The financial meltdown continues – sub prime mortgage collapse spreads into prime – the whole economy is reeling
Peter Oberois
Mar. 29, 2007

The effect of mortgage default and foreclosures are so deep and far reaching that the whole economy is reeling under the pressure. A total financial meltdown is underway while Fed has just realized the magnitude of the problem.

In the past, the sub prime loans to homebuyers with the weakest credit were concentrated in lower-income or economically depressed areas. But over the past few years, a large chunk of the subprime-loan market has shifted to higher-income metropolitan areas. Speculators who buy properties and flip the same fast to make quick profits used these loans. Now it has started backfiring. According to Wall Street Journal, In the Sacramento, Calif., region, where the median household income ranks among the top 10th of major metropolitan areas, the portion of subprime mortgages delinquent for 60 days or more hit 14.1% in December -- more than four times the level a year earlier. Other parts of California, as well as sections of Florida and Massachusetts -- especially those areas where housing prices have surged -- also logged rapid increases in delinquencies.

This is just the tip of the iceberg. The problem has now reached the prime market too. People are reeling under the pressure of deflation. The deflation is felt from increasing expenses compared to income levels. It is difficult to bring any more in other than taking loans but the cost of living keep increasing. The deflation pressure has blown off the fight to maintain the standard of living.

The financial meltdown continues. Sub prime mortgage collapse has spreads into prime. The whole economy is reeling and is ready to get depressed.

The financial meltdown continues – sub prime mortgage collapse spreads into prime – the whole economy is reeling
Peter Oberois
The effect of mortgage default and foreclosures are so deep and far reaching that the whole economy is reeling under the pressure. A total financial meltdown is underway while Fed has just realized the magnitude of the problem.
READ MORE>>

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