Housing woes continue

First, pending home sales fell 2.6 percent in November. How bad is the housing market? Even the bulls are sounding bearish:

In a speech on Tuesday, the head of mortgage finance company Fannie Mae, chimed in with a pessimistic note. Chief Executive Daniel Mudd said home prices would “perhaps begin to gain modestly” in 2010.

That’s just three years away, folks. At least we’re getting more realism from housing insiders.

Second, Countrywide stock took another big tumble of about 20 percent. The company felt compelled to deny the increasing bankruptcy speculation:

In a prepared statement earlier in the day, the company said there was “no substance to the rumor that Countrywide is planning to file for bankruptcy, and we are not aware of any basis for the rumor that any of the major rating agencies are contemplating negative action relative to the company.” …

The stock was shaken by a report in The New York Times that said court records show the lender fabricated documents related to a bankruptcy case of a borrower in Pennsylvania.

Other Countrywide actions in borrowers' bankruptcy cases have come under scrutiny in the past.

The fact that nobody from China or Abu Dhabi has put a penny into Countrywide ought to bely the company’s forced optimism.

Finally, KB Home’s stock also took a tumble on a fourth-quarter loss of nearly $800 million. The fact that KB, which focuses on made-to-order homes, not pre-cut, pre-fab new developments, continues to slide should underscore the depth of the continuing struggles in the housing market.

There's more: "Housing woes continue" >>

Citi may double housing-related writeoff

A little over a month ago, Citi said it was probably going to have to write off about $8 billion in bad loan debt, much of it housing related. Turns out the real answer (for now, anyway) is going to be more than twice that much.

Citigroup Inc. could write off as much as $18.7 billion in the fourth quarter, wrote Goldman analysts William F. Tanona, Betsy Miller and Neil C. Sanyal in a note to investors late Wednesday. If it does, they say, the bank may be forced to lower its dividend by 40 percent.

Citi has about $55 billion in exposure to subprime mortgages, about $43 billion of which are collateralized debt obligations, or CDOs, that have mortgages underlying them.

“We still believe it will be a couple of quarters before the current credit crisis is fully digested by the markets,” the Goldman analysts wrote.

After the November announcement, the Abu Dhabi Investment Authority bought a $7.5 billion chunk of the bank, a 5 percent investment. If the writedown is this bad, Citi will probably need another investment at least that large.

Of course, with that type of bleeding, that means it will be a buyer’s market for any chunk of Citi. And, that’s true in spades if Citi, as is likely, also has to cut its dividend significantly.

CIBC World Markets Corp. analyst Meredith Whitney has said for months that Citi's dividend should be on the chopping block. Earlier this month, she wrote that along with cutting the dividend, Citigroup should raise at least $30 billion in additional capital and sell at least $100 billion in assets.

And, it’s not just Citi. The same Goldman analysts expect Merrill Lynch to have to write off an additional $11.5 billion. Of course, the more these investment banks bleed, and the more their value drops, the more it becomes a falling spiral.

There's more: "Citi may double housing-related writeoff" >>

Your latest upbeat economic news

Home prices fall for the 10th month in a row AND, the price drops are spreading to broader swaths of the country. The October drop-off was 6.1 percent from a year ago.

Yale economist Robert Schiller says the falloff from the June 2006 peak of the housing bubble is the worst since World War II.

For details of how the housing bust is hitting southwest Florida, pretty much ground zero of the bursting bubble, read here.

There's more: "Your latest upbeat economic news" >>

What happens if all those CDOs are uninsured?

It’s quite possible. Today, bond insurer MBIA announced it has more exposure to collateralized debt obligations than its entire net worth.

MBIA said it has exposure to $30.6 billion in complex mortgage securities that it insures, an amount that eclipses its entire net worth, … (including) exposure to $8.1 billion of collateralized debt obligations, or CDOs, including mostly risky debt known as CDO squared, or CDOs backed by other CDOs, it reported on its Web site late on Wednesday. The company's net worth as of September 30 was $6.5 billion.

Meanwhile, Morgan Stanley’s mix of real indignation over the under-insuring, mixed with faux indignation about another company besides Morgan Stanley cutting corners on investments, sounds like it comes straight from a reel of “Casablanca”:

“We are shocked that management withheld this information for as long as it did,” Morgan Stanley said in a report, referring to the CDO-squared exposure.

