Have you been wondering why real estate prices are so high? It's because of a huge amount of speculation in the market and cheap and easy to get loans.
First - the low interest rates are creating artificially high prices. When interest rates were 8% there was a limit to how much of a monthy payment someone could afford. But at 4% the same person can buy a house for almost twice as much for the same payment. Thus - real estate prices increase. Especially for people who are suckered into variable rate loans as low as 3%.
Because the market went up so fast banks started making loans with nothing down and bad credit - figuring the homes are going up so fast that the collateral will cover it. People are buying up homes like they were in 2000 day trading stock. It's called turn and burn. Your hairdresser might own 10 homes in different parts of the country. The bouy a house - sit on it for 6 months - and then sell it for 50 grand more than they paid for it. And it all works as long as prices continue to climb and it remains greed driven.
But this is artificial and at some point the reality will hit like it did for the artificially high dot com stocks. The greed driven market will turn fear driven and collapse extremely fast. And when it hits - real estate will drop to half price overnight - there will be huge losses - and banks will be stuck with property worth far less that the loans against it. And when that happens you'll see a huge banking collapse just like what happened in the 1980s under Reagan.
So - when you hear Bush say that home ownership is at it's highest level ever - this is why.
My accountant was telling me all about it because he's helping process a lot of these transactions for these people. At it all made sense. I had beeen confused about how it is with the deficit so high and economy so low - and real estate so high - how does anyone afford to buy a house? Well - now I know.
So - here's what the crash looks like. And it will be a small interest rate hike to will trigger it. Fear enteres the market. People realize the the rise is over and they start to sell. The houses sit on the market for some time and nothing sells - so people start lowering their price. Once the prices start going down everyone panics and all of a sudden - every turn and burn property is on the markey at the same time. While it sits there - they still have to make the payments on the property and quickly burn up the capital they have - often borrowed on credit cards - and then they can't make the payments anymore.
The homes get reposessed - but the banks can't sell them. Now not only is there a glut of turn and burn properties for sale - but there are forclosure sale properties on the market. And - as interest rates creep up - those people who got a 3% teaser loan that they could barely affors to pay are all of a sudden paying 6% and nearly double the payment. So home owners get hit as well.
With all the loan failures - the banks will start failing and torn to the federal government for yet another huge bailout. A government that already is setting records for deficit spending.
We still owe the money for the 1980s bailout of the Savings and Load industry. this collapse will be far bigger.
But - it won't happen till after the November election.
If you are playing this game - the time to get out is now.
Rape cases are difficult but I have some real problems with rape shield laws. I have seen both sides of the issue. Women who need the protection of the law - and women who lie about being raped for either money or to try to cover up infedelity. Most people are aware of real rapes and feel sorry for the women victims - as I do. But I have seen that the other side is extremely common.
Having said that - if I were on the jury and I were presented with the fact that the woman had sex with another man between the time she was raped and when she was examined by the police - I don't see how I could decide to convict.
Not only would I have a problem with her cerdibility - but how do you determine which sex act caused what results? Which sex act resulted in what?
The standard of the law is "beyond a reasonable doubt" which means that even if they convinced me that he probably did it - probably isn't good enough. And with the woman having sex with another man after the rape and before the medical exam - that's reasonable doubt. There was no case there - and it was properly dismissed.
Personally - I think the girl is lying. And I think she's in it for a buck. But that's just my opinion.
A little tip for those who are raped - go to the police first before having sex with someone else.
My 2 cents ....