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[Music]
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although the subprime crisis seems to be
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showing some signs of easing debate over
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what caused it whether it could have
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been prevented and how long it might
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last will continue for some time to come
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knowledge at Wharton asked Wharton real
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estate Professor Susan Walter for her
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perspective on the latest economic
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developments welcome Professor wer
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pleasure to be here blame for the
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subprime crisis has been attributed to
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all sorts of things uh the uh rise of
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securitization in recent years the use
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of adjustable rate loans uh low interest
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rate policy by the federal Federal
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Reserve and greed of homeowners uh greed
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on Wall Street uh with an aim to
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short-term profits or Regulators of
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their heads in the sand which of these
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factors have been most important in your
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view well guilty as charged all of the
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above were part they all contributed it
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would not have happened but for
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securitization it would not have
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happened but for deregulation and
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deregulation securitization came
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together uh don't know um about the
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greed there certainly are investors out
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there who respect calculating but a
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large part of it is the prices rising
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affordability crisis and pushing on the
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part of both borrowers and lenders for
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more affordable products which were also
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over time standards eroded let more
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people into Home Ownership let more
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people refinance but the standards
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eroded over time now why was that that
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the this is what we call partly it's the
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underwriting question that the lenders
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were simply willing to lend to people uh
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that they had less likelihood of getting
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paid from than they were before what led
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them to do that well I want to be clear
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too there are two ways that Sanders
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wrote over time one the underwriting
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standards literally uh stated income
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came into play in 2006 where people
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could basically say what their income
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was on many of these loans and that's
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underwriting eroding over time but also
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the standards itself the ltvs loan to
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values consolidated loan to values went
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up with piggyback loans so the lending
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standards that existed became more
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liberally offered so in econom call The
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Supply function shifted there was more
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Supply now you ask me why yes why well
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it's a it's an interesting question
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that's going to be a question for
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economic historians to ask and answer
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but in models that my colleague Andre
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POF and I work it's a natural
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competitive moving for market share you
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compete not just on price but you
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compete on uh on Market you compete for
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market share by competing with your
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fellow lenders by undercutting them and
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you can undercut them on rate you can
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undercut them on standards to increase
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market share especially so if the ones
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who originate in making the loans don't
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have any exposure to the risk on the
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other side now there also is a change in
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the the kinds of companies institutions
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that were making uh mortgage loans and
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back in the days when we think of it all
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as being Freddy Mack and Fanny May uh
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there there were certain standards that
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some of these newer firms didn't have to
