Where did the 400 billion USD in subprime mortgage losses go
Wilson
e.g, see this bloomberg article http://tinyurl.com/2vjgq7
Where there is a 400 billion dollar loss there is a 400 billion dollar
gain.
I don't understand WHO gained from this 400 billion dollars?
Who wins here? How?
I'm cash rich - can I benefit by taking some action?
AllEmailDeletedImmediately
"Wilson" <davewi...@sbcglobal.net> wrote in message
news:HYE0j.461$Vq....@nlpi061.nbdc.sbc.com...
money is created out of thin air by the fed (which is a private entity).
the banks were lending non-existent dollars since they only have to have
about 1 dollar on hand for every 10 they lend, or something like that.
it's called fractional reserve banking.
Blash
> Where there is a 400 billion dollar loss there is a 400 billion dollar
> gain.
Sounds nice......just NOT factual.......
You build a house for $1million......a week later, dumb mikey moves in next
door......once you meet him, you want out so you sell your house for
$600K.....
You've lost $400K......did anybody make $400K??? the answer is NO!!!
Bill<NOSPAM>Gross@gmail.ca
when and where are they
going to be discovered?
etrade is a great example, good core biz, for whatever reason they did
subprimes by answering the
siren call of high interest rates. They are now crap. etrade will
likely fail taking investors with it
in a lesson of greed blinding heed.
Rod Speed
> I keep reading about the 400 billion us dollars in subprime losses
> to date, e.g, see this bloomberg article http://tinyurl.com/2vjgq7
> Where there is a 400 billion dollar loss there is a 400 billion dollar gain.
Nope.
> I don't understand WHO gained from this 400 billion dollars?
No one did.
> Who wins here?
No one.
> How?
Didnt happen.
> I'm cash rich - can I benefit by taking some action?
Only in the sense of buying a house thats now buyable for rather less than it once was sold for.
Rod Speed
Nothing like that, actually.
> it's called fractional reserve banking.
Its called mindless pig ignorant silly stuff, actually.
Shaun Eli
Pedro bought a house ten years ago for $100,000. Last year it was
worth $500,000 ('worth' because someone was willing to pay that much).
Pedro takes his $400,000 gain by selling the house to Joe.
Now-- Joe wasn't actually qualified for his mortgage, and defaults,
owing, let's say, $490,000.
Because there are a lot of these circumstances, and more sellers than
buyers, the house is now worth only $300,000.
Joe defaults on his mortgage, loses his $10,000 down payment. The
bank sells the house for $300,000, losing $190,000.
Where'd the money go? Into Pedro's new house, or his bank account, or
whatever. But it's not Pedro's fault that someone was willing to pay
$500,000 for his house last year. It's also not Joe's fault that the
house is worth only $300,000 today. Of course if Joe hadn't defaulted
it wouldn't have mattered, because he'd still be living in the house
and making payments on it, regardless of what it's actually worth at
any random point in time. And you could say that it's maybe Joe's
fault that he took a mortgage he couldn't really afford, as well as
maybe the bank's (and/or mortgage broker's) fault for lending him the
money. There's plenty of blame to go around but the one who may have
ended up with the money isn't necessarily the culprit, if there is any
in any particular case.
Shaun Eli
www.BrainChampagne.com
Brain Champagne: Clever Comedy for Smart Minds (sm)
Bill<NOSPAM>Gross@gmail.ca
debt we trust, gives a simplified,
easy to follow pattern as to how and why the credit crunch happened.
Appraisers inflated the hell out of values, brokers charged usurous
fees, mort bankers booked
huge profits on the CDOs they repackaged along with credit card debts
and car loans, the guys
at Goldman then sold them to anyone with the 10% margin it took to buy
them.
So, we have highly leveraged morts sold to highly leveraged banks who
in turn try to mitigate the
risk by engineering 'swaps' and selling them to other banks and hedge
funds.
This sound like a house of cards? Could be. Why does it result
in a crunch? Because the
banks and brokers burnt customers at home and overseas, now no one is
willing to back them
in future borrowings.
Substitute countrywide, gmac, etc for bank where neccessary, lol.
Like a fever, this will affect other lends and borrowers, eventually
we will all look at lower realty
prices and higher mort rates to offset the losses.
And yes, the huge bundles of cash ended up in the bonuses of the
brokers
acne_is_...@hotmail.com
Deutsche Bank (in the cited article):
"The total damage may reach $400 billion, Deutsche Bank analysts said
last week."
And also by Goldman-Sachs:
"Jan Hatzius, chief economist at Goldman Sachs in New York, estimates
that losses related to foreclosures could be as high as $400 billion
for financial companies."
Isn't it funny how two institutions both come up with the same
estimate for losses (notice they use different terminology)? Lookie
here. The paper loss could reach a trillion dollars, for all we know,
if the face value is in that region (who knows?). But what is the real
loss? Assuming an institution holds on to its CDOs, or another one
buys it at a fire sale price, somebody will make money, or make back
some money, or lose less money than they thought. We have a liquidity
problem right now, just like I mentioned last week:
http://groups.google.com/group/misc.invest.stocks/browse_frm/thread/a74449b0a8431eaf/
These instruments are huge, they are complex, and they are varied.
F**kin' quants really outdid themselves this time. Just to liquidate
or sell pieces of a CDO will take an army of accountants, lawyers, and
conveyance corporations. The last element of the food chain, the
bottom feeders, deal directly with the CC's through auctions (this
varies by state). I'm not even including derivative CDOs. So, to
answer the OP's original question, a bunch of different people will
make money from the meltdown. Money, like matter, can neither be
created or destroyed. Except by governments. Assuming we are not
talking about inflation or deflation, the value goes somewhere. It has
to.
FrediFizzx
news:00b8ce53-93d1-4559...@b36g2000hsa.googlegroups.com...
Good example. The money is still out there. The people that sold at
the top have the money.
Fred
Rod Speed
No they dont when the whole market drops significantly due to the large
oversupply of houses that are the result of mortgage defaults with those
who should never have been given that mortgage in the first place.
RightEagle
> FrediFizzx <fredifi...@hotmail.com> wrote:
> > "Shaun Eli" <missingch...@brainchampagne.com> wrote in message
>
> - Show quoted text -
Hedge funds drive up the price of Subprime Funds, and the Media in
turn, caused a huge drop in the prices because of the negative slant
of news in general. Thus investment firms lost billions on a bet that
these funds would keep rising, which they could not because of rising
interest rates.
Rod Speed
> Hedge funds drive up the price of Subprime Funds, and the Media in
> turn, caused a huge drop in the prices because of the negative slant
> of news in general. Thus investment firms lost billions on a bet that
> these funds would keep rising, which they could not because of rising
> interest rates.
It had nothing to do with rising interest rates, everything to do with
loans to fools that should never have got the loans in the first place
who were absolutely guaranteed to default on those loans.
Nothing to do with the media either.
FrediFizzx
news:5qgub4F...@mid.individual.net...
> FrediFizzx <fredi...@hotmail.com> wrote:
>> Good example. The money is still out there. The people that sold at
>> the top have the money.
>
> No they dont when the whole market drops significantly due to the
> large
> oversupply of houses that are the result of mortgage defaults with
> those
> who should never have been given that mortgage in the first place.
What the heck does that have to do with people that sold at the top?
This totally answers the OP's original question as to where the money
went. It doesn't just vaporize.
Fred
Bill<NOSPAM>Gross@gmail.ca
lowlife american
assholes living in trailer parks and posting on this group.
China will in turn use it to build up a military and take over the
wasteland to the south
of canada. . . . lucky for the world that it is not inhabited by
intellegent life.
You gotta love this, $300 oil ! ! ! ! Buy anything tar
sands. . . . that is until they vote
to allow drilling on FreddiFiXXed fatassed wifes armpits.
Rod Speed
> The money was spent foolishly on shit that china makes and sells to
> lowlife american assholes living in trailer parks and posting on this group.
The problem with sub prime loans has NOTHING to do with trailer parks.
The problem is actually with housing loans to those who were
'living' in trailer parks that they couldnt possibly ever pay off.
> China will in turn use it to build up a military and
> take over the wasteland to the south of canada. . . .
Have fun explaining how come they couldnt even manage to invade Vietnam.
> lucky for the world that it is not inhabited by intellegent life.
Neither is north of that border if you are any indication.
> You gotta love this, $300 oil ! ! ! !
Just another of your pathetic little drug crazed lard arse fantasys.
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote
>> FrediFizzx <fredi...@hotmail.com> wrote
>>> Good example. The money is still out there. The people that sold at the top have the money.
>> No they dont when the whole market drops significantly due to the large
>> oversupply of houses that are the result of mortgage defaults with those
>> who should never have been given that mortgage in the first place.
> What the heck does that have to do with people that sold at the top?
Those had to buy something else to 'live' in and the value of that dropped too.
> This totally answers the OP's original question as to where the money went.
Nope.
> It doesn't just vaporize.
Corse it does when the whole market drops significantly.
CJT
I don't know about $300, but $150 looks like a lock.
--
The e-mail address in our reply-to line is reversed in an attempt to
minimize spam. Our true address is of the form che...@prodigy.net.
Bill Reid
FrediFizzx <fredi...@hotmail.com> wrote in message
news:5qhfkiF...@mid.individual.net...
Oh, but it does, eventually. Last time this question came
up, I mentioned my brother-in-law and sister kind of sold
at the top in one of the most expensive real-estate markets
and moved to the same size house in a much less expensive
market and pocketed the difference. So THAT'S where the
money went...first.
Then of course they bought a boat, and then they needed a
new giant truck to haul it around, so the boat dealer and the
truck dealer got it, and so on. So everybody wound up getting
a little piece of it.
