Like the illusion of Wall Street, with its vast and powerful investment banks, now shuttered, China too is an illusion perpetuated by the Globalists that gave us the 15,000 mile Caesar salad, poisoned cat food and lead based paint on babies' pacifiers. Like the illusion that money would come from thin air to always push housing prices higher, China has spent a generation pursuing its illusion. Pursuing an unattainable dream to be like the West, while 6000 years of its carefully shepherded top soil blows into the sea.
Posted: Mon Aug 25, 2008 12:19 am Post subject: Re: Housing and Economic Collapse - In Progress #3
threadbear wrote:
Armageddon wrote:
When people pay back their loans and banks don't lend it back into circulation, guess what happens ? This is how the central banking cartel causes panics. They use these panics to their advantage to manipulate whatever their agenda is. It has always been this way.
Again--If the economy contracts enough, there will be supply crunches of things you need, and a surplus of credit sensitive assets like houses flooding onto the market. In a difficult scenario, you might get pure deflation. In a monster clusterf**ck, of unprecedented proportion, you can't count on that.
do I smell a bit of frustration threadbear?
You know what my attitude is right?
I'm not here to help people, I'm just in it for the money.
In a deflationary environment the value of the currency goes up.
I am more than happy to off-load my US dollars onto any fool potential customer who wishes to hold onto it believing it will rise in value.
come join the dark side threadbear.........not everybody can be "saved." Isn't that what PO is all about? _________________ joeltrout Oct-2008: Dow 13,000 in three years
Fannie and Freddie are sitting on a portfolio of $6 trillion, and they can’t get private investors to ante up $5.5 billion. How do you spell “toast”.
They are buying time, and it is getting more expensive every day. The US now reminds me of a kid that goes on a spree with his father’s credit card. Dismissing completely, what is going to happen when the bill shows up!
cube said:
Quote:
I'm not here to help people, I'm just in it for the money.
The money you refer to, is one more of the 300+ fiat currencies that has collapsed over the last few centuries. Sounds like a sound approach to me?
Posted: Mon Aug 25, 2008 8:04 am Post subject: Re: Housing and Economic Collapse - In Progress #3
Quote:
AP
Danish central bank rescues nation's No. 10 bank
Monday August 25, 9:34 am ET
By Jan M. Olsen, Associated Press Writer
Danish central bank takes over big bank, hobbled by bad loans and unable to find buyer
COPENHAGEN, Denmark (AP) -- The Danish central bank said Monday it has taken over the nation's 10th largest bank, a 124-year-old institution which had been struggling amid global financial turmoil and mounting losses on mortgage loans as housing prices fell in Denmark.
link _________________ 500 MPH into a brick wall - me
Posted: Mon Aug 25, 2008 1:12 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
cube wrote:
threadbear wrote:
Armageddon wrote:
When people pay back their loans and banks don't lend it back into circulation, guess what happens ? This is how the central banking cartel causes panics. They use these panics to their advantage to manipulate whatever their agenda is. It has always been this way.
Again--If the economy contracts enough, there will be supply crunches of things you need, and a surplus of credit sensitive assets like houses flooding onto the market. In a difficult scenario, you might get pure deflation. In a monster clusterf**ck, of unprecedented proportion, you can't count on that.
do I smell a bit of frustration threadbear?
You know what my attitude is right?
I'm not here to help people, I'm just in it for the money.
In a deflationary environment the value of the currency goes up.
I am more than happy to off-load my US dollars onto any fool potential customer who wishes to hold onto it believing it will rise in value.
come join the dark side threadbear.........not everybody can be "saved." Isn't that what PO is all about?
I can understand the complete head scratching confusion over these issues and anyone saying we may end up with an across the board deflation might be right. We're not oracles. I can't imagine any govt sitting back and not eventually trying to inflate some of these problems away.
I just went to a little diner, by a marina, for breakfast. The marina has never been emptier this time of year. A good half of the moorage was empty. This has been going on for a few years, but this year is the worst, by far. How is the marina responding to this drop in demand? They are raising their rates instead of dropping them. They have fixed costs, that forbid them from dropping their prices to meet diminishing demand and high deisel costs. So while the harbour fills up with boats at anchor, the marinas suffer, as the odd (and I mean odd) 55ft+ Bayliner full of drunken goofballs, with money to burn (literally) ties up at their facility.
Posted: Mon Aug 25, 2008 2:37 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
threadbear said:
Quote:
How is the marina responding to this drop in demand? They are raising their rates instead of dropping them.