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abide by is that correct absolutely
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correct and the firms whose gaining in
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market share were not as exposed to risk
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so that's part of the uh story of how
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this happened uh Fanny and Freddy's
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market share fha's market share
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particularly Federal housing
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Administration government insured
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dramatically declined as subprime
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increased and we saw that starting in
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2002 through uh the end of 2006 so Fanny
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and Freddy were simply not able to make
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the kinds of loans that some of these
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other firms started to make Fanny and
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Freddy and I want to also include FHA
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because there was really a one for one
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uh Fanny and Freddy and FHA were not
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able to make these loans because they by
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law needed to invest in quot unquote
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investment grade which excluded subprime
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now why were these other types of firms
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able to get into the market at this
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point rather than 15 years ago or 30
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years ago or some other time this is uh
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private label securitization which did
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not exist 15 or 20 years ago uh what
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exists did was securitization which was
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Fanny Freddy and jumbo securitization
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jumbo securitization are loans that are
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investment grade Prime but over the
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conforming loan limit 417,000 until
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recently so those were the markets that
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was it uh and that's all that there
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could be because there was really no way
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of evaluating risk charging borrowers
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for different risk so with risk-based
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pricing came the incentive to lend to
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riskier borrowers and to charge them
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perhaps more for the loan and was this
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technical advances or research on this
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is risk are and that sort of thing what
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were the elements that went into that uh
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automated underwriting was first de
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developed by Freddy Mac in the mid1
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1990s and that means computerized
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basically right correct for the risk of
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the borrower using credit card FICO
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score type of information that used to
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be used in consumer credit that Mig ated
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over to mortgage market and the purpose
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of the automated underwriting is to give
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the lender an idea of the the the
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prospects that a particular borrow is
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likely to default on the loan based on
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past history patterns of other other
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people in that cat their characteristics
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and I take it that one of the problems
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with the uh in the subprime situation is
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that now you're dealing with a group of
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borrowers for and a group of products
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for which the track record is not as
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extensive is that is that right that's a
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it's a it's a too simplified that's
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really too simplified well let's hear
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the complicated first okay the um uh
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automated underwriting is quite
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successful at uh predicting based on the
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risk of the borrower there's another
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component which is the value of the home
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so in any more any incentive to default
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on a mortgage or eventually foreclosing
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bare losses uh th that series of events
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happens because of the borrower risk
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their willingness to pay Etc which is uh
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predicted by credit score but in
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addition very key the most key factor
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for foreclosure prediction is loan to
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value so if values deteriorate and if
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loans exceed values then it's very
