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Subject: Housing Bubble III - What the Frack now! Posted by: biliruben - [17502215] Wed, Aug 29, 2007, 12:31 Senator Obama has a RADICAL idea: Actually have those responsible and benefited with massive profits bear some the risk and costs of clean-up It's usually capitalism for the poor and socialism for the rich in these circumstances, so this is truly radical. nscrupulous lenders who deceptively sold subprime mortgages to millions of Americans should be fined and the proceeds used to help bail out borrowers facing a wave of foreclosures, according to Barack Obama, the Democratic senator running to be his party’s presidential candidate. Radical. | |||||||
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| 474 | Perm Dude ID: 5510572522 Sat, Apr 02, 2011, 10:10 | You really have to stop living in the 1970's. UAW and Catepillar sign contract, boosting health care premiums for workers and offering no raises for the life of the agreement. | ||||||
| 475 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 12:11 |
Yeah, well Cat found a work-around the union. They outsource everything to vendors not paying those truly outrageous wages. So the UAW started taking what they could get finally instead of demanding the moon. You really don't want to debate me on Catepillar and I won't debate you on copyright issues. | ||||||
| 476 | Perm Dude ID: 5510572522 Sat, Apr 02, 2011, 12:13 |
Heh. So long as you agree to talk about current (not projected, not past) Cat issues I'm happy to bow to your expertise. Even you can see that much of what you post on that company is a fearful projection. | ||||||
| 477 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 12:14 | Besides they already had negotiated for and won the moon. So what if their most recent contract didn't get moon+. | ||||||
| 478 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 12:17 | I'll stay fearful on this one. You can stage the next journey to the center of the earth in the hundred mile radius crater centered on Peoria if Cat leaves. | ||||||
| 479 | biliruben ID: 34435239 Sat, Apr 02, 2011, 12:54 | Letting international corporations blackmail state after state is unsustainable and bad for our society as a whole. Just say no to corporate blackmail. If that means that the jobs move to Indiana or Mississippi, so be it. Still Americans. | ||||||
| 480 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 17:05 | Smarter Americans. | ||||||
| 481 | Perm Dude ID: 5510572522 Sat, Apr 02, 2011, 17:40 |
So unions are not smart to negotiate a six year no-raise contract? Or smart? Now you are confusing, coming from some distant past as you are. Do you believe that Cat would have gotten a better deal if they moved somewhere else where there there was no union strength? If so, how does that help an area's economy? | ||||||
| 482 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 19:25 |
1) In a depression they should be giving back and working with management to keep the company afloat and competitive. 2) Of course. 3) How does it help an area to pick up a fortune 50 company? How does it help to lose one. Companies are not in the business of propping up wasteful and hostile states. | ||||||
| 483 | Perm Dude ID: 5510572522 Sat, Apr 02, 2011, 19:50 |
Neither should you be more focused on propping up companies. They can take care of themselves. You should be far more focused on people, not companies. | ||||||
| 484 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 21:04 | You should be more focused on economic reality and less on rainbows and utopian thinking. | ||||||
| 485 | DWetzel ID: 31111810 Sat, Apr 02, 2011, 21:11 | How does it help an area to pick up a Fortune 50 company that the area has to overpay for, and that will carpetbag right back out chasing the next dollar once you start to try to recover the wheelbarrows of cash you bribed them with (er, I mean, "economic incentives" from your taxpayers)? | ||||||
| 486 | Perm Dude ID: 5510572522 Sat, Apr 02, 2011, 21:18 |
#484: That is a genuine LOL. You've spent much of this thread, and others, telling us fantastic tales of the future, ignoring the facts on the ground which disprove your visionary "Democrats Are Proven Devils!" future. The economic reality is that Cat is making a lot of money, and have been really making a lot of money since Obama took office. They just signed a contract with the union in which their workers agree to not take raises for six years. And good for them. This should all be pushed aside based on a fantasy of Cat not actually making money and not seeing their stock go up and up (perhaps, in this alternative universe, they are driven from town by callous workers tossing eggs at them after being on strike for 8 months). Reality isn't helping you on this issue, friend. | ||||||
| 487 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 21:21 | Governor Quinn and Speaker for Life Madigan aren't making Democrats, Illinois and machine politics look good, my friend. | ||||||
| 488 | Boldwin ID: 4635123 Sat, Apr 02, 2011, 21:27 |
