August 10th, 2021 by MG
President Bush struck a reassuring tone Wednesday about recent turbulence on Wall Street, saying he believes the markets will work their way through the turmoil safely. In his most extensive remarks on a gyrating stock market, he expressed confidence that investors would eventually calm down. ‘’My hope is that the market, if it functions normally, will be able to yield a soft landing,’’ Bush told reporters at the Treasury Department.
But as commenters on other bubble blogs help point out, we’ve heard about “Staying The Course” before, and we’re not buying it this time when we’re urged to do the same with the housing market.
The New York Times seems to suggest that that idea is not such a bad one:
In a statement that could further fuel the selloff, Countrywide Financial, the nation’s largest mortgage lender, said after the United States market closed that the debt markets were “experiencing unprecedented disruptions” that could hurt its profits and financial health. The company said it planned to hold more loans on its own books because investors were not willing to buy them. But it noted that its capacity to do so was “not unlimited.”
“Trust was shaken today,” said Thomas Mayer, the chief European economist at Deutsche Bank in Frankfurt. “Credit depends on trust. If trust disappears, then credit disappears, and you have a systemic issue.”
“It’s like popcorn in a kettle,” said James Melcher, president of Balestra Capital, a hedge fund in New York. “First you have one or two pops, then it turns into a cacophony. I think we are about halfway through.”
Many experts say the nation’s mortgage problems are likely to worsen in the coming months as hundreds of billions in adjustable-rate loans reset to higher rates in the next 12 to 18 months. At the end of March, nearly one in five subprime home loans were either past due or in foreclosure.
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