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difficult to sell the home therefore
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foreclosure is almost inevitable that's
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where we are today and the models the
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automated underwriting were really not
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developed to predict what values would
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be under extreme circumstances yeah
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let's look at that how extreme they
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really were when when you look back at
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the period that many of these loans were
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being written earlier mid part of this
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decade interest rates were
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extraordinarily low unusually low at
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that time and and what happened
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afterward that seemed to have been the
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trigger event uh for many of these
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defaults and then
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foreclosures appears to be that interest
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rates simply Rose to normal levels uh
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the FED funds rate went went from one to
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I think five and a quarter uh something
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like that was that really so
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unpredictable that rates would go back
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to the normal range uh from an
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abnormally low range yes it's it it
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first of all you can't predict rates but
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certainly the rates as they were in 2006
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were not historically high in fact
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they're historically in a moderate range
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so it's not as simple again to say it
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was the rate rise that occurred in 2006
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nor is it simple to say that it was the
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rate decline in 2001 2 and three which
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set us up those I think contributed they
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were contributory factors but they
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weren't sufficient to explain the sharp
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debacle that we're in now because rates
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certainly haven't gone back to levels we
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saw you know 20 years ago or 30 years
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ago when there were double digit rates
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for many many mortgages correct and at
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that point obviously we didn't have
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anything like we have today we did not
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have this kind of Crisis now the second
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element of this was the uh the falling
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of home prices which as you said left
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lots of people underwater they can't
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sell or they may feel inclined not to
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not to just to walk away as people say
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now the the falling of home prices again
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uh many people tend to think of their
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homes as as as the perfect investment
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that always rises in value but there
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have been periods when they have uh
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retrenched and it doesn't seem again
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from the professionals point of view all
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that surprising that home prices would
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uh level off and perhaps drop after the
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extraordinary gains uh from the '90s
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into the early part of this decade this
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is the first time in US history since
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the Great Depression that we've had a
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national decline in home prices so it is
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exceptional and part of the story of the
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extraordinary collapse of 2007 and
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current 2008 continuing is the 2006
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explosion of credit so that on one hand
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we did have rates go up in 2006 on the
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other hand standards eroded dramatically
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in 2006 and it's the 2006 book of
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business that is under most stress
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that's where the foreclosures are coming
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from as of now so why are we seeing this
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this sort of unprecedented Nationwide
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decline in housing prices so it's not
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local markets it's not unemployment it's
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not simply expectations reversing it's
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not the local Factory shutting down or
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something that indeed has been what
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previous housing price recessions have
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been attributed to there there is a um
