I started out in the mortgage industry back in 2004. If at that time, even at the beginning of 2007 someone told me Countrywide would be out of business or Indymac would be out of business, I would say they were crazy. These were titans of the industry, bulletproof money machines that seemed to have all the answers and products.

And now even fannie mae and freddie mac are on the chopping block. If they go down, I have no clue what happens. This is uncharted waters we are in economically. The public opinion and media presentation limits the effect to just housing, but take a look, when housing numbers go down along with values, all the ancillary industries start to decline. It starts with the realtors and mortgage brokers, then the survey, title and appraisal companies, then the office supply stores see a drop of a few percent, followed by the landscapers, kitchen and bath imporvement people, carpet and flooring installers, durable goods like dishwashers, refrigerators, washer and dryers. Nasty ripples.

I do not think the average person knows what can happen if this trend continues, which I think it will. If you want to buy a house without Fannie and Freddie keeping the rates artificially low, we may be into a situation where to get a loan you need 20 or 30 percent downpayment. So far as rate goes, for private money loans I am seeing interest rates of 10-14%, which when you think about it a 6.5% rate for mortgages does not make sense when there is greater than 5% inflation, that is only a 1.5% yield on investment.

I am just about ready to get ready for the shotgun and canned goods plan, sort of a post economic apocalypse america. $5 gas, cities going bankrupt, cash only home purchases. And it all started with a little deregulation and the fed lowering rates to make people happy.