Last month, JP Morgan CEO Jamie Dimon, in a frank statement, said in discussing their Prime [perfect credit] mortgages: "Prime looks terrible, and we’re sorry. We can say it eight times. It looks terrible.”
This month, he says that JP Morgan's decision to expand to mortgages in 2007 was "wrong."
It's sort of like being a local investor here in Charlottesville and buying a house in 2007, renovating it, and trying to sell it or rent it in 2008 (hey, wait a second, that's a future post on this blog....). But you get our gist: Lack of Foresight.
The excellent Calculated Risk has a list of "Themes" they expect to see in the news repeatedly (not just on Econ, Finance, and Bubble Blogs) over the next few months:
- Alt-A (good credit, 'light documentation' mortgages) is the new subprime. Or “We’re all subprime now!”
- House prices - On a national basis, they think nominal house prices have probably fallen more than half way from the peak to the trough. But there's still a way to go, especially in slower-to-pop areas
- There will be two housing bottoms - One for Existing Houses, One for New Construction
- There will be no rapid recovery for housing