Timberrrrr...

[motordavid]

And, look out below. Another week or two of this mkt gagging
on itself and I maybe filling out this form :



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osei4004

[rayxi]

I know what you mean. Yikes!
Good thing I increased my cash position recently but it still hurts.

[blondboinsd]

I know I was reading about Countrywide today, not too good

[Wagner]

Hmm, IMO this was an issue created (almost entirely) by the bank/mortgage & home builder industries.

The average home buyer over the last 5-8 years has been able to get nearly any amount of money (relatively speaking) for a home purchase with little if any real check into whether it was in their realm of ownership. They were wooed in with talk of "refinance it later", "interest only now, pay the rest later when you refinance" and other lender jargon. In doing so they created a market of "bad" investments and essentially killed credit ratings. Why? Because over 5-8 years peoples credit scores went up based on paying interest only loans or the infamous sub-prime loans. This result now is reaping home owners who looked like sound investments based on credit scores but were inherintly poor investments for lenders as they relied on paying less then the deemed value of the asset.

With that you now have over-valued homes in almost every market, and a large (15% or so) group of buyers who find it impossible to refinance their asset and now watch their credit score drop and their homes taken away.

Personally, I'm not sure how the market corrects this issue or how long it would take. That coupled with gas prices and complex foreign policy makes this an even bigger issue. This is one, and possibly the only, case where I find myself agreeing that big business is the reason for all this trouble. (I usually would say 'buyer beware' however in this case the industry pulled an Enron on the consumer).

[blondboinsd]

Originally Posted by Wagner

Hmm, IMO this was an issue created (almost entirely) by the bank/mortgage & home builder industries.

The average home buyer over the last 5-8 years has been able to get nearly any amount of money (relatively speaking) for a home purchase with little if any real check into whether it was in their realm of ownership. They were wooed in with talk of "refinance it later", "interest only now, pay the rest later when you refinance" and other lender jargon. In doing so they created a market of "bad" investments and essentially killed credit ratings. Why? Because over 5-8 years peoples credit scores went up based on paying interest only loans or the infamous sub-prime loans. This result now is reaping home owners who looked like sound investments based on credit scores but were inherintly poor investments for lenders as they relied on paying less then the deemed value of the asset.

With that you now have over-valued homes in almost every market, and a large (15% or so) group of buyers who find it impossible to refinance their asset and now watch their credit score drop and their homes taken away.

Personally, I'm not sure how the market corrects this issue or how long it would take. That coupled with gas prices and complex foreign policy makes this an even bigger issue. This is one, and possibly the only, case where I find myself agreeing that big business is the reason for all this trouble. (I usually would say 'buyer beware' however in this case the industry pulled an Enron on the consumer).

I totally agree, here in San Diego our market is INSANELY overpriced, in my condo building prices went in presale (DR Horton brand new construction) for roughly 350 (at the low)- 550/600k, ranging from a small 1 bedroom to a full top floor 2/2, the price when I moved in (in NOV 2006) was 230-415ish (I have a 2/2) and now their 230-315, I can only imagine the people who bought those condos in presale I know 3 people have already defaulted on their loans here (or so I've seen) which sucks because it hurts our value even more, and their are still tons of condo projects just being built as we speak, I have no idea how they will sell

[Thunder22]

you must have missed the late day rally... the market closed down only 13.

[Wagner]

Doesn't change the 11.5B Countrywide just had to borrow from over 40 banks.

[motordavid]

Originally Posted by gresch

you must have missed the late day rally... the market closed down only 13.

G,
I didn't miss it, (it was down 340), but it has barely climbed out of the
past few weeks' abyss.
And, as you know, that Dow 30 is not the M, (and the Dow multiplier
only serves to compound the gains, throughout the past months of "ups", imo.)

I have a very broad port., but I have only 4 ups today vs 16+ downs ;
I am pleased to be about 40%+ "cash", cash equiv., a couple of ETFs of
Euros&BritPounds, et al, vs 60% equities.

NEway, things may get uglier before they get better looking, I suspect.

Not crying, but I smell trouble, mid-longer term, in River City.

[AzNMpower32]

Yeah, I have a feeling the worst is yet to come. However, in the end, people will finally stop buying what they cannot afford. Glad we sold our house for a nice sum now, instead of having people afraid to buy later.

[Wagner]

That is the problem, they were told they could afford it.