But now THAT well is dry, so where is the NEXT $400billion
gonna come from? I think my brother-in-law and sister and their
boat and truck dealers deserve an answer to that question...as do
we all, or at least those of us who are smart enough to even ask
the question (and answer it)...
---
William Ernest Reid
Post count: 854
FrediFizzx
news:nKM0j.123036$kj1....@bgtnsc04-news.ops.worldnet.att.net...
<Sigh> I really thought that perhaps you were "smarter than a fifth
grader". ;-) The money is still out there circulating, isn't it? Your
sister's family have some assets they didn't have before, don't they?
The next $400 billion comes from working for it and for time that passes
to make real estate worth more. Sure, real estate is kind of like a
pyramid scheme but it has always been that way and will continue barring
some major catastrophic event.
Fred
<RJ>
You buy a house for $500,000 ( with a full mortgage )
In theory, your bank is holding papers on a $500,000 asset.
You lose your job and can't make payments.
Meanwhile. demand for half-million houses has dried up.
You try to sell your house for a half-mil... can't.
You default on your mortgage. Bank forecloses.
But now, the best they can sell the house for is...... $250,000
Where did the other quarter-mil go ?
The only person who got away clean is the original seller.
They walked away with a check for $500,000 minus closing costs.
<rj>
John A. Weeks III
Blash <bla...@comcast.net> wrote:
I'd love to have you doing my taxes with that kind of abuse of math.
The poster pays $1-million for a house. He sells for $600K. He
has a loss of $400K. This is a real world loss.
Lets say he spent $800K, and the house was valued at $1-million.
He sells at $600k. Now his loss is only $200K.
Who gained this $400K and $200K, the builder, who in turn paid
for workers and materials, who in turn bought stuff at stores
and paid for raw materials. That money kept the business cycle
going.
-john-
--
======================================================================
John A. Weeks III 952-432-2708 jo...@johnweeks.com
Newave Communications http://www.johnweeks.com
======================================================================
Bill<NOSPAM>Gross@gmail.ca
bust and soon.
Billions around the globe hate america and we will be dancing in the
street when that
shithole sinks into the sea. Fuck america and all the lousy bastards
within her
fat and USeless borders.
I hope Chavez gets nukes soon.
Rod Speed
> Rod Speed wrote:
>
>> Bill<NOSPAM>Gr...@gmail.ca <NOSPAM> wrote:
>>
>>
>>> The money was spent foolishly on shit that china makes and sells to
>>> lowlife american assholes living in trailer parks and posting on
>>> this group.
>>
>>
>> The problem with sub prime loans has NOTHING to do with trailer
>> parks. The problem is actually with housing loans to those who were
>> 'living' in trailer parks that they couldnt possibly ever pay off.
>>
>>
>>> China will in turn use it to build up a military and
>>> take over the wasteland to the south of canada. . . .
>>
>>
>> Have fun explaining how come they couldnt even manage to invade
>> Vietnam.
>>> lucky for the world that it is not inhabited by intellegent life.
>>
>>
>> Neither is north of that border if you are any indication.
>>
>>
>>> You gotta love this, $300 oil ! ! ! !
>>
>>
>> Just another of your pathetic little drug crazed lard arse fantasys.
>>
>>
> I don't know about $300, but $150 looks like a lock.
We'll see...
Its certainly possible that the USD will sag so badly that it might happen, but that
sort of thing has been predicted plenty of times before and hasnt happened.
It certainly wont be $300 any time soon.
Rod Speed
If it was that easy to predict, it wouldnt happen.
You dont get fiascos like that very often at all.
Rod Speed
Heavy breathing aint gunna save your bacon child.
> The money is still out there circulating, isn't it?
No it aint if the entire market sags badly.
> Your sister's family have some assets they didn't have before, don't they?
Not if they had bought another property at the top of the market
and had seen its value sag just like the one they sold did.
> The next $400 billion comes from working for it and for time that passes to make real estate worth more.
Thanks for that completely superfluous proof that you have never ever
had a fucking clue about what actually drives real estate property values.
Or anything else at all either.
> Sure, real estate is kind of like a pyramid scheme
Nope, nothing like.
> but it has always been that way and will
> continue barring some major catastrophic event.
Even a catestrophic event like a great depression
or the country losing a world war doesnt stop that.
Rod Speed
> Truth is it really doesnt matter, long as the
> american economy goes bust and soon.
Taint gunna happen, you watch.
> Billions around the globe hate america
Pig ignorant lie. Not even a million are actually that stupid.
> and we will be dancing in the street when that shithole sinks into the sea.
Just another of your pathetic little pig ignorant drug crazed fantasys.
> Fuck america and all the lousy bastards within her fat and USeless borders.
They say nice things about fools like you too. And have the military
system to fuck fools like you over if you get too big for your boots too.
> I hope Chavez gets nukes soon.
Taint gunna happen either, and even he wouldnt
actually be stupid enough to use them even if he did.
Rod Speed
And mostly get to buy another for even more,
and lose just as much value on that one too.
phil scott
ya... well we phucks one chicken and right away *you turn negative.
FrediFizzx
Please do yourself a favor and don't try out for "Are You Smarter Than a
Fifth Grader?". The first grade questions will most likely embarrass
you. Get yourself a good Economics 101 textbook. Ignorance is curable.
We are talking about real money here. Not unrealized gains or losses.
Fred
Rod Speed
Never ever could bullshit its way out of a wet paper bag
Bill Reid
WRONG!!!
> You dont get fiascos like that very often at all.
Just frequently enough to be part of the "historical record"...but
certainly not frequently enough for individuals operating at selfish
greedy cross-purposes to realize en masse the hole they're digging...
Look, there HAVE been some real winners in these periodic
blowouts; I'm not holding my breath waiting for Mark Cuban
to go bankrupt after selling out right at the peak of the dot-com
craze, and I'm hanging on to MY pennies...and oh yeah, that
was what, a whole six years ago?
---
William Ernest Reid
Post count: 855
Bill Reid
Reminds of the joke about how smart you have to be to train
a dog...
> The money is still out there circulating, isn't it?
Might be getting a little limp and frayed at this point, but
even if it's ripped in half you can get a new bill from the bank
if you have the larger half...
> Your
> sister's family have some assets they didn't have before, don't they?
Yeah, a truck that lost 20% when they drove it off the lot, only an
idiot would ask about the boat's value, and a house that's depreciating
in value...
> The next $400 billion comes from working for it
BWHAHAHAHAHAHAHAHAHAHAHAHAHAHA!!!!
Thanks, my sinuses were a little clogged, that really hit the spot!
> and for time that passes
> to make real estate worth more.
You mean "inflation"? Or a thousand years from now when it
is under water from global warming maybe it will be really valuable
as an exotic vacation destination time-share?
> Sure, real estate is kind of like a
> pyramid scheme but it has always been that way and will continue barring
> some major catastrophic event.
Like "deflation"?
What's really fun, as usual, is to go back and read the discussions
on this group concerning real estate a few years back, compared to
the constant drumbeat of bad news today. As usual, only a VERY
few had it right, could somehow "magically" predict the future...how'd
dey do dat?
---
William Ernest Reid
Post count: 856
Rod Speed
> WRONG!!!
RIGHT!!!!!!
Have fun explaining how come even Greenspan who was
paid to see that sort of thing coming, didnt manage to do that.
Yeah, yeah, I know, he's a jew in on the conspiracy to shaft us all...
>> You dont get fiascos like that very often at all.
> Just frequently enough to be part of the "historical record"...but
> certainly not frequently enough for individuals operating at selfish
> greedy cross-purposes to realize en masse the hole they're digging...
Or they didnt have enough information about exactly
what was going on to be able to predict the fiasco
soon enough to avoid any consequences for themselves.
> Look, there HAVE been some real winners in these periodic
> blowouts; I'm not holding my breath waiting for Mark Cuban
> to go bankrupt after selling out right at the peak of the dot-com
> craze, and I'm hanging on to MY pennies...and oh yeah, that
> was what, a whole six years ago?
See above on Greenspan.
Mike M.
"<RJ>" <bara...@localnet.com> wrote in message
news:2s97k313ojj48hmi8...@4ax.com...
Not necessarily. Let's take a closer look at fictional Pedro, mentioned
earlier in this thread.
Him and others of his kind who sold at or near the top for a huge windfall
still, of course, need a place to live. If they were wise and willing/able
to relocate to an area with lower housing costs - or even downsize to say a
condo/less expensive home - they may indeed have managed to hang on to a
large chunk of their windfall.
But, after factoring in greed/false sense of wealth/poor spending habits,
such cases are probably more the exception than rule. The following
scenario seems more likely:
(circa early 2005) Flush with $400K in cash after the sale of his former
home, which he purchased several years earlier for only $100K, Pedro chooses
to upgrade to new construction and purchases a beautiful new townhouse in a
trendy new development.
Although the new home is quite pricey at $600K ($100K more than the sale
price his former home), Pedro's monthly mortgage payment seems reasonable
enough - thanks to a 50% down payment and an incredibly low interest rate
his mortgage broker somehow managed to secure (only 3.9%* Wow!)
Pedro and family settle in to their new home. No point in having $100K
excess cash or "disposable income" sit around and gather dust, so Pedro
starts spending a bit of it on items such as: new furniture; a jumbo-sized
plasma TV; fun-filled vacations to Florida, Disney World, Vegas and so on.
(Very patriotic of him as well - spend, spend, spend helps keep the economic
machine well lubricated.)
(circa early 2007) With cash reserves running dangerously low, and troubled
by the number of "For Sale by Owner/Foreclosure/Bank-Owned Sale" signs
popping up all over his development, Pedro painfully recalls what his
mortgage broker had told him just two years earlier:
"Sure, your monthly payment may go up a little <cough> in two years' time.
