"I know everyone is in a mad funk about what happens when the "Re-sets" start kicking in, but I don't buy that. What matters is how much people paid for their house compared to what it's worth now, or more precisely what it will be worth in two years time."
Reset algothorim: Take negative equity, eliminate refi possibility, add increased negative cash flow from increased payment = if you haven't walked before, now you will.
Good article. Low documentation loans did not go only, and possibly not even mainly, to unqualified borrowers. Many lazy loan applicants with the blessing of equally lazy "lending professionals," chose to go with low doc loans just to avoid the annoying paperwork hassles.
Portfolio Management - Wise to Keep Some Cash [View article]
Very good observation, and congratulations. Cash is always necessary. You may think you're a long term investor, until your business can't extend its line of credit, your mortgage can't be refinanced, your spouse is laid off, your kid has uncovered medical expenses. Cash buys you time. Cash prevents you from selling low when you know better, but have no choice.
Wish we could vote up or down on the articles themselves.
New Jersey fraud case from S&L crisis, where loan appraisals were inflated 300%. The proceeds were pocketed and properties promptly abandoned. When decided 8 years later, the defense claimed it was not fraud because by the time of the settlement, the property value had risen to nearly the original appraised price.
Justice Watch Lawsuit Raises Serious Questions on TARP Decisions [View article]
Wouldn't it be nice to see ALL the fraudulent insider self-dealing fully investigated? If history is any indication, public demand for justice will be assuaged by the token prosecution of isolated individuals largely disassociated from a corporate power base. Madoff and Stanford both fit this profile, and there will be others. To quote one frustrated government official, "we're hell on widows and orphans."
Arthur Levitt Defends High Frequency Trading [View article]
Wall Street today conjures up the image of Cuckoos in stolen digs: A bunch of obligate brood parasites, open-mouthed, squawking, demanding to be fed, rewarded for the feat of having pushed the legitimate population out of the financial nest.
When US resource policy was debated 30 years ago, "import theirs" won over "drain America first." We are not without resources, but we have waited very late in the game to deploy them for our own use. On the bright side, we have everything we need to be self-reliant if we have to be, and the technology to make that happen, and enough flexibility to ride out a transition.
A Granular Look at the Stratified U.S. Consumer [View article]
The upper class is the most egregrious special interest group, having enjoyed an enormous transfer of wealth from the rest of us. To quote Texas from the oil crisis circa '70's: LTBFITD.
>" legislation that require both of the aformentioned classes to continue > to subsidizing transfers income and wealth to the underclasses that..."
A Granular Look at the Stratified U.S. Consumer [View article]
Hey Tyler: PS
How much of the "wealth" of the upper decile do you suppose is in "other" real estate? Are rental properties part of housing or are they "other business assets?" How about smallcomm? Or farm holdings? Or private shares of real-estate related businesses?
A Granular Look at the Stratified U.S. Consumer [View article]
Based on Tyler's charts, I might need to change my name to Lower94th.
The bottom half of the top decile, barely hanging onto that questionable achievement, is weary, leary, and worried. Our own "wealth" has declined, our future security is less certain, and what spending power we have might, for some time to come, be needed to help sustain important extended family: parents with retirement losses, students without prospects, adult children with job concerns. If I am still in the upper class, we are in big trouble.
Citadel Set to Control 97.5% of E*Trade's Order Flow [View article]
Perhaps we should call flash trading what it is - a transaction TAX, paid not to the government, but to Goldman and company. It should be only a matter of time til the authorities grab this revenue source for themselves.
Thanks for the email. I agree that the collapse has further to go in housing. I just think it is collapsing bottom first, like an imploding building. The lower floor hit the ground first, and everything else will price-compress on top. The lower end home here, in perfect condition, is off 60% from the 2006 high. Jumbos, alt a's, everything held by deeper pockets will follow, pretty-much in order of reverse affluence.
Liar Loans Not the Problem [View article]
"I know everyone is in a mad funk about what happens when the "Re-sets" start kicking in, but I don't buy that. What matters is how much people paid for their house compared to what it's worth now, or more precisely what it will be worth in two years time."
Reset algothorim: Take negative equity, eliminate refi possibility, add increased negative cash flow from increased payment = if you haven't walked before, now you will.
Liar Loans Not the Problem [View article]
Disclosure: long low doc mortgage
Portfolio Management - Wise to Keep Some Cash [View article]
Wish we could vote up or down on the articles themselves.
Should Banks Extend and Pretend? [View article]
The CFTC Is Needlessly Breaking Good Products [View article]
Yale professor Robert Shiller's worried we're setting up for another housing bubble within five years: "The low interest rates, the affordability is leaning that way and the ratios are back down." [View news story]
Justice Watch Lawsuit Raises Serious Questions on TARP Decisions [View article]
Arthur Levitt Defends High Frequency Trading [View article]
Clarifying America's No-Win Economic Dilemma [View article]
A Granular Look at the Stratified U.S. Consumer [View article]
>" legislation that require both of the aformentioned classes to continue
> to subsidizing transfers income and wealth to the underclasses that..."
A Granular Look at the Stratified U.S. Consumer [View article]
How much of the "wealth" of the upper decile do you suppose is in "other" real estate? Are rental properties part of housing or are they "other business assets?" How about smallcomm? Or farm holdings? Or private shares of real-estate related businesses?
A Granular Look at the Stratified U.S. Consumer [View article]
The bottom half of the top decile, barely hanging onto that questionable achievement, is weary, leary, and worried. Our own "wealth" has declined, our future security is less certain, and what spending power we have might, for some time to come, be needed to help sustain important extended family: parents with retirement losses, students without prospects, adult children with job concerns. If I am still in the upper class, we are in big trouble.
Citadel Set to Control 97.5% of E*Trade's Order Flow [View article]
Insiders Continue to Sell, Sell, Sell [View article]
On Aug 14 12:25 PM Peter Daskaloff wrote:
> Also, here's an extremely bearish report on the state of the markets
> by Goldman Sachs.
>
> tulpenwoede.tornflag.c...
Economic Collapse Is Accelerating [View article]