Subprime Meltdown; "Just The Tip of The Iceberg"

[Nbadan]

If you're wondering why the job report that sparked yesterday's huge market self-off doesn't reflect today's consumer spending habits, you need to look no further than the huge number of subprime loans looking to get reset in 08...

Calculated Risk: ARM Reset Charts

Next come the huge numbers of evictions...

The fate of the US housing market is increasingly in the hands of an opaque part of the financial system normally associated with moves to evict families from their homes.

Mortgage service companies, which are responsible for calling on Americans to keep up with their loan payments, have assumed a pivotal role in President George W. Bush's market-oriented strategy for dealing with the pending wave of foreclosures in the subprime mortgage sector.

An estimated 6m high-risk subprime loans, worth a total of more than $1,000bn, are outstanding, which will in many cases reset to higher interest rates in the next 18 months, putting more than 2.5m Americans at risk of foreclosure.

"It is sort of like being in New Orleans a month before Hurricane Katrina hit when you know there is a storm coming," said Guy Cecala, of Inside Mortgage Finance.

Economists fear that a wave of evictions of borrowers unable to afford the higher payments will blight neighbourhoods, hit home prices, deepen the worst housing downturn in 16 years, and harm the wider economy.

Financial Times

Now we really know why personal bankruptcy laws were tightened by credit industry insiders during the reign of the do-nothing congress...

[BradLohaus]

I'll just put this here. With the Ron Paul thread going on I forgot to mention that the dollar index has been below the 80 mark for close to 48 hours now.

http://www.kitco.com/

(scroll all the way down, it's in the Indicators chart on the bottom right.)

I still don't think the doomsday scenario is around the corner just because the dollar fell below 80 for the first time. But if it keeps falling and doesn't rebound back over 80 soon, then this could be real trouble for us. In a related note, the Fed will likely cut the federal funds rate by .25% in a little over a week. Now might be a great time to buy some gold. It's been a good time for a while now.

[Nbadan]

[boutons_]

The free market at work. The big guys, having made $Bs that are long gone, will now write it off their losses in their taxes, or go bankrupt, and come back somewhere else.

The little guys will get screwed, always. The whole philosophy of capitalism is to screw the other guy more than he is screwing you.

As George Carlin says, "bend the client over and "service" the account"

The lending companies are as complicit in this mess as are the suckered lendees. This isn't simply a case of caveat emptor.

[smeagol]

The whole philosophy of capitalism is to screw the other guy more than he is screwing you.

So what economic philosophy you champion?

Socialism? Even better still, Communism?

As George Carlin says, "bend the client over and "service" the account"

When I want to learn about philosophy, I usually watch Carlin do stand-up

The lending companies are as complicit in this mess as are the suckered lendees.

True, but the people who borrowed the money are the ones who should take the bulk of the blame.

[boutons_]

smegma, you're ed all your points, so now go yourself.

[smeagol]

smegma, you're ed all your points, so now go yourself.

Idiot, if you can't answer the simple comments I made, just say so and get on with your pathetic life.

Again, you hate capitalism and live in the US (stupid in many dimensions), what system do you champion?

My comment about Carlin, well not much to add there if you look up to him to tell you how to live your life.

Lastly, the idiots who took ARMs should accept their part of the blame in this whole mess.

Care to add anything aside from you one liner "It is all Dubya's fault!"

[Wild Cobra]

I
Again, you hate capitalism and live in the US (stupid in many dimensions), what system do you champion?

I'll put in $100 bux to help buy boutons a one-way ticket to Cuba, Columbia, Venezuela, or some other place.

Maybe North Korea?

Anyone else chip in?

[Holt's Cat]

As if there is even a "free market" at work. Once the task strays from bolding text, croutons sucks hard.

[Switchman]

People can make more $$ during the bad times than they can during the "good times."

I have no sympathy for these people who got in over their heads.

[xrayzebra]

Idiot, if you can't answer the simple comments I made, just say so and get on with your pathetic life.

Again, you hate capitalism and live in the US (stupid in many dimensions), what system do you champion?

My comment about Carlin, well not much to add there if you look up to him to tell you how to live your life.

Lastly, the idiots who took ARMs should accept their part of the blame in this whole mess.

Care to add anything aside from you one liner "It is all Dubya's fault!"

Hey smeagol, can we send him down to you. Or better
yet work out an exchange program, you and your family
for him and his family. Yeah I know, we would come out
better, but after all they are governments working out
the arrangement. Okay, okay, but it was just a thought!