But don't worry about it. Just refinance the loan. After all, your $600K
townhouse will be worth at least $800K by then. How can you go wrong?
Trust me, these exotic adjustable rate products are the greatest thing since
sliced bread. A win-win situation, I tells ya. Can't lose. No worries at
all. Just sign here."
(circa late 2007) Broke* (*refer to details concerning incredibly low
3.9%* interest rate) and unable to awake from his self-inflicted year-long
nightmare, Pedro, now divorced and paying $200/wk. in alimony/child support,
once again lowers the asking price of his supposed "dream" home: $449K.
Then salvation arrives in the form of an offer received: $400K - take it or
leave it, so says the buyer.
Cash-strapped and desperate, Pedro bows his head in defeat and accepts the
low-ball offer. After paying off the mortgage, Pedro returns to his old
neighborhood with $100K in his pocket. Right back where he started from?
Not even close. The vanishing of such money is just the beginning of poor
Pedro's woes.
Mike
-- the guy who took Pedro's money, who in turn lost it to some guy named
Joe. Don't know if Joe still has it, but rumor has it he lost it to another
guy named...
Bill Reid
He was paid to see "irrational exuberance" in the stock market,
and he saw it...only problem, he saw it years before the market
finally DID decline disasterously after first rising tremendously...
I bring up this particular Greenspan prognostication not just
because it is so well-known but so typical. The trick is not to
"see them coming", that's just a matter of common sense, simple
math, and public information and data. The IMPOSSIBILITY
is to "predict" EXACT tops and bottoms, dates and prices...
> >> You dont get fiascos like that very often at all.
>
> > Just frequently enough to be part of the "historical record"...but
> > certainly not frequently enough for individuals operating at selfish
> > greedy cross-purposes to realize en masse the hole they're digging...
>
> Or they didnt have enough information about exactly
> what was going on to be able to predict the fiasco
> soon enough to avoid any consequences for themselves.
In some cases, some people may have been "duped", but in ALL
cases their greed exceeded their caution...and common sense...
> > Look, there HAVE been some real winners in these periodic
> > blowouts; I'm not holding my breath waiting for Mark Cuban
> > to go bankrupt after selling out right at the peak of the dot-com
> > craze, and I'm hanging on to MY pennies...and oh yeah, that
> > was what, a whole six years ago?
>
> See above on Greenspan.
Exactly. I think Cuban has taken some sort of credit for his
apparent prescience, but really how smart do you have to be
to take a $billion for a company with virtually no revenues? The
real question is about the other side of the transaction: how
STUPID do you have to be to PAY a $billion for a company
with no revenues? And how thick do you have to be to not
recognize this kind of activity as a problem? But you brag
that YOU can't "see them coming"...
That's probably because you NEVER heard a word about
mortgage issuers loaning money to people without ANY
documentation of their income or credit history, loaning amounts
up to and OVER 100% of any realistic "appraisal" of the
home value (and of course, an "appraisal" is no different
than looking at the prices of all the other dot-coms and
deciding that a company with no revenues really IS worth
a $billion)...
---
William Ernest Reid
Post count: 858
Bill<NOSPAM>Gross@gmail.ca
"PugFucker" Bush.
A war against america is held daily . . . in the FX arena. And
each day america loses
the battle . . . the dollar is weak, weak as a little girl. It is
hated by the world and will soon
go to zero or lower.
If you consider the actual value of a USeless dollar, it is worth what
scrap paper will fetch,
you are a nation of fat debtors. And the worst educated in the
industrial world.
As an example, it is expected that 10.000 yanks will choke on the
turkey they are deep
throating this thanxgiving . . . . and you wonder why your army full
of fags and weak as
little girls cannot prevail in iraq.
Visit my site and see why EVERYONE hates america, the weak little girl
country of fat debtors.
val189
> An example:
>
> Pedro bought a house ten years ago for $100,000. Last year it was
> worth $500,000 ('worth' because someone was willing to pay that much).
>
> Pedro takes his $400,000 gain by selling the house to Joe.
>
> Now-- Joe wasn't actually qualified for his mortgage, and defaults,
> owing, let's say, $490,000.
>
> Because there are a lot of these circumstances, and more sellers than
> buyers, the house is now worth only $300,000.
>
> Joe defaults on his mortgage, loses his $10,000 down payment. The
> bank sells the house for $300,000, losing $190,000.
>
> Where'd the money go? Into Pedro's new house, or his bank account, or
> whatever. But it's not Pedro's fault that someone was willing to pay
> $500,000 for his house last year. It's also not Joe's fault that the
> house is worth only $300,000 today. Of course if Joe hadn't defaulted
> it wouldn't have mattered, because he'd still be living in the house
> and making payments on it, regardless of what it's actually worth at
> any random point in time. And you could say that it's maybe Joe's
> fault that he took a mortgage he couldn't really afford, as well as
> maybe the bank's (and/or mortgage broker's) fault for lending him the
> money. There's plenty of blame to go around but the one who may have
> ended up with the money isn't necessarily the culprit, if there is any
> in any particular case.
>
> Brain Champagne: Clever Comedy for Smart Minds (sm)
Don't forget the guy on the sidelines who neither bought, nor sold, -
his local govt. decides his house is now worth a lot more because of
market value and taxes him accordingly. Just cuz the city THINKS my
house is suddenly worth a lot more doesn't put the money in my pocket,
but I sure get to pay the extra tax bite.
Rod Speed
> Rod Speed <rod.sp...@gmail.com> wrote
>> Bill Reid <horme...@happyhealthy.net> wrote
>>> Rod Speed <rod.sp...@gmail.com> wrote
>>>>>>> FrediFizzx <fredi...@hotmail.com> wrote
>>> WRONG!!!
>> RIGHT!!!!!!
And that is precisely what the sub prime fiasco was...
> in the stock market,
He his paid to cover a hell of a lot more than just the stock market.
Try the entire economy.
> and he saw it...
Like hell he ever did with the sub prime fiasco.
> only problem, he saw it years before the market finally
> DID decline disasterously after first rising tremendously...
Pity about the sub prime fiasco that he never did see coming.
> I bring up this particular Greenspan prognostication not
> just because it is so well-known but so typical. The trick
> is not to "see them coming", that's just a matter of common
> sense, simple math, and public information and data.
How odd that you didnt manage to predict the sub prime fiasco yourself if its that easy.
> The IMPOSSIBILITY is to "predict" EXACT tops and bottoms, dates and prices...
No one is talking about those, what is being discussed is the sub prime fiasco,
lending immense amounts of money to those who couldnt possibly repay those
loans and securitizing those loans and flogging them off to institutions etc etc etc.
THATS the problem that no one saw coming, even operations like S&P that
are paid to rate those securitys and failed completely to rate them properly,
essentially because they had a financial interest in seeing them flogged off.
>>>> You dont get fiascos like that very often at all.
>>> Just frequently enough to be part of the "historical record"...but
>>> certainly not frequently enough for individuals operating at selfish
>>> greedy cross-purposes to realize en masse the hole they're digging...
>> Or they didnt have enough information about exactly
>> what was going on to be able to predict the fiasco
>> soon enough to avoid any consequences for themselves.
> In some cases, some people may have been "duped", but in ALL
> cases their greed exceeded their caution...and common sense...
You're talking about those taking out the loans. I was talking about
the institutions and hedge funds etc that were actually stupid enough
to buy those securitized sub prime loans. It just wasnt possible to
work out that Bear Stearns etc had actually been that stupid to such
an extent that when those loan defaulted, as was absolutely guaranteed,
that that would produce billions of losses IN THOSE FUNDS.
>>> Look, there HAVE been some real winners in these periodic
>>> blowouts; I'm not holding my breath waiting for Mark Cuban
>>> to go bankrupt after selling out right at the peak of the dot-com
>>> craze, and I'm hanging on to MY pennies...and oh yeah, that
>>> was what, a whole six years ago?
>> See above on Greenspan.
> Exactly. I think Cuban has taken some sort of credit for his
> apparent prescience, but really how smart do you have to be
> to take a $billion for a company with virtually no revenues?
Irrelevant to the sub prime fiasco.
> The real question is about the other side of the
> transaction: how STUPID do you have to be to
> PAY a $billion for a company with no revenues?
Have fun explaining google since then.
> And how thick do you have to be to not
> recognize this kind of activity as a problem?
Have fun explaining google since then.
> But you brag that YOU can't "see them coming"...
You cant with the terminal stupidity of operations like Bear
Stearns and Shittybank actually being stupid enough to get
sucked in on the sub prime fiasco, when there is no way of
knowing just how much they have poured into such dud securitys.
> That's probably because you NEVER heard a word about
> mortgage issuers loaning money to people without ANY
> documentation of their income or credit history, loaning amounts
> up to and OVER 100% of any realistic "appraisal" of the
> home value (and of course, an "appraisal" is no different
> than looking at the prices of all the other dot-coms and
> deciding that a company with no revenues really IS worth
> a $billion)...
Irrelevant to operations like Bear Stearns and Shittybank actually
being stupid enough to get sucked in on the sub prime fiasco.
They and S&P in spades should have been able to work out what
was happening with those loans on that detail. Greenspan in spades.
FrediFizzx
news:d442d239-e613-46d6...@y43g2000hsy.googlegroups.com...
Yep, if you are unfortunate enough to own a house where there is nothing
like California's prop. 13. The home owner voters should organize and
pass a law limiting real estate tax increases based on valuation. Over
the long term your house being worth more will put money in your pocket
even with a bigger tax bite. Most people suck it up because they
realize that.
Fred
Mike M.
"val189" <gweh...@bellsouth.net> wrote in message
news:d442d239-e613-46d6...@y43g2000hsy.googlegroups.com...
