Man this pisses me off -> - Page 3

SANguru · #21 08-31-2007, 06:10 PM

stock market and the housing market are only small pieces to the puzzle. It's the credit market you really have to worry about. Don't forget US borrows money from other countries too. If state doesn't have liquidity and that only means that they can't have bonds for schools, improvement for public roads, etc (read pothole city) you are going to have bigger issues. Why do you think Arnold and the state had such a tough time with the budget?? It's a whole spiral effect. BTW, for something closer to home, how do you think the paramount and 21st century, dreamworks out there finance their projects... It sure as hell ain't all cash. Guess what happens when they don't have funds for projects...

food for thought. Bank of America AND Countrywide were HEAVILY involved in the subprime market also. You can throw your argument out the window. Like I said, I am not condoning the behavior of borrow more than what you can afford. We have to look past who fcuked up and lay blame. We should be focusing on creating a somewhat soft landing to ensure credit quality for the nation as a whole. BTW, my wife is a VP at very large brokerage in the credit market and she warned against all of these a couple years ago so some insight from insider.

Quote:

Originally Posted by B-Line

You have got to be kidding me if you think we are just naive. You don't think we realize that default and foreclosures are driving down the stock market and the housing market?

-- But I am ok with that. The market needed to correct and property values needed some cooling. Lets get rid of the trash, start clean with buyers who can actually afford what they are buying, and let the market self correct.
- Real estate is not a short term investment, and I could care less if my values have gone 20% in the last 4 months, they will climb back up at a rate dictated by real world values, not stupid, interest only, 5 year mortgages.

-- And I don't blame the brokers, if they forged documents that's one thing. But most where just selling a product to consumers who were more than willing to sign on the dotted line to make a quick buck.
Nothing in life comes that fast or that easy without an expected, quick turn.

Can't afford your house now.. MOVE... Chances are most likely you couldn't afford it when you bought it and you mortgaged your future. Taking a big loss on the property? Then you shouldn't have bought something you coulnd't afford to hold onto until the market corrected.

You want to buy a house, don't be a putz. Call a reputable bank, ala Bank of America. Pay the appropriate amount for a 30 year fixed mortgage (6% is a fantastic deal), and ride the wave's of an up and down real estate market..

But don't go crying to uncle Sam that it's not fair, because your neighbor who is living in the identical adjacent house, is paying twice what you are for the privialge, but at least they locked in a long term rate.

B

Sponsored Links

DWill · #22 08-31-2007, 06:41 PM

Hmmmm, seems to me no one from government came to my resuce when the stock market dropped and the margin calls started.

I took my beating. Had to down size home and cars, ended up divorced ( not necessarily a bad thing ) got my credit beat up pretty bad etc, etc...

But I worked my way back.

Seems that it shouldn't have taken a rocket scientist, or even an economics major to figure out the you couldn't afford a $600K house on a $50K - $60k income.

You screw up you take responsibility for it and learn from it.

I read today that there are something like 2MM of these loans still out there that will adjust over the next 2 years. I wouldn't look for this to get too much better anytime soon...

kirkX5m · #23 08-31-2007, 07:28 PM

what also troubles me is that large, i mean we are talking fortune 500 companies like BofA, Cwide and even IBanks like Bear Stearns played this subprime game and are losing their ass BIG TIME. All those analysts, all those smart ivy league school schmucks and this debacle is unfolding. AMAZING!!!!!!!!!!!!!!!!!!!!

SANguru · #24 08-31-2007, 07:49 PM

Quote:

Originally Posted by kirkX5m

what also troubles me is that large, i mean we are talking fortune 500 companies like BofA, Cwide and even IBanks like Bear Stearns played this subprime game and are losing their ass BIG TIME. All those analysts, all those smart ivy league school schmucks and this debacle is unfolding. AMAZING!!!!!!!!!!!!!!!!!!!!

here's what you have to consider - if all your competitors are jumping in on doing these loans and grabbing large market share of the products and profiting, you in turn will need to jump in and get market share even if it is agianst the wishes of your market risk officer. Of course, they do hedge on the other side to balance out the risks but still you can never have an instrument that has 0 risk even with a say a AAA insured bond as rated by Moody or S&P.

SANguru · #25 08-31-2007, 08:53 PM

so very interesting that you brought that up and i quote:

Originally Posted by MrLabGuy

Sorry but if you were stupid enough to get into a RISKY MORTGAGE you should have thought twice about buying a house you could not afford in the first place.

I sure hope you're not calling yourself stupid. As with any investment you have risk. It's all about how much risk you are willing to take. You win some you lose some.

Quote:

Originally Posted by MrLabGuy

Example...I took out a 5 year adjustable loan on a condo rental I own and rent out about 4 years ago. I had every intention of selling it before the loan adjusted to a higher rate as part of a strategy to get the most out of my investment.

It now looks as though I will lose out because the market is flooded with condos and the value has dropped about 75,000 in the last 6 months.

Good news for me is I've owned the property for about 20 years which I purchased for $87,000 as a first home. Even in this depressed market it will go for $325,000 so I'm not hurting so bad after-all.

Motto of the story is I gambled and lost about 75-80K but will live with my decision. My overall strategy of buying property I could afford had paid off in the long run.

MrLabGuy · #26 08-31-2007, 11:52 PM

Quote:

Originally Posted by SANguru

so very interesting that you brought that up and i quote:

Originally Posted by MrLabGuy

Sorry but if you were stupid enough to get into a RISKY MORTGAGE you should have thought twice about buying a house you could not afford in the first place.

I sure hope you're not calling yourself stupid. As with any investment you have risk. It's all about how much risk you are willing to take. You win some you lose some.

Hardly, in my case it was in investment property I'd owned for almost 20 years. The loan was minimal and I planned to sell the condo in a few years prior to the 5 year term.

At the time of the loan it was a sound move considering the real estate market 4 years ago. Same goes with the stock market...You win some and you lose some. Good ideas today are a bust tomorrow.

The big difference here is that I did not take on more loan than I could financially handle and I'm not looking for a bailout. What I am doing is refinancing to a 30 year fixed which still has a decent rate. I'll sit on the rental property for a few more years and wait until the inevitable up-swing in the market. I ended up losing a little money in the short term out of equity but I'll recover without any government subsidy.

Real estate is an investment just like the market...You win some and lose some...When you lose you lick your wounds, learn to diversify and come out swinging.

Michael

Wpcmac · #27 09-01-2007, 12:47 AM

Two words -"Personal Responsibility". I love my country, but too often the American public looks to place the blame where it does not lie. People who bought more house than they could afford, made bad decisions.

If you invest in the stock market and lose, it is not the fault of your broker or the companies in which you chose to invest in. The same holds true for what could be the largest investment in most peoples' lives. I think people need to stop trying to blame everyone else for their own ignorance.

Quicksilver · #28 09-01-2007, 04:55 PM

Maybe and maybe not. Even the best investor may be no match for a scrupulous con artist called a broker. Think about it. From year to year the average Joe continues to vote for politicians who promise the moon and deliver nothing. And they continue to buy cars from slick talkin car salesmen who rip them off. Do you honestly believe that others couldn't be suckered by dishonest real-estate brokers, loan agents, and bank officials?

Quote:

Originally Posted by Wpcmac

If you invest in the stock market and lose, it is not the fault of your broker or the companies in which you chose to invest in. The same holds true for what could be the largest investment in most peoples' lives. I think people need to stop trying to blame everyone else for their own ignorance.

Sponsored Links