Meltdown far from over, new mortgage crisis looms, page 1

Meltdown far from over, new mortgage crisis looms

news.yahoo.com

WASHINGTON – The full scope of the housing meltdown isn't clear and already there are ominous signs of a new crisis — one that could turn out the lights on malls, hotels and storefronts nationwide.

Even as the holiday shopping season begins in full swing, the same events poisoning the housing market are now at work on commercial properties, and the bad news is trickling in. Malls from Michigan to Georgia are entering foreclosure.

Hotels in Tucson, Ariz., and Hilton Head, S.C., also are about to default on their mortgages.

That pace is expected to quicken. The number of late payments and defaults will double, if not triple, by the end of next year, according to analysts from Fitch Ratings Ltd., which evaluates companies' credit

One hope was that the U.S. would use some of the $700 billion financial bailout to buy shaky investments from banks and insurance companies. That was the original plan. But Treasury Secretary Henry Paulson has issued a stunning turnabout, saying the U.S. no longer planned to buy troubled securities. For those watching the wave of commercial defaults about to crest, the announcement was poorly received.

"He's created havoc in the marketplace by changing the rules," Rosen said. "It was the stupidest statement on Earth."

You know, I never even thought about commercial properties. The housing situation has yet to bottom out, and with a commercial bubble going to pop, we're really going to be screwed. I have a feeling regardless of whether or not we're on main street, wall street, or the farm, we're going to be looking at a really, really bad situation in the near future.

I can't even fathom what Paulson is thinking right now. If this is true and we have another bubble just as bad or worse as the first one, it's possible the entire economy will go into a freefall.

I'm starting to think in a few years we'll all be working on bridges and dams and lining up to get our rations of chicken soup and onions.

news.yahoo.com
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