> Don't forget the guy on the sidelines who neither bought, nor sold, -
> his local govt. decides his house is now worth a lot more because of
> market value and taxes him accordingly. Just cuz the city THINKS my
> house is suddenly worth a lot more doesn't put the money in my pocket,
> but I sure get to pay the extra tax bite.
And speaking of property taxes, or so-called tax reform to be more specific,
the end result of my state's (FL) supposed tax "cut" somehow morphed into a
tax INCREASE. One way or another, falling property values of not (Enron
style accounting practices?) the greedy bastards always find a way to
increase revenue.
My property tax bill arrived in the mail just a few days ago. Expecting to
see the fruits of the much-publicized tax reduction legislation (only a
modest bill reduction, in fairness, as the assessed value of my home is
already artificially low due to $25K homestead exemption/3% assessment
increase cap.), I wasn't too surprised to my bill had actually gone up
slightly. It only took a couple seconds to spot the trickery.
Sure, the ad valorem portion dropped ~$80. compared to last year. But my
city has its own fire and solid waste services, and the amount billed for
such services shows up in the non-ad valorem portion of the tax bill. For
about the past 20 years, the rate increase concerning that particular
category usually fell in the 0 - 20% range. But this year's rate increase
<surprise-surprise> amounted to more than 30%, or about $120. ($526.
compared to last year's bill of just over $400.)
End result of the property tax"cut": a bill that is ~$40.00 higher than last
year! Just the same old switcharoo/slight of hand shenanigans...
Mike
Bill Reid
Taking a brief look at his purported statements on the subject
and what I "seem to remember", it does appear as if he blew his
prognostications six ways to Sunday. But he did that a lot; he
apparently used to date Barbara Walters, and she says he advised
her NOT to buy a Manhattan condo back in the '70s because
he thought it would be a bad investment, but the condos she was
looking at then for like $200K now sell for something like
$8million...
Anyway, nice dodge trying to get me to defend Alan Greenspan,
they guy who said the stock market was wildly over-inflated but then
proceeded to cut rates everytime somebody in Asia sneezed or
LTCM barfed...
> > in the stock market,
>
> He his paid to cover a hell of a lot more than just the stock market.
>
> Try the entire economy.
Yeah, at the very macro "big picture" level, but right now you
have further dodged away from your original statement by obsessing
on the details of something now known as "sub-prime"; Alan
apparently (incorrectly in my opinion) confined his analysis of
the real estate market to AVERAGES of owner equity and
indebtedness.
This is a classic mistake, because markets always move AT THE
MARGIN, and what you call "sub-prime" was a known quantity
of loan originations for MARGINAL borrowers, but this quantity
only somewhat nudged the AVERAGES in the wrong direction.
This is equivalent to saying that AVERAGE person didn't own the
dot-coms at their most ridiculous levels; this is both true and misleading
as a practical prognosticatory metric at the same time...
> > and he saw it...
>
> Like hell he ever did with the sub prime fiasco.
There you go again, all obsessed with the specifics of "sub-prime".
If somebody didn't use that precise term in 2002 while predicting
the exact day in 2007 that Citigroup would write down a few $billion,
nobuddy nose nuttin 'bout nuttin...
> > only problem, he saw it years before the market finally
> > DID decline disasterously after first rising tremendously...
>
> Pity about the sub prime fiasco that he never did see coming.
Yeah, a friggin' shame...exactly what could he have done about
it in the first place? I mean, I could tell you EXACTLY how to
fix the problem now and forever in the future, but it would 1) take
an act of Congress, and 2) collapse the US real estate market
by up to 80% in a matter of months...
> > I bring up this particular Greenspan prognostication not
> > just because it is so well-known but so typical. The trick
> > is not to "see them coming", that's just a matter of common
> > sense, simple math, and public information and data.
>
> How odd that you didnt manage to predict the sub prime fiasco yourself if
its that easy.
I posted several times in the early 'oughties about the real estate
market "boom" and it's relationship to an ill-advised credit bubble,
which really is a situation that has developed over decades of time.
Sorry though, don't think I used the current headline term "sub-prime
fiasco" WHATEVER THE HELL THAT IS, so my "common
sense" is to be discarded...as is all "common sense" the moment
most people encounter the "chaos" of the markets: NOBUDDY
NOSE NUTTIN 'BOUT NUTTIN!!!
> > The IMPOSSIBILITY is to "predict" EXACT tops and bottoms, dates and
prices...
>
> No one is talking about those, what is being discussed is the sub prime
fiasco,
> lending immense amounts of money to those who couldnt possibly repay those
> loans and securitizing those loans and flogging them off to institutions
etc etc etc.
This was all known years ago...what's your point?
> THATS the problem that no one saw coming, even operations like S&P that
> are paid to rate those securitys and failed completely to rate them
properly,
> essentially because they had a financial interest in seeing them flogged
off.
Again, what was your point again? What did you say to set off this
"discussion":
> >>>> If it was that easy to predict, it wouldnt happen.
So your point is that nobody could predict any problems with loans
to unworthy debtors for amounts up to and over the size of the collateral
based on a constantly rising market fueled by said type of loans?
I merely disagreed with that...but was THAT your point?
> >>>> You dont get fiascos like that very often at all.
>
> >>> Just frequently enough to be part of the "historical record"...but
> >>> certainly not frequently enough for individuals operating at selfish
> >>> greedy cross-purposes to realize en masse the hole they're digging...
>
> >> Or they didnt have enough information about exactly
> >> what was going on to be able to predict the fiasco
> >> soon enough to avoid any consequences for themselves.
>
> > In some cases, some people may have been "duped", but in ALL
> > cases their greed exceeded their caution...and "common sense"...
>
> You're talking about those taking out the loans.
WRONG!!! Man, are you a slave to the popular press on this
subject! I WAS talking about the large financial institutions that
bought the CDOs; the stuff about "predatory loan practices" against
"innocent" home-buyers and re-financers is a bunch of media
hooey...
> I was talking about
> the institutions and hedge funds etc that were actually stupid enough
> to buy those securitized sub prime loans.
Right, me too...
> It just wasnt possible to
> work out that Bear Stearns etc had actually been that stupid to such
> an extent that when those loan defaulted, as was absolutely guaranteed,
> that that would produce billions of losses IN THOSE FUNDS.
Me, I'm a "big picture" guy...if bad loans are out there,
SOMEBODY'S taking a loss; names like "Bear Stearns",
"Citigroup", "sub-prime fiasco" mean NOTHING to me...once
again, you're obsessed with the media-supplied "details"...
> >>> Look, there HAVE been some real winners in these periodic
> >>> blowouts; I'm not holding my breath waiting for Mark Cuban
> >>> to go bankrupt after selling out right at the peak of the dot-com
> >>> craze, and I'm hanging on to MY pennies...and oh yeah, that
> >>> was what, a whole six years ago?
>
> >> See above on Greenspan.
>
> > Exactly. I think Cuban has taken some sort of credit for his
> > apparent prescience, but really how smart do you have to be
> > to take a $billion for a company with virtually no revenues?
>
> Irrelevant to the sub prime fiasco.
How smart do you have to be to pawn off your crappy loans
to Citigroup and pocket the origination fees for your irresponsible
behavior? If they get away with it, it appears that humans of
presumably ordinary intelligence will do it again and again and again...
> > The real question is about the other side of the
> > transaction: how STUPID do you have to be to
> > PAY a $billion for a company with no revenues?
>
> Have fun explaining google since then.
What's your point? Google(TM) is a giant money-making machine...
> > And how thick do you have to be to not
> > recognize this kind of activity as a problem?
>
> Have fun explaining google since then.
I'm glad that you want me to have so much fun...however,
I would be having more fun right now if I understood what
your point is...
> > But you brag that YOU can't "see them coming"...
>
> You cant with the terminal stupidity of operations like Bear
> Stearns and Shittybank actually being stupid enough to get
> sucked in on the sub prime fiasco, when there is no way of
> knowing just how much they have poured into such dud securitys.
OK, maybe we can't know those details, but that there was a
large market in CDOs WAS known years ago...but apparently
that's not good enough for you, you want names and social
security numbers as well...
> > That's probably because you NEVER heard a word about
> > mortgage issuers loaning money to people without ANY
> > documentation of their income or credit history, loaning amounts
> > up to and OVER 100% of any realistic "appraisal" of the
> > home value (and of course, an "appraisal" is no different
> > than looking at the prices of all the other dot-coms and
> > deciding that a company with no revenues really IS worth
> > a $billion)...
>
> Irrelevant to operations like Bear Stearns and Shittybank actually
> being stupid enough to get sucked in on the sub prime fiasco.
Of course, irrelevant; as I said before, "common sense" is the
first casualty of market "warfare"...if we can't know the exact
amount of CDOs bought by Citigroup, NOBUDDY NOSE
NUTTIN 'BOUT NUTTIN!!!
And that's part of why these "mistakes" keep happening again
and again and again; since NOBUDDY NOSE NUTTIN BOUT
NUTTIN, maybe it really DOES make sense to buy a dot-com
with no revenues or a CDO consisting of a bunch of "sub-prime"
mortgages...hey, let's just "roll the dice" and see what happens,
I've always been lucky, how 'bout you?
> They and S&P in spades should have been able to work out what
> was happening with those loans on that detail. Greenspan in spades.
Well, yeah, you're right, they (particularly the big financial houses)
blew it. Some of the "bad actors" have "fallen on the sword" (with
a giant severance package, boo-hoo) if that makes you feel any
better.
Look, it's always a debate about whether something is a good
investment or not, and as I've said, "common sense" tends to fly
out the window at certain times (a LOT of the time). For me,
I just try not to fall victim to the mentality of surrender to the
craziness of the markets, but it looks like you are a typical
POW of helplessness...
