point (subprime is contained), here's an article that states that "tighter lending standards...will cut into home sales even further and drive prices lower." Gosh, I'm so glad the subprime mess is contained...except for declining sales and dropping prices! Check it out: http://www.newsmax.com/money/archives/articles/2007/4/11/103242.cfm?MN=1&PROMO_CODE=3224-1&S=AL This news, of course, had its affect outside the direct housing market to building material suppliers, whose shares dropped today. See http://www.forbes.com/feeds/ap/2007/04/11/ap3603359.html

What a day. More contradictions and entertaining speculation. Thank goodness, when it's all said and done, the subprime mess is contained.