Mish Shedlock posts some very significant charts and tables showing a disaster in the making.
I probably have a lot more to say about this later; but for now, it appears that default rates are running at an average of about 25% nationwide on typical residential mortgage loans.
Since the risk models are predicated upon default rates never exceeding the 3% to 5% range, and since exceeding those levels even by a little would amount to a “crisis”, I just wonder what kind of words are being thrown around in the corridors of power about this data. I wonder how long the – let’s face it – assholes in DC and on Wall Street have known about this.
When you throw in that “jumbo” mortgages are in substantially better shape – and this indicates a situation where a very small number of the people at the top are doing fine while literally everyone else is borderline homeless – I imagine the congresspersons with more foresight have already built their underground bunkers. No wonder they’re losing it over the events in Arizona. To most of us, that appeared as the random act of a lunatic; but our rulers see a dangerous rabble out there where Jared whatshisname is just the first wave.
Maybe they’re right. I hope not.