Housing Market Causes Big Stock Drop
by Ian Mosley
The Dow Jones stock market took its worst plunge in five years last week losing 585 points (rebounding 93 points Monday then dropping 146 Tuesday) suggesting the economy is shaky at best. Once again the housing market was a big source of concern. Increasingly the housing market is beginning to resemble a Pyramid or “Ponzi Scheme.” Imagine a completely worthless stock which shoots up to stratospheric heights and then collapses. The last people holding the stock lose big time, but the people who sell up until the last minute make money. While houses do have some intrinsic value, a $200,000 house priced at $600,000 is two-thirds Ponzi Scheme.
According to Yahoo News, “Countrywide Financial Corp. said Tuesday its second-quarter profit shrank by nearly a third as softening home prices led to rising delinquencies and mortgage defaults among the most creditworthy borrowers. The huge mortgage lender was forced to take impairment charges as it braced for the possibility of more people failing to make their mortgage payments. Countrywide also said the market will become increasingly challenging as loan production subsides while lenders compete with one another more fiercely.”
In other words, the Great Housing Boom of the early 2000s is finally over, the free-fall is beginning, and a lot of these parasitic little mortgage companies you see advertised on TV and who send you spam e-mails all the time may soon be gone.
Yahoo goes on: “‘This is a huge battleship and it’s headed in the wrong direction,’ Chief Executive Angelo R. Mozilo said during a lengthy conference call with Wall Street analysts. ‘Looking to the second half of 2007, we expect difficult housing and mortgage market conditions to persist.’”
America’s economic base has been undermined by outsourcing. For the past ten years American manufacturing has steadily shrunk. Meanwhile America has imported everything from heavy industrial goods to cheap plastic rubbish from abroad, mostly Asia. Americans have “made money” in a very artificial and non-productive way largely through a form of land speculation involving selling and re-selling grossly overvalued private homes. Making money by actually creating new products and manufacturing them is increasingly rare.
Meanwhile the economy is not so much crashing as slowly toppling. At some point in the near future a tipping point will be reached, gravity will take over and the whole thing will flop down into the abyss.
The next step after a housing market collapse will be massive layoffs in the “upper middle class,” the people who put on suits every day and go into air-conditioned offices and cubicles where they push papers and play with computers for salaries which are almost as hugely inflated as housing values. Most of these people never think about their jobs being outsourced, but the CEO and top executives think about outsourcing their jobs every day.
If the typical yuppie dad loses his job, he’ll probably lose his house. If our economy begins to slow down and there are massive white collar lay offs, it will be almost impossible for high-paid yuppies to find equally good-paying jobs. A $7.50 per hour pizza delivery job isn’t going to pay a $2,000 per month mortgage. During a recession, Latino and Black quota-hires are usually the only people who can pick up the very few jobs which become available. White people are last in line –and that usually means waiting an extra one to two years for the next job and meanwhile losing a home.
Many of these white yuppies have heard of David Duke. They know that there are pro-white political activists who are trying to undo racial quotas, stop outsourcing and end the evil corporate and government policies that will bring on the next recession if not the next Great Depression. We may not take power anytime soon, but enough political pressure on something like outsourcing (or quotas) could make a difference. With enough help from ordinary white people, pro-White activists like Duke could become political reformers, who can change the system before disaster strikes, instead of being isolated prophets saying “I told you so” when the collapse finally happens.