What’s driving the financial crisis?

It all started with the sub-prime crisis and yet it still goes on. For many, things are about to get better; in other words they think the “bottom” of the crisis is near. I’m not so sure; the key element rests with real-estate sales. Everywhere, inventories are bulging, prices are keeping steady or not going down fast and significantly enough to “unclog” the entire market. In addition, obtaining financing has become extremely tenuous. Banks now have cold-feet and are reluctant to make loans. So, we’re in fact facing a “quadruple-whammy” with serious real-estate investors waiting by the sidelines for the bottom to fall, normal folks who can’t get the mortgages they needs, banks that won’t make money available, plus a grossly over-supplied market. My sense is that it will take another year of misery before real estate prices start really tumbling down and banks realize that their assets secured by real property must be discounted by 30 to 50 percent. At that time, they’ll plunge deep into the red…