I know many in real estate would like to remake the movie "Weekend at Bernies" to "Weekend with Bernake!"  But you can't! Sooner or later the party had to end. This market is so fraugth with intrigue, fraud and drama no one knows what to believe anymore.  I was thinking how in real estate the agent used to be the portal for the buyer in the sense that the real estate agent sat the buyer down adn qualified the buyer looking over income, debt, and bank statements to see if the buyer was qualified to buy.  If things looked good, the process for buying began.  In recent years inexperienced agents did not qualify buyers and put them into the car first, and when the contract was about to be written would go into a scramble mode to find any lender that could accommodate the deal.  Kind of really doing things backwards when you think about it. 

The fact was the old way of conforming ratios of debt and income were pretty good, but there were not enough deals to satisfy the greed in the banking world...so the 20% down rull gave way to the 80/15/5, and then the 80/10/10 and then the 100% borrower, and then to sub-prime that really could not afford to repay or refinance their own loan. With each change of the requirements we scrapped through the dreggs and of the barrell and beyond to find warm bodies to buy more real estate.  Well the news is, the party is over, and the appreciation and values we are now left looking at are not real by any stretch of the imagination.  So why is this a surprise to many in real estate that the copse of what we are doing is stinking so much now that the government and banks cannot even fake its death anymore?

What we will be hearing about shortly is the banks and the lending institutions are broke.  Watch the news carefully.  Bernake's speech his morning was an attempt to pour oil on the waters, and prop it up with words of confidence that really isn't there.  Too bad rigamortis is now setting in.  The fact of the matter is that the banks cannot raise cash to keep things running, they can't make loans, and they cannot hide the truth any longer.  Thier assets are now liabilities especially when you lend out 100% and it is now worth 75%, and the borrower has walked.  And guess what?  There are no buyers to take it off the banks hands.