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"From small things momma...

...big things one day come!"  says the gospel according to Dave Edmunds.  

So, I'm thinking: is that gospel at work in the housing market?  Beyond the things we're all painful aware of  - the rampant speculation, mortgages given to people with no hope of paying the money back, toxic assets securitized and resold several times - could there also be a small thing at work here, a little gospel spark causing a big conflagration?

The spark, of course, being the crackdown on immigration, legal or otherwise. Think about it.  Regardless of your attitudes toward immigrants, housing depends on a ready supply of new homeowners moving in at the market's low end.  Those starter homeowners trade up as their incomes rise and economic confidence improves.  And their "trading up" supports the next highest ranks of homeowners and so on and so on, up the chain it goes.

The housing market may need those "trader-uppers" more than it thinks.  It's the "trickle-up" theory of economics in action.

Immigrants pursuing the American dream create demand for houses.  More demand causes prices to stabilize.  Stable prices improve security values.  Improved security values means fewer toxic assets.  Fewer toxic assets...well, you get the picture.

Oh yeah, I think increased immigration could help solve the Social Security funding problem, too.


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