Bill Fleckenstein’s article today on sub-prime loans and what they will do to our economy is really worth reading.
“…Normal homes sold for $1 million in value. In this new seven-home development, (homes) sold for $1.3 million to $1.5 million each… now most of the seven homes are vacant — worth no more than $900,000. Thus, all the lenders are sitting on losses of $400,000 to $600,000. This is just one of many that are happening daily.”
Chicken Smith View:
Place another tick mark on the “Recession to start in 2007” column. Folks, it’s not just a bunch of Chicken Littles running around saying this. This is coming from those inside the sub-prime lending field. I bet you even a secretary at one of these lenders can see that nothing good can come out of this.