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bsrsharma
Participantanxvariety,
Can you please explain your post in simpler English for those of us not versed in options vernacular. I am intrigued by that 2700%. What the heck is that?
ParticipantYes; the moment I read “froze the assets”, I consider it is all over. I have rarely seen anything good ever happen after this near death experience (bruises from dot com implosion).
ParticipantYes; the moment I read “froze the assets”, I consider it is all over. I have rarely seen anything good ever happen after this near death experience (bruises from dot com implosion).
ParticipantThat is a bit old by now. What is more interesting is this nugget:
“The news comes amid media reports that Bear Stearns froze the assets in a third fund with exposure to the credit markets.”
This third fund is NOT leveraged and is NOT subprime. That folks is interesting – an unleveraged prime fund imploding. Early signs of potential systemic collapse?
ParticipantThat is a bit old by now. What is more interesting is this nugget:
“The news comes amid media reports that Bear Stearns froze the assets in a third fund with exposure to the credit markets.”
This third fund is NOT leveraged and is NOT subprime. That folks is interesting – an unleveraged prime fund imploding. Early signs of potential systemic collapse?
August 1, 2007 at 9:50 AM in reply to: If tax write-off was reversed, what would happen to the economy? #69162ParticipantI remember reading somewhere an analysis that concluded, (in steady state conditions, unlike the bubble implosion we are in now), eliminating mortage deduction may reduce the home ownership and home prices by about 20-25%. Another loophole is the tax free gain of $250K/$500K every 2 years that enhances the gain of home buying vs. other risks like stock/bond etc., investing that is taxed @15% long term rate. Net result is massive over allocation of capital towards housing stock to the detriment of other more productive investments. The craze of McMansions is a drain on land, building materials, energy, promotes illegal immigration, urban sprawl, induces people to assume needlessly large debt in turn causing rat race like lifestyle to pay for it and generally lowers quality of life.
August 1, 2007 at 9:50 AM in reply to: If tax write-off was reversed, what would happen to the economy? #69233ParticipantI remember reading somewhere an analysis that concluded, (in steady state conditions, unlike the bubble implosion we are in now), eliminating mortage deduction may reduce the home ownership and home prices by about 20-25%. Another loophole is the tax free gain of $250K/$500K every 2 years that enhances the gain of home buying vs. other risks like stock/bond etc., investing that is taxed @15% long term rate. Net result is massive over allocation of capital towards housing stock to the detriment of other more productive investments. The craze of McMansions is a drain on land, building materials, energy, promotes illegal immigration, urban sprawl, induces people to assume needlessly large debt in turn causing rat race like lifestyle to pay for it and generally lowers quality of life.
ParticipantAny guess on probability of CFC imploding? That will be quite an event.
ParticipantAny guess on probability of CFC imploding? That will be quite an event.
ParticipantI agree Jim Cramer is a fruitcake (along with his nut case pal Larry Kudlow), but in this instance he may be innovative. Instead of prolonging the Chinese water torture, a mortgage company a day folding down, middle class (and lower) folks holding high LTV assets draining what little cash they have to feed fat and lazy investors who greedily bought way over rated bonds, if a majority of such borrowers follow his advice and repudiate their loans, it will precipitate whatever is going to happen in next few years and blow up the credit system at once. Once the excess faux liquidity, wealth and leverage have been squeezed out, a recovery based on affordable housing can start. I can’t think of a good reason why slow death is preferable to quick death.
ParticipantI agree Jim Cramer is a fruitcake (along with his nut case pal Larry Kudlow), but in this instance he may be innovative. Instead of prolonging the Chinese water torture, a mortgage company a day folding down, middle class (and lower) folks holding high LTV assets draining what little cash they have to feed fat and lazy investors who greedily bought way over rated bonds, if a majority of such borrowers follow his advice and repudiate their loans, it will precipitate whatever is going to happen in next few years and blow up the credit system at once. Once the excess faux liquidity, wealth and leverage have been squeezed out, a recovery based on affordable housing can start. I can’t think of a good reason why slow death is preferable to quick death.
ParticipantWhile i agree that he is a shock jock, I also think many of his analyses are quite rational. If he is recommending a general repudiation for underwater high LTV loans, that is probably going to be main stream behavior too. Once a sizable fraction of consumers say I don’t care for my credit rating since I have nothing more to lose, the whole credit machine may implode.
ParticipantWhile i agree that he is a shock jock, I also think many of his analyses are quite rational. If he is recommending a general repudiation for underwater high LTV loans, that is probably going to be main stream behavior too. Once a sizable fraction of consumers say I don’t care for my credit rating since I have nothing more to lose, the whole credit machine may implode.
ParticipantWhen a fairly mainstream investment advisor starts advocating repudiation of loans, I think the general financial structure has started a slow collapse. This bubble bursting is going to severely stress all lender-borrower relationships. Finally we may reach the golden moment advocated by Shakespeare:
“Neither a borrower nor a lender be;
For loan oft loseth both itself and friend.
And borrowing dulls the edge of husbandry.” -
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