I've been wondering where our unemployment rate will top out during this 'recession'. Unemployment is currently 6.5%. In 1933 25% of all workers, and 37% of all non farm workers were out of work. In 1940 unemployment still averaged 14.6%. If things continue to deteriorate, as most economists seem to think they will, we're gonna see a lot more mortgage defaults. Those of us who own our homes had better hope there isn't a compelling reason for us to liquidate anytime in the near future or we'll be one of those 'bubblers' ourselves. It's been one of the misrepresentations in this financial fiasco from the outset that there hasn't been a human face put on it from the Treasury or the White House. It's all been about injecting liquidity, and frozen credit. Rec'd.

Erica, I subscribe to the "if it happened in my neighborhood" school of thought. Every event, I run it through my mind that way. I really helps to clarify my thinking about so many things. And I recommend it highly. So your description is so apt here. Every single for sale sign that has gone up in my neighborhood prompts concern. Indeed, one of the families that moved here within the last few years is owned by someone who was a mortgage broker himself, but is now unemployed and a stay-at-home dad. (I'm surprised he even told me what he used to do, but that it was August when I met him.)

There are so many stories that we know of and so many more we can run through our minds, just based on where the economy is. People who need to take second jobs to make ends meet. People fearful of losing a job and thereby a home and health insurance.

It's this kind of thing that prompted my idea of the Public Health census - because a stressed person has a lowered immune response or may be depressed, for sure is anxious, likely sleepless.

It disrupts kids to lose a house and friends and their school. Pretty soon you have a whole distressed family. If houses are empty, the neighborhood can fall prey to crime - drug lords moving in or simply vandalism - or housing values can drop even further. A city loses its tax base and services drop. Schools cut budgets. Fewer police and fire fighters. It's a feedback loop like a whirlpool, dragging everything down and down. We can all do the thought experiment. It's not pretty. Very scary.

Erica, you are not being histrionic at all! God help us. Exactly!

Maybe you should try channeling Dickens.

"I know this is histrionic, and you can feel free to take me to task about that, but I just don't know how else to make the point. People speak so casually about the need for the market to reset housing prices, to pop the bubble."

I don't get the point. Few take this casually. Housing prices already have had a drastic fall and the bubble was popped at least a year ago in the macro view.

I know two women who bought in the past 3 years. Neither is whining about it. One got her house re-appraised at about 20% less than the purchase price, so her taxes are lower. She's running a thriving business and did not over-spend when she bought, so for her the purchase wasn't a great investment timing-wise but she's fine anyway. I don't know the details of the other but have no reason to believe she's in trouble (good job, sound judgment).

I see almost no signs of foreclosures or home sales where I live. That's not to say that other areas have not been hit hard. It's to establish a counterpoint to whatever vague point was supposed to have been made by erica's post.

btw, I've moved twice since 2000, choosing to rent both times because I couldn't understand or afford the local housing market. Maybe 2009 will give me a chance to buy in.