So says economist Michael Darda of MKM Partners:
Lastly, we don’t believe the $275 billion mortgage rescue package unveiled yesterday will be a game changer. It may help those holding on by their fingernails, but many of these borrowers are going to be in trouble if home prices continue to adjust downward, which is highly likely until inventory-to-sales ratios get back to 7-8 months(from about 12 months now). The collapse in home building (bad for the economy in the near term) is a painful but necessary adjustment that will ultimately help to stabilize inventories and home prices.
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