The View From Inside a Depression

[ralphfurley]

[quote=Arraya]http://www.youtube.com/watch?v=pFMgwL-Tq4s&feature=player_embedded[/quote]

Keiser has a way of putting stuff out there…

“Why not give Osama Bin Laden a bonus for the great work he did on 9/11? That’s the same thing as giving JP Morgan a bonus or Goldman Sacs a bonus. They are all terrorists. They are all destroying the economy. One uses derivatives… one uses airplanes…”

—@ 5:50—
http://www.youtube.com/watch?v=tbAqqLkiUkg&feature=related

[briansd1]

[quote=ucodegen]
Unless you are trying to use the house as an HELOC ATM, there would be no need to refi your own house. Part of the problem was that HELOC ATM was in overdrive and people shaped their lives around it. [/quote]

That’s what I meant by wherewithal to service the debt.

The wherewithal to service the debts was not based on the monthly operating cash inflows to the borrowers, but based on delaying the debt payments until the collateral (real estate or securities) could be sold at a huge profit.

The borrowers would then repeat the cycle again.

Borrowers were greedy; and lenders were greedy.

[briansd1]

[quote=ucodegen]
Unless you are trying to use the house as an HELOC ATM, there would be no need to refi your own house. Part of the problem was that HELOC ATM was in overdrive and people shaped their lives around it. [/quote]

That’s what I meant by wherewithal to service the debt.

The wherewithal to service the debts was not based on the monthly operating cash inflows to the borrowers, but based on delaying the debt payments until the collateral (real estate or securities) could be sold at a huge profit.

The borrowers would then repeat the cycle again.

Borrowers were greedy; and lenders were greedy.

[briansd1]

[quote=ucodegen]
Unless you are trying to use the house as an HELOC ATM, there would be no need to refi your own house. Part of the problem was that HELOC ATM was in overdrive and people shaped their lives around it. [/quote]

That’s what I meant by wherewithal to service the debt.

The wherewithal to service the debts was not based on the monthly operating cash inflows to the borrowers, but based on delaying the debt payments until the collateral (real estate or securities) could be sold at a huge profit.

The borrowers would then repeat the cycle again.

Borrowers were greedy; and lenders were greedy.

[briansd1]

[quote=ucodegen]
Unless you are trying to use the house as an HELOC ATM, there would be no need to refi your own house. Part of the problem was that HELOC ATM was in overdrive and people shaped their lives around it. [/quote]

That’s what I meant by wherewithal to service the debt.

The wherewithal to service the debts was not based on the monthly operating cash inflows to the borrowers, but based on delaying the debt payments until the collateral (real estate or securities) could be sold at a huge profit.

The borrowers would then repeat the cycle again.

Borrowers were greedy; and lenders were greedy.

[briansd1]

[quote=ucodegen]
Unless you are trying to use the house as an HELOC ATM, there would be no need to refi your own house. Part of the problem was that HELOC ATM was in overdrive and people shaped their lives around it. [/quote]

That’s what I meant by wherewithal to service the debt.

The wherewithal to service the debts was not based on the monthly operating cash inflows to the borrowers, but based on delaying the debt payments until the collateral (real estate or securities) could be sold at a huge profit.

The borrowers would then repeat the cycle again.

Borrowers were greedy; and lenders were greedy.

[NotCranky]

The comments about different behaviors related to direct experience with the depression,or lack of, are way too general IMO. Many people of all ages, by means of Helocs and cash out refinances leveraged boom “equity” constructively. It was expanded beyond what it would have been if it just sat there waiting for it to disappear or even to cash out at the peak.

Yes, there were absolutely reasons to refinance during the boom. Two of the people that I saw doing it best in my neighborhood looked to be at least 100years old. I think they had experienced the roaring 20’s. This dimension is something that the bubble blogger(especially HBB types) rarely gets. Sure, for everyone that did it somewhat right there were probably several who spent their good fortune on bigger, soon to be upside down houses,new soon to fail businesses, toys and fun. To not leverage was to stay neutral or to just enjoy average accrued benefits of real estate in the end.

I am not a Republican.

[NotCranky]

The comments about different behaviors related to direct experience with the depression,or lack of, are way too general IMO. Many people of all ages, by means of Helocs and cash out refinances leveraged boom “equity” constructively. It was expanded beyond what it would have been if it just sat there waiting for it to disappear or even to cash out at the peak.