And when those two give Cat the finger and tell them they aren't going to stop buying votes or even slow down in a depression, the only realistic response is goodbye. Or in your bubble, "Why sure, here's a blank check and we'll just pass that bird right on to our shareholders at the next meeting". | ||||||
| 489 | Building 7 Leader ID: 171572711 Tue, May 10, 2011, 16:12 | Americans have lost $10.06 trillion in home equity since the peak of the housing bubble. But only $530 billion in mortgage debt has been defaulted or written off by the banks. Until this debt is cleared... there's no guessing what mayhem the banks and/or Wall Street or Congress will get up to. | ||||||
| 490 | Khahan ID: 373143013 Tue, May 10, 2011, 16:23 |
My home value is down almost $100k from when I bought it. But I haven't lost squat, so take me out of that figure. No desire to sell. No need to take a loan against it. In about another 20 years, we'll look at the value of my house and then determine what, if any, home equity I lost. Those numbers are truly meaningless paired together. There is absolutely no context to them. There is no reality to the comparison. Putting large numbers like that up there is nothing more than a scare tactic for the masses. If somebody wants meaningful stats, the information needs to be mined for more background information. But for a news story, 10.06 trillion is much more sexy (and unsubstantiated, but that doesn't matter). | ||||||
| 491 | Building 7 Leader ID: 171572711 Tue, May 10, 2011, 16:39 |
How about I post what I want to, and you can post what you want to. Other readers may be interested in those stats. My home value is down almost $100k from when I bought it. But I haven't lost squat. You have a $100,000 paper loss. You have an unrealized loss of $100,000. If you sell your house, you will lose $100,000. | ||||||
| 492 | Perm Dude ID: 5510572522 Tue, May 10, 2011, 16:39 |
My home value is down almost $100k from when I bought it. But I haven't lost squat, so take me out of that figure. No desire to sell. No need to take a loan against it. Exactly. In fact, part of the reason we had such a huge housing bubble is that banks and real estate professionals sold the public on the idea of their houses being equity instead of homes. The belief that we have "lost" equity is another step into the fantastical realm of the Realtor. | ||||||
| 493 | Khahan ID: 54138190 Tue, May 10, 2011, 17:21 |
You have a $100,000 paper loss. You have an unrealized loss of $100,000. If you sell your house, you will lose $100,000. Very big fallacy. What does a loss on paper mean? Right now, to me, it means absolutely nothing. Zilch. I've lost nothing. I paid X amount for my house (and still making that payment) and I have the exact same house I obtained at settlement. I am not selling it. I am not taking a loan against it. I'm not concerned about what might happen, if. At least not in this scenario. If I or my wife lose our job or get transferred and we have to sell, THEN I will have lost $100,000. But we haven't lost our jobs, we havent been transferred. We are not moving, selling or otherwise doing anything with our house but living in it. I have lost nothing. Just like stocks. If I buy $10,000 worth of stocks and the stock price drops from $20 to $10, I haven't lost a thing yet. Not until I sell. "lost on paper" is a meaningless catch phrase that sounds good to unscrupulous portfolio managers who want to get you to buy financial products from them that you don't need. As of today I intend to be in my house at least another 20 years, maybe longer. I've lost nothing. So again, don't count my house in those meaningless, scare-tactic figures. | ||||||
| 494 | Building 7 Leader ID: 171572711 Tue, May 10, 2011, 17:28 |
Go ahead and keep telling your family that you haven't lost $100,000 on your house. I have a stock that has lost $1000. I tried to pull a Khahan, and told my wife, we have not lost $1000. She didn't swallow it. | ||||||
| 495 | Perm Dude ID: 5510572522 Tue, May 10, 2011, 17:33 |
See, that is the main difference: Stocks are financial instruments. Houses are not. Maybe she wasn't buying it because she perceives the difference you do not. And (again) using a bubble mentality about houses reveals that people still haven't learned the lessens necessary when it burst. | ||||||
| 496 | weykool ID: 343561414 Tue, May 10, 2011, 18:52 |
Khahan and PD are making great points. In addition I would like to add another: I buy my home for 500K It increases in value to 900K. The bubble bursts and is now only worth 600K. Should the bank be expected to somehow write off the 300K "lost value" to clear the debt? Be careful when you look at statistics without examining all of the underlying data. | ||||||
| 497 | Frick ID: 52182321 Tue, May 10, 2011, 19:28 |
Post 489 is trying to draw a conclusion from two unrelated statements. The amount of debt that has been written off is a fact. The amount of home equity that has been lost is more of an estimate. Aside from that, what correlation is there between home owners that have a home that is paid for and written off debt? My parents have a home that has been paid off. It has likely declined in value in the last few years, but what does that have to do with debt write-offs? As PD mentioned, stocks are financial instruments. While many people treated homes as financial instruments, they ultimately are not, unless you are a real-estate speculator. My home has lost value, ok, I'm not planning on selling, so nothing has changed. Warren Buffet is considered to be one of the best investors of the last 100 years. Read one of his books and see how often he checks the prices of stocks that he owns. He gives a great reason for why he doesn't The stock market tells you the price that a stock is selling for. It doesn't tell you the value. Keep those two ideas separate. Price and value are not the same thing. | ||||||