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for there is a factor there's a critical
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factor that all of this misses and it's
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not interest rates either what it is is
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that the standards the roading
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especially in 2006 when there was a
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dramatic decline in standards was
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unsustainable and that retrenched we had
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a sharp reversal starting in 2006 of
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these
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unsustainable standards which were
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artificially inflating housing prices so
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over this period standards eroded
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artificially inflating housing prices
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housing prices increases and even levels
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could only be sustained with this
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unsustainable overly liberalized credit
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being manufactured which directly caused
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the price rise of 2006 and basically
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that boils down to you you make money so
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easily available that people have more
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to spend and they bid up prices is that
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absolutely it's a credit induced bubble
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people are able and willing to pay more
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when you have zero Z down payment
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negatively advertised they can get into
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the home and the bet is not on them the
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bet is on someone else what's going to
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happen in the future so it's an
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affordability and it also is uh simply
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these are loans without money going into
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in some cases that's the investor side
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of the story now uh there's also been
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there was during this period an increase
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in the use of adjustable rate mortgages
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and this has been one of the problems
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for borrowers who now are facing re sets
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the interest rates have gone up and
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that's causing their monthly payments to
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rise to points where they can't pay it
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or don't want to pay it uh what caused
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or first is it correct that the use of
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adjustable rate mortgages increased uh
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and what caused that not just adjustable
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rate mortgages more to the point teaser
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rate adjustable rate mortgages in option
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arms all of these latter are negatively
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advertising instruments that is you get
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into the loan and then you borrow more
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money over time so that drives loan to
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Value ratio up which again is going to
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be the key to the next part of the story
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which is now what do we do our loan is
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worth more than the home maybe we
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walk and there's lots of research that
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says that people who don't have skin in
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the game as they say that is equity in
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the house are more likely to walk away
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from it than people who do absolutely
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that is a key constent in all of our
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research foreclosure loan is driven by
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high loan to value upside down LTV is
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greater than one and one of the factors
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uh here is that uh lenders stopped
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requiring the this the kind of down
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payments that many people were
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accustomed to years ago 10% or 20% of
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the sales price why did they stop
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demanding those well in part it was
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ability to expand the market this
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natural competition if one guy is doing
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it the other guy is doing it that's how
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you get market share and it's not simply
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the LTV of one lender these are
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consolidated loan to value ratios so
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they were allowing piggybacks to come on
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uh which were very popular to allow
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people to afford their home and good
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business good
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fees now there's lots of debate about
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what to do now uh now that this has