Yes, there were absolutely reasons to refinance during the boom. Two of the people that I saw doing it best in my neighborhood looked to be at least 100years old. I think they had experienced the roaring 20’s. This dimension is something that the bubble blogger(especially HBB types) rarely gets. Sure, for everyone that did it somewhat right there were probably several who spent their good fortune on bigger, soon to be upside down houses,new soon to fail businesses, toys and fun. To not leverage was to stay neutral or to just enjoy average accrued benefits of real estate in the end.

I am not a Republican.

[NotCranky]

The comments about different behaviors related to direct experience with the depression,or lack of, are way too general IMO. Many people of all ages, by means of Helocs and cash out refinances leveraged boom “equity” constructively. It was expanded beyond what it would have been if it just sat there waiting for it to disappear or even to cash out at the peak.

Yes, there were absolutely reasons to refinance during the boom. Two of the people that I saw doing it best in my neighborhood looked to be at least 100years old. I think they had experienced the roaring 20’s. This dimension is something that the bubble blogger(especially HBB types) rarely gets. Sure, for everyone that did it somewhat right there were probably several who spent their good fortune on bigger, soon to be upside down houses,new soon to fail businesses, toys and fun. To not leverage was to stay neutral or to just enjoy average accrued benefits of real estate in the end.

I am not a Republican.

[NotCranky]

The comments about different behaviors related to direct experience with the depression,or lack of, are way too general IMO. Many people of all ages, by means of Helocs and cash out refinances leveraged boom “equity” constructively. It was expanded beyond what it would have been if it just sat there waiting for it to disappear or even to cash out at the peak.

Yes, there were absolutely reasons to refinance during the boom. Two of the people that I saw doing it best in my neighborhood looked to be at least 100years old. I think they had experienced the roaring 20’s. This dimension is something that the bubble blogger(especially HBB types) rarely gets. Sure, for everyone that did it somewhat right there were probably several who spent their good fortune on bigger, soon to be upside down houses,new soon to fail businesses, toys and fun. To not leverage was to stay neutral or to just enjoy average accrued benefits of real estate in the end.

I am not a Republican.

[NotCranky]

The comments about different behaviors related to direct experience with the depression,or lack of, are way too general IMO. Many people of all ages, by means of Helocs and cash out refinances leveraged boom “equity” constructively. It was expanded beyond what it would have been if it just sat there waiting for it to disappear or even to cash out at the peak.

Yes, there were absolutely reasons to refinance during the boom. Two of the people that I saw doing it best in my neighborhood looked to be at least 100years old. I think they had experienced the roaring 20’s. This dimension is something that the bubble blogger(especially HBB types) rarely gets. Sure, for everyone that did it somewhat right there were probably several who spent their good fortune on bigger, soon to be upside down houses,new soon to fail businesses, toys and fun. To not leverage was to stay neutral or to just enjoy average accrued benefits of real estate in the end.

I am not a Republican.

[briansd1]

[quote=Russell]new soon to fail businesses, [/quote]

I think that you’re on to something here.

After the dot-com crash, many unemployed became self-employed. They were successful at first. They flipped and plowed the money into bigger more fanciful businesses.

People flipped business (restaurants, salons, bars, franchises, etc) just like they did houses.

Now those businesses don’t have the operating cash flow to pay down the debts.

I’m seeing more and more empty retail space.

[briansd1]

[quote=Russell]new soon to fail businesses, [/quote]

I think that you’re on to something here.

After the dot-com crash, many unemployed became self-employed. They were successful at first. They flipped and plowed the money into bigger more fanciful businesses.

People flipped business (restaurants, salons, bars, franchises, etc) just like they did houses.

Now those businesses don’t have the operating cash flow to pay down the debts.

I’m seeing more and more empty retail space.

[briansd1]

[quote=Russell]new soon to fail businesses, [/quote]

I think that you’re on to something here.

After the dot-com crash, many unemployed became self-employed. They were successful at first. They flipped and plowed the money into bigger more fanciful businesses.

People flipped business (restaurants, salons, bars, franchises, etc) just like they did houses.

Now those businesses don’t have the operating cash flow to pay down the debts.

I’m seeing more and more empty retail space.

[briansd1]

[quote=Russell]new soon to fail businesses, [/quote]

I think that you’re on to something here.

After the dot-com crash, many unemployed became self-employed. They were successful at first. They flipped and plowed the money into bigger more fanciful businesses.

People flipped business (restaurants, salons, bars, franchises, etc) just like they did houses.

Now those businesses don’t have the operating cash flow to pay down the debts.

I’m seeing more and more empty retail space.

[Author]

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