Shocked that there’s gambling in this loan-based securities establishment!

Meawhile, Bear Stearns posted its first quarterly loss in history.

I’m sure the bulls on the Street are trying to do their latest spinmeistering as we speak.

There's more: "What happens if all those CDOs are uninsured?" >>

Now China wants a piece of the U.S. financial action

Just weeks after Singapore and the Abu Dhabi Investment Authority became major investors in cash-strapped financial institutions, China is getting in on the action.

Morgan Stanley, the No. 2 U.S. investment bank, reported a $9.4 billion writedown on Wednesday from bad bets on mortgage-related debt, leading it to take a $5 billion infusion from an arm of the Chinese government.

China Investment Corp. (made the) investment in Morgan Stanley. China's government-controlled investment vehicle will hold no more than 9.9 percent of the investment bank once its investment converts to common shares in 2010.

Several points to note. One, the writedown is three times what MS had previously warned of just a month ago.

Two, if the writedown problems are continually that bad, as every financial institution weighing in on the matter of their books in the past 30 days have said, just how shaky is the system?

Three, as I’ve talked about before, just how much will foreigners try to invest in U.S. financial institutions? Will the Securities and Exchange Commission weigh in, or drop some hints? Or the Fed? Or Congress?

Paul Kennedy spoke about issues like this in his magisterial book, “The Rise and Fall of the Great Powers,” too.

There's more: "Now China wants a piece of the U.S. financial action" >>

Here it comes: foreign bank buy-ups

The Abu Dhabi Investment Authority’s $7.5 bil buy into Citigroup got all the publicity, but Singapore bought a $10 bil chunk of UBS recently, too. It’s striking to note that both purchases were made on terms that put the American companies’ stock valuation at little above junk-bond status.

So, what’s next? A tightening of the lending spigots. Singapore didn’t get to the level of development it has today by throwing around nickels like manhole covers.

Maybe, the venerable Singaporean practice of caning will get exported the boardrooms of UBS and other American financial institutions while we’re at it. It couldn’t hurt.

There's more: "Here it comes: foreign bank buy-ups" >>

Freddie Mac leaking money, pushes back on lenders

The latest home-finance bad news, as well as the answer proposed for it, are certain to add weight to the housing bubble anchor.

Freddie Mac expects to lose an additional $5.5-$7.5 billion over the next few years, beyond the $4.5 billion it’s already lost this year.

"I honestly think it's going to get tougher before it gets better," Richard Syron, the company's chairman and CEO, said in a discussion with financial analysts in New York.

Hello, presidential candidates, are you listening?

Meanwhile, Freddie Mac is protecting its own bottom line:

Syron's remarks came a day after Freddie Mac and its larger government-sponsored rival Fannie Mae said they are changing their criteria for purchasing delinquent home loans they've guaranteed, in order to reduce the number they buy from investors.

On Tuesday, McLean, Va.-based Freddie Mac announced it was imposing a 0.25 percent fee on all new home loans it buys or guarantees with settlement dates starting March 9, matching an earlier move by Fannie Mae. Both companies have begun adding surcharges on loans to borrowers with credit scores below 680 and who are borrowing more than 70 percent of the home's value.

This can only push the price of new loans up further, while making banks and other lending institutions even more nervous about iffy loans they have on the books dating from March 9 to the present.

We’re going to see more and more financial CYA like this in the coming six months or so. Financial bulls who claim housing market recovery is “just around the corner” are full of it.

There's more: "Freddie Mac leaking money, pushes back on lenders" >>

Two big NOs to the mortgage freeze

Bill Fleckenstein has a laundry list of reasons to oppose it.

They include the possibility that it will further deflate values, more than doing nothing would, and encourage further irresponsibility, including from the holders of doggy mortgages:

This bailout will complicate the lives not just of homeowners but of anyone who touches the mortgage paper after them. Allowing someone to pick whatever mortgage rate they'd like to pay will solve nothing. It will only make mortgage-backed assets worth that much less, with the very stocks that rallied recently on this idea being the ones negatively impacted.

Jon Markman agrees and for similar reasons :

Have we completely lost our common sense? Is it really desirable to provide easier money to people and companies that got into trouble by abusing their access to money in the first place? And is it really a good idea both to cancel mortgage bondholders' contracts for the sake of an adjustable-mortgage-rate freeze and to provide a couple of years of grace for stressed-out home borrowers who are likely to eventually default anyway?

