Even if 50% of the loans to entry level buyers fails, if banks/lenders werent leveraged like they were it would be ZERO problem.
My wifes grandfather has lived in the PHX market for 70 years and he says this market isnt the worst he has seen..we have seen worse housing drops than this..he says the S&L implosion was worse.
If the leverage hadnt happened AND the Fed wasnt tossing cheap money around we wouldnt be here.
If cheap money wasnt available and regulation was in place then lender and builder GREED wouldnt have happened in the first place.
Its a HUGE misnomer than the Equal Lending rules caused this, that just isnt going to work for me..makes no sense and is just blaming the wrong group.
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Koaj,
Sorry that just does not fly to me.
Even if 50% of the loans to entry level buyers fails, if banks/lenders werent leveraged like they were it would be ZERO problem.
My wifes grandfather has lived in the PHX market for 70 years and he says this market isnt the worst he has seen..we have seen worse housing drops than this..he says the S&L implosion was worse.
If the leverage hadnt happened AND the Fed wasnt tossing cheap money around we wouldnt be here.
If cheap money wasnt available and regulation was in place then lender and builder GREED wouldnt have happened in the first place.
Its a HUGE misnomer than the Equal Lending rules caused this, that just isnt going to work for me..makes no sense and is just blaming the wrong group.
So farking what that W was fiscally irresponsible?
same "farking" " Guns and Butter" deficit spending as LBJ back in the 1960's. should have raised taxes OR cut spending, like NOT doing that seniors drug plan, which was a scam anyhow, when Iraq started to drag on BUT NO, can't do like daddy and say "no new taxes" and then raise them even IF the budget goes right in the sewer.
btw, the original tax cuts even, before 9-11 and Iraq came along, pretty much assured that the government would run huge deficites.
I remember when the Republican party stood for fiscal responsability.
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So farking what that W was fiscally irresponsible?
same "farking" " Guns and Butter" deficit spending as LBJ back in the 1960's. should have raised taxes OR cut spending, like NOT doing that seniors drug plan, which was a scam anyhow, when Iraq started to drag on BUT NO, can't do like daddy and say "no new taxes" and then raise them even IF the budget goes right in the sewer.
btw, the original tax cuts even, before 9-11 and Iraq came along, pretty much assured that the government would run huge deficites.
I remember when the Republican party stood for fiscal responsability.
wall - so you're ok with congressional policy trying to engineer affordability
inherently that's wrong and then allowing banks to lever 30-1 on top of that is even worse and then telling Fannie and Freddie to overpay for trillions in worthless paper is even worse
the ball got pushed downhill somewhere and it started in washington...
leverage is fine...when you borrow against worthless assets, thats when the problem starts
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wall - so you're ok with congressional policy trying to engineer affordability
inherently that's wrong and then allowing banks to lever 30-1 on top of that is even worse and then telling Fannie and Freddie to overpay for trillions in worthless paper is even worse
the ball got pushed downhill somewhere and it started in washington...
leverage is fine...when you borrow against worthless assets, thats when the problem starts
leverage is fine...when you borrow against worthless assets, thats when the problem starts
hate to tell ya this BUT excessive leverage is ALWAYS a perscription for disaster. 10% stock margin rates is what brought about the 1929 stock market crash because of forced liquidations. that's WHY the Fed had at least a 50% margin for years.
one of the problems no is that the "hedge hogs" and other "institutions" found ways around those margin requirements in both stocks AND the so called "derivatives". when they started DOWN, the liquidation selling was like a snowball down hill.
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leverage is fine...when you borrow against worthless assets, thats when the problem starts
hate to tell ya this BUT excessive leverage is ALWAYS a perscription for disaster. 10% stock margin rates is what brought about the 1929 stock market crash because of forced liquidations. that's WHY the Fed had at least a 50% margin for years.
one of the problems no is that the "hedge hogs" and other "institutions" found ways around those margin requirements in both stocks AND the so called "derivatives". when they started DOWN, the liquidation selling was like a snowball down hill.
