Right on the Money

Implications: This article has excellent insight to the reality that the housing boom has been fueling the economy for some time.  If housing were removed from GDP, we would be growing at about 1% per year, pretty anemic.  The issue of overzealous lenders allowing 100% financing, stated income loans, and other more-than-aggressive practices, will come back and haunt us.

Analysis: The information has always been there...the housing ATM added several trillion dollars to the GDP, which was really like adding adding a loan to the operating income line on a balance sheet.  With no growth in appreciation of value, the lines of credit are "tapped out", plus borrowers, in many cases, are left with loans they cannot repay.  Job losses will accelerate in the housing and related industries.  If GE is laying off 35% of it's lender workforce, what do you think others will be doing soon?