| 498 | Khahan ID: 54138190 Tue, May 10, 2011, 23:48 |
Go ahead and keep telling your family that you haven't lost $100,000 on your house. I don't need to. My wife agrees with me. Until we actually try to sell it, we have not lost anything. One other thing we are not doing - we have not put together a portfolio of our networth that includes the value of our home and tried to give ourselves an appraised value or personal wealth value based on that. Whatever our personal worth may be , we are not trying to take a loan out on it. We are not borrowing against it, hedging on it, betting on it or in anyway having it affect any financial decisions we make. The only thing we did was include the amount of our mortgage when we considered how much life insurance to take out. So no, we have not lost anything because we have not included it in anything. We have not in any way, shape or form counted on it for anything. And as pointed out, if we bought it for $400,000 and its now worth $900,000, we also have not gained anything. Not until we sell it or try to take a home equity loan out against that $500,000. Until we actually try to do something w/ that increased value we have not gained squat. | ||||||
| 499 | Tree ID: 320371412 Wed, May 11, 2011, 00:47 |
I don't need to. My wife agrees with me. Until we actually try to sell it, we have not lost anything. this is exactly correct. i've got a ton of valuable baseball cards. but that card that lists at $500? i haven't lost $500 by holding it - but if i sell it for $300 because i can't get anyone to pay $500 for it? well that's another story... | ||||||
| 500 | Building 7 Leader ID: 171572711 Wed, May 11, 2011, 07:53 |
Heading into wordsmithing terrority. I think we all know the difference between a realized loss and an unrealized loss. I hope your house recovers it value. So Tree, what's your most valuable baseball card? | ||||||
| 501 | Building 7 Leader ID: 171572711 Wed, May 11, 2011, 08:02 |
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| 502 | Khahan ID: 373143013 Wed, May 11, 2011, 09:08 |
hope your house recovers it value Thanks, if things go as planned, we should have about another 20 years before its a concern. | ||||||
| 504 | Perm Dude ID: 39961218 Wed, Oct 19, 2011, 22:26 | Citi to pay $285 million to settle SEC fraud charges regarding the repackaging of risky mortgages. | ||||||
| 505 | Frick ID: 387512315 Thu, Oct 20, 2011, 08:32 | I wish I could be punished like Citi. What type of deterrent would a $0.03 speeding ticket be? | ||||||
| 506 | sarge33rd ID: 329132012 Thu, Oct 20, 2011, 13:13 |
The settlement may also have trouble getting approval from Jed S. Rakoff, the federal district judge in New York who must ultimately sign off on the fine and who has taken a hard line on S.E.C. settlements. Our one hope for some REAL punitive measures? | ||||||
| 507 | boikin ID: 532592112 Thu, Oct 20, 2011, 13:43 | I am not sure what fining the company does, wouldn't make more sense to fine the employees who decided repack the risky mortgages? | ||||||
| 508 | Perm Dude ID: 39961218 Thu, Oct 20, 2011, 16:08 | Or at least stop giving them bonuses. | ||||||
| 509 | Boldwin ID: 35615181 Thu, Oct 20, 2011, 17:21 |
In all these cases it was the board of directors who chose to line their pockets with bonuses from year-to-year increases while they neutered and gutted the risk management and fraud watch departments. This isn't on the employees. Two examples:- All the Devils Are Here, Bethany McLean and Joe Nocera | ||||||
| 510 | boikin ID: 532592112 Fri, Oct 21, 2011, 10:37 | Well fine the board of directors then, not the company. | ||||||
| 511 | sarge33rd ID: 309252112 Fri, Oct 21, 2011, 13:35 | if a corporation ia an individual under political contribution laws; then it is an individual for compliance law too. Fine the living pi$$ out of them for these economy destroying actions and use those monies to provide Unemployment benefits and mortgage buy down benefits for those who were screwed by these outfits. | ||||||
| 512 | Perm Dude ID: 39961218 Sun, Oct 23, 2011, 12:54 | Bank of America passing off risky derivatives onto depositors. | ||||||
| 513 | Perm Dude ID: 39961218 Fri, Nov 04, 2011, 13:52 | Did Fanny and Freddy cause the housing collapse? | ||||||
| 514 | Perm Dude ID: 3210201915 Mon, Nov 28, 2011, 13:27 | More on what caused the crash. Or more importantly, the boogeyman 1977 law which did not. | ||||||
| 515 | Boldwin ID: 4110312718 Mon, Nov 28, 2011, 15:17 | Oh wow does he turn a blind eye when it suits him. In order to force illegal aliens and unemployed and any poor person whatsoever into a home, they lowered loan requirements everywhere. They didn't just say, only if you are a minority do you get to do 'no doc' loans without any realistic hope of repayment. | ||||||