Actually the soft hand of government has been around since we started the country..without government intervention at times, greed and the market can trample on societal rights as you well know
So yeah..I am ok with congress establishing Equal Lending rules..that doesnt excuse underwriters laziness.
You CAN have equal lending and not implode the industry and in all seriousness it wasnt the actual mortgages that did this anyway, rather the packaging of the CMOs and the effect of the leveraging to all involved..and the effects of the insurance leveraging.
If the Fed hadnt left the spigot running and regulators were enforcing then the bubble would never have happened...
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Koaj,
Actually the soft hand of government has been around since we started the country..without government intervention at times, greed and the market can trample on societal rights as you well know
So yeah..I am ok with congress establishing Equal Lending rules..that doesnt excuse underwriters laziness.
You CAN have equal lending and not implode the industry and in all seriousness it wasnt the actual mortgages that did this anyway, rather the packaging of the CMOs and the effect of the leveraging to all involved..and the effects of the insurance leveraging.
If the Fed hadnt left the spigot running and regulators were enforcing then the bubble would never have happened...
You CAN have equal lending and not implode the industry and in all
seriousness it wasnt the actual mortgages that did this anyway, rather
the packaging of the CMOs and the effect of the leveraging to all
involved..and the effects of the insurance leveraging. ---------------- well when people stopped paying their mortgages or when ARMs reset...thats when the problem started
leverage is fine as long as the asset you borrowed against performs. these did not
agreed on the Fed point...greenspan will be the ultimate villian in all of this
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You CAN have equal lending and not implode the industry and in all
seriousness it wasnt the actual mortgages that did this anyway, rather
the packaging of the CMOs and the effect of the leveraging to all
involved..and the effects of the insurance leveraging. ---------------- well when people stopped paying their mortgages or when ARMs reset...thats when the problem started
leverage is fine as long as the asset you borrowed against performs. these did not
agreed on the Fed point...greenspan will be the ultimate villian in all of this
Not anything higher than 5 to 1 leverage wise..that gives a 20% to 30% wiggle room drop and have it not smash the balance sheets.
I think the margin rules for traders should be in force for businesses..that would be 2 to 1.
Having 20 to 1 margin has monster ramifications..a 5% drop can KILL you. How could these morons think that this inflated RE market would not correct 10-20%, thats just a normal cycle for the market..at 5 to 1 margin that is FINE..at 20-30-40-50 to 1 that means implosion, margin calls and BK.
If AIG hadnt blown their leverage rules, these investments would NEVER had been floated since holders would never had purchased if they werent insured.
All of this discussion is about leverage and financial ratios, not about Equal Lending..
I really dislike people pointing the finger at the lower income as if they were the cause for this..MAYBE there is a HINT of responsibility to say Countrywide or IndyMac, but even that I dont believe.
If money wasnt flowing and everyone turned into either an investor or a mortgage broker, the money and guidelines would have been restrictive and conservative and we would never have created IO loans or ARM mortages like we did.
It is like saying the Naz bubble was due to optic stocks..in reality the optic stocks were just part of the top and between them and .com stocks that is all people remember.
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Koaj,
Not anything higher than 5 to 1 leverage wise..that gives a 20% to 30% wiggle room drop and have it not smash the balance sheets.
I think the margin rules for traders should be in force for businesses..that would be 2 to 1.
Having 20 to 1 margin has monster ramifications..a 5% drop can KILL you. How could these morons think that this inflated RE market would not correct 10-20%, thats just a normal cycle for the market..at 5 to 1 margin that is FINE..at 20-30-40-50 to 1 that means implosion, margin calls and BK.
If AIG hadnt blown their leverage rules, these investments would NEVER had been floated since holders would never had purchased if they werent insured.
All of this discussion is about leverage and financial ratios, not about Equal Lending..
I really dislike people pointing the finger at the lower income as if they were the cause for this..MAYBE there is a HINT of responsibility to say Countrywide or IndyMac, but even that I dont believe.
