Toot Our Own Horn !!

Well what can we at LNR say ? 10 days ago we wrote our first major story titled:
“Feds Missing Crucial Element to Solve Credit Crisis” where we explained that without stabilizing falling home prices- the credit crisis cannot be addressed in the long term- and that the housing crisis was clearly the root of our current financial problems. We’ve been scanning the media for the past week for any support on our analysis- nothing found- finally- 10 days later, the Wall Street Journal reports:

· OCTOBER 15, 2008 Wall Street Journal
No Quick Fix for Housing PricesEconomists Press for New Programs for Homeowners toStemDownward SpiralBy RUTH SIMON and MICHAEL CORKERY…..

But some economists say the government needs to do more to address the underlying problems that triggered the credit crisis. "It's very disappointing" that the plan doesn't do anything "to stop the spiral in home prices," which is reducing net worth and creating a falloff in consumer spending, says Harvard University economist Martin Feldstein.
One problem with the refinancing program is that it will help only 400,000 troubled homeowners, according to some estimates, well short of the nearly 12 million Americans who owe more on their mortgages than their homes are worth and are in danger of default “

Well, we cannot agree more since we published this analysis 10 days before the Wall Street Journal. Crashing home prices can only be addressed by halting evictions-thereby keeping homes from being dumped on the auction/short sale market, and cutting home building permits for companies until the huge overhang of home supply gets soaked up. -LNR