Amongst all the clutter (and there is surely tons of clutter in the news these days), here is some truly worthwhile reading regarding: “Why a Housing Bailout Won’t Help,” from the Wall Street Journal’s Holman Jenkins, Jr.

Most of us have read the anti-bailout arguments. What makes this piece so very interesting is Holman’s analysis of the underlying mortgage mess as a relatively simple, regional problem:

Too many people made bad bets on the future of residential real estate in remote southwestern suburbs. His analysis neatly summarizes a trend; bad bets on the future of far-flung suburbs.

What’s wrong out there? Jenkins concludes:

Many of these homebuyers are underwater not just because they bought more house than their incomes could support, and not just because prices are falling. They were also betting on commute patterns and demographic expectations that are proving invalid.

For you builder-types, our recent history (which is still evolving) is nothing short of a master roadmap towards the future, of what not to do. Hope this costly lesson is learned by all!

Tags: Sub Prime

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