The mainstream media will talk a great deal about how the number of mortgage applications is soaring.
What they don't tell you is that one-third of all those applications are denied.
It takes two ingredients to make a bull market:
1. Cheap money
2. Loose lending standards
Thanks to Mr. Bernanke we have #1.
We don't have #2 and won't for a long time. Why?
Because banks and lenders aren't stupid. Conditions for making loans are awful. Rising unemployment, massive loan defaults, and let's not forget inflation and the disaster of borrowing short and lending long when interest rates will likely explode in a few years. If I was a lender I'd be hoarding cash now and building reserves to ride out the bad months still to come---and likely rejecting lots of new loan applications.
Robert J. Abalos, Esq.
Report: 1 in 3 Loan Applications Denied