You're assuming a few things: first, that the poor were the victims; second, that subprime equals stupid; third, that people who bought with subprime had a choice, or even wanted a choice.

Despite the media blitz to the contrary, many (not all, but many) of the folks in the urban areas (Miami, Atlanta, Detroit, Cincy, Philly, etc) now in serious trouble were not poor deluded non-white fools who couldn't have known better. In my experience, many did have a plan, the same plan as the subprime lenders: count on nice, steady appreciation to give them the needed equity in a few years, all the while charging rent on the 2, 3 or 4-unit houses they were buying. Some of these people were looking to flip the house inside a year--why not? It worked in 2003 and 04.

Oh, and I shouldn't forget my favorite scenario: the bust-out. (Tony Soprano would have loved this.) Buy a house with no money down, and STRIP the thing bare: heating systems, boilers, fixtures, right down to the copper pipes. Then vanish without making a single payment. You think I'm joking? Call any realtor in Providence, they've seen it.

Having witnessed all this, I have a hard time listening to sob stories about the poor wittle people who got hurt by the big bad banks.

"Quality of borrowers had relatively little to do with the housing crash. It was the quality of the collateral."

Hmm... The housing stock in Eastern MA--RI is just fine. That, after all, is the COLLATERAL to the loans. Are you implying the houses were in disrepair??

"That's why, traditionally, foreclosed houses have been a risky buy. If they went to foreclosure, it was often (not always but often) because something unexpected happened that reduced the value of the house to below the amount of the original mortgage. Flooding, unexpected zoning changes, something like that."

Traditionally, in the East, foreclosures had nothing to do with that. It had to do with job loss or catastrophic illness/death. We don't have zoning changes here (ha!) or flooding (???).

I don't know if you're in the industry or what, but the valuations seem to be fine. The single biggest issue is that the risky buyers who subsequently went to foreclosure diluted the housing market with their short sales. Prices in MA/RI have dropped less that 5% overall and not at all in certain markets. Hence, the "housing bubble" does not exist in certain areas here.

"The other issue was overbuilding. Massive numbers of new units were coming onto markets so fast that the supply increase was higher than what traditional models allowed for. Excess supply depressed prices faster than anyone expected."

Not in the Northeast. There is less than 7% new construction here as a percentage of sales.

"The character of the much maligned "subprime borrower" had relatively little to do with it. If the purchase prices had not been inflated, any borrower could have usually avoided foreclosure by selling, even if he or she could no longer make the payments."

Bulls*%t. Do you honestly think that lending to scumbags in large numbers leads to anything good? These people willfully falsified their employment, assets, income and even credit standing to get loans. How can they pay ANY loan back if they actually don't have legitimate jobs?? And given that these people all bought in the same neighborhoods, so that whole streets were in foreclosure, how could these people sell for original value??

My father told me a truism about sales many years ago: something is worth something because someone is willing to pay something for it. If a house can be marketed at $400,000 and sell for about that much a month later, guess what, that's how much it's worth, no matter what you think three years later.

Here's the news: people are still looking to buy houses. They always will, despite the "I'll never pay more than $50,000 for a house" contrarian Salonista willing-to-rent-until-he's-on-Medicare moron. People are still willing to pay for a house--not as much as last year, but close. Sophisticated renters realize that renting is a long-term waste of money. Most people realize that house prices are a function of supply and demand and act accordingly. In areas like the Northeast, NY or the CA Bay area, there is only do much buildable land, so house prices will be high. If you want a lower price, go to AZ/NV/FL. (Warmer, too.)

"This is the buzz I have heard in the industry, that credit ratings were not an accurate predictor of loan repayment. Pretty interesting."

I think you may be confusing the credit ratings of mortgage pools with credit ratings of borrowers.

Either way, though, if you're looking for a 581 Fico buyer with no skin in the game (ie, nothing down) to give you the same assurances they'll repay you with the same fidelity as, say, a 650 Fico borrower, you've got another think coming. I've never been in secondary banking, and I could tell you that.

Beef and butter are not exactly staples in Japan, and many Japanese go their entire lives without eating either. Beef is atrociously expensive in Tokyo and is a status symbol of the rich. Butter is something used in Western-style restaurants and not part of traditional cooking.

Japan's topography has never lent itself to cattle herding (or herding at all). The Japanese diet, I believe, focuses on rice, vegetables, tofu and seafood--giving them the second longest life expectancy in the world (http://geography.about.com/library/weekly/aa042000b.htm).

Regarding food, the Japanese are concerned about a much more serious threat to their food supply--the depletion of worldwide fishing stocks. That would be a far graver threat to Japan.

BTW, ElectroRobot--lol!