Personally, I think they’re right. I don’t doubt that I’m more politically liberal than either one of them, but, liberalism doesn’t equate to irresponsibility or free passes.

If that’s not enough, Markman says we could stand to learn a lesson from Japan:

Postponing the undeniable anguish involved in making participants own up to debt-fueled losses is exactly why it took Japan more than a decade to shake off the bursting of its own credit bubble back in 1990. Interest rates were cut essentially to zero, but because moribund banks and real-estate tycoons were given government stipends, they drew funds and attention away from more-productive uses, and the country entered a recession that haunts Japan to this day.

Plus, Markman points out, in the future, holders of mortgage-based securities will demand a higher risk premium. (Now, on the other hand, that’s going to be true anyway.

Beyond that, he says we should expect a spate of lawsuits before this is all over.

And, in yet more cheery news, auto loan delinquencies are their highest in a decade and look like they will continue to rise.
Two big NOs to the mortgage freeze

There's more: "Two big NOs to the mortgage freeze" >>

WaMu making HUGE job cuts

Per the AP:

Washington Mutual Inc., the nation's largest savings and loan, said Monday that problems in the mortgage and credit markets are forcing it to close offices, lay off more than 3,000 workers and set aside up to $1.6 billion for loan losses in the fourth quarter.

That’s not the half of it.

I’ve already read a bit of speculation that WaMu might have to board up ALL the windows. If that’s the case, the subprime crisis/housing bubble has officially become the worst economic problem since the two Arab oil embargos, and threatens to become the worst since World War II.

To say the least, WaMu is once-burned, twice-shy:

After dismantling much of its subprime mortgage operation in September, Seattle-based WaMu will now get out of the business entirely. The company said it will close about 190 of its 335 home loan centers and sales offices, shut down nine call centers and eliminate 2,600 home loan workers and 550 corporate and support jobs.

That, in turn, tightens the credit market, with less money for residential loans. And, all the slashing still won’t stanch the bleeding:

For the first quarter of 2008, the company said it expects loan losses to total $1.8 billion to $2 billion. Loan losses will remain high throughout the year, WaMu added.

Actually, I think WaMu will become a takeover target sometime next year. And, given that they’ve already dipped their toes in the water by propping up Citigroup, don’t be surprised if investors from Abu Dhabi or elsewhere in the Arab world try to get a piece of the action, if only most indirectly and discreetly.

And, that’s not the only rocky financial news of Monday. Bank of America shut down a major institutional investment fund Pthat was leaking like a sieve.

There's more: "WaMu making HUGE job cuts" >>

Recession more likely — and around party convention time

Moody’s expects a nationwide housing price drop of 15 percent by 2010 and a California/Florida drop of as much as 30 percent, with full recovery not until 2010.

House prices are forecast to fall 13% from their peak through early 2009. After accounting for incentives home sellers are offering buyers, effective declines peak-to-trough will total well over 15%, the report said.

Punta Gorda, Fla., and Stockton, Calif,, are the hardest hit markets in the United States, with price declines from peak-to-trough forecast at 35.3% and 31.6%, respectively.

"This is the most severe housing recession since the post-World War II period," Moody’s Mark Zandi told Reuters.

Remember, the freeze doesn’t apply to already-delinquent homebuyers, nor does it apply to upside-down loans. And, at a 15 percent drop, not to mention 30 percent in California and Florida, many loans will be upside down.

As for a recession possibility?

The same Moody’s report says housing will knock 1.5 percentage points off economic growth next year, most of that by before the end off summer.

So, a recession — right around the Republican and Democratic national conventions. And, a “reset freeze” that’s like a Band-Aid on a horror flick chainsaw wound.

There's more: "Recession more likely — and around party convention time" >>

Foreclosures hit record high in third quarter

By percentage points, the rate of homes in foreclosure jumped 20 percent from the second quarter to the third.

The Mortgage Bankers Association in its quarterly snapshot of the mortgage market released Thursday said that the percentage of all mortgages nationwide that started the foreclosure process jumped to a record high of 0.78 percent during the July-to-September period. That surpassed the previous high of 0.65 percent set in the prior quarter.

