Credit Crisis

Minnesota home prices have declined by as much as 20 percent. More than 27,000 will have their homes foreclosed on in the next year. Twenty-five percent of ARMS in the state have yet to adjust. And thousands of more homeowners are struggling with negative equity in their homes as the housing market continues to be hit with serious aftershocks.

So how will homeowners caught up in the crisis fare under the Bush Administration’s Wall Street bailout? U of M law professor and former assistant attorney general Prentiss Cox says the bailout is “like a reverse criminal action where you give restitution to the criminals and put the victims in jail.” He talks to MnIndy about how we got here and why the bailout needs to change.

In another sign of the worsening American credit crisis, JP Morgan Chase agreed to buy out insolvent investment firm Bear Stearns for approximately $267 million.

Bear Stearns, which was valued at $3.54 billion at close of trading on Friday and almost $16 billion as recently as last year, was damaged fatally by a liquidity crisis evidently [...]