A Bloomberg blurb:

More borrowers are finding it harder to meet interest payments following 17 interest-rate increases by the Federal Reserve since mid-2004.

The default rate for subprime loans rose to 7.35 percent in July from 5.51 percent a year earlier, according to investment bank Friedman Billings Ramsey Group Inc. in Arlington Virginia.

Nine percent of all subprime loans made in 2006 may default within five years, the worst performance since at least 1998, Glenn Schultz, head of asset-backed securities at Charlotte, North Carolina-based Wachovia Corp., said in an Oct. 17 report.

`More Visibility'

``People have a little more visibility on the slowdown than they did two or three months ago,'' said Andrew Chow, who manages $5.5 billion of asset-backed securities and credit-default swaps at Seneca Capital Management in San Francisco.

Bill Gross, manager of the world's biggest bond fund at Pacific Investment Management Co. in Newport Beach, California, forecasts the housing slump will cause the economy to slow and force the Fed to lower interest rates to 4.5 percent next year. The central bank's target for overnight loans between banks is 5.25 percent. Pimco is a unit of Munich-based Allianz SE.

Watch that money supply grow while your wages do not. It takes some inverse reasoning, and conclusions that are contrary to one's own interest, for the little people, to adopt the platform that debt is good.

I am tempted to propose an initiative for Portland Oregon that dictates that the only "affordable housing" projects that the city supports are those that are cooperatively owned. That is, after HUD related funding, or state processed funding, is paid off that the residents (or members of the coop) get to keep the property rather than some landlord that seeks a gift -- and it is a gift that they seek.