- This topic has 137 replies, 23 voices, and was last updated 16 years, 5 months ago by
latesummer2008.
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May 19, 2007 at 4:56 PM #53868May 19, 2007 at 4:56 PM #53879
limo_888
ParticipantI’m currently holding cash, but I want to invest in gold to hedge my profolio. What do you think about gold? Is there a chance that it breaks 700 mark?
May 20, 2007 at 7:17 AM #53908latesummer2008
ParticipantHitting Appraisals – Next Bomb to drop in this marketplace. The banks are already getting fat with foreclosures and REOs. There will come a point when they don’t want anymore properties in a declining market. LTV (Loan to Value) will drop from:
100% to 90% to 80% to 70%
Why? because property values are WAY over priced and WILL start dropping rapidly. BANKS will always protect themselves. They make money when times are good or bad. LOAN SHARKS…
It would be interesting to see how many transactions “Fall out of Escrow” as prices drop before they have a chance to close….
May 20, 2007 at 7:17 AM #53919ParticipantHitting Appraisals – Next Bomb to drop in this marketplace. The banks are already getting fat with foreclosures and REOs. There will come a point when they don’t want anymore properties in a declining market. LTV (Loan to Value) will drop from:
100% to 90% to 80% to 70%
Why? because property values are WAY over priced and WILL start dropping rapidly. BANKS will always protect themselves. They make money when times are good or bad. LOAN SHARKS…
It would be interesting to see how many transactions “Fall out of Escrow” as prices drop before they have a chance to close….
May 20, 2007 at 9:57 AM #53924LookoutBelow
ParticipantNot necessarily….1,800 banks went out of business in 8 months in the summer of 1930…..most bankers (99%) are not nearly as smart as people would like to think they are. They're robot worker units with no personality mostly
I played golf with a "banker" a few weeks ago and he was a "True Believer" in the BS hype of this "Goldilocks" economy…..I just snickered….he wasnt even aware of the severity of the real estate meltdown thats already starting to occur. In fact !, the idiot JUST bought a new 900K home and STILL hasnt sold his original one, he was a little concerned because they havent even had one offer yet !!!….. Hows THAT for being "informed" ? …I'm pretty sure he wont be able to make both of those mortgages for too long….I sensed that in our conversations….
I spun a very small version of my real estate meltdown tale and his eyes lit up like he JUST saw the light !!..I gave him a homework assignment to check out a few web sites for his edification…..Heheheheee…..im sure he hasnt slept a wink since then !!…Fools I tell ya !!
Too bad really, he was a nice young man, but he's gonna pay up the wazzoo ……some will be kings, some will be pawns
May 20, 2007 at 9:57 AM #53935ParticipantNot necessarily….1,800 banks went out of business in 8 months in the summer of 1930…..most bankers (99%) are not nearly as smart as people would like to think they are. They're robot worker units with no personality mostly
I played golf with a "banker" a few weeks ago and he was a "True Believer" in the BS hype of this "Goldilocks" economy…..I just snickered….he wasnt even aware of the severity of the real estate meltdown thats already starting to occur. In fact !, the idiot JUST bought a new 900K home and STILL hasnt sold his original one, he was a little concerned because they havent even had one offer yet !!!….. Hows THAT for being "informed" ? …I'm pretty sure he wont be able to make both of those mortgages for too long….I sensed that in our conversations….
I spun a very small version of my real estate meltdown tale and his eyes lit up like he JUST saw the light !!..I gave him a homework assignment to check out a few web sites for his edification…..Heheheheee…..im sure he hasnt slept a wink since then !!…Fools I tell ya !!
Too bad really, he was a nice young man, but he's gonna pay up the wazzoo ……some will be kings, some will be pawns
May 20, 2007 at 10:34 AM #53930ParticipantDepression or Recession ? Hopefully we are not headed for a Depression, However there are striking similarities.
Essentially, A BANKING NIGHTMARE with all these crappy loans and NO REGULATION. Oh, “I get it, let’s just let the banks regulate themselves!”. The “Market” will take care of it. Yeah, it sure is “taking care” of it now. Nothing like a “Fox in the Henhouse”. This could get REALLY bad, I’m afraid.
Let’s just hope it is MERELY, a recession.
May 20, 2007 at 10:34 AM #53941ParticipantDepression or Recession ? Hopefully we are not headed for a Depression, However there are striking similarities.
Essentially, A BANKING NIGHTMARE with all these crappy loans and NO REGULATION. Oh, “I get it, let’s just let the banks regulate themselves!”. The “Market” will take care of it. Yeah, it sure is “taking care” of it now. Nothing like a “Fox in the Henhouse”. This could get REALLY bad, I’m afraid.
Let’s just hope it is MERELY, a recession.
