Bob K.

The Government's Subprime 'Bailout' Plan Will Kill the Housing Market

JCrash, most of these loans are non recourse loans, which means exactly as you described. You can simply walk away from the debt. The lender only has a claim on the asset, in this case the house. The point the author is making is that if the prime brokers must correctly value their assets on their balance sheets, it significantly impairs their ability to lend, and in some cases their ability to survive. Go ahead and look at the level 3 disclosures and you will see they have more assets they cannot value "read" sell than the capital in their business. That is the reason for all of these bailouts. They could not care less about these home owners.

The Government's Subprime 'Bailout' Plan Will Kill the Housing Market

I am sorry to say but the author is correct, these "saved borrowers" are far better off defaulting and renting through their negative credit period of seven years than being stuck in a negative amortized loan. Meaning the price of their homes continue to fall as their payments remain with little upside of an equity build. Do the math. The prime brokers set up an ingenious trap.

Real Estate Gauge: Private Residential Investment as a Percentage of GDP

Can you gragh a correlation between this data and housing prices?

Housing: You Call This a Bottom?!

Thanks, I will. Have a great night

Housing: You Call This a Bottom?!

You are obviously a very successful trader....most are not. I am a technical based investor, but as you know, the macro helps you pick the sectors where you will shorten your odds, but maybe you just follow Cramer's picks. Having said that...I believe Barry is early, but correct...but why are you mad at him, your a trader, his insight shouldn't hurt you. His insights have helped me put on shorts or puts on Apple, Whirlpool, Google, Group one, Nutrisystems, and Childrens place, (all but NTRI, GPI are closed booked profits) as a trader you cannot help to see the deterioration in their TSV, and Moneystreams. And I bailed on oil after three years this fall. Good luck to you. Throw out your picks, love to learn from you.

Housing: You Call This a Bottom?!

Maybe, maybe not...that is not where you will get burned. The consumer drives 60-70 percent of GDP, if they are continually denied access to the cash in their homes, they will need to stop spending(starting to happen), extract from non secured sources (Stephanie Pomboy from Market Mavens has recently reported on the significant increase in credit card debt), which is a short term fix. Thus setting up a significant slow down, that the fed can't easily fix by lowering rates (why, he does not control the ten year, which affects the Home equity rates, won't raise housing prices, and non secured debt is relatively immune to fed policy), thus a recession is in the cards sooner than later. By telling people all is now OK when in fact it is not, dooms those who think it is safe to extend themselves in the housing and / or the stock market on a false premise.

Housing: You Call This a Bottom?!

Barry is absolutely correct, the media, power brokers, and the industry has been happy talking the housing sector for a better part of a year. They obviously fear a collapse in sentiment which will take the legs out from the market. By any measurement, housing prices are extremely overvalued in the aggregate and will continue to fall as people give up. We have two major overhangs to digest, the ratio of investors to homeowners are out of whack (18% of buyers from 2003 to 2006 Vs. a long term 10% average) these people do not have the cash flow to maintain their positions and will sell as they run out of cash, further suppressing the market and the sub prime borrower which has been discussed previously. Don't get caught in the bear trap, this will be long and painful. Bob