Housing Bubble Bursting?

[JSmith43]

Maybe its time for the lenders to step up to the plate and start cutting their borrower's monthly payments for a period of time....before Japan and China own most of our land. Just a thought....After all it is a 'World Economy' right?
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The biggest lenders function as middlemen between would be home owners and investors in mortgage backed securities seeking what they consider to be an investment vehicle that balances return and risk.

Some of them have been rebalancing that theory in their own minds lately.

 

[ZZGAMAZZ]

Ayn Rand Institute website provides interesting commentary on the need to refrain from government intervention.

 

[Randolph Kinney]

The biggest lenders function as middlemen between would be home owners and investors in mortgage backed securities seeking what they consider to be an investment vehicle that balances return and risk.

Some of them have been rebalancing that theory in their own minds lately.

Without an excess of money and credit, speculation requires a long-term sacrifice in the investor's standard of living.

 

[moh malekpour]

Who Ya Gonna Blame? By: Marc Porlier

Who Ya Gonna Blame? By: Marc Porlier

 

[Austin]

Who Ya Gonna Blame? By: Marc Porlier

It is our political system and the fact that we have a politically managed economy. Take the GSE's for example. What is the purpose of their existence? It is to circumvent the laws of economics by creating demand for real estate where none would exist without it. This is driven by the voters demanding that the government provide for them what they are not capable of providing for themselves and using their collective voting power to keep the system out of balance.
Look at this subprime mess. We are at the beginning of a crash and the government through the FHA is already prolonging the problem with a revised more lenient system of subprime lending. The cure for this won't come internally, it will come externally facilitated by the global economy. It is a never ending boiling cauldron and cycle that repeats itself every so often.
The rubber will meet the road when the baby boom realizes that their nest egg is being eroded away and then we will have a situation of the feds being between a rock and hard place.

 

[Riick]

Who Ya Gonna Blame?

Maybe one answer is HERE: http://www.youtube.com/watch?v=cmAm8GNJ_IA

 

[Greg Bell]

Home depot down but Wal Mart looking good.Good time for the Enron crowd to buy on this dead cat bounce.Sell into strength and make some cash off the bigger fools..Too easy..

 

[Randolph Kinney]

Money market funds have losses - a rush to prop up

Legg Mason, SunTrust Shore Up Money Funds for SIVs


Legg Mason Inc. and SunTrust Banks Inc. are propping up money-market funds to cushion them from possible losses on debt issued by structured investment vehicles.

Legg Mason invested $100 million in one of its money funds and arranged $238 million in credit for two others, the Baltimore-based company said in a Nov. 9 regulatory filing. SunTrust Banks Inc. received approval from regulators last month to protect two money funds that bought debt from Cheyne Finance Plc if the SIV is unable to repay the Atlanta-based bank.


The 10 largest managers of U.S. money funds have $50 billion in SIV debt, some issued by vehicles such as Cheyne that defaulted because of losses from securities linked to subprime mortgages, according to reports from the companies. At least four companies -- Legg Mason, SunTrust, SEI Investments Co. and Wachovia Corp. -- have stepped in to make sure their funds don't ``break the buck,'' or fall below the $1 a share net asset value that all funds seek to maintain.


``This is the first real case'' of securities held by money-market funds defaulting, said Peter Crane, founder of Crane Data LLC, the Westborough, Massachusetts-based publisher of the Money Fund Intelligence Newsletter.

As long as investors get their money, who cares if the loss was made good?

And the game continues.

 

[Randolph Kinney]

The FED: ready to inflate yet?

When the fear of inflation is replaced by fear of a 1930s style deflationary crash, the FED will step in with near zero interest rates to prop up the banking system just like Japan did in the late 90's and 2000s and what it did after the Dot.com crash.

Why will that happen you ask? The banking system may be insolvent after Citi, Bank of America, Merrill Lynch, Fannie, Freddie and a host of others finally come clean with the total exposure to impaired assets (derivative losses).

Signs of deflation are being downplayed. Home prices are falling across the nation. Defaults and foreclosures are rising across the spectrum of credit. The ability to finance home sales have contracted as willing investors that buy mortgages have disappeared. Mortgage debt salted in all sorts of derivative paper have rising deficiencies producing a deflation of value that has spread around the world.

The markets are betting heavily that the FED will act again come December 15. The only question is, will it be 0.25 or 0.50 cut in the funds rate and will that be enough? Hardly.

 

[Austin]

Foots prints in the sand. How do you know when the bottom is approaching. Every locality has its own little signs. They started this weekend in this area and this method works every time around here.
Saturday I was going to town and a man had parked his truck down the road from our farm and was picking up aluminum cans. This morning I took the garbage to the collection point and some idiot was parked blocking the drives and was in the household trash dumb looking for aluminum cans inside garbage bags. He ask me if any cans were in my bagged garbage. They have a separate box for cans and newspapers. Every time Goodyear Tire goes on strike it last about 3 months. I see dudes driving $40,000 SUVs picking up cans a couple of months into the strike. Every one locally counts on a Goodyear strike to get their house painted cheap every contract cycle. We have a convenience store holdup a couple of times a week. That is known locally as Xmas shopping prep. Usual suspects.

I have had two calls this morning from individuals wanting appraisals. They are vague about the purpose and intended use. The last one said he wanted it for a contractor that was going to do some work on his house and the contractor was financing the construction job and wanted to know what the property was worth. I suggested a BPO. Let the Realtors do the dirty work.

I have been through this before and am taking a sabbatical. I am not getting involved in this carp again. I have one bank I do work for and that is it. I had a good month last month but the last two weeks have been as dead as I have ever seen it. I am watching this one from the side lines.

Like I said; foot prints in the sand.