Jim Cramer say “Just walk away”

[GoUSC]

no_such exactly. He is speaking to capital preservation. Aka don’t throw all the cash you have in the bank chasing an upside down home. I hate to say but but it’s true.

[GoUSC]

no_such exactly. He is speaking to capital preservation. Aka don’t throw all the cash you have in the bank chasing an upside down home. I hate to say but but it’s true.

[Bugs]

I found interesting his comment that the Fed could reverse the trend by lowering the prime by 1%. For a $230,000 loan, the difference between monthly payments between 6.5% mortgage and a 5.5% mortgage is $145. I can’t imagine that would make enough difference nationwide to keep people in their homes or increase demand.

There’s another video on the same page that is a clip from a local TV news broadcast in the Sacramento area. This piece talks about the high foreclosure rate in one of the zips up there, and focuses on a couple residental subdivisions where 20% and 25% of the homes have been taken back from the banks, and where they are unable to resell those homes at even 50% off the 2006 purchase prices.

The ARMS are coming home to roost.

[Bugs]

I found interesting his comment that the Fed could reverse the trend by lowering the prime by 1%. For a $230,000 loan, the difference between monthly payments between 6.5% mortgage and a 5.5% mortgage is $145. I can’t imagine that would make enough difference nationwide to keep people in their homes or increase demand.

There’s another video on the same page that is a clip from a local TV news broadcast in the Sacramento area. This piece talks about the high foreclosure rate in one of the zips up there, and focuses on a couple residental subdivisions where 20% and 25% of the homes have been taken back from the banks, and where they are unable to resell those homes at even 50% off the 2006 purchase prices.

The ARMS are coming home to roost.

[rb_engineer]

He meant everyone since he expects 100% default rate on those loans which implies that everyone will be down 20% and should walk. I hope people don’t cling on his predictions since he’ll stab them in the back a week later.

[rb_engineer]

He meant everyone since he expects 100% default rate on those loans which implies that everyone will be down 20% and should walk. I hope people don’t cling on his predictions since he’ll stab them in the back a week later.

[Ozzie]

Wow, I thought people on this board were smarter than this. The entire video is SARCASM. Geeez, some people lose all their sensibility when they think someone is defending their opinion.

I might have to send him an email with a link to this thread. I guarantee he’d mention on his TV show.

[Ozzie]

Wow, I thought people on this board were smarter than this. The entire video is SARCASM. Geeez, some people lose all their sensibility when they think someone is defending their opinion.

I might have to send him an email with a link to this thread. I guarantee he’d mention on his TV show.

[LA_Renter]

Cramer did a doom and gloom scenario as a “just in case” this actually happens this is what the argument would be. Actually I thought it was pretty creative to out Bear the Bears. I mean the 100% default on 2/28’s is obviously hyperbole. The eerie thing about this act is that it had substance and it does show he understands the bearish outlook on housing and lenders. The peak of resets on 2/28’s beginning Oct going through Feb is Real. The NOD’s and NOT’s we are seeing are Real. And yes it is true that you are better off walking away from an upside down home. These things are too close to home right now to make too much fun of. The one thing he kept mentioning is that this would all go away if the FED lowers 100 basis points. Is he doing this series to send a message to the FED? or is this satire by taking jab at somebody like Bill Gross at Pimco who makes a very bearish housing argument to persuade the FED to lower the overnight funds rate which would benefit somebody like Bill Gross. Overall I think this is Cramer’s way of acknowledging the bear argument on RE through humor by taking an even more hyperbolic bearish stance.

[LA_Renter]

Cramer did a doom and gloom scenario as a “just in case” this actually happens this is what the argument would be. Actually I thought it was pretty creative to out Bear the Bears. I mean the 100% default on 2/28’s is obviously hyperbole. The eerie thing about this act is that it had substance and it does show he understands the bearish outlook on housing and lenders. The peak of resets on 2/28’s beginning Oct going through Feb is Real. The NOD’s and NOT’s we are seeing are Real. And yes it is true that you are better off walking away from an upside down home. These things are too close to home right now to make too much fun of. The one thing he kept mentioning is that this would all go away if the FED lowers 100 basis points. Is he doing this series to send a message to the FED? or is this satire by taking jab at somebody like Bill Gross at Pimco who makes a very bearish housing argument to persuade the FED to lower the overnight funds rate which would benefit somebody like Bill Gross. Overall I think this is Cramer’s way of acknowledging the bear argument on RE through humor by taking an even more hyperbolic bearish stance.

[PerryChase]

What’s so shocking with walking away? We should emphasize that walking is an option provided by the loan agreement. In essence a mortgage is simply an option to stay and make the payments or walking and turning your house over to the lender.

You stay if you’re in the money, else walk away.

Cramer is right about the 2/28. Imagine 1%-3% teaser rate mortgages recasting at 8%-12%; combine that with 20% drop in real estate values. Of course, the owners will default at near 100% rate.

[PerryChase]

What’s so shocking with walking away? We should emphasize that walking is an option provided by the loan agreement. In essence a mortgage is simply an option to stay and make the payments or walking and turning your house over to the lender.

You stay if you’re in the money, else walk away.

Cramer is right about the 2/28. Imagine 1%-3% teaser rate mortgages recasting at 8%-12%; combine that with 20% drop in real estate values. Of course, the owners will default at near 100% rate.

[rb_engineer]

PerryChase,

I’m just saying don’t be so happy that Cramer is in the your camp today. He will just as easily start pumping LEND next week and forget all about what he said in the video. And no 2/28 will NOT default 100%, some undoubtly has already refinanced, and most of US will not go down 20%.

So you’ll simply walk away from all your investments if you are under water?

[rb_engineer]

PerryChase,

I’m just saying don’t be so happy that Cramer is in the your camp today. He will just as easily start pumping LEND next week and forget all about what he said in the video. And no 2/28 will NOT default 100%, some undoubtly has already refinanced, and most of US will not go down 20%.

So you’ll simply walk away from all your investments if you are under water?

[LA_Renter]

I just saw Cramer on CNBC and that Doom and Gloom scenario wasn’t as much satire as I thought he was trying to portray. He basically said the CFC conference call last week was probably the most important conference call of the year. He indicated Mozillo was not exaggerating the state of housing and that ALT-A is subprime. He really has gone very bearish on this sector. He basically said Indymac will go the way of AHM today. He lays the blame on Greenspan in creating these products more so than the lenders. Right now he sounds like a poster on Piggington. It is Cramer so take it with a grain of salt, he is good entertainment and does have a great deal of knowledge of the market and he can be incredibly wrong at times like everybody else trying to read a market. But after seeing him today it is very apparent he was not making fun of the doom and gloom scenario, it was more like breaking the ice to joe 6 pack that this is going to be bad. That’s my take at least.

[Author]

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