Quote:
The Building Storm
by David Galland
That’s because, in addition to the straight-up consequences of the government monetary prolificacy and businesses raising prices to try and stay afloat, there is something else feeding power to the storm… something we have been warning about for years now: the rising odds that the global fiat currency system will fail.
Posted: Mon Aug 25, 2008 2:50 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
Housing’s Decreasing Value:
Quote:
According to the NY Times, in the three years since housing peaked in Merced, California, the median sales price has fallen by 50 percent. There are thousands of foreclosures on the market. The asking prices on those properties are so low that competitive bidding, a hallmark of the boom, is back.
But almost no homeowner can afford to sell. If you cannot go as low as “the foreclosure price” — the cost of a comparable bank-owned house — real estate agents say you might as well not even bother listing your home.
And so most people do not: three out of four existing-home sales in Merced County are now foreclosures, the highest percentage in the state, according to DataQuick Information Systems. The only group for whom selling makes sense, real estate agents here say, are the elderly entering assisted-living facilities, who often have decades of appreciation built into their home’s value.
As Merced goes, so might go much of the nation. With as many as 2.5 million homes in the United States entering foreclosure this year and, at best, sales of only five million existing houses, the foreclosure price is becoming the rule in many areas. In Los Angeles County, whose 10 million people make it the most populous county in the United States, a third of the sales are foreclosures.
(no link)
The day is here for many when a house is no longer an asset. It is rapidly reverting to its original status, an expense!
Joined: Mar 12, 2007 Posts: 1009 Location: As close as I can get to the beginning of the pipe.
Posted: Mon Aug 25, 2008 5:56 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
Quote:
"If it is true, as we suspect, that we are at the peak of a credit/financial bubble that started right after WW2 ended, and it is at a parabolic peak and cannot be sustained, then the world’s central banks already know this too. They probably are trying to decide when to let go…They all don’t have to agree, it only will take one major Central Bank to let go, then the others will be forced to follow.
The central banks in question would be the BOJ, the US Fed and the ECB, and likely the BOC. The Russian central bank is an odd man out and is a wild card, but not as central to the equation. Either all the major central banks listed keep up the same rate of infusions, or the end of the world credit system comes in a week or two after one ‘lets go’.
Now as to the USD strengthening now, and gold’s vexing $100 plus volatility, it just seems best to make any protective moves well ahead of the fatal day. Once the situation gets out of control, Credit Crisis II begins, in a week from that point you will find it hard to make any changes. I view gold’s present volatility as a total side issue, compared to what would happen if all one’s money was tied to the financial system, the USD and so on, and then one’s financial situation was frozen if the central banks decide to let go, and world foreign exchange restrictions are instituted. Gold is still one of the best ways to ride out what may come to pass."
Laird paints a pretty picture of overshoot. First central bank to let go is a rotten egg. Then they all fall down. Oh, goody. And he makes good points about positioning yourself before it happens, because once the collapse comes, everything will be frozen.
Quote:
"Nobody will escape the wrath of this deleveraging, and that is why I call it Credit Crisis II. Credit Crisis I was only the preliminary round…Credit Crisis II is characterized by the realization that the gigantic losses of capital cannot be purged from the financial system, even with big public bailouts. And that this deleveraging cannot be stopped. There are too many interlinkages. And, without writing a book on this, the next victim when Credit Crisis II unfolds, will be massive world currency instability. This will make any of the banking and currency crises we have seen since WW2 look like child’s play. It is not clear when Credit Crisis II begins but it is threatening already.
" _________________ "When fascism comes to America it will be wrapped in a flag and carrying a cross." --Sinclair Lewis
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Mon Aug 25, 2008 6:32 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
I'm starting to believe that Fannie & Freddie's efforts to hang on through the election cycle, while supported by the inaction in Washington, will actually make the housing crisis worse.
At this time, relatively more mortgages are going through F & F (as compared to private lenders). However as interest rates increase for F & F, they also increase for those seeking new mortgages. As mortgage rates go higher, the housing markets slump further, and eventually the fall in home asset values will bring down F & F anyway.
In a government takeover, not only will borrowers get better rates, but foreclosures will fall. I'm basing that on what happened after Indyamc went under, where the FDIC cut back on foreclosures. _________________ It's already over, now it's just a matter of adjusting.
