From Investor's Business Daily:This is bad news for 3 reasons:
- California is a monumental housing bubble still waiting to pop.
- The jobs explanation tells us that it is a mistake to fixate on subprimes when they are only the posterboy du jour for massive overleveraging under a wide array of guises and financial instruments (all the non-subprimers who nevertheless stretched to bid above asking price or are otherwise overleveraged and one paycheck away from default).
- The bank-blaming bailouters will not let these facts get in the way of slick politicking--but they might use these facts to exploit the old rustbelt constituency and expand their bailouts to Chrysler, Ford, and General Motors . . . again.