re: I can't beleive we still get these "it's all the borrowers fault" comments. It probably is but let's hang the bankers too.

First off, it was the banksters writing the 125% LTV mortgages, not consumers. This, of course, signaled to consumers that the banks believed so strongly that their home value would rise rapidly and perpetually that it was OK to borrow against this perceived equity.

Face it, from realtors to mortgage brokers/bankers to the mass media, the general public was told that they were stupid not to get on board with the "flip this house" mentality and to cash in on the housing gold mine.

The real root cause was the Fed under Greenspan keeping interest rates artificially low for years (actually negative, when you take inflation into account).

See my post from August 1, 2007:

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In Treating U.S. After Bubble, Fed Helped Create New Threats

* Low Rates Bolstered Economy, But Housing, Foreign Debt Appear Out of Balance

* Greenspan's Legacy at Stake

"If I were a biologist I'd call this a perfect example of symbiosis," former Fed Chairman Paul Volcker mused in a February speech at Stanford University. "Contented American consumers matched against delighted foreign producers. Happy borrowers matched against willing lenders. The difficulty is, the seemingly comfortable pattern can't go on indefinitely."

Almost every economist agrees. The debate is over how, not whether, the global economy rebalances: Will it be smooth, through some combination of declining dollar and accelerating foreign demand? Or will it be chaotic, with a dollar collapse, much higher U.S. interest rates and perhaps a global recession?

Mr. Volcker thinks a crisis is likely. Investor confidence could fade "at some point," he said, with "damaging volatility in both exchange markets and interest rates."

http://tinyurl.com/5s439s

All that the idiot Greenspan ever said relative to the housing bubble was that there was "a bit of frothiness".

re: If we approach 20 - 20% unemployment many of us will foreclose and worse.

We're way past that.

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Part-Time Workers Mask Unemployment Woes

The national unemployment rate has risen to 9.5 percent, the highest level in more than a quarter-century. Yet it still excludes all those who have given up looking for a job and those part-time workers who want to be working full time.

Include them — as the Labor Department does when calculating its broadest measure of the job market — and the rate reached 23.5 percent in Oregon this spring, according to a New York Times analysis of state-by-state data. It was 21.5 percent in both Michigan and Rhode Island and 20.3 percent in California. In Tennessee, Nevada and several other states that have relied heavily on manufacturing or housing, the rate was just under 20 percent this spring and may have since surpassed it. (MORE)

http://tinyurl.com/lymjjr

SEE ALSO:

http://tinyurl.com/5ulhpl

About half of U.S. mortgages seen underwater by 2011

NEW YORK (Reuters) – The percentage of U.S. homeowners who owe more than their house is worth will nearly double to 48 percent in 2011 from 26 percent at the end of March, portending another blow to the housing market, Deutsche Bank said on Wednesday.

Home price declines will have their biggest impact on prime "conforming" loans that meet underwriting and size guidelines of Fannie Mae and Freddie Mac, the bank said in a report. Prime conforming loans make up two-thirds of mortgages, and are typically less risky because of stringent requirements.

"We project the next phase of the housing decline will have a far greater impact on prime borrowers," Deutsche analysts Karen Weaver and Ying Shen said in the report.

"For many, the home has morphed from piggy bank to albatross," the analysts said. (MORE)

http://tinyurl.com/lv8tb9

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More than half of cars bought under 'Cash For Clunkers' are foreign brands

The disclosure that 55% of vehicles being purchased under the program are foreign makes -- mostly Japanese and South Korean brands -- could raising questions about whether the stimulus benefits American auto workers, or those in Asia.

http://tinyurl.com/newz3j

I'd laugh if this wasn't so sick.

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"To know and not to know, to be conscious of complete truthfulness while telling carefully constructed lies, to hold simultaneously two opinions which canceled out, knowing them to be contradictory and believing in both of them, to use logic against logic, to repudiate morality while laying claim to it, to believe that democracy was impossible and that the Party was the guardian of democracy, to forget, whatever it was necessary to forget, then to draw it back into memory again at the moment when it was needed, and then promptly to forget it again, and above all, to apply the same process to the process itself -- that was the ultimate subtlety; consciously to induce unconsciousness, and then, once again, to become unconscious of the act of hypnosis you had just performed. Even to understand the word 'doublethink' involved the use of doublethink."

--George Orwell, 1984

re: Kinda funny how all of a sudden it's time to bring the troops home from Iraq. And how they now have 6+ years of experience in controlling unruly civilians. And how their ranks now contain significant numbers of borderline criminal-types who might not have many qualms about using their weapons on us.

I think that the only certainty going forward is increasing uncertainty as global capitalism goes into its death throes. Where, exactly, this will take society is anyone's guess, but I cannot see it taking us in a positive direction in the short run.

As you point out, there are now plenty of trained borderline criminal-types wearing uniforms and carrying heavy weaponry. But, there is also a heavily-armed civilian population that vastly outnumbers them and would be difficult at best to try to control.

As the economy continues to deteriorate, only God knows how this will play out.