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Housing Bubble Bursting?

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Mentor said:
They had a choice to either go for greater market share or an increased emphasis on quality of loans and sustainability of their business plan.

Voters are responsible ultimately, as they seem to keep politicians in power that keep interfering with market mechanisms which would otherwise let the chips fall where they may and weed out the losers in a more rational fashion.

I think Mozilo should get partial credit for his explanation:shrug:
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Mozilo playing victimized card by borrowers is a very good joke for late night TV comedy shows like Jay Leno or David Letterman. May be we should send it to them. It is just funny.
I give him 5 for the joke and -10 for playing victim
 
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Randolph Kinney said:
Yeah sure. His reasoning is like a drug dealer; I counld't sell the stuff if they didn't want it and there was no demand for it. :peace:
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I only gave him partial credit for the grain of truth about the people. In reference to the drug pusher analogy, the addictions most worrisome to me include the need for a "fix" in the form of additional laws and regulations.

I say no bail outs. A big part of the solution is to roll back the enabling legislation and regulation that cripples marketplace correction mechanisms.

Regulation in the form of licensing schemes, etc, slowly lobotomizes the population by providing the illusion that their interests are better protected by complex government schemes than by their own individual due diligence and market based protections such as Underwriter's Laboratories, Consumer's Union, etc.
 
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Riick said:
OFF TOPIC -- Moh

How do you put a link in here w/ a Title instead of the http:// ??
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1) Type the Title you would like to have show.

2) Select/highlight the Title.

3) Click the link button on the tool bar:
createlink.gif


4) Type the address and click OK.
 
hmmm, let me see - how can we make this mess even more monstrous and ugly.... I know:

Federal Reserve Chairman Ben Bernanke Wednesday proposed that the federal government guarantee so-called “jumbo” home loans worth up to $1 million.

http://www.msnbc.msn.com/id/21694890/

First FDIC chair calls for lenders to freeze rates for those with ARM's they can't afford and now this.

My first read is that this is another really bad idea - someone tell me if I am wrong.

They do not want to let this house of cards fall until they have built it as high as it can go.
 
If you guys haven't seen it yet, Fox has a new business channel. I was watching Neil Cavuto tonight and he was addressing the banking issue with some gurus.
Here is the scoop. Friday MS announced a 3.6 billion dollar write off. They were expecting a range of 3 to 6 billion and it came in low so MS is looking relatively good. Many others are expected to announce Monday or later in the week their expected losses. If they all come on the low end like MS did the system will stay on tract, but if it is worse things could get bad in a hurry.

What do they mean by get bad? The bottom line is a giant government bailout. Many want to let the market work itself out and the losers take the loss but the word is that the global economy would collapse and the governments can't afford to let that happen. They blame congress for letting this happen and say the problem was letting these banks get as big as they are. The end result will be mergers in the short run and government bailout with a new round of regulation to follow.

Monday, tomorrow, is a critical day so we need to see what happens tomorrow and the remainder of the week. This has the potential of making the S & L bailout look like a Sunday school picnic. :fiddle:
 
23Degrees said:
hmmm, let me see - how can we make this mess even more monstrous and ugly.... I know:

Federal Reserve Chairman Ben Bernanke Wednesday proposed that the federal government guarantee so-called “jumbo” home loans worth up to $1 million.

http://www.msnbc.msn.com/id/21694890/

First FDIC chair calls for lenders to freeze rates for those with ARM's they can't afford and now this.

My first read is that this is another really bad idea - someone tell me if I am wrong.

They do not want to let this house of cards fall until they have built it as high as it can go.
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It Ain't Gonna Happen. May be $625K for a short time but I doubt it.

Struggling homeowners, prospective buyers hope cap onconforming mortgage loans will be lifted
A bill already passed by the House, HR 1427, would reform Fannie Mae and Freddie Mac and allow the two to securitize loans of up to $625,000 in expensive housing markets.

A similar bill has stalled in the Senate Banking Committee. Differing ideas and proposals have made it difficult for lawmakers to agree on housing reform legislation.

Sen. Barbara Boxer, D-Calif., and Rep. Duncan Hunter, R-Alpine, are among those saying they favor raising the conforming-loan limit, but proponents' hopes remain dim.

The Office of Federal Housing Enterprise Oversight, which regulates Fannie Mae and Freddie Mac, announced last month that the conforming-loan limit will remain at $417,000 in 2008 despite slumping home prices. But the agency said it would lower the limit in 2009 if home prices decline 3 percent or more for the 2006-08 time period.

Opponents to an increase in the limit say mortgage lending should remain in the private sector and not with government-sponsored enterprises such as Fannie Mae and Freddie Mac. They say a higher conforming-loan limit could hurt lower-income home buyers.
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