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Mon Aug 25, 2008 7:58 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
Quote:
Freddie Mac sells $2bn of its debt
By Saskia Scholtes in New York
Published: August 25 2008 18:24 | Last updated: August 25 2008 23:19
The crisis gripping Fannie Mae and Freddie Mac spread across the financial system on Monday as JPMorgan Chase warned of a possible $600m (£323m) loss from its holdings of preferred shares in the two mortgage financing groups.
JPMorgan said it would write down the value of its $1.2bn of preferred shares in Fannie and Freddie by half.
Banks and insurers own most of the $36bn in preferred stock in Fannie and Freddie, and JPMorgan’s announcement will raise pressure on other holders to make similar writedowns.
Preferred shares are a hybrid of debt and equity and are attractive to investors because they pay interest above equivalent debt instruments.
No other bank has written down the value of its Fannie and Freddie preferred shares, and only a few have revealed their holdings. Philadelphia-based Sovereign said last week that it held more than $600m in Fannie and Freddie preferred stock.
FT _________________ It's already over, now it's just a matter of adjusting.
Posted: Mon Aug 25, 2008 10:00 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
DantesPeak wrote:
Quote:
Freddie Mac sells $2bn of its debt
By Saskia Scholtes in New York
Published: August 25 2008 18:24 | Last updated: August 25 2008 23:19
The crisis gripping Fannie Mae and Freddie Mac spread across the financial system on Monday as JPMorgan Chase warned of a possible $600m (£323m) loss from its holdings of preferred shares in the two mortgage financing groups.
JPMorgan said it would write down the value of its $1.2bn of preferred shares in Fannie and Freddie by half.
Banks and insurers own most of the $36bn in preferred stock in Fannie and Freddie, and JPMorgan’s announcement will raise pressure on other holders to make similar writedowns.
Preferred shares are a hybrid of debt and equity and are attractive to investors because they pay interest above equivalent debt instruments.
No other bank has written down the value of its Fannie and Freddie preferred shares, and only a few have revealed their holdings. Philadelphia-based Sovereign said last week that it held more than $600m in Fannie and Freddie preferred stock.
I wouldn't say for sure but this may be the straw that breaks the camel's back. The floodgates have opened. _________________ Civilization is a personal choice.
Posted: Tue Aug 26, 2008 11:50 am Post subject: Re: Housing and Economic Collapse - In Progress #3
June - Case-Shiller new home
Yearly % -15.92%
In actuality home prices have probably dropped more than 50% from their ‘05 highs. Most people can not afford to sell their homes in the present market, not with foreclosure sales now dominating that market.
We have probably returned to the 100 year mean, how much lower they will go is the real question? With housing rapidly losing its asset value, and 18.5 million vacant homes in the country, 10 cents on the dollar is probably a realistic estimate. That will occur as the economy deteriorates further and people are unable to maintain their property taxes.
Joined: Apr 27, 2007 Posts: 4351 Location: The Great Sonoran Desert
Posted: Tue Aug 26, 2008 12:03 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
Quote:
A generation of conservative propaganda, arguing that markets make wiser decisions than government, has been destroyed by these events. The interventions amount to socialism, American style, in which the government decides which private enterprises are "too big to fail." Trouble is, it was the government itself that created most of these mastodons--includin g the all-purpose banking conglomerates. The mega-banks arose in the 1990s, when a Democratic President and Republican Congress repealed the New Deal-era Glass-Steagall Act, which prevented commercial banks from blending their business with investment banking. That combination was the source of incestuous self-dealing and fraudulent stock valuations that led directly to the Crash of 1929 and the Great Depression that followed.
Quote:
***An agenda of deeper reforms can boost public confidence even as it undoes a lot of the damage caused by the financiers and bankers. Some suggestions: ***
§ Nationalize Fannie Mae and other government-supporte d enterprises instead of coddling them. Restore them to their original status as nonprofit federal agencies that provide a valuable service to housing and other markets. Make the investors eat their losses. Buy the shares at 2 cents on the dollar. Without a federal guarantee, these firms are doomed anyway.
§ Resolve the democratic contradiction of "too big to fail" bailouts by dismantling the firms that are too big to fail--especially the newly created banking conglomerates that have done so much harm. Restore the boundaries between commercial banking and investment banking. In any case, market pressures are likely to shrink those behemoths as banks sell off their parts to survive. For the remaining big boys, revive antitrust enforcement. Set stern new conditions for emergency lending from government-- supervised receivership, stricter lending rules to prevent recidivism and severe penalties for greed-crazed shareholders and executives.
