CalculatedRisk nails the issue of why the current Treasury programs and proposals are designed to fail when it comes to the real estate market. TARP, TALF, 4.5%, etc... they won't have the impact on the RE market that everyone is hoping for (Hope is not a strategy!). Why? Credit is not the issue. Lending standards are. Deleveraging is not occuring because of the rate levels. It is occuring because we are withdrawing from an era of excessively loose lending without regard to repayment ability.
My favorite passage:
One of the tragedies of the housing bubble was that some people were enticed to buy a home before they were really ready to be homeowners, and others to extend themselves too far. Many of these people are now soured on the wonders of homeownership, and they will not be buyers for an extended period of time.
Amen, brother! Interesting read
here.
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