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“There Goes the Neighborhood”

April 28, 2004

I stumbled across an excellent article in Washington Monthly this morning. Probably the single best article I’ve ever read regarding the housing industry, the role of Fannie Mae and Freddie Mac, and housing’s relation to the economy as a whole.

It warns of a coming housing crash.

If you are a homeowner, or just, well, like reading about economics and secondary mortagages, dig in. It’s a long one, but the prose is magnificent.

A quote:

Greenspan knows, perhaps better than anyone, that this economy is perched nervously on top of a wobbly, Dr. Seuss-like tower. Our recovery is propped up by consumer spending, which is in turn propped up by mortgage refinancing, and if that refinancing dries up before more props can be put in, the whole edifice could fall.

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