---
William Ernest Reid
Post count: 860
Thurston Howell IV
properties. When defaults occurred, the properties asking price is
much lower.....hence hugh eliminations of money out of the market.
This is just starting.
On Wed, 21 Nov 2007 11:21:33 +1100, "Rod Speed"
<rod.sp...@gmail.com> wrote:
>It had nothing to do with rising interest rates, everything to do with
>loans to fools that should never have got the loans in the first place
>who were absolutely guaranteed to default on those loans.
>
>Nothing to do with the media either.
Rod Speed
> Real Estate bubble burst...prices too high...loans too high to buy the
> properties. When defaults occurred, the properties asking price is
> much lower.....hence hugh eliminations of money out of the market.
> This is just starting.
Nope, its been going on for quite a while now and wont get a lot worse except
with the ARMs that are still to bite the stupids that have them on the bum.
Rod Speed
>>>>> WRONG!!!
Irrelevant to being able to see the sub prime fiasco coming.
> Anyway, nice dodge trying to get me to defend Alan Greenspan,
Just another of your pathetic little drug crazed fantasys on both counts.
> they guy who said the stock market was wildly over-inflated but then
> proceeded to cut rates everytime somebody in Asia sneezed or LTCM barfed...
He role has always been about a hell of a lot more tha just the stock market.
>>> in the stock market,
>> He was paid to cover a hell of a lot more than just the stock market.
>> Try the entire economy.
> Yeah, at the very macro "big picture" level, but right now you have
> further dodged away from your original statement by obsessing
> on the details of something now known as "sub-prime";
Its what was being discussed, you pathetic excuse for a bullshit artist.
Not predicting the stock market, what you proceeded to irrelevant rabbit on about.
> Alan apparently (incorrectly in my opinion) confined his analysis of the
> real estate market to AVERAGES of owner equity and indebtedness.
> This is a classic mistake, because markets always move AT THE MARGIN,
We aint talking about predicting the market, you fool.
What is being discussed is being aware of the SECURITIZATION
OF SUB PRIME MORTGAGES THAT ARE GUARANTEED TO
SEE A HELL OF A LOT OF DEFAULTS BECAUSE NO ONE
BOTHERED TO CHECK IF THE BORROWER COULD EVER
HOPE TO PAY OFF THAT MORTGAGE, AND THE EFFECT
THAT WOULD HAVE ON THE ENTIRE ECONOMY AS THE
OPERATION THAT GOT INVOLVED IN THAT SCAN LOST
BILLIONS OF BUCKS IN THE PROCESS.
> and what you call "sub-prime" was a known quantity of loan
> originations for MARGINAL borrowers, but this quantity only
> somewhat nudged the AVERAGES in the wrong direction.
Wrong.
> This is equivalent to saying that AVERAGE person didn't own
> the dot-coms at their most ridiculous levels; this is both true and
> misleading as a practical prognosticatory metric at the same time...
Thanks for that completely superfluous proof that you have never
ever had a fucking clue about what the sub prime fiasco is about.
>>> and he saw it...
>> Like hell he ever did with the sub prime fiasco.
> There you go again, all obsessed with the specifics of "sub-prime".
Pity it happens to be what was actually being discussed, fool.
> If somebody didn't use that precise term in 2002 while
> predicting the exact day in 2007 that Citigroup would write
> down a few $billion, nobuddy nose nuttin 'bout nuttin...
No one is talking about predicting the day, you terminal fuckwit.
He didnt even see the massive write downs that were the
inevitable result of securitization of sub prime loans coming
at all, let alone exactly when they would be announced.
>>> only problem, he saw it years before the market finally
>>> DID decline disasterously after first rising tremendously...
>> Pity about the sub prime fiasco that he never did see coming.
> Yeah, a friggin' shame...exactly what could
> he have done about it in the first place?
Exposed the terminal stupidity of the ratings that operations
like S&P was putting on those securitized loans for starters.
That alone would have caused a massive stink and got the
fools that just took the S&P ratings at face value to pause
and see whether S&P could bullshit their way out of their
predicament. Of course they wouldnt be able to do that.
> I mean, I could tell you EXACTLY how to fix the problem now
> and forever in the future, but it would 1) take an act of Congress,
No it wouldnt for Greenspan to have pointed out the terminal stupidity of
the S&P ratings and why S&P was doing that for their own financial benefit.
> and 2) collapse the US real estate market by up to 80% in a matter of months...
Wouldnt have done a damned thing to the US real
estate market if it had been done early enough.
And it would do a lot less damage to the US real estate market than
not doing anything until operations like Bear Stearns and Shittybank
hand to announce the predicament they had got themselves into.
>>> I bring up this particular Greenspan prognostication not
>>> just because it is so well-known but so typical. The trick
>>> is not to "see them coming", that's just a matter of common
>>> sense, simple math, and public information and data.
>> How odd that you didnt manage to predict
>> the sub prime fiasco yourself if its that easy.
> I posted several times in the early 'oughties about the real estate
> market "boom" and it's relationship to an ill-advised credit bubble,
Nothing to do with the sub prime fiasco.
> which really is a situation that has developed over decades of time.
Nothing to do with the sub prime fiasco.
> Sorry though, don't think I used the current headline term
> "sub-prime fiasco" WHATEVER THE HELL THAT IS,
Thanks for that completely superfluous proof that you STILL havent
even managed to grasp what that is actually about even now.
Hint: have a look at what has happened to Bear Stearns and Shittybank and S&P some time.
Doesnt have a damned thing to do with US real estate property values
except that once the sub prime loans were no longer readily available,
because no one would actually be stupid enough to buy those securitized
sub prime loans anymore, that inevitably resulted in heaps of loan defaults
and that had a significant effect on real estate property values.
> so my "common sense" is to be discarded...as is all "common
> sense" the moment most people encounter the "chaos" of the
> markets: NOBUDDY NOSE NUTTIN 'BOUT NUTTIN!!!
Never ever could bullshit its way out of a wet paper bag.
>>> The IMPOSSIBILITY is to "predict" EXACT tops and bottoms, dates and prices...
>> No one is talking about those, what is being discussed is the sub
>> prime fiasco, lending immense amounts of money to those who couldnt
>> possibly repay those loans and securitizing those loans and flogging
>> them off to institutions etc etc etc.
> This was all known years ago...
How odd that we didnt see the results Bear Stearns and Shittybank got at that time.
> what's your point?
>> THATS the problem that no one saw coming, even operations like S&P
>> that are paid to rate those securitys and failed completely to rate
>> them properly, essentially because they had a financial interest in
>> seeing them flogged off.
> Again, what was your point again? What did you say to set off this "discussion":
Never ever could bullshit its way out of a wet paper bag.
>>>>>> If it was that easy to predict, it wouldnt happen.
> So your point is that nobody could predict any problems with loans
> to unworthy debtors for amounts up to and over the size of the collateral
> based on a constantly rising market fueled by said type of loans?
Nope.
> I merely disagreed with that...
No you didnt.
> but was THAT your point?
Nope.
>>>>>> You dont get fiascos like that very often at all.
>>>>> Just frequently enough to be part of the "historical record"...but
>>>>> certainly not frequently enough for individuals operating at
>>>>> selfish greedy cross-purposes to realize en masse the hole
>>>>> they're digging...
>>>> Or they didnt have enough information about exactly
>>>> what was going on to be able to predict the fiasco
>>>> soon enough to avoid any consequences for themselves.
>>> In some cases, some people may have been "duped", but in ALL
>>> cases their greed exceeded their caution...and "common sense"...
>> You're talking about those taking out the loans.
> WRONG!!!
RIGHT!!!!!
> Man, are you a slave to the popular press on this subject!
How odd that I dont even read the popular press, fuckwit.
> I WAS talking about the large financial institutions that bought
> the CDOs; the stuff about "predatory loan practices" against
> "innocent" home-buyers and re-financers is a bunch of media hooey...
Pity I didnt even mention any of that.
>> I was talking about the institutions and hedge funds etc that were
>> actually stupid enough to buy those securitized sub prime loans.
> Right, me too...
Lying, again. You were mindlessly rabbiting on about predicting the market.
A different matter entirely.
>> It just wasnt possible to work out that Bear Stearns etc had
>> actually been that stupid to such an extent that when those
>> loan defaulted, as was absolutely guaranteed, that that
>> would produce billions of losses IN THOSE FUNDS.
> Me, I'm a "big picture" guy...if bad loans
> are out there, SOMEBODY'S taking a loss;
In the past that was whoever was actually stupid enough to be writing the loans.
The difference with the sub prime fiasco IS THE SECURITIZATION
OF THOSE LOANS WITH S&P RATINGS ON THOSE LOANS THAT
SAW HORDES STUPID ENOUGH TO BUY THE S&P RATINGS
AND DECIDE THAT THEY WERE A SAFE INVESTMENT.
> names like "Bear Stearns", "Citigroup", "sub-prime fiasco" mean NOTHING to me...
No surprises there.
> once again, you're obsessed with the media-supplied "details"...
Never ever could bullshit its way out of a wet paper bag.
>>>>> Look, there HAVE been some real winners in these periodic
>>>>> blowouts; I'm not holding my breath waiting for Mark Cuban
>>>>> to go bankrupt after selling out right at the peak of the dot-com
>>>>> craze, and I'm hanging on to MY pennies...and oh yeah, that
>>>>> was what, a whole six years ago?
>>>> See above on Greenspan.
>>> Exactly. I think Cuban has taken some sort of credit for his
>>> apparent prescience, but really how smart do you have to be
>>> to take a $billion for a company with virtually no revenues?
>> Irrelevant to the sub prime fiasco.
