California, Ohio and Florida had more than two-thirds of the 25 cities with the nation's highest foreclosure rates during the third quarter, as the credit crunch and falling home values hit homeowners, a foreclosure-listing service said.And from Justice:
James J. Saccacio, chief executive of RealtyTrac Inc., said the number of filings at 77 of the 100 largest metro areas rose from the second quarter. There continue, however, to be "pockets of the country -- most noticeably metro areas in the Carolinas, Virginia and Texas -- that have thus far dodged the foreclosure bullet," the CEO noted.
Higher interest rates and weaker home values have hit many homeowners hard, especially those with higher-risk subprime mortgages. Lenders, in turn, have tightened standards, making it tougher for individuals and companies to obtain credit.
Early this month, RealtyTrac of Irvine, Calif., said third-quarter foreclosure filings surged 30% nationally from the second quarter and nearly doubled from a year earlier, with one foreclosure filing for every 196 U.S. households. Third-quarter filings were up from a year ago in 45 states. Mr. Saccacio said at the time that "given the number of loans due to reset through the middle of 2008, and the continuing weakness in home sales, we would expect foreclosure activity to remain high and even increase over the next year in many markets."
Barris, Mike. California, Ohio, Florida Lead in Foreclosure Rates. Wall Street Journal. 14-Nov-2007.
It wasn’t too long ago that capitalist pundits proclaimed the end of sharp economic crises. The reality, however, is that capitalism is a crisis-ridden system. At the end of the ‘90s, the Federal Reserve moved to contain the collapse of the dot-com boom by lowering interest rates, which combined with an abundant supply of cheap credit and rising home values to trigger the housing bubble.
This led to a feeling of invincibility and incredibly risky investments for casino financial capitalism, which further detached it from the real economy. The current crisis shows that it can only remain suspended in air for a while before the “reality-based” economic laws have an effect.
The current boom has been defined by the increasing chasm between the ultra-rich and the rest of the population. While a few roll in money, wages for the majority have stagnated. Wages and salaries now make up the lowest share of gross domestic product in the U.S. since 1947. Ultimately the falling share of wages in national income is restricting the market for capitalism and increasing the tendency towards crisis.
Enormous anger has built up during the boom years at the unequal nature of society. A job (albeit often low paid and insecure) and the availability of relatively cheap credit, have softened the blows that have rained down on working-class people.
However, the onset of a world recession, when it comes, will profoundly alter the political situation as billions of working-class people will be expected to pay for the crisis. There is not a mechanical connection between economic developments and the consciousness and combativity of the working class, but, whether sooner or later, the coming economic upheavals will lay the basis for a massive increase in radicalization in the U.S. and internationally.
Shibabaw, Theodros. The Credit Bubble Bursts. Justice. 08-Sep-2007.