torgo_x forwarded the most clear and forceful explanation of how really bad mortgage ideas work, and why the current situation can’t end well. Math is hard, and optimism is easy. I’d guess a lot of the people who do this think of themselves as risk-takers who are going to win. I wish them all luck tripling their incomes in the next five years.
I wonder what the impact of a really bad housing crash would have in Orange County. Not only is real estate development a big local industry, but that whole slimy subprime mortgage business is mostly here too. So much so that we refer to big-spending young guys who party hard as “mortgage bro’s”.
If there’s no more money for the next swathe of terra cotta boxes in Temecula, and no more spiffs for selling predatory refi’s to hicks, and no more interest-only ARM crazy home loans to sell, that’s a big chunk of the local wealth just flat fucking gone. It could be as bad as the Great Defense Slump of the 1970s, which was a carnival of suicidal dads, boarded up ranch-style homes, and 40 year old draftsmen lining up for government aid and retraining programs. Oh by the way, those are gone now because we didn’t need them in the New Economy. Whoo boy.