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    • December 9, 2007 at 7:19 PM #11147
      farbet
      Participant

      Interest rate ‘freeze’ – the real story is fraud

      New proposals to ease our great mortgage meltdown keep rolling in. First the Treasury Department urged the creation of a new fund that would buy risky mortgage bonds as a tactic to hide what those bonds were really worth. (Not much.) Then the idea was to use Fannie Mae and Freddie Mac to buy the risky loans, even if it was clear that U.S. taxpayers would eventually be stuck with the bill. But that plan went south after Fannie suffered a new accounting scandal, and Freddie’s existing loan losses shot up more than expected.

      Now, just unveiled Thursday, comes the “freeze,” the brainchild of Treasury Secretary Henry Paulson. It sounds good: For five years, mortgage lenders will freeze interest rates on a limited number of “teaser” subprime loans. Other homeowners facing foreclosure will be offered assistance from the Federal Housing Administration.

      But unfortunately, the “freeze” is just another fraud – and like the other bailout proposals, it has nothing to do with U.S. house prices, with “working families,” keeping people in their homes or any of that nonsense
      http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2007/12/09/IN5BTNJ2V.DTL&type=printable

    • December 9, 2007 at 7:21 PM #112529
      farbet
      Participant

      Savings and loan debacle round 2

      • December 9, 2007 at 7:45 PM #112550
        4plexowner
        Participant

        The savings and loan bailout was petty cash compared to today’s crisis

        There are at least $450 trillion dollars worth of derivatives floating around the planet right now – some portion of this paper mountain is currently shaking and bankers and politicians are running scared as a result

        We are currently only hearing about the $20 trillion dollars worth of derivatives written on top of mortgage debt (MBS, CDOs, etc) – we don’t know if the fear being displayed by our ‘leaders’ is only caused by the $20 trillion or if they are reacting to something bigger that we aren’t aware of yet

        All of the same financial games were played with derivatives written against auto loans and credit card debt and who knows what else – some analysts think we will start hearing about the collapse of derivatives based on auto loans and credit card debt very soon since late payments and defaults are increasing with both those categories of debt – perhaps we will have a freeze on credit card payments and a moratorium on auto repossessions in 2008?

        Ultimately, this whole $450+ trillion mountain of derivatives will have to be marked down to some value that is much, much lower than today – 20 to 30 cents on the dollar seems to be the current value of an MBS – the next few years are certain to be interesting

      • December 9, 2007 at 7:45 PM #112665
        4plexowner
        Participant

        The savings and loan bailout was petty cash compared to today’s crisis

        There are at least $450 trillion dollars worth of derivatives floating around the planet right now – some portion of this paper mountain is currently shaking and bankers and politicians are running scared as a result

        We are currently only hearing about the $20 trillion dollars worth of derivatives written on top of mortgage debt (MBS, CDOs, etc) – we don’t know if the fear being displayed by our ‘leaders’ is only caused by the $20 trillion or if they are reacting to something bigger that we aren’t aware of yet

        All of the same financial games were played with derivatives written against auto loans and credit card debt and who knows what else – some analysts think we will start hearing about the collapse of derivatives based on auto loans and credit card debt very soon since late payments and defaults are increasing with both those categories of debt – perhaps we will have a freeze on credit card payments and a moratorium on auto repossessions in 2008?

        Ultimately, this whole $450+ trillion mountain of derivatives will have to be marked down to some value that is much, much lower than today – 20 to 30 cents on the dollar seems to be the current value of an MBS – the next few years are certain to be interesting

      • December 9, 2007 at 7:45 PM #112705
        4plexowner
        Participant

        The savings and loan bailout was petty cash compared to today’s crisis

        There are at least $450 trillion dollars worth of derivatives floating around the planet right now – some portion of this paper mountain is currently shaking and bankers and politicians are running scared as a result

        We are currently only hearing about the $20 trillion dollars worth of derivatives written on top of mortgage debt (MBS, CDOs, etc) – we don’t know if the fear being displayed by our ‘leaders’ is only caused by the $20 trillion or if they are reacting to something bigger that we aren’t aware of yet

        All of the same financial games were played with derivatives written against auto loans and credit card debt and who knows what else – some analysts think we will start hearing about the collapse of derivatives based on auto loans and credit card debt very soon since late payments and defaults are increasing with both those categories of debt – perhaps we will have a freeze on credit card payments and a moratorium on auto repossessions in 2008?

