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Diego Mamani
ParticipantZandi was overly optimistic a year ago. And now he’s overly pessimistic:
“We have a very soft economy and if the Fed doesn’t lower rates then the economy could fall into a recession,” said Mark Zandi, chief economist at Economy.com.
Could he have a conflict of interest if some of his corporate clients stand to benefit from a bail out (in the form of lowered short-term interest rates)? I’m not happy that the Fed has bowed to pressure from the whiners at Wall Street (and their consultants, like Zandi).
I remember now that Economy.com was purchased by Moody’s some time back. Moody’s is responsible for giving AAA ratings to MBS (essentially junk), that many pension funds, and other institutional investors, ended up buying. It turned out that Moody’s, like S&P, had a tremendous incentive to give prime ratings to junk bonds.
And now Mark joins the chorus of whiners asking for (and getting!) a bailout. Disgusting.
ParticipantWhen I was young, bankers were fairly well educated. But it looks like a HS diploma is not required nowadays:
The bank I work for has several supermarket branches but we don't do any secondary market loans out of them. Every loan originated in a supermarket branch stays [in our] portfolio. Our primary reason for being here [there?] is customer convEnience and checking account aCquisition. We keep longer hours 7 days a week and their [there] is always a manager/loan officer and personal banker on duty. It's a huge competItive advantage for us in our market. Every supermarket branch aCquires several new client relationships daily. Many other banks in our market struggle to attract 1 or 2 new customers in an entire week.
ParticipantNow I remember that our friend Leatherface (the CEO) said a few days or weeks ago that he knew the bubble would burst. Remember how he unloaded his company stock in 2006 and early 2007? Well, perhaps this lawsuit is not entirely frivolous. He’s admitted he knew the party (the housing orgy, if you will) would end soon, and he cashed out, but the little people in his firm were left holding the bag.
ParticipantIt’s really idiotic to tie both your job and retirement savings to the fortunes of one single company. Stan is right, this was done by Enron employees too, who appeared in front of a judge, crying and saying that “we don’t understand no risk diversification of them investments”.
Frivolous lawsuit!
September 11, 2007 at 6:20 PM in reply to: “Theory” that RE bottom is looming . . . and RE is 25% undervalued . . . #84210ParticipantWell, we naively measure house prices in dollars only. Smart people measure prices in real dollars (i.e., inflation-adjusted), which is much better.
But since the dollar has lost so much value relative to gold, the Euro, oil, etc., you would be surprised to see how much California housing prices have changed from 1998 to 2005 if you were to measure them in gold oz., or in oil barrels, etc.
I agree with Bugs that this is not as straightfoward as it sounds, because many of these metals/commodities are highly volatile.
ParticipantHow much longer? As soon as the Navy, UCSD, Sharp Health Care, and Qualcomm close shop and lay everybody off.
[/good natured sarcasm off]
September 11, 2007 at 2:22 PM in reply to: Where did this five year window to live in a house come from? #84195ParticipantA friend of mine and I bought houses at about the same time in 2001. He bought in Dallas, and I bought in the O.C. We both got 30-year fixed rate mortgages. In 2004 my friend’s employer relocated him to NYC, and in 2005 I sold to relocate to northern L.A. county.
We both threw lots of money down the drain by not having signed up for 5-yr or 7-yr ARMs. True, my house doubled in value, but I could have saved serious $$ with an ARM. People do move more often than in the past.
A 30-yr fixed mortgage is a superior product, but we pay more for it (in the same way that a Camry costs more than a Corolla b/c it’s a better car).
September 10, 2007 at 1:20 PM in reply to: Innovest posted their August San Diego foreclosure numbers and it ain’t pretty.. #84069ParticipantRE: S.D. Daily Transcript.
Does anybody know why this site has not been updated for over a month?
http://www.sddt.com/Finance/EconomicIndicators.cfm
ParticipantHey WH, care to share the bio of David Tepper? Thanks.
ParticipantThe kitchen floor even looks like concrete, and the ceiling looks damaged. No wonder the kid looks miserable!
And the quality of writing nowadays! Since when a ‘circular driveway’ is a ‘circle driveway’?
ParticipantFrom our friends at Zillow.com:
Sale History
08/01/2006: $296,000
06/15/2005: $230,000
05/02/2000: $53,500
06/04/1999: $66,957
09/24/1996: $63,000I wonder if the 2005 or 2006 sales were fraudulent, especially the 2006 one. Applying a reasonable 4% annual appreciation rate to the 1996 and 1999 prices, this house in the desert should be in the $92K – $97K range.
At $146K it’s still ridiculously overpriced!
August 17, 2007 at 2:27 PM in reply to: How the S&L crisis is similar to what’s happening now #77159ParticipantThe guaranteed FDIC bailout makes bankers less careful than they otherwise would be when lending money.
The S&Ls relaxed lending standards and lent generously to people who wanted to buy houses in the late 1980s housing boom. Buyers were afraid that they may be “priced out forever,” so they were willing to pay any price for a house and the S&Ls were happy to lend them money.
When subprime borrowers started to default en masse, S&Ls hiked the interest rates they pay on CDs, etc., in an effort to improve their liquidity. Savers, lulled by the (FDIC-like) NCUA guaranteed bailout, happily deposited their money. Eventually the party stopped, countless of S&Ls went belly up, and the taxpayer had to foot the bill for billions of dollars.
August 17, 2007 at 2:27 PM in reply to: How the S&L crisis is similar to what’s happening now #77280ParticipantThe guaranteed FDIC bailout makes bankers less careful than they otherwise would be when lending money.
The S&Ls relaxed lending standards and lent generously to people who wanted to buy houses in the late 1980s housing boom. Buyers were afraid that they may be “priced out forever,” so they were willing to pay any price for a house and the S&Ls were happy to lend them money.
When subprime borrowers started to default en masse, S&Ls hiked the interest rates they pay on CDs, etc., in an effort to improve their liquidity. Savers, lulled by the (FDIC-like) NCUA guaranteed bailout, happily deposited their money. Eventually the party stopped, countless of S&Ls went belly up, and the taxpayer had to foot the bill for billions of dollars.
August 17, 2007 at 2:27 PM in reply to: How the S&L crisis is similar to what’s happening now #77305ParticipantThe guaranteed FDIC bailout makes bankers less careful than they otherwise would be when lending money.
The S&Ls relaxed lending standards and lent generously to people who wanted to buy houses in the late 1980s housing boom. Buyers were afraid that they may be “priced out forever,” so they were willing to pay any price for a house and the S&Ls were happy to lend them money.
When subprime borrowers started to default en masse, S&Ls hiked the interest rates they pay on CDs, etc., in an effort to improve their liquidity. Savers, lulled by the (FDIC-like) NCUA guaranteed bailout, happily deposited their money. Eventually the party stopped, countless of S&Ls went belly up, and the taxpayer had to foot the bill for billions of dollars.
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