Dow Drops 395, Oil at $139, Less Jobs and Growing Mortgage Crisis
by Jeff Davis
The Dow Jones just dropped 395 points as oil shot up to $139 per barrel, and the jobless rate hit a three and a half year high of 5.5 percent. As bad as all this sounds, it may only be the tip of the iceberg as the mortgage crisis keeps growing without bound threatening to take out major banks and knocking over more economic dominoes.
The obsessive coverage of the Democratic primaries knocked the subprime mortgage crisis off the front page for the last few months, but it’s bubbling away under the surface, along with Bush’s coming attack on Iran, which will cause the price of oil to skyrocket even further.
One news article reports that homes were lost at the highest rate on record in the first three months of 2008, and that late payments soared to a new high –which of course means even more foreclosures in the near future. The increasing number of homes thrown back on the market causes house prices to further drop. The mortgage companies and banks are absorbing all this damage easily losing $100,000 if not much more on each house dumped back on the market. The mostly non-white subprime borrowers simply declare bankruptcy and walk away. (more…)