[Marxism] Worst is yet to come on mortgage crash

[Margaret Wyles]

> In addition, an awful lot of people have been using home equity lines to
> borrow against the equity in their homes, but that equity may disappear at
> any time if the general price of housing actually falls.  All of this cuts
> into people's purchasing power even if people don't actually get 
> foreclosed
> on, and thus the crisis can easily spread into every other part of the
> economy.
>

"As banks rein in riskier lending, companies could find themselves starved 
of capital to refinance loans that are coming due or to overhaul their 
businesses. The result, experts say, is that some struggling companies may 
be forced to seek bankruptcy protection-a development that would exacerbate 
bond market turbulence and could ripple through the broader economy."
This is a scenario for a downward, self-perpetuating spiral into a slump of 
potentially massive proportions.

http://www.wsws.org/articles/2007/aug2007/fina-a02.shtml