[smeagol]

I'll put in $100 bux to help buy boutons a one-way ticket to Cuba, Columbia, Venezuela, or some other place.

No such country as Columbia.

It's Colombia, and it is far from being communist.

[smeagol]

Hey smeagol, can we send him down to you.

Believe it or not, the leftists we have down here are much worse than boutons

[xrayzebra]

Believe it or not, the leftists we have down here are much worse than boutons

Is that possible? Yeah guess it is, I remember the
communist in Europe in the 50's.

[Wild Cobra]

No such country as Columbia.

It's Colombia, and it is far from being communist.

OK, my bad on the spelling. Isn't there some pretty bad problems there? Am I wrong to understand that it is a country or corruption?

[Nbadan]

People can make more $$ during the bad times than they can during the "good times."

I have no sympathy for these people who got in over their heads.

Nice exhibition of empathy there, but this doesn't just effect 'these people', with all these homes going on the market at once, it drops prices across the board for everyone else too, including you and me. So we could be in for a few years of home price depreciations until we rebuild enough credit worthy borrowers with at least some money in their pockets who can afford to take the risk of buying these soon to be vacated homes....and there will be millions of them....banks will buy back these homes at pennies on the dollars, so you will witnesses some substantial savings if you took my advice a year ago and waited till the hammer dropped on easy-credit to buy a home.....

[Yonivore]

Nice exhibition of empathy there, but this doesn't just effect 'these people', with all these homes going on the market at once, it drops prices across the board for everyone else too, including you and me.

Some would call that a buyer's market.

So we could be in for a few years of home price depreciations until we rebuild enough credit worthy borrowers with at least some money in their pockets who can afford to take the risk of buying these soon to be vacated homes....and there will be millions of them....banks will buy back these homes at pennies on the dollars, so you will witnesses some substantial savings if you took my advice a year ago and waited till the hammer dropped on easy-credit to buy a home.....

So, you do see the upside. People have to live somewhere, whether they're paying for their homes or renting them back from the new owners -- occupancy will remain stable.

[Nbadan]

Some would call that a buyer's market.

Some would call that a down, or depreciating market....

[Yonivore]

Some would call that a down, or depreciating market....

And the rental markets will be up. Woo Hoo.

I have no sympathy for the buyers or the lenders in this fiasco. As some wealthy guy said a few days ago. That's what happens when you lend money to poor people.

[Nbadan]

And the rental markets will be up. Woo Hoo.

I have no sympathy for the buyers or the lenders in this fiasco. As some wealthy guy said a few days ago. That's what happens when you lend money to poor people.

..Yes much better to keep the money amongst those who deserve it...those who God intended...

[Nbadan]

So, you do see the upside. People have to live somewhere, whether they're paying for their homes or renting them back from the new owners -- occupancy will remain stable.

There is never a 'UPSIDE' to reintroducing risk into any market....people have been supporting their own consumption habits by using their homes as banks, primarily because easy credit introduced many new potential buyers into the market and over-inflated home evaluations, well, those days are just about over....

[Yonivore]

There is never a 'UPSIDE' to reintroducing risk into any market....people have been supporting their own consumption habits by using their homes as banks, primarily because easy credit introduced many new potential buyers into the market and over-inflated home evaluations, well, those days are just about over....

Sure there's an upside. Someone is going to be able to capitalize on this and make a freakin' killing.

If we can just keep the government from "bailing" anyone out.

[Yonivore]

..Yes much better to keep the money amongst those who deserve it...those who God intended...

Hey, the proof is in the pudding. I'm not rich but, the man has a point. I guess he could have said, this is what happens when you lend money to irresponsible poor people but, I don't know of any responsible poor person that would have entered into such a dumbass arrangement.

Oh, I forgot...you screwed the pooch on this, didn't you?

[Nbadan]

Sure there's an upside. Someone is going to be able to capitalize on this and make a freakin' killing.

If we can just keep the government from "bailing" anyone out.

See - What's wrong with Globalism 101

[Nbadan]

Hey, the proof is in the pudding. I'm not rich but, the man has a point. I guess he could have said, this is what happens when you lend money to irresponsible poor people but, I don't know of any responsible poor person that would have entered into such a dumbass arrangement.

Oh, I forgot...you screwed the pooch on this, didn't you?

...because multi-nationals never default on loans, right?....