Everybody thinks that the housing situation will be cured easily. I am not as sure. There may be an important shift in the housing situation as this current credit crisis meets up with the housing prices that have been rising for many years and pricing many potential buyers out of the market. Granting that houses are not tulip bulbs, it is nevertheless the case that when you have too much supply at too high prices you have a bubble that may not be easily amenable to lower interest rates especially with the economy slowing. I have written a little more on this in the new Barrel Report section at (white label, right top) http://www.Barrelomoney.com. It may be best to let prices adjust a bit before jumping to the rescue of builders and speculators. When prices adjust, lower rates and other incentives can help more than they can early on because it doesn't do a buyer that much good to pay a slightly lower interest rate if a house is dramatically overpriced and propped up artificially so a speculator can profit. Yes you want to prevent things from getting carried away on the downside but careful, measured action can be more effective and less costly for the economy as a whole even if there is some pain in the process.

Wrong. To get the slump over it must be at the base. Bad housing period. The poor land use has crippled our economy. When we need to bould new refineries there is no longer land because of over built housing. The small unfit apartments the are being built are a crime as they are greed machines to exact as much profit per sw ft. Apt and housing needs to be better built larger and designed for upgrades as technology brings in new functions and items into our lives. Think of the aptments that were build in the swingle years before vcr, computers,Dvd ,cell phones,and all the technology we take for granted. Think of the wiring and the space these take up. No much of the over blown housing needs to be plowed under and the total nation taken into account in use of the land to sustain the economy, New refineries need to be built. Then gas prices would drop. There is plenty of crude to buy the time and the R&D for new power sources to be tested and refined. New sources are necessary for the advancement of technology and it also means new ways of construction and using some old technology that was forgotten.
Most of all a tax increase and and balanced budget. So, we have the funds for these "rainy days"!!

First, let me address the RTC. If you want another RTC you are looking for more trouble. Anyone promoting this idea has no idea of just how bad - and how corrupt - the original was. In 1990 Congress approved approx. 100 billion and it was administered privately. It was as "crooked as a snake" and I have first hand experience to back up what I say. Further, adjusting for inflation and scope, Congress is going to have to appropriate over ONE TRILLION to cover this one. The amount of default will be over 10 times that of 1990 and three to six times as pricey. Even Congress is going to balk when they get the price. The only sensible solution to this one is the same as the one J.P. Morgan applied in 1909. There will be consolidation and there will be failure, from banks to builders to homeowners, both single and condo's. The government can help save some, but not all. Going back to the RTC for a moment. They bought condo operations that essentially had failed. A sixty unit building with 15 owners could not pay it's maintenance and went into disrepair. The RTC went in, refurbished the empty 45 and promoted sales. They were not "fire sale" or "bargain basement", but they priced fair and under market and of course, sold. The RTC did not have these in abundance either. They also had buildings that were incomplete, complete and undesirable under the best of circumstance and ones that were too pricey in the first place. A lot of this just simply went to auction as there was no other way. Guess who was always the high bidder? On Wall St. they call this insider trading - and it's illegal, ask Martha Stewart. Of course the RTC was an arm of the government - so?
As to the other two comments - the housing problem is far from over. It is now spreading. Try Spain and G.B. Try the news from G.B. back in Nov. and look Northern Rock. Expect that here.
As to building refineries? Not a bad idea, but world demand for oil is up-way up. India and China have a large appetite also and there is only so much to go around. Exploration and new finds might help but it would be temporary if demand continues. In short no change unless people change their habits.
Big SUV's to small fuel efficient. 70 to 55.
The only way this happens in the U.S. is for the government to order it, and than, the population gets mad.

The fact of the matter is, they unjustly raised housing prices for personal gain. Now that its blowing up in all our faces we cry and cry and cry. SOLUTION!!! Drop the housing costs back down to a fair value and the non rich can actually afford to make their payments. Houses sell ,we can pay, and the banks and mortgagers get paid. TA DA. Problem solved. QUIT BEING GREEDY IDOITS!!!

I've seen all kinds of articles about the govt. essentially mandating that the mortgage holders reduce the balance of some mortgages BELOW the now lower home values. However, I've seen no mention at all of the restrictions that should be placed on the borrowers. For a simple example, if my house cost $400,000, but is now worth $370,000 and they reduced my mortgage to 90% of the new value, could I then just sell the property and make a profit???? Even if they reduced it just to the value of the house, could I then just sell and walk away? These borrowers have, for the most part, proven they are bad financial risks and this encourages future risk taking (equity loans, buying what you can't afford, etc). Lastly, let's assume they don't sell and the house eventually increases in value. Does the bank get the full reduced value of the mortgage back upon sale? Are there further restrictions on equity loans?

ALAN GREENSPAN ,YOU ARE AN IDIOT. AS A CHAIRMAN OF THE FEDERAL RESERVE YOU DID ALLOW ALL THIS MESS TO HAPPEN .IT WAS JUST A BUBBLE AND ALL KNEW IT WILL BURST EVENTUALLY,LIKE THE DOT COMS,DID. NOW YOU SAY THE US ECONOMY WONT HEAL ,UNLESS THE HOUSING MARKET RECOVER. RECOVER BY WHOM ,STUPID? WE CANT AFFORD THOSE HOMES THEY ARE OVERPRISED,OVERTAXED AND OVERINSURED. CAN YOU TELL ME HOW THE HOUSE I DID BUY IN 1998 FOR 75000 COST NOW 350000? WHO CAN BUY IT? WHERE OUR KIDS WILL RAISE FAMILIES? YOU DAM DAM KEEP YOUR MOUTH SHUT