Bloomberg had this article out about how the U.S. housing market lost $3.3 trillion in 2008 AND that 1 in 6 people with mortgages are underwater, or 17%. It's not getting any better. We have pending home sales coming out today at 10:00AM - consensus 82.3 (range: 78.2 to 84, previous actual: 82.3). I'll be really surprised if pending sales remained "unchanged". Motor vehicle sales are also coming out (total consensus: 7.7M (range:7.3M to 8.1M, previous actual: 7.7M). This is another consensus estimate where it is also "unchanged". Whatever.

You see, 2.6 million people lost jobs in 2008. How in the world are these people going to pay their mortgages? For most families, this is the single largest monthly expense. How are they going to pay it? They can't! This fuels the supply side of the foreclosure market, thus creating more vacancies and pressure on other homeowners to reduce their prices (against their will).As long as there are less buyers who are interested and qualified, this death spiral will continue. It all comes back to the jobs, you see?

I spent some time investing in residential real estate in Baltimore, buying up properties for $1,000-3,000 each. I can tell you that most of Baltimore is in the shitter. But this isn't isolated. Cities all over the US are seeing the effects of this crisis. What do I mean? Consider this: a single foreclosure can cost the local gov't $34,000 (stuff like trash removal, unpaid utility bills, police, inspection, etc.). A vacant house is usually looted within 72 hours of being vacant in some neighborhoods.

It's no wonder then why California, among other states, is getting terminated. In fact, credit-default swaps, for anything that has to do with Cali, has tripled since September. This lost tax revenue is killing the local municipalities. When the locals start asking for help en masse, the states get burdened, and then what? The states have to turn to the federal government. They can't support shit right now. Who's going to support them? The Chinese? Give me a break. This whole thing is ridiculous. It's like a bad dream, except it's a real-life nightmare.

Don't even get me started on these people not paying taxes. Or, how about the fact that BAC spent approx. $10 million to sponsor a bullshit Super Bowl "Fun Fest"? Ask the taxpayers if they're having fun.