New York Times: 5 million Loans expected to be in trouble by year end

Here is some more proof that the debt bubble is imploding. Look at the huge spike in delinquencies below that was published in the New York Times today:

Here is the link to the article. Some highlights:

"As Bill Evolves, Mortgage Debt Is Snowballing

When Congress started fashioning a sweeping rescue package for struggling homeowners earlier this year, 2.6 million loans were in trouble. But the problem has grown considerably in just six months and is continuing to worsen.

More than three million borrowers are in distress, and analysts are forecasting a couple of million more will fall behind on their payments in the coming year as home prices fall further and the economy weakens.

Those stark numbers not only illustrate the challenges for the lawmakers trying to provide some relief to their constituents but also hint at what the next administration will be facing after the election. While the proposed program would help some homeowners, analysts say it would touch only a small fraction of those in trouble — the Congressional Budget Office estimates it would be used by 400,000 borrowers — and would do little to bolster the housing market."

My Take:

Only Congress can find a way to piss away $300 billion dollars. These bailouts will not work because the losses are too large. Its like throwing a pail of water on a 6 alarm fire.

Watching my tax dollars get pissed away on such a stupid bill really annoys me. The sad thing is we will spend billions and possibly trillions trying to "save" the housing market. The reality is the only thing that will save the housing market is to leave it alone and let prices fall back to affordable levels.

What sense does it make to prop home prices up at levels at which no one can afford to buy them? This accomplishes nothing other than delaying the inevitable which is free falling prices due to massive defaults, lack of buyers, massive foreclosures, and tougher lending standards.

I wish this disaster didn't occur during an election year because I think Congress may have taken a different stance and kept their noses out of this bursting debt/housing bubble to a larger extent.

Congress needs to realize that the housing market cannot be saved and it must correct.