Quoted: It just means that the people selling the homes gambled and lost big time.
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My take is: This is Bad Decision Making + Desperation (squared).
From a real perspective it means that slashing prices is not enough. They need to deflate inventory (the biggest "holy fuck" I'm seeing in the numbers right now). And they don't want to lower "comparables" in the high end subdivision, so they're giving away homes in the lower end one.
Lehman is rumored to be shitting the bed soon, and we're seeing counterparties setting trade limits just like they did with Bear Stearns. But this time the Federal Reserve does not have the juice to do anything about it.
Did you guys know that the Fed is down to $30b in treasuries on hand, compared to $300b last year at this time.
I suppose the tax payers can go on the hook to print a bunch of new ones..., but I'm seeing bad signs and, while the rose-colored glasses crew will show up shortly to tell me I'm wrong, I will take little comfort from their protestations.