Let us pause now for a meta-subprime moment.
On Thursday, the Wall Street Journal ran a short piece reporting on a new study examining the likely impact of adjustable rate mortgages resetting to higher monthly payments. The conclusion: More foreclosures are coming, but it won't be that bad for the overall mortgage industry.
In his watchdog blog Beat the Press, economist Dean Baker took immediate issue with the Journal's positive spin, warning that if home prices continue to fall in 2007, the, er, fallout will be severe. A day later, financial journalist and econoblogger Felix Salmon provided a link to the original report, and critiqued Baker's analysis. Baker dropped by for a little push-back in Salmon's comments area, possibly alerted to the post by a commenter in Baker's discussion section.
Meanwhile, over at the high-value-added and housing-market-obsessed blog Calculated Risk, the lively readers who congregate at that watering hole were ripping into the latest news of subprime lender woes (bankruptcies, rescue loans from hedge funds, etc.) and chewing over today's contradictory housing economic indicator news: housing starts, up significantly, which the Wall Street Journal cited as "strong" data that helped boost the stock market, but housing permits down again, which David Seiders, chief economist of the National Association of Home Builders, considered the more important, and troubling, figure.
If the Internet is a many-sided dialogue that the world is having with itself, and blogs are the filter points that aggregate and highlight the most interesting snatches of conversation in that dialogue, then the detailed babble sloshing around the subprime meltdown is a great example of how it all works. But what is of particular fascination to me right now is how the hubbub is being monetized by its own subject, most obviously by Google-delivered ads that are targeted to keywords and which generate an insistent commercial counterpoint to the to and fro of every debate. Everywhere you go in the housing bubble blogosphere, you will find advertisements for mortgage lenders who are often pitching the very same products whose widespread deployment has crippled the industry.
The Implode-O-Meter appears to be mainly an exercise in subprime woe schadenfreude by a digital librarian named Aaron Crowne. Crowne is taking pleasure in painstakingly documenting each new instance of pain for the mortgage lending industry (his current total number of imploded lenders is 42). The page is generating some great Google ads, including a pitch for LoanSifter, the "premier online search engine for the mortgage industry," a whole host of links to companies offering loans to would-be home buyers with bad credit, and, my favorite, Pachulski Stang Ziehl Young Jones & Weintraub LLP, a law firm that has adroitly positioned itself as a specialist in handling bankruptcy filings for distressed subprime mortgage lending companies that might be in need of legal representation.
This presents us with the odd image of executives at subprime lenders despondently clicking their way to the Mortgage-Lender Implode-O-Meter to see if the news of their demise has been reported, only to be distracted by a Google ad that will direct them to expert legal help. That's the Web for you: always ready to be helpful!