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happened and it seems to me there are
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two broad areas which are what to do
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about the people uh the borrowers and
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the lenders who are in trouble right now
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and then what to do to prevent a
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recurrence of this kind of thing in the
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future so let's break it down what what
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do you think should be done uh for the
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borrowers who are finding themselves
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underwater today this is this has been a
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big issue in Washington recently yeah on
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the one hand there's moral hazard
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involved there's the story of rescuing
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people who make bad decisions only
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supports bad decisions going forward and
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there are bad decisions not only but
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borrowers but by the underwriting
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agencies Etc and by investors so let's
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let everyone take their medicine and
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educate and go forward learn by doing
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and there is an argument for that unless
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it actually leads to a serious recession
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which is a Desta one where in fact we
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have a free fall in prices which feeds
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back to the overall economy we don't
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know that that's going to happen but we
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don't know that it's not going to happen
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so there there it's one thing to say uh
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this is a homeowner who took a chance
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and it didn't work out and that's their
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tough luck it's another thing to say to
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that person's Nextdoor neighbors uh it's
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too bad that your home prices are
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falling because there's a glut of houses
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on the market uh in your neighborhood
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due to this that's it's really what
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we're concerned about is the collateral
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damage the rest of us uh uh suffering in
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some ways that is economy and what's the
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medicine what's the response to that uh
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the FED is out of quivers at that point
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so preventing that kind of free fall on
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housing prices has to be out there we
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have to have some tool to do that even
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if we don't implement it immediately
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because in fact the need for it depends
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on the severity of the slow down or
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recession that we may be in and what do
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you think is the tool for for dealing
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with that well uh the concept has been
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supported by the fetch chair banki uh
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it's there's a bipartisan leg
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legislation on the hill uh that has the
00:15:06
FHA coming in putting a floor on the
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market uh there's something to be said
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for that kind of response where the
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lenders take a haircut the investors
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take a haircut but they do it and then
00:15:18
in return for uh the federal government
00:15:20
then taking the risk of further price
00:15:22
declines which hopefully then will be
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slowed down so you'd make both parties
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suffer enough that they wouldn't want to
00:15:27
do it again and at the same time limit
00:15:30
their losses to the point where their
00:15:32
their their disaster doesn't spill over
00:15:34
and affect everyone else floor to for
00:15:37
security for all of us now how do we
00:15:39
distinguish between the borrower who is
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uh just an ordinary homeowner with a
00:15:45
primary residence who either made a
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mistake or was duped into a mortgage
00:15:49
that wasn't a good idea and somebody who
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is a Speculator or somebody who was
00:15:53
buying more house than they really could
00:15:55
afford well that's a simple one I there
00:15:57
are uh owner occupants versus investors
00:16:00
and have to go down that line and again
00:16:03
uh talking about the institutions the
00:16:05
the the ones that lent money
00:16:08
um how big a haircut do they need to
00:16:10
take to discourage this kind of thing in
00:16:12
the future well that of course is going
00:16:14
to be question but there are already uh
00:16:17
firms out there that are pricing there
00:16:18
is some sign it looks like right now
00:16:21
there's some trades at about a 20 30%
00:16:23
haircut now this is dealing with the
00:16:25
current crisis but but looking down the
00:16:27
road I think most people would uh would
00:16:29
like to not see this kind of volatility
00:16:31
in these markets in the future are there
00:16:33
things that can be done to tweak the way
00:16:35
the mortgage markets work and the
00:16:37
Securities markets work to prevent the