> How smart do you have to be to pawn off your crappy loans to Citigroup
> and pocket the origination fees for your irresponsible behavior?
Smart enough to get S&P to rate them in a way that would
get fools to believe that they were safe investments.
> If they get away with it, it appears that humans of presumably
> ordinary intelligence will do it again and again and again...
You wont be doing it now.
>>> The real question is about the other side of the
>>> transaction: how STUPID do you have to be to
>>> PAY a $billion for a company with no revenues?
>> Have fun explaining google since then.
> What's your point?
That that mindlessly superficial way of deciding what might fly
would have seen you decide that google was never going to fly.
> Google(TM) is a giant money-making machine...
It wasnt at float time revenue wise.
>>> And how thick do you have to be to not
>>> recognize this kind of activity as a problem?
>> Have fun explaining google since then.
> I'm glad that you want me to have so much fun...however, I would
> be having more fun right now if I understood what your point is...
Not even possible, you've got that problem with ear to ear dog shit.
>>> But you brag that YOU can't "see them coming"...
>> You cant with the terminal stupidity of operations like Bear
>> Stearns and Shittybank actually being stupid enough to get
>> sucked in on the sub prime fiasco, when there is no way of
>> knowing just how much they have poured into such dud securitys.
> OK, maybe we can't know those details,
No maybe about it.
> but that there was a large market in CDOs WAS known years ago...
Not with SUB PRIME LOANS there wasnt.
Which might just be why its called the sub prime fiasco, stupid.
> but apparently that's not good enough for you, you
> want names and social security numbers as well...
Nope, just the basic information that its sub prime loans that will
be defaulting in huge numbers thats the 'assets' being securitized.
Thats what the S&P rating was supposed to be about, but wasnt, essentially
because it was in S&P's interest for those to be completely misleading.
>>> That's probably because you NEVER heard a word about
>>> mortgage issuers loaning money to people without ANY
>>> documentation of their income or credit history, loaning amounts
>>> up to and OVER 100% of any realistic "appraisal" of the
>>> home value (and of course, an "appraisal" is no different
>>> than looking at the prices of all the other dot-coms and
>>> deciding that a company with no revenues really IS worth
>>> a $billion)...
>> Irrelevant to operations like Bear Stearns and Shittybank actually
>> being stupid enough to get sucked in on the sub prime fiasco.
> Of course, irrelevant; as I said before, "common sense" is the
> first casualty of market "warfare"...if we can't know the exact
> amount of CDOs bought by Citigroup, NOBUDDY NOSE
> NUTTIN 'BOUT NUTTIN!!!
It aint the amount of CDOs that matters, its the quality of the loans that were securitized, fool.
> And that's part of why these "mistakes" keep happening again
> and again and again; since NOBUDDY NOSE NUTTIN BOUT
> NUTTIN, maybe it really DOES make sense to buy a dot-com
> with no revenues or a CDO consisting of a bunch of "sub-prime"
> mortgages...
Pity that fact wasnt available to the market.
> hey, let's just "roll the dice" and see what happens,
> I've always been lucky, how 'bout you?
Thats not what the S&P rating is about.
>> They and S&P in spades should have been able to work out what
>> was happening with those loans on that detail. Greenspan in spades.
> Well, yeah, you're right, they (particularly the big financial houses)
> blew it. Some of the "bad actors" have "fallen on the sword" (with
> a giant severance package, boo-hoo) if that makes you feel any better.
And that fool Greenspan hasnt hung himself.
> Look, it's always a debate about whether something is a good
> investment or not, and as I've said, "common sense" tends to
> fly out the window at certain times (a LOT of the time).
The problem aint common sense flying out the window, the problem
was that it wasnt visible that the CDOs were sub prime loans that
didnt qualify for anything like the rating that S&P was giving them.
> For me, I just try not to fall victim to the mentality
> of surrender to the craziness of the markets, but
> it looks like you are a typical POW of helplessness...
Time for new glasses. I havent lost even a cent due to the sub prime fiasco.
And wasnt actually stupid enough to use your approach with regard to google either.
George Grapman
>
>
> Time for new glasses. I havent lost even a cent due to the sub prime fiasco.
What could you lose? Your only asset is your welfare stipend.
suds mcduff
> On Nov 20, 1:28 pm, "Rod Speed" <rod.speed....@gmail.com> wrote:
>> FrediFizzx <fredifi...@hotmail.com> wrote:
>>> "Shaun Eli" <missingch...@brainchampagne.com> wrote in message
>>> news:00b8ce53-93d1-4559...@b36g2000hsa.googlegroups.com...
>>>> An example:
>>>> Pedro bought a house ten years ago for $100,000. Last year it was
>>>> worth $500,000 ('worth' because someone was willing to pay that
>>>> much). Pedro takes his $400,000 gain by selling the house to Joe.
>>>> Now-- Joe wasn't actually qualified for his mortgage, and defaults,
>>>> owing, let's say, $490,000.
>>>> Because there are a lot of these circumstances, and more sellers than
>>>> buyers, the house is now worth only $300,000.
>>>> Joe defaults on his mortgage, loses his $10,000 down payment. The
>>>> bank sells the house for $300,000, losing $190,000.
>>>> Where'd the money go? Into Pedro's new house, or his bank account,
>>>> or whatever. But it's not Pedro's fault that someone was willing to
>>>> pay $500,000 for his house last year. It's also not Joe's fault
>>>> that the house is worth only $300,000 today. Of course if Joe
>>>> hadn't defaulted it wouldn't have mattered, because he'd still be
>>>> living in the house and making payments on it, regardless of what
>>>> it's actually worth at any random point in time. And you could say
>>>> that it's maybe Joe's fault that he took a mortgage he couldn't
>>>> really afford, as well as maybe the bank's (and/or mortgage
>>>> broker's) fault for lending him the money. There's plenty of blame
>>>> to go around but the one who may have ended up with the money isn't
>>>> necessarily the culprit, if there is any in any particular case.
>> No they dont when the whole market drops significantly due to the large
>> oversupply of houses that are the result of mortgage defaults with those
>>
>> - Show quoted text -
>
> Hedge funds drive up the price of Subprime Funds, and the Media in
> turn, caused a huge drop in the prices because of the negative slant
> of news in general. Thus investment firms lost billions on a bet that
> these funds would keep rising, which they could not because of rising
> interest rates.
>
> http://www.globaltreeregistry.com/Home_Page.html
>
I suppose it was only a matter of time until a right wingnut blamed the
sub-prime defaults on the media....
Bill<NOSPAM>Gross@gmail.ca
subprime borrower that was
actually paying his monthly pay'ts 2 months back.
Find me a country anywhere that would tolerate Fox and the right wing
nuts running the show,
Pravda was less biased in communist days.
Like i said, socialism will never die because the conservative
factions in the USeless keep re-
inventing it every time a corporate donor needs a welfare handout.
The Fed has been reduced
to little more than a puppet show for the brokerage and banking
sectors.
As with the roman empire, america will colapse from forces within and
very shortly.
The USSR appeared to be a fortress until a few cracks brought it all
down within a month, ditto
america, the most hated, imperialistic empire in modern history.
Mike M.
"jdoe" <jd...@aol.com> wrote in message
news:p78bk3dqb8unhfdkd...@4ax.com...
> 1. that tax decrease package needed to be voted on before being
> implemented, that vote was to take place this coming Jan.
Actually, the take decrease package was just that - a package. The first
phase, which passed earlier this spring (don't you remember all the
legislators posing in front of the news cameras giving each other
high-fives?) provided immediate relief - or approx. $468.00 in savings to
the average FL homeowner. That portion is already in effect.
The second phase of the reduction, a complicated/smoke-and-mirrors plan tied
to median home values, which didn't even address two major issues - an
increase in homestead exemption amount (from $25K to $50K) and portability -
was to be placed on the ballot in Jan. '08 for voters to decide.
It was doomed right out of the gate, lawsuit or not. Most saw through the
smoke and mirrors, explaining why it had such little public support - pretty
much a snowball's chance in hell of passing in Jan. '08.
> you need to grasp the facts before commenting
See above. You missed the point I was trying to make.
The legislation was riddled with loopholes that local taxing authorities
could, and likely would, take full advantage of, allowing them to actually
*raise* revenue via other methods. One such loophole was just recently
described in an article in the local newspaper.
A neighboring city's residents are grumbling about a $125.00 fire protection
"surcharge" that suddenly popped up on their tax bill this year. The city -
similar to many other cities/local taxing authorities across the state - is
taking a preemptive approach, knowing revenue will soon be taking a big hit
(assuming the second phase passes, combined with declining property
values/tax assessments.)
Fortunately state legislators took the hint and went back to work
formulating a better/more realistic plan that addressed voters' concerns,
eliminated a lot of the loopholes and added the two main components voters
favored most, which earlier legislation sorely lacked. Now that package
will most definitely pass in '08.
Mike
Thurston Howell IV
SMS 斯蒂文• 夏
> I keep reading about the 400 billion us dollars in subprime losses to date,
> e.g, see this bloomberg article http://tinyurl.com/2vjgq7
>
> Where there is a 400 billion dollar loss there is a 400 billion dollar
> gain.
> I don't understand WHO gained from this 400 billion dollars?
Most of it went to the sellers, especially developers, that were able to
sell houses for greatly inflated prices because easy credit made the
competition for these houses greater. The savvy seller that cashed out
before prices plunged, and the developer that sold new homes for 1.5-2x
what they currently sell for, got their money and ran.
The loan companies made out very well because sub-prime loans generate
large commissions from points and fees. The loan wholesalers (banks)
ended up with the bad loans. Since there was very little down payment,
even a foreclosure doesn't get the bank back what they loaned.
