Monday, September 15, 2008
The end of the world as we know it
Unless you live in a snow cave near the south pole, you probably heard about the stock market meltdown today. The Dow was down about 5%, not a record by any means. It dropped over 20% on Oct 19th 1987 (black monday). But 5% is still a bunch in one day, especially since much of that was in the financials. AIG dropped 50%, Wamu was down another 40% to about $2. Did anyone think Wamu would be a 2 buck chuck stock a couple of years ago. Some respected experts and financial gurus are now predicting armagedon. By the looks of the Asian markets tonight they might be right. They are following the US market...right off a cliff.
What does this mean to the real estate market. Who knows for sure but I expect it will serve to further tighten the credit markets. Making financing harder and harder to get. It may also further confuse and delay foreclosures. As banks fail and the paperwork gets shuffled around who knows how long people may slip through the cracks.
Will the gubment step in and take over the financials? Will they offer mortages? I'd bet they will do something. But our gubment being what it is, it will probably be a disaster. The last week has been a scary one. This could easily go sideways if even a little bit of panic sets in. Let's hope they can keep this meltdown undercontrol.