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March 15, 2007 at 12:44 PM in reply to: Get fired up! Congress considering bailing out SUB PRIME! #47755
Cow_tipping
ParticipantSome how its mirroring Tulip bulbs more and more …
Didn’t the Dutch government say they will buy Tulip bulbs at 10% of market … and didn’t that run the Dutch govt into bankruptcy and they re negged on it …
Watch as this implodes bigger and better with each government intervention.
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Cow_tipping.ParticipantInterest rates should hit the 10 mark. That’s when the panic turns into suicidal thoughts.
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Cow_tipping.ParticipantForget long term financing. I know of several people who got an ARM, and are refinancing (and they do it every 2-3 years) into another arm … so far, other than the 3-5% it tacks on to the amount its worked out fine cos interest rates have only risen slightly since 02. I cant wait for the great printing press to start humming and send interest rates into the mid teens.
Again, only thinking how much a month. Stupid.
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Cow_tipping.ParticipantNo … dont leave … the parents may have come home, but you might want to be around to watch the kids get a spanking. :-)).
In any case, many cities are inflating the bubble. Charlotte for example. 98-02 RE went down, in non inflation adjusted dollars. Houses that sold in 96 for 202K went for the same 202K in 02. Then It slowly crept up with inflation till ~2006. After which nothing was available for under 320K.
Can you say humongo bubble … and we are still pumping it up … booya.
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Cow_tipping.ParticipantOf course it can sink below 2002 prices. The jobs that were then available in CA have gone Poof … heck I expect to see 97 prices. And those jobs have gone Poof to India and china as well.
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Cow_tipping.ParticipantNot quite … you have sold something, which now is worth less. Essentially you buy it at $0 and hand it back to them … Trading halted dont mean squat … worthless paper is floating around … and can be bought for nothing.
Buying a Put … you’re buying the right to sell a stock at the strike price. Whatever happens to the stock … not your problem, the transaction happens anyway. BTW in a market, equity trades out number options trades 10 to 1. Buy options outnummber puts prolly 3 to 1. So when the put call is being excercised, the brokerage is raking in the big money on the worthless buy options. They have very sophisticated software that lets them finely manipulate their exposure that if you’re making money on 1 … you can bet they are taking it in on 100. They are also so braced against the “armageddon scenario” … that if it tanks … they make the most $$$. There is a yeild curve called a condor … it moves significantly in any direction, they make like bandits.
You want to cry now … OK here it is …
An out of the money put (stock selling at 50 and you buy a put for under 50, but typically say 40) will cost you 25 cents per contract. If the stock tanks like it did … you stand to make $40 per 25 cents you spent.
When I used to watch my old friend play options, he had ~7-8K split in ~20-30 companies in various sectors. 200-300 each. 90% os them expired worth less … and the other 10% doubled his $$$ and armageddon scenarios are the bread and butter. If he had a few of those … he’d have made like bandits.
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Cow_tipping.ParticipantCA has a huge underground economy. But of course that is where the liar loans comes.
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Cow_tipping.ParticipantPuts will result in tons of money if its halted and/or delisted. If the stock drops to like .32 cents … you get the strike price minus the 32 cents per equity you’re short. I believe the minumum is a 100 count per contract. can you say Ka-ching.
However once trading is halted on the equity, you cannot buy the option either. That door gets closed … cos halt in equity = halt in option.
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Cow_tipping.
PS: I wasn’t too clear in my repy. Even if trading is halted there is still a price which ironically moves as well. You only cannot buy the option. Ones that you hold, you can sell.ParticipantOK I’d like to buy some gold funds (or is it better to buy actual gold ??) and short some stocks via puts (AKA trading options not equities). My question is, what online trade company is the best for the options trading and what gold fun to buy and with what company if its even needed.
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Cow_tipping.ParticipantIts somewhat common. Builders tell people, “yea, you can always sell it for more in 3 years and move up with your larger down payment. So you get the low payments for 3 years and then what do you care. you anway will mae out like bandits when you sell it”
Of course, that means, you get a over priced house with a un proportionatly low payments, and if you sell in 3 years cos you cant move up cos you owe more than your house is worth …
Oh yea, the 3 years … ended last week.
Its all because people have only been thinking how much a month.
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Cow_tipping.ParticipantIf 20% down was really really required, houses will cost … 25% of what they do in CA. Yes 1/4th. They’d prolly drop to ~150-300K on average. Dont worry about it. You wish 20% down was required. Heck I hope it never happens, cos I already own a house.
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Cow_tipping.ParticipantRealtors like stock exchanges rely on volume. They dont want a slow slide down taking years. That means no one will be buying as prices are slowly dropping cos no one wants to buy a declining assent. Doesn’t matter if drops 1% a year. Volume is what really matters. Now if prices drop 30-50% overnight, and then start slowly climbing again that will spur a lot of people to get back in. yesterday it was 1 mill, now its just 600K … buy now when its low, or be priced out forever. See how that works.
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Cow_tipping.ParticipantNationwide its ~10% of total outstanding mortgages by number, not amount, but number. However that includes the 30 yr mortgages that originated in 1977. Last 3 years the sub primes were much much higher and that is nationwide. CA presumably has much more jumbo, alt A, subprime and no doc, and heck lots of super stretch mortgages as in someone who can get a 300K house, cant find one for 300 so he gets a 800K house hoping he’d be bailed out when his house triples in value. Huge huge numbers. And surprisingly, 2% is enough to crash the market. Housing without someone living in it cost you a lot …
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Cow_tipping.ParticipantJax is Humid, summer winter all the time.
Central NC is humid in the summer but not all other times. The opposite of CA actually. But I doubt that any where is as dry as Vegas and PHX, but the places everyone here has mentioned are humid at some point in the year or other. Except of course AZ and NV.
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