        Ultimately, this whole $450+ trillion mountain of derivatives will have to be marked down to some value that is much, much lower than today – 20 to 30 cents on the dollar seems to be the current value of an MBS – the next few years are certain to be interesting

      • December 9, 2007 at 7:45 PM #112714
        4plexowner
        Participant

        The savings and loan bailout was petty cash compared to today’s crisis

        There are at least $450 trillion dollars worth of derivatives floating around the planet right now – some portion of this paper mountain is currently shaking and bankers and politicians are running scared as a result

        We are currently only hearing about the $20 trillion dollars worth of derivatives written on top of mortgage debt (MBS, CDOs, etc) – we don’t know if the fear being displayed by our ‘leaders’ is only caused by the $20 trillion or if they are reacting to something bigger that we aren’t aware of yet

        All of the same financial games were played with derivatives written against auto loans and credit card debt and who knows what else – some analysts think we will start hearing about the collapse of derivatives based on auto loans and credit card debt very soon since late payments and defaults are increasing with both those categories of debt – perhaps we will have a freeze on credit card payments and a moratorium on auto repossessions in 2008?

        Ultimately, this whole $450+ trillion mountain of derivatives will have to be marked down to some value that is much, much lower than today – 20 to 30 cents on the dollar seems to be the current value of an MBS – the next few years are certain to be interesting

      • December 9, 2007 at 7:45 PM #112748
        4plexowner
        Participant

        The savings and loan bailout was petty cash compared to today’s crisis

        There are at least $450 trillion dollars worth of derivatives floating around the planet right now – some portion of this paper mountain is currently shaking and bankers and politicians are running scared as a result

        We are currently only hearing about the $20 trillion dollars worth of derivatives written on top of mortgage debt (MBS, CDOs, etc) – we don’t know if the fear being displayed by our ‘leaders’ is only caused by the $20 trillion or if they are reacting to something bigger that we aren’t aware of yet

        All of the same financial games were played with derivatives written against auto loans and credit card debt and who knows what else – some analysts think we will start hearing about the collapse of derivatives based on auto loans and credit card debt very soon since late payments and defaults are increasing with both those categories of debt – perhaps we will have a freeze on credit card payments and a moratorium on auto repossessions in 2008?

        Ultimately, this whole $450+ trillion mountain of derivatives will have to be marked down to some value that is much, much lower than today – 20 to 30 cents on the dollar seems to be the current value of an MBS – the next few years are certain to be interesting

    • December 9, 2007 at 7:21 PM #112646
      farbet
      Participant

      Savings and loan debacle round 2

    • December 9, 2007 at 7:21 PM #112687
      farbet
      Participant

      Savings and loan debacle round 2

    • December 9, 2007 at 7:21 PM #112694
      farbet
      Participant

      Savings and loan debacle round 2

    • December 9, 2007 at 7:21 PM #112728
      farbet
      Participant

      Savings and loan debacle round 2

    • December 9, 2007 at 7:44 PM #112540
      farbet
      Participant

      famous quotes from the press today

      “Right now I think it takes a brave soul to buy a home because there’s so much chatter about housing prices dropping,” Toll said

      The government-led initiative may “reduce the severity of the decline,” said Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University in New Haven, Connecticut. Still, “if past cycles are a guide, we could have weak or declining markets for five to 10 years,” Shiller said.

      It’ll be the biggest housing recession we’ve known,” said Allen Sinai, chief global economist at New York-based Decision Economics Inc. “Even if we figure this part of it out, we are not through it.”

      “At best, it may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts. “The fundamental problem with housing is oversupply

      • December 9, 2007 at 7:51 PM #112560
        farbet
        Participant

        In Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.

        Back to demand. The demand for housing is broken up into parts:

        1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.

        2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.

        3. There are a few investors, but they have to have their own sources of financing.

        4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).

        These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.

        The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.

        With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
        Implodemeter 12/09/07

      • December 9, 2007 at 7:51 PM #112677
        farbet
        Participant

        In Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.

        Back to demand. The demand for housing is broken up into parts:

        1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.

        2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.

        3. There are a few investors, but they have to have their own sources of financing.

        4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).

        These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.

        The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.

        With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
        Implodemeter 12/09/07

      • December 9, 2007 at 7:51 PM #112715
        farbet
        Participant

        In Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.

        Back to demand. The demand for housing is broken up into parts:

        1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.

        2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.

        3. There are a few investors, but they have to have their own sources of financing.

        4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).

        These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.

        The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.

        With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
        Implodemeter 12/09/07

      • December 9, 2007 at 7:51 PM #112724
        farbet
        Participant

        In Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.

        Back to demand. The demand for housing is broken up into parts:

        1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.

        2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.

        3. There are a few investors, but they have to have their own sources of financing.

        4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).

        These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.

        The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.

