Walkaways
12/12/2007 10:39:00 PM | Author: baloghblog
No one at the top saw it coming. Business leaders, agency heads, fed presidents, nor the US president had a clue. Funny thing, no one at the bottom saw it coming either. Three and a half weeks was all it took, twenty four days. Sure, I guess one could argue that the signs were there - increasing foreclosures, decreasing job creation, stagflation pushing up food, energy, and living expenses, while the housing crisis deflated personal asset values. The election debacle, leaving neither side happy, a congress and presidency destined to do little for the average citizen.

It started in Detroit, though some in Miami and Southern California would disagree. It's tough to define the beginning when a movement has no leaders, no goal, and no direction. Hell, it doesn't even have a "branded" name on the evening news that sticks yet.

As the housing crisis deepened in the fall of '08, many fixes were enacted by the fed and by congress, most helping no one, a few helping to prop up multinational banking institutions enough to keep the earnings cycle rolling along. After ***redacted*** was sworn in on January 20th, and the 111th congress took over the reins, it was clear there would be no more easy answers, no more quick fixes. Discontent ratings were high, but not yet above last years historical ranges. The stock market managed a meandering 8% decline last year. Things were bad, but there began to be a whiff of something stranger in the air. People had been struggling hard to hold on to their homes, working to refinance or join government programs to lock in interest rates. Scrapping to make payments and keep food on the table.

Then the March foreclosure data came in, and all hell broke loose.

A 1000% increase in Detroit, and eleven times more foreclosures in South Florida and in pockets of Southern California. People had stopped struggling. They walked away.

The first groups truly did leave their home, packing up family and belongings and moving in with relatives and friends, leaving behind empty shells of homes in their wake. It was rumored that in Detroit, 10% of homeowners stopped paying their mortgages in the prior month. In an unwinding clusterfuck, never seen before in this country - financial institutions losing liquidity, stock values plummeting, nest eggs evaporating, even credit unions folding - people began ignoring their obligations, but staying put in their homes. Even families that had the means to make payments stopped doing so, seeing it as a fools errand.

The banks weakened further. Amounts over the $100k FDIC limit were another casualty. The dollar fell off a cliff as foreign holders ran for the door. Three and a half weeks later, things had ground to a halt. 75% of mortgages were delinquent according to the following month's report.

"WALKAWAYS!" someone spray painted on the side of a house in an exurban housing development.

An accusation? A curse? A subversive rallying cry?

The great walking away had begun.
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