Well,it took long enough.
Henry Paulson Jr. — that would be the U.S. Secretary of the Treasury — admitted that the housing/credit/confidence crush (HCCC for short) is a hell of a lot worse that he ever imagined (clearly the Secretary does not exactly have a fertile imagination!) and, . . . now this is the best part . . . ready? . . . he thinks it will get a lot worse before it gets better!
How much worse?
Let’s see. Paulson (or is that Jr.? No, that’s the mob uncle from the Sopranos) says this year alone he thinks we will see something like one million foreclosure proceedings.
That means hundreds of thousands who may just end up living in their BMW’s. But you know what they say . . . smoke ’em if you have ’em!
“The longer housing prices remain stagnant or fall,” says Paulson, “the greater the penalty to our future economic growth.”
Well, yeah! You don’t have to be Secretary of the Treasury to figure that one out.
Speaking at Georgetown University (he saved travel expenses on this venue), Mr. Secretary said the current housing/credit/confidence crush (HCCC) is “the most significant current risk to the economy.” Gee, I would have thought the biggest risk was rising cable TV rates, but what the heck do I know. He’s the Secretary of the Treasury for God’s sake.
Now, with these strong words, you might expect the recommendation of strong action.
Don’t get your spinal fluid gushing on this one — Paulson says hidden brokerage fees should stay, well, hidden; and, he is all for those nasty prepayment penalties!
So, don’t expect much action from the good Secretary. In fact, don’t expect much action from anyone in Washington aimed at taming banks and mortgage lenders. Ain’t gonna happen.
This isn’t a “meltdown,” this is a lock down, and we are all prisoners of a home mortgage industry run amok.