"The housing bubble is in the early stages of implosion. We do not know for sure how long the adjustment will take or are we sure how deep it will be, but we do know it has to happen and that the risks to our economy and the world economy are enormous.
"Sub-prime loans now make up over 50% of mortgages and with those come all sorts of exotic mortgages that borrowers do not understand and eventually wonâ€™t be able to service. That means many millions of Americans will go broke and bankrupt over the next several years. $11 trillion in real estate values in just a few years time could become $6 trillion in value. Sixty-five million Americans own homes and many put zero to 5% down...
"Interest-only mortgages nationwide average 31%. In California, they make up 61%, and in Santa Rose and Vallejo, where they are 77% and 78% respectively. Next year, 2006, about $300 billion in mortgage debt will enter its adjustable period. Borrowers will have to begin repaying interest and principal at new higher interest rates. Then there are buyers who take out two mortgages at once to buy a home. Standards â€" there are no standards. Itâ€™s whatever the lender wants to do.
"Todayâ€™s debt and leverage makes the 1920s look like childâ€™s play. You cannot have an economy that is 60% dependent on real estate. Industries such as construction, commodities, lending, brokerage, mortgages and insurance are holding America economically together."