| 516 | Perm Dude ID: 3210201915 Mon, Nov 28, 2011, 15:27 |
I have no idea what you are talking about. I don't think you do either. The 1977 law had virtually nothing to do with the housing bubble. And we know this because the evidence demonstrates it. If, indeed, that law made the housing bubble occur, at the very least the timing and magnitude for defaults of those obtaining mortgages under that law would have been higher and more frequent at the bubble began to pop. And they weren't. That law didn't cover the vast majority of risky mortgages. It didn't cover any commercial loans, which were also tanking. And it didn't cover home mortgages outside the United States, which also had a housing bubble. Your theory doesn't answer any of these other problems. That's because it doesn't fit. | ||||||
| 517 | Boldwin ID: 4110312718 Mon, Nov 28, 2011, 15:48 |
To be fair there were two components. One was that the CRA forced lower lending requirments all over the country not just so called redlined communities. The other side of the problem was that there suddenly appeared a market for all that bad paper. The market for bad securities reached beyond our borders. If more money is available to chase bad loans, more bad loans will be made, bubbles will grow and burst. The poorly regulated and unsustainably leveraged derivitives markets know no borders and apparently effected housing markets elsewhere as well. Central banks aren't limited to our country. Are run by the same dynasty wealth and they time the bubbles. | ||||||
| 518 | sarge33rd ID: 010232811 Mon, Nov 28, 2011, 16:14 |
The CRA did NOT lower lending requirements. It prohibited, discriminatory lending practices that had been common place prior. For ex, a single woman could seldom obtain a mortgage prior to CRA, REGARDLESS of income/history. Why? She might get pregnant and quit her job. CRA made such aspects, illegal in the consideration of the loan. Really B, try READING the CRA instead of swallowing the BS stories and lies, spread by those with an agenda. | ||||||
| 519 | sarge33rd ID: 010232811 Mon, Nov 28, 2011, 16:16 | REDLINING, or what the CRA was to remedy | ||||||
| 520 | Boldwin ID: 4110312718 Mon, Nov 28, 2011, 17:25 |
Yeah...lol...no, it got so bad that HUD required FM to do 50% of their business with less than desirable borrowers:In November 2000 Fannie Mae announced that the Department of Housing and Urban Development ("HUD") would soon require it to dedicate 50% of its business to low- and moderate-income families." - wikiNo, they didn't demand they specifically start loaning to illegal aliens without jobs but the goal requirements drove the lowering of standards as much as the demand in the securities market for subprime bundles. | ||||||
| 521 | Boldwin ID: 4110312718 Mon, Nov 28, 2011, 17:28 | Correction, again FM/FM didn't loan, they bought those poor loans and wrote the standards by which those loans were written. | ||||||
| 522 | Perm Dude ID: 3210201915 Mon, Nov 28, 2011, 18:09 |
You still haven't address the lack of actual evidence. Mostly, because the evidence points in the other direction. If your premise is correct, the CRA-based mortgages would have had a higher default rate and they would have been defaulting at the same frequency (minimum) as other loans. If the default rate for CRA-based loans was not higher than other mortgages then your premise is incorrect. There is simply no other way to look at it. Unless, of course, you are now of the belief that we have gone through a housing crisis which was unconnected to mortgage default rates... And none of this speaks to the housing crisis in other countries, nor to the collapse of the commercial market. | ||||||
| 523 | sarge33rd ID: 010232811 Mon, Nov 28, 2011, 18:52 |
In November 2000 Fannie Mae announced that the Department of Housing and Urban Development ("HUD") would soon require it to dedicate 50% of its business to low- and moderate-income families." This does not mean more low income loans need to be made, It ONLY means, Fed funds will be targetted more toward that segment than in the past. IOW (nrs are purely hypothetical): Banks write $10,000,0000 in paper last month Freddie and Fannie have $2,000,000 to buy paper $8,000,000 was to prime and $2,000,000 to subprime Freddie and Fannie bought $1,500,000 prime and $500,000 subprime new rules.... Banks write $10,000,0000 in paper FM/FM has $2,000,0000 Banks write 8m prime and 2m sub FM/FM buys $1,000,000 ea prime and subprime The rate of writing loans by the lenders, is unchanged. The allocation of FM monies, does not and did not dictate the terms of lending. And FTR, the CRA, states explicitly, that banks must follow sound lending practices. | ||||||
| 524 | Boldwin ID: 1510432817 Mon, Nov 28, 2011, 19:01 |
Why is it that you buy every syllable of every lying politician unless they are muslims or marxists promising to kill us? There was no standard low enuff to worry Frank and Dodd and no upper limit to subprime lending in their eyes. In their cases you can tell exactly what they are lying about by how they are reassuring you. | ||||||
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