Defaults also hit an all-time high:

The delinquency rate for all mortgages climbed to 5.59 percent in the third quarter. That was up from 5.12 percent in the second quarter and was the highest since 1986, the association said. Payments are considered delinquent if they are 30 or more days past due.

Homeowners with spotty credit who have subprime adjustable-rate loans were especially hard hit. Foreclosures and late payments for these borrowers also reached all-time highs in the third quarter.

All of this puts the “rate reset freeze” into starker relief.

Remember, it does not apply to homes in mortgage default, let alone all the way past that into foreclosure.

At the same time, this will probably increase pressure for a Fed rate cut. That, in turn, will probably tank the dollar.

There's more: "Foreclosures hit record high in third quarter" >>

White House OKs mortgage rate reset freeze — so what?

The good news? It’s for five years.

The bad news? As preliminary reports indicated the freeze in adjustabale rate mortgage rate resets only applies to homeowners current on their mortgages.

Nor, of course, do we know if ARM –holders who get a five-year grace period will actually learn the discipline it takes to handle a merely delayed, not eliminated, rate reset when it comes down the road.

If not, we’ve just shuffled trouble off to Buffalo, where it will keep growing in the dark.

And, this freeze also assumes lenders will be highly willing to refinance. Well, given what we’ve seen so far, that may not be quite so true.

First, lenders just have not been that anxious to move on this issue.

Second, this may be a situation similar to where people take out six- or seven-year car loans and are, in essence, “upside down” on the vehicle, especially if they want to resell before paying the note off. Something similar may be happening in the case of some houses.

Or, related to that, if a house has lost that much value, investors who bought loans that are now nonperforming would have to agree to eat a loss.

And with slice-and-dice collateralized debt obligations never priced to market, the word “crater” immediately comes to mind in thinking of their potential value in such a situation.

Beyond that, banks and other lending agencies will surely be asking for proof of insurance when a borrower wants to re-fi to a straight-up mortgage. Well, getting back to my early point, what if that ain’t happening, or they ain’t making the grade?

That said, allowing courts more power over renegotiating loans, at least in bankruptcies, would leverage mortgage-buying speculators more.

On the other hand, some economists say that would make lenders more nervous about making loans, which would then make them more pricey.

And, bottom line: people who have paid off loans may not want any sort of bailout that comes out of their wallets.

No word as to whether or not BushCo supports allowing courts more latitude in resetting delinquent mortgages, which is under discussion in the Senate.

There's more: "White House OKs mortgage rate reset freeze — so what?" >>

“The Pope of the Fed” still proclaims infalliblity

Former Federal Reserve chief Alan Greenspan finally admit there’s a housing bubble. But, “me responsible?” No way.

Said the former Federal Reserve chairman: "Markets are becoming aware of the fact that the decline in housing is not stopping. . . . I have no particular regrets. The housing bubble is not a reflection of what we did, as it is a global phenomenon."

Greenspan's conclusion is not accurate. But before describing why, I find it interesting that he said the words "housing bubble." Recall that as the housing bubble was raging and he was still Fed chairman, he argued that real estate could not experience a bubble because all housing markets were local. He specifically cited the impossibility of arbitrage between Portland, Maine, and Portland, Ore., as though that was an impediment to a bubble.

In essence, Greenspan won’t admit that his policies “delocalized” the housing market, either, by artificially inflating the housing sector, which then brought in all the financial institutions who came up with the ideas for their wacky collateralized debt obligations.

Greenspan is now trying to pass the buck globally. More below the fold:

Now he's making the argument that not only is there a housing bubble but that it's been a worldwide housing bubble. Well, this is a rare occasion where he is right. It is a worldwide housing bubble. But that does not mean he was a hapless bystander as the bubble developed. Just the opposite is the case.

One reason for the global housing bubble is that the dollar has been the world's reserve currency, with parts of South America, the Middle East and the Far East linking their currencies to ours. As such, the weak dollar has been a conduit for spreading easy money globally. Therefore, although Greenspan did not directly cause the housing bubble in Europe, his pursuit of wildly indulgent monetary policies at home were transmitted abroad. That did not exactly hurt the development of a housing bubble there.

Exactly. Greenspan’s part in the eventual weakening of the dollar has helped export the larger American financial problems that stem from the housing bubble.

