Banks Get Picky About Credit Cards

This is a very interesting article. The implications of this are far reaching.

JMO:
We've created a number of conveniences with credit cards. By making credit cards harder to qualify for, and less affordable you will see more consumers returning to a cash/debit card payment method. This will do several things including changes to rental card and hotel policies and rates. It will also cause consumers to save more, live within their means and in turn spend less. Remember, if we're not spending we are not "stimulating the economy". When you acknowledge the BILLIONS if NOT TRILLIONS of dollars that are spent using credit cards you can imagine what a 10-20-30% decrease in usage will do to our economy.

Shutting Down Fannie/Freddie?

Last Week Taylor, Bean & Whitaker and Now Moody's Reports...

The two giant players in the US home loan finance market share a ‘bleak’ near-to immediate-term outlook as losses continue to mount, according to Moody’s Investors Service. Regulators may begin to wind down government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac within the next 18 months, Moody’s said Monday in a global banking analysis report. Source: National Mortgage News.

JMO:

If this is true (I will continue to research), then it signals a significant lack of confidence in the mortgage/real estate market on the part of the Gov't (current owner of Fannie/Freddie). Some of the key questions are. How will mortgages be issued/serviced/sold in the future. These are interesting times...

Report Says That Nearly Half Of Homes In The U.S. Will Have Negative Equity By 2011

Deutsche Bank believes that nearly half of all mortgages will have negative equity by 2011, meaning that they will be worth less than the amounts owed on them. This certainly coincides with the statistics presentd by JMO in our blog post on July 14th (REO's expected to increase an ADDITIONAL 150% IN 2009).

JMO:
This only addresses that nearly 50% of homes will have negative equity. It does not estimate of those properties how many will become short sales, foreclosures and deeds-in-lieu. Of additional concern is how many purchasers of homes in the last year will find themselves in this same "underwater" position. If you are intending on holding onto or acquiring property, please make sure you have a long-term (10 yrs or more) strategy in place that will allow you absorb the "paper loss" you will take.