What's so strange is why the banks weren't taking the initiative to
renegotiate these loans, i.e. lowering payments by stretching out the
term, or lowering interest rates--anything to keep the buyer from
defaulting.
> Who wins here? How?
> I'm cash rich - can I benefit by taking some action?
Unfortunately no. If you had had the foresight to sell some stocks short
then you might have done okay.
One area that's doing well right now is rental properties. If you can
pick up some bargain basement rental units right now, then you could
break even, but it's really too early to do this as prices are still
falling in most areas.
yassahmassa
SMS éz‰⁄ï∂• ⃠<scharf...@geemail.com> wrote:
> The loan companies made out very well
No, they did not. Their executives made out just fine, but sub-prime
lending companies and their shareholders are all facing bankruptcy. What
do you think all the media fuss is about?
Consider this: Ameriquest Mortgage, one of the top sub-prime lenders,
has closed down, bankrupt. California billionaire Roland E. Arnall, the
CEO who drove the company into bankruptcy (with such policies as
falsifying income reports on sub-prime borrowers to make them more
appealingly credit-worthy and get them loans larger than they could
afford) has been appointed Ambassador to the Netherlands by George W.
Bush. This is a payback appointment, since Arnall has been one of Bush's
largest campaign contributors since 2002.
When questioned about the appointment, a White House spokesman noted all
the "contributions" made by Arnall to the "community". I wonder which
community that is.
Whatever. Due to the "friendship", however crooked and corrupt, between
George Bush and one of the primary architects of the current suffering
and misery, don't expect Arnall's fortune to be diminished by a single
dime, no matter how many families are ruined by his actions. Taxpayers
are currently even paying his salary. What a great fucking country, eh?
Rod Speed
> Wilson wrote:
>> I keep reading about the 400 billion us dollars in subprime losses
>> to date, e.g, see this bloomberg article http://tinyurl.com/2vjgq7
>> Where there is a 400 billion dollar loss there is a 400 billion dollar gain.
>> I don't understand WHO gained from this 400 billion dollars?
> Most of it went to the sellers, especially developers, that were able to sell houses for greatly inflated prices
> because easy credit made the competition for these houses greater. The savvy seller that cashed out before prices
> plunged,
There's fuck all of those. The vast bulk would have traded up to something
higher priced and got fanged very comprehensively indeed compared with
what they would have ended up with if they hadnt done that.
> and the developer that sold new homes for 1.5-2x what they currently sell for, got their money and ran.
Even less of those. That market has been booming for a
long time due to the very low interest rates and almost no
developers would have been able to pick the end of that.
> The loan companies made out very well because sub-prime loans generate large commissions from points and fees.
Yes, but that aint where the vast bulk of the $400B went.
> The loan wholesalers (banks) ended up with the bad loans.
Not just banks, the main problem is that those sub prime loans
were securitized and flogged to a hell of a lot more than just banks.
> Since there was very little down payment, even a foreclosure doesn't get the bank back what they loaned.
It does if they securitized the loan and flogged
it off to some other sucker before it defaulted.
> What's so strange is why the banks weren't taking the initiative to
> renegotiate these loans, i.e. lowering payments by stretching out the
> term, or lowering interest rates--anything to keep the buyer from defaulting.
The reason is obvious, they make a lot more money securitizing those
loans and flogging them off to other suckers before they default.
THATS whats different this time around, the absolute vast bulk of the sub prime
loans were securitized and flogged off to suckers like ShittyBank and Bear Stearns.
And what you are suggesting wont work anyway, the sub prime loans
were so sub prime that it isnt even possible to come up with lowered
payments that the suckers could actually afford to pay. It was always
about ARMs that didnt look too bad at the promotional up front rate
but which guaranteed default when the sucker rate came to an end.
>> Who wins here? How?
>> I'm cash rich - can I benefit by taking some action?
> Unfortunately no. If you had had the foresight to sell some stocks short then you might have done okay.
> One area that's doing well right now is rental properties. If you can pick up some bargain basement rental units right
> now, then you could break even, but it's really too early to do this as prices are still falling in most areas.
And its less clear whether the market will implode quite significantly more yet.
Rod Speed
> SMS éz??ļ?. āf <scharf...@geemail.com> wrote
>> The loan companies made out very well
> No, they did not. Their executives made out just fine,
Its more than just the executives, the front line apes did
quite well on commissions before it all imploded too.
Corse most of both would have gotten involved personally themselves
too and may well have lost more on that than they gained personally too.
> but sub-prime lending companies and their shareholders are all
> facing bankruptcy. What do you think all the media fuss is about?
> Consider this: Ameriquest Mortgage, one of the top sub-prime lenders,
> has closed down, bankrupt. California billionaire Roland E. Arnall,
> the CEO who drove the company into bankruptcy (with such policies as
> falsifying income reports on sub-prime borrowers to make them more
> appealingly credit-worthy and get them loans larger than they could
> afford) has been appointed Ambassador to the Netherlands by George W.
> Bush. This is a payback appointment, since Arnall has been one of
> Bush's largest campaign contributors since 2002.
> When questioned about the appointment, a White House
> spokesman noted all the "contributions" made by Arnall
> to the "community". I wonder which community that is.
> Whatever. Due to the "friendship", however crooked and corrupt,
> between George Bush and one of the primary architects of the current
> suffering and misery, don't expect Arnall's fortune to be diminished by
> a single dime, no matter how many families are ruined by his actions.
Bet he got some downsides from the implosion.
> Taxpayers are currently even paying his salary.
> What a great fucking country, eh?
You're always welcome to set fire to yourself in 'protest' or sumfin.
phil scott
> "Rod Speed" <rod.speed....@gmail.com> wrote in message
>
> news:5qgub4F...@mid.individual.net...
>
> > FrediFizzx <fredifi...@hotmail.com> wrote:
> >> Good example. The money is still out there. The people that sold at
> >> the top have the money.
>
> > No they dont when the whole market drops significantly due to the
> > large
> > oversupply of houses that are the result of mortgage defaults with
> > those
>
> What the heck does that have to do with people that sold at the top?
> This totally answers the OP's original question as to where the money
> went. It doesn't just vaporize.
>
you are correct fred..the money IS still out there....however, one can
exagerate the mechanisms to show up the bigger picture.
say that 600 trillion is printed up or created in the form of e money
loans to member banks.. that 600 trillion remains out there. but its
no longer worth a damn.. as we have seen in prewar germany and south
america... hyper inflation... the 'money' is out there.
the net actual 'value' of the goods, fishies in the ocean,and junk
cars...doesnt change an iota... only the fiat money numbers change.
Phil Scott
PaPaPeng
<scharf...@geemail.com> wrote:
>What's so strange is why the banks weren't taking the initiative to
>renegotiate these loans, i.e. lowering payments by stretching out the
>term, or lowering interest rates--anything to keep the buyer from
>defaulting.
That's because the banks and the investment houses don't actually own
the original mortages. The banks and IHs may be the third, fourth or
higher level owners of investment certificates. These investment
certificates are based on the perceived value of the certificates
issued by another (4) financial institution who may have valued their
certificates they issued based on the investments they bought from
someone else (3 &2). The original loan company(1) no longer owns the
mortages it sold to bank (2) that bundled them into an investment
block of subprime mortages.
To get down to the roots of the problem a housing loan company issues
loans. Its sales personnel hype subprime loans because their earnings
and the loan company's is based on the size of the loan not the
borrowers' ability to service the loans. These subprime loans are
given on a higher interest rate to justify the risk. Some loan
company or bank then bundles the loans together and sells them to a
another bank or IH as a single unit of investment. The attraction is
that its unlikely all of the loans will default at any one time. This
will average out the good ones and still pay a good return. A key
point to remember is that the original loan company no longer owns the
mortages. The home owner has never met the new entity that he makes
his monthly payments to.
In good times this works. The primary owner of these bundled
investments borrows money from another bank or IH using these subprime
bundles as security. The figures look good and the lending bank is
only too happy to lend to a large borrower who looks very capable of
paying back the interest and the principal. The bank has a " loans
issued" asset that is bringing in earnings and its own book value
increases. This allowing it to borrow from other banks or to issue
more loans. That's what banks do. And so on as loans multiply
"assets" along the banking-financial system we have an economic boom.
Now when the subprime cirsis broke the company holding the real
mortages cannot pay the interest on the loans it borrowed from the
banks to buy these bundled mortages. It goes belly up. At last
count more than a hundred housing loan companies went belly up.
"Since late 2006
189
major U.S. lending operations have "imploded"
http://ml-implode.com/
The lending bank's only recourse is to seize the bundled mortages to
recover its loans. This bank is not in the housing loan business. It
will have trouble sorting out which mortage is in default, which one
can be rescheduled and which can be foreclosed. It doesn't know what
these mortages are actually worth now. The next bank that or the IH
that accepted the bundled subprime certificates and invested in them
doesn't even have the recourse to sieze the mortages. All they have
are pieces of pretty paper. They can't force the issuing institution
to make good and therefore drive them into insolvency and the investor
loses all.
If you can't follow the explanation so far neither can the banks and
FHs and they have no idea of what they will eventually lose for they
have no idea of what they do or do not own that is solvent. Morgan
Stanley took a $3.7 billion write off. CITIGroup is in for $15
billions. Everyone is waiting for more banks and FHs to announce
their losses and that's only the first round. Revised figures are
expected to be worse. In the UK the Treasury was foolish enough to
try to rescue Northern Rock and may have to write off UK pounds 23
billions (USD 47 billions) of tax payers' money.
http://www.guardian.co.uk/business/2007/nov/23/northernrock.bankofenglandgovernor
(follow the back articles at the bottom of the current one) .
Governments and banking agencies have to unsnarl the banking system
first. Unsnarling individual mortage holders will have to wait.
