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Housing Bubble Bursting?

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My interest in this housing situation is only superficial. The housing crisis is just a symptom of the underlying disease.
I have a deep interest in national economic models and tend to see things in terms of national economic models. For example, last night I was watching the History Channel and they had a series on Adolph Hitler and how he came to power. Hitler took a nation in total turmoil, promised to improve things in four years and then created one of the greatest economic recoveries in history and he did it in the four years as he promised to do.
As a student I was questioning myself about how this economic model worked. They played an old tape recording of a conservation of Hitler talking with the president of Finland in which Hitler was talking very sensibility about the situation Germany faced, primarily due to the Soviet Union. Essentially, the German economic model was getting killed by Stalin’s economic model.
The basic problem with all economic models, save one, has one common little quirk: To keep the scam working or the music playing requires some economic blood from outside the system. That dilemma is what underlies all economic models for nation states.
What was Hitler’s dilemma? The same as the Roman Empire, they needed this outsource of economic blood to stay alive economically. If you look at the history, Hitler started in 1933, you see how his model solved this problem of needed wealth. What else happened in 1933 in Germany? Hitler started stealing the wealth he needed by taking it from the Jews. That lasted for about 4 years but then like the Romans he had to resort exploiting other nations for his blood supply. Like the Romans before him, he had to conquer other nations to fill the blood bank but the Roman end came as a result of all the slaves they conquered living amongst them. In other words, Hitler had to keep growing to feed the system. So he resorted to using slave labor and conquest.
What did Hitler tell the President of Finland was causing him a problem? It was the oil in Romania he had to have and the totally unexpected economic and military muscle of Stalin. Hitler attacked Russia to get the oil fields in Romania. Hitler explained that the reason Stalin was so strong was that he was essentially using slave labor to solve his problem. There in lies the dilemma. Stalin’s model was superior because his was a slave state and slave states are more efficient that National Socialists states. The slaves don’t get paid or have entitlements.
I said all of the above to point this out: What is the greatest political issue in the news today in this country? It is immigration and the war in Iraq. What is behind this? It is that our system needs an outside source of economic blood to keep the music playing. We need cheap oil, stability abroad, economic growth as example being the real estate bubble and more cheap labor from immigration. Kind of like the Romans. Otherwise, our welfare state will collapse. What did Hitler in? Answer is a slave state economic model he could not match... What will do the USA in? In my view it will be a combination of the slave state like mentality like the Arab World and the fact that the immigrants coming in will use our democratic model to vote themselves economic entitlements which will only serve to buy us a little more time in the short run but hasten our demise in the longer term.
And in closing; the housing bubble and all of the babbling on this thread has a simple explanation: The housing bubble was an act of desperation to prop up the system and keep the music playing just a little longer. The problem we face is not the housing bubble, the problem is that our economic gas tank, like Hitler explained: “All of these tanks and trucks drink gas like you would not believe, we have got to get the oil but the Russians are not what we expected to encounter.” We didn’t expect the Muslim world to have the might we are up against either. The more things change the more they stay the same. Just ask the Romans.
 
Austin, I somewhat agree with your post; however, I believe the "slave state" that most threatens us is China.
 
I believe the "slave state" that most threatens us is China.
Whether a threat or not, within the lifetime of the younger generation, they surely will surpass us in economic might and we will be a second rate power who will no longer be able to oppose them. Sooner or later they will take Formosa back and when they do this nation will be helpless to stop them because we cannot be weaned off their cheap goods just like we cannot leave the Arabs alone because we have to suckle off their oil teat. By then, the question is who will feed us? We are well on our way to a nation which is destroying agriculture as we know it. We are selling out the small farmer. Tyson throttles its poultry growers. Smithfield ditto for its pig farmers. There are so few dairies left in Arkansas they have a new save the dairy organization. We are losing a dairy per week in the state. Mega dairies are beholden to large producers. Soybeans are at the mercy of Brazil...We will not be able to grow our own food soon. BTW, my uncle ran an orchard until he retired. He hired people and paid them by the bushel. They could pick 100 - 120 b. per day and make double the minimum wage. Today, pickers are illegals often paid by 'contract' involving a single payment to a legal who then distributes the money to his so-called 'subcontractors'. They might average 30 - 40 b. per day or a few more on big apples. Orchards don't make money because they are competing against Chile and other nations where substandard wages are the norm. I noticed there is a strike in Poland where doctors want their wages doubled...from $480 to $1000/ month...and I just spent $260 to spend 15 minutes with one.
 
Mortgage official defends subprime loans

http://www.marketwatch.com/News/Story/Story.aspx?guid={CA2C0E30-7240-48F4-AF46-49CD8C96F5AD}&siteid=nbk

WASHINGTON (MarketWatch) -- The chief of the Mortgage Bankers Association defended the use of subprime loans Tuesday, saying they've enabled millions of Americans to buy homes and urging that a fix for that sector of the market not end up hobbling the entire mortgage industry.


