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Atrios sez;

Over the past few years I've been quite puzzled over who could actually be paying typical prices in some housing markets. Who could afford them? We know now that part of the answer to that question is that plenty of people were buying houses they couldn't afford, over the long run at least, because they were getting loans with ridiculous terms.

A second group were people who were trading in a previous home in which they'd built up some equity.

A third group were people who got some sort of economic windfall - an inheritance for example - that allowed them to buy.

A fourth group were those people who actually had the household income to cover a $2500-$3000/month mortgage.

Groups one and two are drying up. I'm not sure how many people there really are in groups three and four.

I've been puzzled by this as well. John and I have looked at a lot of houses in the 300K+ range, in a seemingly never-ending sea of new subdivisions. Literally.. subdivision after subdivision.. an endless line of expensive houses. You'd be amazed at how many new-ish million dollar + subdivisions there are in the DF/W metro.. and I've always thought, you know.. I earn in the top 20%, with no kids to bleed me dry, and there's absolutely no way I can afford one of those homes (mine is much more modest). I keep asking, who the fuck are these people that are buying these houses?

Now we know.. It's in the blood of Americans to live beyond our means, and value wealth (or at least the appearance of it) beyond all. We're a horribly ignorant and shallow people. So, now we're seeing the implosion when reality kicks all these people in the balls. Unfortunately, it won't fundamentally change the American psyche.. and in the long term, when the shit storm lands full force, a Democrat will be in the White House - and just who do you think is going to be blamed for everying?

Another long term consequence is the horror of when these middle aged people hit retirement and have absolutely nothing.. no 401K, no employer retirement (because they don't do that anymore), a social security check is about it.. and I don't think people can live on that. It will be a blood bath..

And so there will be a sea of empty, expensive, houses. The banks will try and sell them.. and discount them, while nobody buys them because they're still unaffordable, until it reaches a point where they will simply sit empty and rot... and the community's tax revenue dries up, and the schools go to shit.

Meanwhile.. the architects of this disaster, the bank and mortgage CEOs and executives, walk away with millions. It is what defines America now. That is our way.. and it is a truly disturbing realization. Bomb the fuck out of the scary boogeyman.. spend a trillion dollars killing people 5000 miles away.. enjoy your illusion of "security".. while the MSM feeds you the most insipid "news" coverage, and political hypocrits tell you how you're supposed to behave.

There is no free and peaceful America anymore (if there ever was one). There is only a bunch of stupid fucking dishonest cowards.