For more reading on the subprime and coming economic crisis go to Asia
Times online at http://www.atimes.com/
Among the many excellent articles Mogumbo Guru writes hunorous
articles on a serious subject and provides a good insight into
financial and economics you won't get elsewhere.
sample: THE MOGAMBO GURU
More than 'sheets' hitting the fan
We're talking about banks' balance sheets, and the numbers seem so
horrific that we are suddenly thinking about banks going belly up.
(Nov 20, '07) Full article in
http://www.atimes.com/atimes/Global_Economy/IK21Dj01.html
SMS 斯蒂文• 夏
> In article <47468dfe$0$79871$742e...@news.sonic.net>,
> SMS éz‰⁄ï∂• ⃠<scharf...@geemail.com> wrote:
>
>> The loan companies made out very well
>
> No, they did not. Their executives made out just fine, but sub-prime
> lending companies and their shareholders are all facing bankruptcy. What
> do you think all the media fuss is about?
"Made" is in the past tense, not the present tense. The reason they're
in bankruptcy now is that it collapsed so fast that they could not sell
the loans that were already approved and funded. Most of these lending
companies sell 100% of their loans, they are in business only for the
fees and points.
> Whatever. Due to the "friendship", however crooked and corrupt, between
> George Bush and one of the primary architects of the current suffering
> and misery, don't expect Arnall's fortune to be diminished by a single
> dime, no matter how many families are ruined by his actions. Taxpayers
> are currently even paying his salary. What a great fucking country, eh?
Yep. First we bailed out the S&L crooks that got rich from Reagan's
deregulation of the banking industry, now we are suffering again from
the lack of regulation in the mortgage industry. The bandaids are
already making it worse. Lowering short-term interest rates further
devalues the dollar, plus it lowers interest rates paid on savings, plus
it increases oil prices, plus it lowers stock values.
The place to put your money when a Republican is president is in Euro's.
231
> On Fri, 23 Nov 2007 00:25:17 -0800, SMS ???. ?
You've mangled that utterly. The problem with Northern Rock isnt that
they bought any of those securitized sub prime loans, the problem is
that they were borrowing on the short term money market and lending
on medium and long term mortgages and when the short term money
market dried up as a result of the sub prime fiasco, so that no one was
interested in lending anything in the short term market because they
had no idea who was about to incur billions of losses in due to those
securitized mortgages turning to dog shit, Northern Rock's source of
funds drived up.
> and may have to write off UK pounds 23
> billions (USD 47 billions) of tax payers' money.
No they wont. Northern Rock wont go down if the UK taxpayers provide the
cover for the lack of short term money and the nervous depositors who pulled
their deposits out when the problem with the sub prime fiasco became obvious.
> http://www.guardian.co.uk/business/2007/nov/23/northernrock.bankofenglandgovernor
> (follow the back articles at the bottom of the current one) .
Pity you cant actually manage to comprehend what those are saying.
> Governments and banking agencies have to unsnarl the banking system first.
Thats easy enough to do, and they have done that by providing that short term
money that no one else is prepared to provide because it isnt clear who is holding
much of the paper that has turned to dog shit as a result of the sub prime fiasco.
> Unsnarling individual mortage holders will have to wait.
They wont ever be unsnarled. Those who were stupid enough to get
sucked into loans that they couldnt possibly repay by lying about their
capacity to pay will default. In spades those who could barely manage
to cover their ARM payments at the sucker rates, when those sucker
rates end and they get to double or triple the interest rate they are paying.
> For more reading on the subprime and coming economic
> crisis go to Asia Times online at http://www.atimes.com/
The same mindless hysterical hyperventilation happened during the
most recent melt down in asia and it didnt in fact affect anyone but asia.
> Among the many excellent articles Mogumbo Guru writes
> hunorous articles on a serious subject and provides a good
> insight into financial and economics you won't get elsewhere.
Pity it hasnt helped you any.
> sample: THE MOGAMBO GURU
> More than 'sheets' hitting the fan
> We're talking about banks' balance sheets, and the numbers
> seem so horrific that we are suddenly thinking about banks
> going belly up. (Nov 20, '07) Full article in
> http://www.atimes.com/atimes/Global_Economy/IK21Dj01.html
Taint gunna happen, you watch.
mich
> news:5qgub4F...@mid.individual.net...
>> FrediFizzx <fredi...@hotmail.com> wrote:
>
>>> Good example. The money is still out there. The people that sold at
>>> the top have the money.
>>
>> No they dont when the whole market drops significantly due to the large
>> oversupply of houses that are the result of mortgage defaults with those
>> who should never have been given that mortgage in the first place.
>
> What the heck does that have to do with people that sold at the top? This
> totally answers the OP's original question as to where the money went. It
> doesn't just vaporize.
The seller of the $300 000 house has $300 000 in cash.
The buyer had a $300 000 house that's only worth $250 000.
FrediFizzx
news:J_h4j.91889$qP4.1...@weber.videotron.net...
So what? That is an "unrealized" loss of $50K if the buyer hangs on to
it. In five years or so the house might be worth $350K for an
unrealized gain of $50K on the worth of the house. If the buyer
defaults and the bank losses the $50K, the seller is the one who has the
real money gain that the bank lost.
Fred
Rod Speed
> mich <cop...@vidotron.cr> wrote>>>> FrediFizzx <fredi...@hotmail.com> wrote
>>>>> Good example. The money is still out there. The people that sold at the top have the money.
>>>> No they dont when the whole market drops significantly due to the large
>>>> oversupply of houses that are the result of mortgage defaults with those
>>>> who should never have been given that mortgage in the first place.
>>> What the heck does that have to do with people that sold at the top?
>>> This totally answers the OP's original question as to where the
>>> money went. It doesn't just vaporize.
>> The seller of the $300 000 house has $300 000 in cash.
>> The buyer had a $300 000 house that's only worth $250 000.
> So what? That is an "unrealized" loss of $50K if the buyer hangs on to it. In five years or so the house might be
> worth $350K for an unrealized gain of $50K on the worth of the house. If the buyer defaults and the bank losses the
> $50K, the seller is the one who has the real money gain that the bank lost.
Usually not, because hardly any of the sellers just kept the pile of
cash. The vast bulk of them upgraded to a higher value property
and got fanged by the property downturn just like everyone else did.
And the original seller wouldnt normally have had the place fully paid off anyway.
mich
FrediFizzx <fredi...@hotmail.com> wrote
> mich <cop...@vidotron.cr> wrote
>> FrediFizzx <fredi...@hotmail.com> wrote
>>> Rod Speed <rod.sp...@gmail.com> wrote
>>>> FrediFizzx <fredi...@hotmail.com> wrote
>>>>> Good example. The money is still out there. The people that sold at
>>>>> the top have the money.
>>>> No they dont when the whole market drops significantly due to the large
>>>> oversupply of houses that are the result of mortgage defaults with
>>>> those
>>>> who should never have been given that mortgage in the first place.
>>> What the heck does that have to do with people that sold at the top?
>>> This totally answers the OP's original question as to where the
>>> money went. It doesn't just vaporize.
>> The seller of the $300 000 house has $300 000 in cash.
>> The buyer had a $300 000 house that's only worth $250 000.
> So what? That is an "unrealized" loss of $50K if the buyer hangs on to
> it. In five years or so the house might be worth $350K for an unrealized
> gain of $50K on the worth of the house. If the buyer defaults and the
> bank losses the $50K, the seller is the one who has the real money gain
> that the bank lost.
The question is where did the money go. The buyer of the house has a house
that is worth $50 000 less than what he paid. Accept the facts and move on.
FrediFizzx
Please learn the difference between "unrealized" and "realized" gains
and losses. If you can't see that the seller got the money the bank
lost when the buyer defaulted, then there is not much more help I can
offer and my work here is done.
Fred
Rod Speed
> FrediFizzx <fredi...@hotmail.com> wrote
>> mich <cop...@vidotron.cr> wrote
>>> FrediFizzx <fredi...@hotmail.com> wrote
>>>> Rod Speed <rod.sp...@gmail.com> wrote
>>>>> FrediFizzx <fredi...@hotmail.com> wrote
>>>>>> Good example. The money is still out there. The people that> sold at the top have the money.
>>>>> No they dont when the whole market drops significantly due to the large oversupply of houses that are the result
>>>>> of mortgage defaults with those> who should never have been given that mortgage in the first place.
>>>> What the heck does that have to do with people that sold at the
>>>> top? This totally answers the OP's original question as to where
>>>> the money went. It doesn't just vaporize.
>
>>> The seller of the $300 000 house has $300 000 in cash.
>
>>> The buyer had a $300 000 house that's only worth $250 000.
>
>> So what? That is an "unrealized" loss of $50K if the buyer hangs on
>> to it. In five years or so the house might be worth $350K for an
>> unrealized gain of $50K on the worth of the house. If the buyer
>> defaults and the bank losses the $50K, the seller is the one who has
>> the real money gain that the bank lost.
> The question is where did the money go.
And he clearly claimed at the top that its still out there.
Not necessarily when the entire market sags.
> The buyer of the house has a house that is worth $50 000 less than what he paid.
And the seller may well have bought another more expensive house with the
proceeds of the sale, and has ALSO lost even more than that in value too.
> Accept the facts and move on.
No thanks, I'll keep rubbing your noses in the fact that his original is just plain wrong.
Rod Speed
Not relevant to what is being discussed.
> If you can't see that the seller got the money the bank lost when the buyer defaulted,
That isnt necessarily true when the seller will usually spend that money on a new
more expensive house and will suffer even more of a loss than the original buyer lost.
> then there is not much more help I can offer
You've never managed to grasp the basics, so you never ever had anything to offer.
> and my work here is done.
Nope, you've been done, like a dinner.