At the same time, MBA Chairman John Robbins acknowledged that "unethical actors" in the mortgage industry have hurt borrowers and damaged bankers' reputations.


Subprime delinquencies have jumped in the U.S. as interest rates have climbed and house prices stopped rising. Subprime loans are usually extended to those borrowers with blemished credit records.


But Robbins, in a speech at the National Press Club, said subprime loans remain "an extremely important tool for providing homeownership opportunities in this country."


"We must find a way to prevent future abuse without eliminating subprime loans," Robbins said in a prepared text.


"I want you all to remember that three million Americans used a subprime loan to purchase a house," he said.
 
Home auctioneers - a sign of a distressed real estate market

http://www.latimes.com/news/local/la-me-bankrupt20may20,1,7319441.story

A sign of the distressed real estate market and growing volume of foreclosures, the auction of 92 homes, condominiums and apartment buildings in Los Angeles, Orange and Ventura counties was the kind of event not seen in the Southland for more than a decade. In fact, the company that staged the auction — Real Estate Disposition Corp. of Irvine — came out of hibernation to do it, said its chairman, Rob Friedman.

A sister firm, LandAuction.com, conducts sales of land, but, Friedman said, Real Estate Disposition last conducted big home auctions during the real estate bust of the early to mid-1990s.

Saturday's auction was the second of three being held by the company in conjunction with major lenders that pay the firm a commission on each sale. The first was May 12 in San Diego; the third is being held at the Riverside Convention Center today.

The brisk bidding highlighted a paradoxical feature of the real estate market in the Los Angeles area. Sales volume has declined steeply as houses languish on the market, but without a corresponding drop in prices. From April 2006 to last month, the median home price in Southern California rose 6.1%, according to DataQuick Information Services, though growing inventories could signal price declines.
 
Income checks needed for loans, regulator says

http://www.marketwatch.com/News/Story/Story.aspx?guid={2E65948B-59C2-4E91-AD27-62BB82968E33}&siteid=nbk

WASHINGTON (MarketWatch) -- Banks need to know a potential borrower's real -- not stated -- income when a subprime loan is applied for, a top U.S. banking regulator said Wednesday, as problems in the subprime mortgage market persist.


"What we need to make clear," said Comptroller of the Currency John Dugan, "is the principle that a lender, in underwriting a mortgage loan, must assess not just a borrower's will to make timely payments on the loan, but also his or her capacity to do so."
 
The auctioneers were all excited about selling 12 Homes out of 25 at one auction in California , less Thai 50% and they think it's greatest thing since
the 125% LTV loan.The ones that sold were about 30% below the asking price , go figure....
 
Mortgage Bankers Mad As Hell

http://www.cnbc.com/id/18801746

On TV today, I'm reporting a story about the mortgage bankers pushing back against the very premise of this whole subprime mortgage "crisis." The chairman of the Mortgage Bankers Association, John Robbins, is giving a speech at the National Press Club. It opens like this, "I stand before you today mad as hell. I have to be angry. It would be too depressing to accept that a very few unethical people can give my profession, and me, a black eye. But it's worse than that. It's not just our reputations that have been damaged. People have been hurt. The very people we take pride in helping. All because of a very few unethical actors."

The trouble is that politicians and state and federal regulators are all clamoring to toughen and tighten the industry, police the bankers and lenders and essentially treat them all like "unethical actors." And of course the bankers don't like that.

But Mr. Robbins also contends that the "crisis" in the subprime market really isn't as bad as we in the big, bad media make it out to be. Everybody needs to take a breath, is essentially what he's saying. A teeny, tiny percentage of all loans really will end up in foreclosure, he claims, and the good, big lenders will bounce back.
 
LENDERS ARE SHOCKED ABOUT THE 'CRASH"....
NEW YORK (CNNMoney.com) -- The subprime mortgage meltdown has been a shock to industry insiders, but now they say it's hitting harder and faster than expected - even to those who predicted the crisis in the first place.

That was the message Monday from a panel of leading industry executives on the state of the mortgage lending industry at the Mortgage Bankers Association's National Secondary Market Conference & Expo in New York.


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Michael Marriott, a panelist and managing director for Credit Suisse, said, "Last October, I predicted the subprime market would collapse and many issuers would go out of business. But the violence and speed of the market sell-off surprised people."

David Lowman, a panelist and chief executive of JPMorgan Chase & Co.'s global mortgage business, said, "35 percent of what once could be done, can no longer be done," referring to mortgage loan products that have effectively been taken off the shelves.

And speaking separately from his Atlanta office, Duane LeGate, president of House Buyer Network, a specialist in short sales and foreclosure prevention, said one of the real estate agents he works with had six deals blow up within four days because, "The loan originator told him, 'We're not offering [these products] anymore.'"

According to LeGate, this kind of thing just started to happen in the past month or so.

Allen Hardester, director of business development for mortgage broker Guaranteed Rate, said many once-common subprime loans products are now almost impossible to find.

PS.Some idiots say it's only a tiny percentage of loans , does someone pay these clowns..
 
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