Karmic News debut

If you’ve been cruising the left side of the Internet, you’ve heard how California’s hot housing market is cooling off.

The Home Price Index for the first quarter of 2005 showed California prices went up 25 percent in one year.

In the last five years, home prices climbed 103 percent -- more than doubled. No other market matched it.

Most experts agree. “Massive amounts of foreclosures and a drastic drop in real estate prices are overdue,” says Roger Herman at World Socialist Web Site.

Reports by the Federal Deposit Insurance Corporation – better known as the F-D-I-C – claim the market will NOT collapse. Just stagnate until wages catch up.

Riiiight.

But as historians know, “The past is prologue,” so it behooves us to recall that real wages for the working class have either stayed the same or fallen for the last 30 years.

The federal folks who finance mortgages are worried about the fallout that would follow a collapse in the housing market.

If enough homebuyers defaulted on loans, the F-D-I-C could be dragged “to the brink of insolvency,” Herman says.

Now, Bird Street listeners must understand: these warnings do not come from idle nay-sayers muttering over their third martini.

Uh-uh.

This is the same situation that killed off so many savings and loans in the 1980s, bringing the Federal Savings and Loan Insurance Corporation to its knees.

This bursting bubble could bring on a depression so deep and so dark that even people who DON’T own their homes, or speculate in risky mortgage deals could feel it.

A lot.