 |
PMI, big in the field of insuring private mortgages, is THE canary in the coal mine for the entire housing industry.
It’s the harbinger of what’s to come for banks and other lenders.
It’s an alarm bell for investors everywhere.
And it’s screaming “bloody murder” — plunging virtually nonstop and losing most of its value in just the past four months. (See chart.)
Why is this former rock star of mortgages falling so far, so fast? Consider these undeniable facts:
Fact #1: The mortgage and housing bust, where the giant debt crisis of 2007-09 began, is upon us again!
U.S. home prices have just plunged ANOTHER 5.5 percent in the first quarter. Delinquencies and home foreclosures, which some hoped were “a thing of the past,” are now striking 6.4 million mortgages nationwide.
Fact #2: No more giant government rescues are in the works.
Every single one of Washington’s mega-programs to supposedly “save” the real estate market has failed. So with Congress trying to avoid budget-busting rescues like the plague, another big government bailout of this industry is a pipedream.
Fact #3: Big banks are loaded with foreclosed homes they can’t sell.
The last count? 872,000 units! Still in the pipeline? Another 1 million in the foreclosure process, and millions more at risk of tumbling into foreclosure, according to latest estimates by RealtyTrac!
To counter the housing disaster, Fed Chairman Bernanke has been running the money-printing machine virtually nonstop.
He’s already printed closed to $1.6 trillion, helping to drive gold, silver and other commodities sky high. And now, with housing crashing AGAIN, he’s bound to step up the pace even more.
My recommendation: If you were lured back into banking and mortgage stocks, get the heck out.
If you’re looking to sell your real estate properties, don’t wait for higher prices!
And if you’re looking to grow your wealth, here’s the key:
Each and every one of these dramatic changes — falling housing stocks, surging precious metals and more — gives you a tremendous profit opportunity.
Best wishes,
Mike
Mike Larson graduated from Boston University with a B.S. degree in Journalism and a B.A. degree in English in 1998, and went to work for Bankrate.com. There, he learned the mortgage and interest rates markets inside and out. Mike then joined Weiss Research in 2001. He is the editor of Safe Money Report. He is often quoted by the Washington Post, Reuters, Dow Jones Newswires, Orlando Sentinel, Palm Beach Post and Sun-Sentinel, and he has appeared on CNN, Bloomberg Television and CNBC.
