It is not a housing crisis. It is not yet even a crisis at all. It is financial problem. As long as there is fraction reserve bank their will periodically be these problems and from time to time a real financial crisis.

I like the "Let's start with some straight talk." intro. How else would we know that he's about to say something really stupid?

Here is how I see it.

McCain: No solution.

Clinton: Short term solution, no long term solution.

Obama: Short term solution and long term solution.

Sorry floccina, you're dead wrong - the reason we have a mortgage crisis has to do with the inability of people in recent years to find affordable housing: the mortgages people are defaulting on are ones that, essentially are too big for them to afford, but that were necessary to afford the property. In the NY region, houses an hour outside the city start at something like $500K, not for luxury, but for a basic middle class single family home; this is expensive, and drives much of the demand for ever larger loans.

Yes, we have a banking crisis. But we also have a housing crisis, and the solutions offerred, most distressingly, really only focus on the banking aspect. We also need to revamp HUD, focus on urban affordable housing development, and probably support the notion that people rent, as well as own. There's lots we could do. And it's one of those ways that I find Clinton preferable - she's offering more practical solutions than uplifting rhetoric, and I think that's what's needed here.

Obama also put a couple of detailed policy papers today, in addition to the speech. So he has practical solutions.

Bottom line is it's all about you sell yourself. Clinton sells herself as Mrs. Fix-It, so that's how we perceive her. Obama likes to do the thematic stuff, so we see him that way. In reality both of them are technocrats with 99% identical policies.

The danger here is if either of them actually start to believe their own rhetoric. It's obviously impossible to micromanage the United States economy, just the same as it's impossible to change the culture in Washington.

Good point about the root of the housing crisis resting in the high cost of housing.

In which case, the crisis is its own solution. Let the market fall, rewrite the personal bankruptcy rules for those persons holding motgages for real estate at rates the market no longer supports. Set them up to repair their credit.

Investors are going to be compelled to absorb their paper losses anyway, and are doing so already. This is the crisis as it manifests on Wall Street. Stabilize the financial system but DO NOT bail them out.

Then go back and prosecute relevant parties for mortgage and securities fraud. Regulate the Wall Street brokerages and hedge funds that played such a large role in something that is impacting the broader economy and inflating our federal debt due to actions on the part of the Fed in stabilizing the system.

There will be lots and lots of shareholder lawsuits. These will come in from all over the world. Good.

Raise taxes on the top 1-3% so the financial elite starts policing each other rather than hopping into the sack for the next big scam.

Case closed.

I forgot. This will also have the fringe benefit of shrinking the financial sector, sending a lot of little hot shit traders packing.

They'll have to squeak out a spare annual living over at e-trade, like the Japanese housewives who make money in the currency trade and hide it from their husbands.

This should start a real movement on behalf of small investors.

Cheers.

Thing is, most bank traders are playing the house advantage side of the game. There's evidence that that is the source of their profitability (E.g. when UBS started its own hedgefund, and lost big money on it).

Re:the derision in McCain's speech towards people who buy houses to rent.

I own and live in a 3-family house. We live in one unit and rent the other two. Since we bought the house in 1999, I've had two lengthy periods of unemployment. If I hadn't had that rental income coming in -- had I purchased a single-family home -- I wouldn't've been able to make my mortgage payments and probably would've lost the house.

Just another way the distinctions he's trying to draw don't make sense

I predict it won't be long before McCain realizes a central demographic fact.

The irresponsible folks that are in over their heads living in expensive houses with more expensive mortgages are also known by a common name:

Swing voters.

"We also need to revamp HUD, focus on urban affordable housing development, and probably support the notion that people rent, as well as own."

Why is there still a difference between interest on a mortgage and rental payments. Both should be a tax deduction. That would ease the need to buy a home and in the end lower home prices and allow the "American Dream" to be reachable for most Americans again in the future.

"Thing is, most bank traders are playing the house advantage side of the game. There's evidence that that is the source of their profitability"

Exactly. That's why I want the little assholes over at e-trade, working the market without the benefit of institutionalized insider trading.

And with their *own money* this time.

It's a populist revolution in the making. These people are entitled.

Webboy writes:
Sorry floccina, you're dead wrong - the reason we have a mortgage crisis has to do with the inability of people in recent years to find affordable housing:

And yet home ownership hit record levels recently and the homes will not disappear after foreclosure. And homes are bigger and better than they have ever been. Now just because it is not crisis does not mean there is no problem at all. It is a problem for those people who bought homes and cannot pay for them but they are not enough to be a crisis for all. And yes slow growth policies and over regulation of what can be built have made housing more difficult for the poor to afford than would otherwise be but that is a different long term issue.

If every problem is called a crisis the words loose all distinction.

As long as there is fraction reserve bank their will periodically be these problems and from time to time a real financial crisis.

Bear Stearns, JP Morgan and rival investment banks borrow from, lend to and trade with other banks and corporations, not the public.

If any one had a "house advantage,'' why would the others willingly trade with it?

As for the housing problem or "crisis" if you must: I'm with floccina: it's the strict zoning regulations and wasteful consumption habits that keep housing unaffordable.

A family of 10 Japanese or Indonesians or, even, Germans, could live in most American 3-bedrooms.

There is no "house advantage'' that I'm aware of, but if Marcin Tustin or anyone else knows of one, please let me in on the secret so I can let these "little assholes" give my money their "house advantage.''

Both Hillary and Obama make great points on what is going on in the U.S. Hillary is trying to fix every problem at once by coming up with quick solutions that could possibly work, but is that good enough for you, possibly? When Obama made his speech he was very clear that we can fix our situation. Not in days and maybe not in years but it can be done. He doesn't offer very many solutions because he is playing it safe. He is looking back on all the disasters before now that have caused great damage and he wants to take this process slow. Part of me believes that we should take it slow. We need a plan that will work, not possibly work. No matter what each candidate says they are going to do or what they are going to try to do, most of it won’t happen. In the election of Bush and Gore, Gore had the popular vote, but it was bush that had the Electoral College vote. To tell the truth what we want doesn't matter, what they want doesn't matter. There are people in this world that hold more power then the presidents and it’s them who decide what will happen. I’m not saying that it's a conspiracy I’m just saying that there are people who have power and will do anything to keep it with them and their families. The presidents are told what to say and what to do. They don’t have a say in it. There was a prophecy told last year when our world started its downfall that the U.S. will not fall by its enemies that surround it, but within. And please don’t get me started on the price of oil and gas. There is enough oil in the state of Texas alone to allow the U.S. to be stocked on oil for more than 10 years. Every president that we have ever had always said that they would put an end to the government having so much power, but look at us now. Nothing has changed except for them having more say in a matter than we do. It’s not our opinion anymore. Each candidate isn't telling a speech to impress you or your opinions; they are trying to impress the higher power, to receive their vote. I believe that what is happening to our world is our fault. Believing that one person can solve all of our problems is a joke. The problems that we are about to face is what everyone should be worrying about. If we don’t change the way that we live and do things I wouldn’t doubt that we run our economy into the ground, use up every natural resource and face the brink of extension.