§ Assign the Federal Reserve's regulatory role to a new public agency that is visible and politically accountable. Make the Fed a subsidiary agency of the Treasury Department and reform its decision-making on money and credit to restore an equitable balance between competing goals and interests--seeking full employment but also stable money and moderate inflation.
§ Begin the hard task of re-creating a regulated financial system Americans can trust, one that recognizes its obligations to the broad national interest. This requires regulatory reforms to cover moneypots like private-equity funds and to clear away the blatant conflicts of interest and double-dealing on Wall Street, and also to give responsible shareholders, workers and other interests a greater voice in corporate management and greater protection against rip-offs of personal savings.
§ Re-enact the federal law against usury. The details are difficult and can follow later, but this would be a meaningful first step toward restoring moral obligations in the financial sector. People would understand it, and so would a lot of the money guys. Maybe in the deepening crisis, Washington will begin to grasp that money is also a moral issue.
Economic Free Fall _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Joined: Oct 23, 2004 Posts: 5928 Location: New Jersey
Posted: Tue Aug 26, 2008 3:35 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
Quote:
S&P downgrades several of Fannie Mae's ratings
By Sue Chang
Last update: 4:33 p.m. EDT Aug. 26, 2008Comments: 3
SAN FRANCISCO (MarketWatch) -- Standard & Poor's Ratings Services on Tuesday cut several of Fannie Mae's (FNM:Fannie Mae)
ratings, including its risk-to-the-government standalone issuer credit rating to A- from A, its subordinated debt rating to BBB+ from A- and its preferred stock rating to BBB- from A-. All the ratings downgraded remain on review for possible further cuts. S&P said the move reflects increasing uncertainty about whether government support will extend to these securities in the context of further deterioration in the asset quality of Fannie Mae's mortgage portfolio. At the same time, the ratings agency affirmed Fannie Mae's senior unsecured debt rating at AAA/A-1+. "The affirmation of the long-term AAA and short-term A-1+ senior unsecured debt ratings reflect our expectation of continued government support for the viability of Fannie Mae and its senior unsecured debt, as represented in the Treasury's Economic Stimulus Plan released earlier this year," said Victoria Wagner, an S&P credit analyst.
S&P Lowers Ratings on Fannie
By LAUREN POLLOCK
August 26, 2008 4:55 p.m.
Standard & Poor's Ratings Services lowered its preferred-stock and subordinated debt ratings on mortgage giant Fannie Mae, reflecting increased uncertainty about whether government support will extend to those securities in the event of further deterioration of the company's mortgage portfolio.
The moves mark the latest blow to the ailing mortgage giant and add to the worries of shareholders, who have been fretting ever since Congress last month gave the Treasury authority to make loans to Fannie Mae or smaller rival Freddie Mac or buy shares in them.
In cutting its preferred stock rating three notches to BBB- and its subordinated debt rating by one notch to BBB+, the ratings agency noted the long duration of the weak housing market and the rising severity of residential mortgage losses are driving credit costs higher and Fannie Mae's operating earnings lower. Both ratings indicate below-average credit quality.
WSJ _________________ It's already over, now it's just a matter of adjusting.
Posted: Tue Aug 26, 2008 3:52 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
When I bought my house 15 years ago it was worth 94k. Two or three years later I refied and was so happy it was worth a little over 100k. during the boom I watched the price go to almost 300k. Now zillow says its worth 150k. To me that is near a bottom. But this is my family home, and my thought is once I make my last pmt the house becomes worth ZERO. This is the home that will hopefully be given to one of my kids someday. Even if we all have to live there together forever,, we will have a home.
I do feel bad for the many underwater. They have to really think hard weather or not it is worth it to stay and do they REALLY LOVE where they are.
God I hope the bottom has come, its not the answer to the main problems by a long shot, but at least it could help confidence
Posted: Tue Aug 26, 2008 7:34 pm Post subject: Re: Housing and Economic Collapse - In Progress #3
shortonoil wrote:
June - Case-Shiller new home
Yearly % -15.92%
In actuality home prices have probably dropped more than 50% from their ‘05 highs.
Actual case shiller charts are public. You can get there at the link below. For the 20 city index, looks like a -19.2% drop from the peak in July of 2006. Price levels have returned to July 2004 levels.
Typical housing led recessions in the past resulted in 30-35% losses in home values from the peak. That wouldd put home prices at early 2003 / late 2002 levels.
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