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August 4, 2007 at 11:45 PM in reply to: August 17, 1981 HOUSING BOOM GOES BUST IN LOS ANGELES #70389August 4, 2007 at 11:45 PM in reply to: August 17, 1981 HOUSING BOOM GOES BUST IN LOS ANGELES #70466
Allan from Fallbrook
Participantone muggle: You’re right about the CDO leverage. Most of that leverage was in the 10x to 20x range. That’s gonna hurt coming back the other way.
August 4, 2007 at 10:00 PM in reply to: August 17, 1981 HOUSING BOOM GOES BUST IN LOS ANGELES #70367ParticipantTemeculaguy: Take that one step further. All of this is built upon an insane amount of debt. Real wages have been stagnant since the mid-1970s, and American households have been sustaining the illusion of prosperity through ever increasing amounts of debt.
A great many of those soon to be foreclosed upon properties were financed with 100% LTV loans. Add in those HELOCs you spoke of, as well as all of the commercial revolving debt and the picture becomes even grimmer.
Add in the coming credit crunch, add tightening lending standards and the fact that most banks have not hit the market with their REO portfolios yet and you start to get the sense of something really ugly. Then what happens during the next wave of mortgage resets? And the next?
Wow.
August 4, 2007 at 10:00 PM in reply to: August 17, 1981 HOUSING BOOM GOES BUST IN LOS ANGELES #70444ParticipantTemeculaguy: Take that one step further. All of this is built upon an insane amount of debt. Real wages have been stagnant since the mid-1970s, and American households have been sustaining the illusion of prosperity through ever increasing amounts of debt.
A great many of those soon to be foreclosed upon properties were financed with 100% LTV loans. Add in those HELOCs you spoke of, as well as all of the commercial revolving debt and the picture becomes even grimmer.
Add in the coming credit crunch, add tightening lending standards and the fact that most banks have not hit the market with their REO portfolios yet and you start to get the sense of something really ugly. Then what happens during the next wave of mortgage resets? And the next?
Wow.
ParticipantAnd how many folks will read this article and then tell you that it’s different now?
ParticipantAnd how many folks will read this article and then tell you that it’s different now?
ParticipantI agree with ThriftyDifty: It can (and will) get much, much worse.
I think that stock market valuations are inherently worthless right now, mainly due to bloated corporate earnings. Standard valuations based on traditional methods are therefore not going to be worth much.
IMHO, there are three bubbles right now: Housing, Credit and Stock Market. I also believe there is a coming credit crunch and that is where things will get really ugly.
The majority of mortgage resets are still over the horizon and yet we have seen some seriously bad bloodletting as of late. Wall Street has now taken to punishing risk taking, as evidenced by the last week or so in the market.
If you speak with anyone in banking right now, the message is one of the coming crunch. I would have to believe that with a huge inventory overhang, tightening lending standards and declining values, the RE market will probably be on the front end of the bust, with the stock market not too far behind.
The Japanese learned this particular lesson the hard way, and, to a certain extent, have still not gotten over the effects.
ParticipantI agree with ThriftyDifty: It can (and will) get much, much worse.
I think that stock market valuations are inherently worthless right now, mainly due to bloated corporate earnings. Standard valuations based on traditional methods are therefore not going to be worth much.
IMHO, there are three bubbles right now: Housing, Credit and Stock Market. I also believe there is a coming credit crunch and that is where things will get really ugly.
The majority of mortgage resets are still over the horizon and yet we have seen some seriously bad bloodletting as of late. Wall Street has now taken to punishing risk taking, as evidenced by the last week or so in the market.
If you speak with anyone in banking right now, the message is one of the coming crunch. I would have to believe that with a huge inventory overhang, tightening lending standards and declining values, the RE market will probably be on the front end of the bust, with the stock market not too far behind.
The Japanese learned this particular lesson the hard way, and, to a certain extent, have still not gotten over the effects.
ParticipantJohn Kenneth Galbraith.
His book on the 1929 Crash is a good read right about now. One interesting point that Galbraith made is to be very careful when all of the “experts” hasten to reassure you that the market fundamentals are “still sound”.
The scary part is that the worst hasn’t even happened yet. If this carnage is any indicator, it is gonna get really ugly.
ParticipantJohn Kenneth Galbraith.
His book on the 1929 Crash is a good read right about now. One interesting point that Galbraith made is to be very careful when all of the “experts” hasten to reassure you that the market fundamentals are “still sound”.
The scary part is that the worst hasn’t even happened yet. If this carnage is any indicator, it is gonna get really ugly.
ParticipantCardiffBaseball: My Pee Wee team is D2 as well, and all brand new players.
What I find absolutely amazing is how quickly the team (I have a 28 player roster) has pulled together. My focus is always on conditioning and fundamentals; nothing fancy on either offense or defense and the kids have taken to it like ducks to water.
The only caution I ever offer to parents of a kid new to tackle football is that first game. In Pee Wee and Jr Midget, he will be encountering players that have been playing 4 to 5 years of tackle ball and, in some cases, have really mastered the art of the hit. They will target kids who are just standing around on a play and/or not paying attention.
I teach my kids the “ABC rule”: Always Be Conscious – know what’s going on around you, keep your head up and always pay attention.
Yeah, that whole set up at LCC HS is really nice. I saw the gym and indoor facilities, too. Fallbrook UHS is getting renovated, but the difference between the two high schools is unbelievable. LCC paid about $1MM more and got about 2 to 3x the facilities for their money.
ParticipantCardiffBaseball: My Pee Wee team is D2 as well, and all brand new players.
What I find absolutely amazing is how quickly the team (I have a 28 player roster) has pulled together. My focus is always on conditioning and fundamentals; nothing fancy on either offense or defense and the kids have taken to it like ducks to water.
The only caution I ever offer to parents of a kid new to tackle football is that first game. In Pee Wee and Jr Midget, he will be encountering players that have been playing 4 to 5 years of tackle ball and, in some cases, have really mastered the art of the hit. They will target kids who are just standing around on a play and/or not paying attention.
I teach my kids the “ABC rule”: Always Be Conscious – know what’s going on around you, keep your head up and always pay attention.
Yeah, that whole set up at LCC HS is really nice. I saw the gym and indoor facilities, too. Fallbrook UHS is getting renovated, but the difference between the two high schools is unbelievable. LCC paid about $1MM more and got about 2 to 3x the facilities for their money.
ParticipantCardiffBaseball: Is he Pee Wee or Jr Midget? I coach Pee Wee this year, and coached Mitey Mite the last two. Mitey Mite is more fun because, for most kids, it is their first exposure to football and you don’t have to “unlearn” any bad habits. Pee Wee is more interesting because the kids are older and it opens up more options offensively and defensively.
I hope you enjoy your season. We won’t be seeing la Costa Canyon this year, but I have played you guys in years past and you consistently field some good teams. Nice renovation of the high school, by the way. Wow. That new sports facility there is the you know what!
Go Apaches!
ParticipantCardiffBaseball: Is he Pee Wee or Jr Midget? I coach Pee Wee this year, and coached Mitey Mite the last two. Mitey Mite is more fun because, for most kids, it is their first exposure to football and you don’t have to “unlearn” any bad habits. Pee Wee is more interesting because the kids are older and it opens up more options offensively and defensively.
I hope you enjoy your season. We won’t be seeing la Costa Canyon this year, but I have played you guys in years past and you consistently field some good teams. Nice renovation of the high school, by the way. Wow. That new sports facility there is the you know what!
Go Apaches!
ParticipantWhat a great letter! Pretty much sums it up, right?
Course, those new iPhones are pretty nice…
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