00:16:39
the the kind of excesses that led to
00:16:41
this tweaks is a small word there are
00:16:43
going to have to be major changes to the
00:16:45
way securitization works this exposes
00:16:48
the kiles heill of securitization which
00:16:51
it which is that leads to a pro-
00:16:53
cyclical impact of housing on the
00:16:55
overall economy housing brings down the
00:16:57
overall econ economy and then the
00:16:59
overall economy interfaces with housing
00:17:01
and then we're in a free fall we need to
00:17:04
have a response I think it's early in
00:17:06
the game certainly early in the game to
00:17:08
put on major changes in in in uh
00:17:11
regulatory responses because right now
00:17:13
we have to be very concerned about
00:17:14
liquidity that's the number one issue in
00:17:17
the subprime market we have to be very
00:17:19
concerned about liquidity in the overall
00:17:21
mortgage Market major looking down the
00:17:23
line we are going to have to question
00:17:27
the underlying basis for where we are
00:17:29
here today which is risk-based price
00:17:33
securitization that's what's new this
00:17:35
time and can you explain that what's new
00:17:38
this time is unlike the securitization
00:17:40
of the past the securitization is
00:17:43
tranching of risk in very complicated
00:17:46
cdos Clos SS instruments which do not
00:17:50
trade so we have neither Market
00:17:53
discipline because we don't although the
00:17:56
the price of the loan may be vary by
00:17:58
risk may as I say the price of the
00:18:01
mortgage instrument did not in the
00:18:04
securitization uh of the mortgage
00:18:06
instrument these Securities did not
00:18:09
trade therefore there wasn't a market
00:18:12
discipline to price the risk and give
00:18:15
the signal of these were extraordinarily
00:18:18
risky instruments they were marked to
00:18:21
model not to Market lots of fees UPF
00:18:24
front across the board but the ultimate
00:18:27
risk was known because in fact they
00:18:30
weren't priced to the risk uh in some
00:18:33
sense you know it's a it's a disaster
00:18:35
when we have potentially uh the
00:18:37
Foreclosure rate that we have of 2 3%
00:18:40
could bring down the economy with if
00:18:42
there's a recession that's serious um
00:18:45
but on the other hand uh if this is
00:18:48
priced if the rate of return on the
00:18:52
instruments that Wall Street pays is
00:18:55
high at least we're sending the right
00:18:56
signal that did not happen
00:18:59
in our research what we've seen is the
00:19:01
standards eroded but the rate did not go
00:19:04
up so this is a failure of pricing not
00:19:07
surprising because these instruments did
00:19:09
not trade well if they don't trade and
00:19:11
you don't have examples of recent sales
00:19:14
to look at to set values how will you
00:19:16
set values I mean they tried to use
00:19:18
models and that clearly doesn't work
00:19:20
these are theoretical basis clearly for
00:19:22
for setting value what's the alternative
00:19:25
well uh if we are going to have
00:19:27
securitization there's going to have to
00:19:28
be securitization with trading or with
00:19:32
some indicator that these are
00:19:34
extraordinarily risky Securities because
00:19:36
they don't trade some kind of red flag
00:19:38
and there's discussion SEC is moving
00:19:40
along these lines that's one answer the
00:19:43
other answer is and these are not either
00:19:45
or the other answer is we've been in a
00:19:48
extreme deregulated environment where
00:19:51
basically anything goes and in that
00:19:53
environment even the competitors can
00:19:56
race to the bottom so they may be some
00:19:59
need for the return of credential
00:20:03
regulation especially if it's the banks
00:20:06
themselves who are engaging in this race
00:20:09
to the bottom competition because then
00:20:12
all of us are exposed to demand deposit
00:20:14
insurance now in order to encourage uh
00:20:17
trading would you have to have some form
00:20:19
of standardization so that uh people
00:20:21
would have a fairly good understanding
00:20:23
of what this instrument is I gather that
00:20:26
in this recent event many were sort of
00:20:27
custom made and each one in some
00:20:30
respects unique to all the others which
00:20:32
of course music can't trade liquidity ET
00:20:35
so how would you standard
00:20:36
standardization there's no trading so
00:20:39
that's an open question there are ways
00:20:41
and um we're just beginning to think
00:20:44
about how that would actually come about
00:20:47
it could be totally Market based
00:20:49
incentives for standardization SEC might
00:20:51
have to have a role but as you say
00:20:53
without standardization there is no
00:20:55
liquidity there is no trading and
00:20:58
another proposal that's been floating
00:21:00
around is to make sure that the
00:21:03
participants in these markets all keep
00:21:05
skin in the game as they say that is
00:21:08
that instead of packaging up bundling up
00:21:10
one of these Securities then sending it
00:21:12
on its way into the market and
00:21:14
forgetting about it uh the creators uh
00:21:17
would would have to maintain some sort
00:21:19
of position or some sort of guarantee so
00:21:22
that if things went wrong uh they would
00:21:25
pay a price uh and that would give them
00:21:27
an incentive to produce things of a
00:21:28
higher quality does something along
00:21:30
those lines make sense it does uh the
00:21:32
basic um research that my colleague
00:21:35
Andre pavlof and I have done which in
00:21:37
fact helped explain the Asian banking
00:21:39
crisis uh points to the incentive to
00:21:43
produce fees short-run produce fees and
00:21:45
if there's nothing on the other side
00:21:47
about what the consequences these fee
00:21:49
driven returns then you are going to
00:21:51
have a race to the bottom it is under
00:21:54
certain circumstances inevitable so this
00:21:56
is not the first time that we've had a
00:21:57
real State and Bank crisis that occurs
00:22:00
together in fact throughout history we
00:22:02
just look at Asia look at Japan over the
00:22:04
last 20 years so yes skin in the game so
00:22:07
that its decisions are not just
00:22:09
short-term fee driven is absolutely
00:22:11
critical uh in every step of the
00:22:15
way uh looking at the the other uh part
00:22:19
of the equation which is the the home
00:22:20
buyer who people will continue to want
00:22:23
to get mortgages and uh you get the
00:22:26
impression that many people are still
00:22:27
going to want to use adjustable rate
00:22:29
mortgages uh for some types of borrowers
00:22:31
they may be a better choice than the
00:22:33
classic 30-year fixed rate mortgage do
00:22:35
you agree with that they should still be
00:22:37
part of the market there nothing wrong
00:22:38
with adjustable rate mortgages we've had
00:22:40
adjustable rate mortgages for tens of
00:22:42
years and in the rest of the world they
00:22:43
are the most common they are the
00:22:45
standard mortgage it's not just where
00:22:47
mortgages that a problem the problem are
00:22:49
negatively advertising teaser rate
00:22:52
option arms which are predictably
