Another sign of mortgage banking collapse leading to depression in economies
Peter Oberois
Mar. 6, 2007

The bubble in real estate and mortgage banking is so big that the historic parallels are unavailable. The long term bear markets start with disbelief and trying to scoop as much as possible after a little fall. The sentiment characteristics determine what will really happen.

Some big investors are betting on a recovery in the sub prime market as mortgage lenders'' stock prices tumble. That is the first sign of a long-term bear market in mortgage lending and real estate. Disbelief and hope that recovery will be staged soon is creating the ideal scenario for deflation very long-term bear markets.

The mortgage banking industry is in deep trouble. The real problem of real estate has just started. People are just unable to pay their series of mortgages and the home equity line of credit. Some big investors are betting on a recovery in the sub prime market is also spreading rumors that like in eighties savings and loan problem, the Fed will bail out those who cannot pay the mortgage.

That is not going to happen. Federal Government’s debt is so heavy; it just does not have the means to bail out those who cannot pay the mortgage.

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Another sign of mortgage banking collapse leading to depression in economies
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