If money wasnt flowing and everyone turned into either an investor or a mortgage broker, the money and guidelines would have been restrictive and conservative and we would never have created IO loans or ARM mortages like we did.
It is like saying the Naz bubble was due to optic stocks..in reality the optic stocks were just part of the top and between them and .com stocks that is all people remember.
How could these morons think that this inflated RE market would not
correct 10-20%, thats just a normal cycle for the market..at 5 to 1
margin that is FINE..at 20-30-40-50 to 1 that means implosion, margin
calls and BK. ----- agreed 10000% but the feds were buying everything...it was, as they say "riskless"
blame goes everywhere...consumers are dumb, banks are greedy...someone married them and that would be a mix of congressional and fed policy
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How could these morons think that this inflated RE market would not
correct 10-20%, thats just a normal cycle for the market..at 5 to 1
margin that is FINE..at 20-30-40-50 to 1 that means implosion, margin
calls and BK. ----- agreed 10000% but the feds were buying everything...it was, as they say "riskless"
blame goes everywhere...consumers are dumb, banks are greedy...someone married them and that would be a mix of congressional and fed policy
leverage is fine as long as the asset you borrowed against performs. these did not
problem IS that's what HAPPENS in a CRASH. the excessive leverage makes everything fold up like a nickle knife.
and it's always the "investment" that everyone thinks "can never go down" that's overleveraged. I remember when the strip mall market crashed in Houston in the early 1980's. a lot of lawyers and docs looking for "tax advantaged investments" took a HUGE bath on those limited partnerships. that was ANOTHER market "that couldn't go down"
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leverage is fine as long as the asset you borrowed against performs. these did not
problem IS that's what HAPPENS in a CRASH. the excessive leverage makes everything fold up like a nickle knife.
and it's always the "investment" that everyone thinks "can never go down" that's overleveraged. I remember when the strip mall market crashed in Houston in the early 1980's. a lot of lawyers and docs looking for "tax advantaged investments" took a HUGE bath on those limited partnerships. that was ANOTHER market "that couldn't go down"
As a former Realtor and partner in a Money-Management firm -both in the 90's , I can tell you that ARMS and I/O loans were not the rage then as a product ... this is a 2000 plus product en masse..
The point about Greenspan's policies creating an 'artificial' bull market for housing prices is exactly right ..
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As a former Realtor and partner in a Money-Management firm -both in the 90's , I can tell you that ARMS and I/O loans were not the rage then as a product ... this is a 2000 plus product en masse..
The point about Greenspan's policies creating an 'artificial' bull market for housing prices is exactly right ..
"Barack Obama" is a farking joke and doesn't have a farking clue about economics. Complete and total utter dumb ass.
That might be true, but than again, Obama is doing the will of his masters, the central bankers are collapsing this shit on purpose to bring about a one world currency = MORE CONTROL.
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Quote Originally Posted by claycourtlesson:
"Barack Obama" is a farking joke and doesn't have a farking clue about economics. Complete and total utter dumb ass.
That might be true, but than again, Obama is doing the will of his masters, the central bankers are collapsing this shit on purpose to bring about a one world currency = MORE CONTROL.
I think Obama knows exactly what he and his elitist friends are doing. No different than when the Rothschild's spread rumors in England that Napoleon had trounced Russia and invaded successfully than bought up everything for pennies on the dollar when the masses sold and the market tanked.
As well the same thing happened in the late 1920's-1930's now they are doing it again on a much larger scale. Except this time it is more about complete domination and control rather than amassing wealth, they already have that, this is insanity.
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I think Obama knows exactly what he and his elitist friends are doing. No different than when the Rothschild's spread rumors in England that Napoleon had trounced Russia and invaded successfully than bought up everything for pennies on the dollar when the masses sold and the market tanked.
As well the same thing happened in the late 1920's-1930's now they are doing it again on a much larger scale. Except this time it is more about complete domination and control rather than amassing wealth, they already have that, this is insanity.
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