00:22:55
subjecting borrowers to payment shock at
00:22:58
the same time that they're predictably
00:23:00
artificially uh boosting the market so
00:23:02
that the other side market prices will
00:23:04
fall recipe for exactly where we are now
00:23:07
uh when people take out adjustable rate
00:23:10
mortgages uh one of the appeals is that
00:23:12
with the teaser rate uh you qualify for
00:23:14
the loan uh based on the low rate that
00:23:17
with a with a smaller payment that will
00:23:19
fit a more modest income um but there's
00:23:22
been some talk of uh having to look more
00:23:26
deeply into the borrower future or
00:23:28
estimate what it's going to be and see
00:23:30
what will be the borrower's ability to
00:23:32
pay a higher payment if interest rates
00:23:35
cause a reset that's much higher is
00:23:37
there some way to do that well it's
00:23:39
certainly very reasonable it's in the
00:23:40
FED proposed rules that indeed you
00:23:43
underwrite to the rate that the teaser
00:23:46
rate adjusts to which of course it would
00:23:49
have avoided a lot of the damage that we
00:23:51
have the other issue of adjustable rate
00:23:53
mortgage is no you can't have an
00:23:56
adjustable rate mortgage which under
00:23:58
writes to any interest rate but adjusted
00:24:00
rate mortgages as I said before are not
00:24:02
the cause of the problem that we're
00:24:03
currently in they're well vetted
00:24:05
instrument we can have them we can have
00:24:07
adjustable rate mortgages we can have
00:24:08
fix rate mortgages what we can't have is
00:24:11
an explosion of credit that induces
00:24:13
price Rises artificially and then
00:24:15
induces the pullback um two things which
00:24:18
you didn't ask me about what I want to
00:24:20
quickly address is one um early on you
00:24:24
said well what caused this one of the
00:24:25
causes was default rates did not rise
00:24:29
immediately and of course they don't
00:24:31
rise as long as values are driven up but
00:24:33
as long as credit standards erode as
00:24:36
long as more credits pushed out there
00:24:38
that's unsustainable prices will
00:24:40
increase so the signal to pull back is
00:24:43
not in the default so if you're looking
00:24:44
for it there you're not going to find it
00:24:46
so you need to have Market discipline
00:24:49
which is lo looking to the long term and
00:24:52
car and able to identify this artificial
00:24:56
credit induced bubble and price it
00:24:59
that's one way out the other way out is
00:25:02
a credential way out which is if the
00:25:04
banking sector is part of this boom
00:25:07
artificial boom and by the way it was
00:25:10
tangential this time around in the US
00:25:12
but it isn't in the rest of the world
00:25:14
we've seen these kinds of booms and bust
00:25:17
brought down Japan for 20 years which
00:25:19
came from the banking sector so in this
00:25:22
case there has to be Prudential
00:25:24
supervision of the banks themselves
00:25:26
because Banks them too can engage in
00:25:30
feed driven race to the bottom even if
00:25:32
they have skin in the game it happens
00:25:35
and there's no reason why it wouldn't
00:25:36
happen I want to make sure we understand
00:25:38
what credential means in this context
00:25:40
you mean can you explain that a little
00:25:42
further thinking further down further
00:25:45
down long and that of course is what The
00:25:47
Regulators must do if on the one hand
00:25:49
they're also giving out demand deposit
00:25:51
insurance which basically takes out a
00:25:54
big part of the providers of the fund to
00:25:58
the banks from making these decisions
00:26:00
someone has to have the long run
00:26:03
concerns demand depositors are neither
00:26:05
in place nor do they have the incentive
00:26:07
with insurance to do so uh finally uh
00:26:10
what is your general assessment of the
00:26:12
way the Federal Reserve has handled this
00:26:14
so far uh banki is really pulled this
00:26:17
off he's it's really incredible
00:26:19
nonetheless even he is quite concerned
00:26:21
with going forward there may need to be
00:26:24
more that happens and it's out of his
00:26:26
hands at this point and looking at the
00:26:28
things they've done it's a whole range
00:26:30
of things from opening the discount
00:26:31
window to to uh uh lending out
00:26:35
treasuries and taking mortgage
00:26:37
Securities in in as collateral uh to
00:26:40
helping out with the bar Stern situation
00:26:42
which of these do you think have been
00:26:43
the most
00:26:44
useful well we've been so exposed uh not
00:26:48
just us but worldwide to potentially
00:26:50
worldwide
00:26:52
crash that there are two of these that
00:26:55
are absolutely critical one was when is
00:26:57
the decline in short-term rates The
00:27:00
increased liquidity which is not just
00:27:01
the FED but worldwide which keeps arms
00:27:05
low lowered short-term rates which allow
00:27:07
these teaser rates to adjust to a lower
00:27:08
rate than they otherwise would adjust to
00:27:11
secondly equally important is the
00:27:13
historic Bear Sterns Intervention which
00:27:16
is going to be very controversial
00:27:18
historically and brings on its own
00:27:20
questions going forward of now we have a
00:27:23
whole other part of the financial system
00:27:26
that is going to be rescued to some
00:27:29
degree and therefore there's a more
00:27:32
obviously increased moral hazard there
00:27:33
as well a very controversial decision
00:27:37
and and and have you got a conclusion of
00:27:39
your own about that well my at the at
00:27:41
the time and I think without that we
00:27:44
would have had a bank run in the
00:27:45
non-financial sector no doubt about it
00:27:49
and it does seem that uh although people
00:27:51
have called it a bailout or a rescue
00:27:53
there certainly was a lot of suffering
00:27:55
on the part of baris's employees and
00:27:57
Sheriff shareholders and Executives the
00:27:59
shareholders the shareholders were
00:28:01
indeed disciplined and I'm sure that was
00:28:04
part of the planning of the event let me
00:28:06
just finish by asking uh do you think
00:28:08
we're closer to the end of this whole uh
00:28:10
process or still still in the
00:28:14
beginning we're not in the beginning uh
00:28:16
we're not at the end what really there's
00:28:20
really this critical middle piece of how
00:28:22
does the overall economy perform and how
00:28:26
does that subvert
00:28:27
the potential recovery in the housing
00:28:30
market or in fact uh cause the housing
00:28:33
market to further unravel and that's
00:28:36
really we need that there's no answer we
00:28:39
don't know that's uncertainty what
00:28:41
simply going to play out in the next
00:28:42
three to six months so this really is
00:28:44
very much uh not just a routine crisis
00:28:47
or cycle but a kind of Uncharted
00:28:49
Territory for the next six months we are
00:28:51
in Uncharted Territory we simply don't
00:28:54
know how far the econom is going to fall
00:28:56
if it's going to fall and how that's
00:28:58
going to interact interact with falling
00:29:00
home prices well we'll be watching thank
00:29:02
you very much pleasure