May 20, 2007 at 1:48 PM #53958bob2007
Participantbayparkwatcher,
Each situation has its own requirements, but I see an awful lot of people put off selling when they think they should because of taxes. Later, their tax problem goes away because their investments decline. It doesn’t have to be an all or nothing. Sell half.
May 20, 2007 at 1:48 PM #53969Participantbayparkwatcher,
Each situation has its own requirements, but I see an awful lot of people put off selling when they think they should because of taxes. Later, their tax problem goes away because their investments decline. It doesn’t have to be an all or nothing. Sell half.
May 20, 2007 at 2:00 PM #53960TemekuT
Participantbayparkwatcher, as a trustee you are bound by the Uniform Prudent Investor’s Act. For your own education as to your responsibilities, I would suggest you read “Investing and Managing Trusts under the New Prudent Investor Rule” by John Train and Thomas A. Melfe. This book is easily ordered online and I’d suggest you read it ASAP. Then, if you will contact me via this board, I’ll create a temporary e-mail account so you can write me and get the name of the financial advisor I plan to use.
I am in my last class for certification as a professional fiduciary trustee and my eyes have really been opened by the classes I have taken. I will be testing the above mentioned advisor by moving a portion of my own portfolio over.
I don’t want to mention the name of the person as this is not the point of this board and also because I am just starting with the person.
May 20, 2007 at 2:00 PM #53971Participantbayparkwatcher, as a trustee you are bound by the Uniform Prudent Investor’s Act. For your own education as to your responsibilities, I would suggest you read “Investing and Managing Trusts under the New Prudent Investor Rule” by John Train and Thomas A. Melfe. This book is easily ordered online and I’d suggest you read it ASAP. Then, if you will contact me via this board, I’ll create a temporary e-mail account so you can write me and get the name of the financial advisor I plan to use.
I am in my last class for certification as a professional fiduciary trustee and my eyes have really been opened by the classes I have taken. I will be testing the above mentioned advisor by moving a portion of my own portfolio over.
I don’t want to mention the name of the person as this is not the point of this board and also because I am just starting with the person.
May 20, 2007 at 7:46 PM #53992Anonymous
Guestls08, more regulation would have prevented nothing. The problem, in my opinion, has been the rampant printing of U.S. dollars (look at the growth of M2/M3), allowing the Feds to think that they could have their cake and eat it, too.
As you know, when you put in regulations, you substitute the government’s judgement for that of individuals, and you substitute a government bailout for the loss of capital/equity of the individuals involved. While there are lots of smart folks in government, with good intentions, there are too many of them with questionable judgement and suspect motivations.
You cannot regulate against foolishness and poor judgement. Even the smartest folks take leave of their senses at times.
No, more regulation of banks would have solved nothing.
Let folks reap what they sowed. Those who go broke will have to go grovel for food, clothing, and shelter from their wiser, prudent family members. Big deal.
May 20, 2007 at 7:46 PM #54003Guestls08, more regulation would have prevented nothing. The problem, in my opinion, has been the rampant printing of U.S. dollars (look at the growth of M2/M3), allowing the Feds to think that they could have their cake and eat it, too.
As you know, when you put in regulations, you substitute the government’s judgement for that of individuals, and you substitute a government bailout for the loss of capital/equity of the individuals involved. While there are lots of smart folks in government, with good intentions, there are too many of them with questionable judgement and suspect motivations.
You cannot regulate against foolishness and poor judgement. Even the smartest folks take leave of their senses at times.
No, more regulation of banks would have solved nothing.
Let folks reap what they sowed. Those who go broke will have to go grovel for food, clothing, and shelter from their wiser, prudent family members. Big deal.
May 20, 2007 at 9:31 PM #54004GuestYes, regulation and underwriting standards, enforced by Fed and OHFEO, certainly WOULD have made a difference.
When the Fed “prints” money it is in reality making credit more available to banks through the overnight repo system.
If the banks don’t want the credit, i.e. they don’t feel comfortable deploying more capital at the level of acceptable risk, then they won’t.
This typically happens in the middle phases of a recession when everybody knows you’re in it and the Fed has already lowered rates significantly and yet the banks don’t see much increase in lending and investments since they feel conditions are poor credit risk is high. The phrase “pushing on a string” hits the Lexis-Nexis data bases of newpaper business sections for 10-20 months.
Japan’s central bank lowered rates to zero and yet most of the credit it created was NOT deployed inside Japan, but outside.
Also remember that if a central bank targets interest rates, which the Fed does, (as opposed to money supply, which the Fed attempted to do in the 1980’s for a certain period of time), then the Fed is setting the price of money. The quantity that customers take depends on their own business decisions. And if underwriting is lax, they want lots of it since they are under the delusion they can lend out to subprime scum, borrow from Fed or equivalents and make a fat vig, and repeat.
Stricter underwriting and sober credit risk understanding would have resulted in less demand for money. And less inflation.
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