Meanwhile, Saint Alan chose to be a bubble-inflator and a false prophet, already a year ago:

On Oct. 9, 2006, at a financial conference in Calgary, Alberta, he said: "I suspect that we're coming to the end of this downtrend, as applications for new mortgages, the most important series, have flattened out. . . . There is a good chance of coming out of this in good shape, but average housing prices are likely to be down this year (meaning 2006) relative to 2005. I don't know, but I think the worst of this may well be over."

It’s clear, based on his history, that Greenspan was blowing smoke up the housing market’s collective skirt.

Bill Fleckenstein concludes his column by telling us exactly what the Fed needs right now: A Paul Volker to make the country take its medicine.

There's more: "“The Pope of the Fed” still proclaims infalliblity" >>

Subprime fallout continues to move beyond the coasts

The Dallas/Fort Worth Metroplex will lose $4 billion in housing value in 2008, trailing only Los Angeles and New York City and ahead of Chicago.

Especially given that new house costs in Dallas are much lower than on either coast and a fair amount less than in Chicago, this is big news. (On a percentage basis, Dallas’ projected 0.8 percent drop is one-third more than Chicago’s projected 0.6 percent drop.)

Plus, Odessa is on the top-20 cities in proportional value of losses, at a pegged 1.2 percent drop.

Other Texas metro areas projected to take a hit are Laredo at 0.9 percent drop; Killeen-Fort Hood at 0.8 percent; Houston, Midland and Abilene, with a 0.7 percent loss; Austin, Bryan-College Station, San Angelo and Tyler, at 0.6 percent off; El Paso, Amarillo and Corpus Christi, at 0.5 percent off; Brownsville, at 0.4 percent drop; Lubbock, Beaumont-Port Arthur and Waco at 0.3 percent.

And, it’s hitting other noncoastal areas besides Dallas. Follow the link to read about places like Ogden, Utah and Albuquerque, N.M.’s ranking, too.

There's more: "Subprime fallout continues to move beyond the coasts" >>

Home sales drop for eighth straight month

Sales volume off 1.2 percent from a year ago; more notably, average price is down 5.1 percent.

Again, that’s pretty much the sound of silence you hear from presidential candidates discussing the economy.

I think I have yet to hear a candidate from either party mention the “r” word. Short of a recession, most of the reforms in the housing industry that Democrats are talking about don’t get to more root issues, such as an economy hugely dependent on spending by consumers already stretched to the limit.

Well and good for Hillary Clinton to be decried over NAFTA and WTO support, but what do other candidates propose today to address root causes?

There's more: "Home sales drop for eighth straight month" >>

Could the housing crunch ultimately drop prices 30 percent?

One expert says we should look back to 1925-33 and its similar drop to consider similar radical changes to today’s real estate world. That would include further changes in bankruptcy law, mortgage securities law and more.

There's more: "Could the housing crunch ultimately drop prices 30 percent?" >>

So much for the whistling in the dark that the subprime crisis won’t affect Texas

And what it might say nationally and politically

D/FW existing home prices are down 3 percent from a year ago. And, that’s worse than the national average fall-off of 2 percent.

Despite folks in Texas (that’s YOU, Gov. Helmethair) doing this whistling in the dark, this is just another sign that tells me it’s more and more likely we’re facing a recession sometime next year.

As a political issue, then, things that should be on the table are better regulation of banks, mortgage lenders, etc. on subprime loans; better regulation of lending institutions in requiring a higher actual percentage of capital backing outstanding loans, better regulation of CDOs and other investment vehicles, and yes, Chuck Schumer, taxing hedge fund management fees, and other things, as capital gains.

Since $100/bbl oil (or above) will exacerbate the financial situation, we need to have presidential candidates addressing other issues.

Peak Oil. Forget, or get beyond, the shibboleth phrase “energy security.” Actually start talking about Peak Oil. Stop putting blinders on this part of our future. Tell Americans unless major changes are made now, this will be far more gut-wrenching than global warming, with major changes happening sooner.

The dollar, world currencies, inflation, etc. Talk more about why you think a stronger or weaker dollar is better. Be realistic about how much you think China can be made to do with its currency. Maybe Richardson’s idea, of announcing proposed Cabinet appointments in advance of the general election, is one way to signal planned economic policies.

