Why do banks fail? Well, many banks lent money on real estate in depressed areas in the north like rustbelt Detroit were unemployment is high. Workers lost their jobs and could not pay; this caused people to move out and prices to fall. General Motors losing 39 billion in 2007 did not help. The economy is in terrible shape and will get worse.
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I know
lots of people in the south who are also in trouble. California and
Florida are not the only places hit hard. Places like South Carolina are
also suffering as prices fall and companies close. The glut of unsold
homes in sunny miami is so high that a realtor told me they had 17 years
worth of unsold homes.
Many realtors are quitting and doing other work. It is the worst possible time to be selling your home as few have any money and banks do not want to make loans. |
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hit were the expensive homes. Some houses selling for 1.5 million are now
for sale at $495,000. Land in Florida that was for sale at $50,000 an acre
is now for sale at $10,000 an acre. The state will see a dramatic drop in
taxes. Without personal income tax Florida depends on high real estate
taxes.
While the houses of the rich were hit hardest, even entry level condos have gone down in price. The construction industry is dead. On Miami Beach you see many half built condos and now we see why the country is in decline. |
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Offshore outsourcing of high paying high tech jobs to India did cause a dramatic drop in new employments; that combined with companies closing their US operations and moving to low wage China has been a one two punch that destroyed the US economy, but things will get worse.
Many foreign investors used to buy expensive luxury condos, but all the searching at airports and draconian laws used to stop money laundering have spooked the overseas crowd. Many are buying property in Europe were banks loan money, property taxes are low, and the euro is high. I predict that as flight of money from banks gets worse this will prompt the US government to seek legislation to prevent funds form leaving our shores.
The US is in worse shape than ever as money is pulled out of US banks by american investors and sent overseas.
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