        With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
        Implodemeter 12/09/07

      • December 9, 2007 at 7:51 PM #112758
        farbet
        Participant

        In Economics 101 students learn that markets are driven by demand and not supply. The Bush/Paulson plan addresses supply and assuming that the plan gets off the ground it will only address supply at the margin. This is not anyone’s fault. The pill that is required to fix the housing market will have to be swallowed in parts over time. The market is not willing to admit at this point how severe the problems are.

        Back to demand. The demand for housing is broken up into parts:

        1. subprime demand, once estimated to be about 20% of the market, basically no longer exists. They can’t get the financing.

        2. The Alt. A group may also want to buy a home, but they can no longer obtain financing.

        3. There are a few investors, but they have to have their own sources of financing.

        4. That leaves only the prime borrower, defined as someone with the credit history, income, and down payment necessary to get a mortgage that can be sold to Fannie Mae and Freddie Mac (agency paper in the language of the “biz”).

        These people fall into two groups: a) those that are will buy a home at or near current market prices. This is where most of the housing demand is coming from at this point. I call this group the “oblivious” group, because they are oblivious to the current market conditions and just want a home. People have a variety of legitimate reasons for buying a home, but in these times a “romantic” notion of home ownership based on thinking of the early and mid 20th century just may be obsolete.

        The second group of prime buyers b) is very cognizant of the market conditions and are sitting on the sidelines waiting for the price of homes to fall more. My guess is, this second group of prime buyers is slowly growing larger at the expense of the “oblivious” group.

        With all that said the housing market goes no where until demand increases. Demand will not increase until the price of existing homes decreases (forget new homes it is only 15% of the housing market) and the second group of buyers believes that we have hit the bottom. They will not believe that we have hit bottom until the housing inventory number starts to decline. If you will notice there are no comments about interest rates, they are not material.
        Implodemeter 12/09/07

    • December 9, 2007 at 7:44 PM #112655
      farbet
      Participant

      famous quotes from the press today

      “Right now I think it takes a brave soul to buy a home because there’s so much chatter about housing prices dropping,” Toll said

      The government-led initiative may “reduce the severity of the decline,” said Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University in New Haven, Connecticut. Still, “if past cycles are a guide, we could have weak or declining markets for five to 10 years,” Shiller said.

      It’ll be the biggest housing recession we’ve known,” said Allen Sinai, chief global economist at New York-based Decision Economics Inc. “Even if we figure this part of it out, we are not through it.”

      “At best, it may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts. “The fundamental problem with housing is oversupply

    • December 9, 2007 at 7:44 PM #112697
      farbet
      Participant

      famous quotes from the press today

      “Right now I think it takes a brave soul to buy a home because there’s so much chatter about housing prices dropping,” Toll said

      The government-led initiative may “reduce the severity of the decline,” said Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University in New Haven, Connecticut. Still, “if past cycles are a guide, we could have weak or declining markets for five to 10 years,” Shiller said.

      It’ll be the biggest housing recession we’ve known,” said Allen Sinai, chief global economist at New York-based Decision Economics Inc. “Even if we figure this part of it out, we are not through it.”

      “At best, it may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts. “The fundamental problem with housing is oversupply

    • December 9, 2007 at 7:44 PM #112704
      farbet
      Participant

      famous quotes from the press today

      “Right now I think it takes a brave soul to buy a home because there’s so much chatter about housing prices dropping,” Toll said

      The government-led initiative may “reduce the severity of the decline,” said Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University in New Haven, Connecticut. Still, “if past cycles are a guide, we could have weak or declining markets for five to 10 years,” Shiller said.

      It’ll be the biggest housing recession we’ve known,” said Allen Sinai, chief global economist at New York-based Decision Economics Inc. “Even if we figure this part of it out, we are not through it.”

      “At best, it may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts. “The fundamental problem with housing is oversupply

    • December 9, 2007 at 7:44 PM #112738
      farbet
      Participant

      famous quotes from the press today

      “Right now I think it takes a brave soul to buy a home because there’s so much chatter about housing prices dropping,” Toll said

      The government-led initiative may “reduce the severity of the decline,” said Robert Shiller, chief economist at MacroMarkets LLC and a professor at Yale University in New Haven, Connecticut. Still, “if past cycles are a guide, we could have weak or declining markets for five to 10 years,” Shiller said.

      It’ll be the biggest housing recession we’ve known,” said Allen Sinai, chief global economist at New York-based Decision Economics Inc. “Even if we figure this part of it out, we are not through it.”

      “At best, it may stop some of the hemorrhaging of the housing market, but it doesn’t necessarily turn things around,” said Nicolas Retsinas, director of Harvard University’s Joint Center for Housing Studies in Cambridge, Massachusetts. “The fundamental problem with housing is oversupply

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