There's more: "So much for the whistling in the dark that the subprime crisis won’t affect Texas" >>

Brookings tries to explain away subprime worries and cheats

Cutting some evidentiary corners, and looking past the CDO valuation issue for the most part, is an easy way of doing that. Take this bit of playing with the facts:

[A]mong all U.S. residential mortgage originations, subprime loans altogether comprised a cumulative total of under 13 percent from 1994 through 2005, though they rose to 19 percent in the year 2004 and 21 percent in 2005, according to the Mortgage Bankers’ Association (MBA). This means at least 87 percent of residential mortgages as of mid-2007 were not subprime loans, according to the MBA’s delinquency studies.

So, the study simply ignores 2006 and early 2007 data on subprime loans, despite the sudden increase in the percent of loans being subprime ones in 2004-05.

Brookings also claims the problem is confined to subprimes, when the number of defaults in the loan class above them, Alt-A, has also been increasing.

And, it claims there is no credit crisis even while admitting that CDOs and other mortgage securitizations have risk that it says, in not so many words, wasn’t priced to market.

The Brookings report is either ignorant or willful on the economic issue that lending institutions don’t know how many of these instruments could go bad, therefore don’t know how much money they’ll have to tie up to account for them.

It also has nothing unfavorable to say about Fed rate cuts.

The only thing I found myself in agreement with was no bailout for borrowers. On the other hand, it didn’t say anything against a bailout for lenders.

In other words, it sounds like it was written by two Wall Street bulls with connections to financial institutions.

There's more: "Brookings tries to explain away subprime worries and cheats" >>

Housing prices take another tumble

Housing prices fell in August for the eighth month in a row and took the biggest decline in 16 years.

An index of 10 U.S. metropolitan areas fell 5 percent in August from a year ago. That was the biggest drop since June 1991. The lowest ever was a decline of 6.3 percent in April 1991.

Meanwhile, consumer confidence took a tumble, to the lowest point since just after Hurricanes Katrina and Rita in 2005.
I’m still waiting for presidential candidates to address the housing issue and possible recession more, and when they do discuss it, to do something besides offer a simple, guilt-free bailout. Remember, many subprime mortgages were not the lessee’s first home to buy, and in some cases, were even used to buy second or third homes as investment properties.

There's more: "Housing prices take another tumble" >>

Subprime crisis could out-cost 1980s S&L debacle

A new estimate places the final cost of the subprime crisis/housing bubble at $400 billion, while, in inflation-adjusted dollars, the S&L crisis weighs in at $240 billion.

In a new report to be issued today, the Joint Economic Committee of Congress predicts about two million foreclosures by the end of next year on homes purchased with subprime mortgages. That estimate is far higher than the Bush administration’s prediction in September of 500,000 foreclosures, which in itself would be a tidal wave compared with recent years. Congressional aides provided details of the report yesterday to The New York Times.

The Joint Economic Committee estimates that the lost of real estate wealth just from foreclosures on subprime loans will be about $71 billion. An additional $32 billion would be lost because foreclosed homes tend to drive down the prices of other houses in the neighborhood.

Those figures would cause a decline of $917 million in lost property tax revenue to state and local governments, which will also have to spend more on policing neighborhoods with vacant homes.

And, you wonder why people like me warn about a pending recession?

Global Insight, a research firm, predicts that the national average for housing prices will drop 5 percent over the next year and 10 percent before mid-2009, for a total of about $2 trillion. Economists at Goldman Sachs have predicted prices will drop by 15 percent, meaning an overall decline of more than $3 trillion; other forecasters have said the decline could be 20 percent or more.

That’s why.

Don’t forget, we haven’t even talked about spending downturn due to fewer home equity loans being taken out, or ones already on the books turning upside-down due to downturns in home value.

Economists continue to update their predictions on how the loss of housing wealth might affect the overall economy. Nigel Gault, chief domestic economist at Global Insight, said he assumes that consumers reduce their spending by about 6 cents for every dollar of lost wealth.

If prices drop 5 percent next year, that would mean a decline of $60 billion in spending, all else being equal. That would be a noticeable slowdown, but not enough to cause a recession.

In the last several years, Americans have increased spending faster than their incomes by borrowing against the rising value of their homes. Economists estimate that such mortgage-equity withdrawals may have added one-quarter of a percentage point to consumer spending growth — a boost that could now disappear.

That’s why presidential candidates better recognize this is going to be a serious issue next year.

There's more: "Subprime crisis could out-cost 1980s S&L debacle" >>