Today's financial news was dismal, at best. Lehman Bros has declared bankruptcy, insurer AIG is having financial woes, and Merril Lynch is being bought out by Bank of America. The Dow Industrial Average on the New York Stock Exchange, closed at 10,917, down 504 points!
All eyes are on blaming the Housing Market for what is being described at a financial hurricane. I don't see where the blame should be on the 'Housing Market" which is where buyers and sellers meet to exchange real property. Although the recent surge in prices (yes, it seems so long ago that prices were on the increase) was fueled by a pent up demand by buyers and the exuberance of sellers (another familiar word), they certainly could not have done this on their own.
If there wasn't the financing, this couldn't and wouldn't have happened. The experts and commentators on TV and the Internet are looking for an easy scapegoat for today's bad news. It's not the housing market. They should instead take a serious look at the real source of the problem, those that made the loans that shouldn't have been and those that bought and exchanged the paper that those loans created, without really looking, caring or understanding about the value. This was not the housing market. It is a different market where money is changes hands to finance these loans, loans that never should have been. That's where the focus of any correction needs to be.
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