Market crash: are we there yet ?

[camaraderie]

Mitch....
I am not at ALL forgiving of the Republican Controlled 6 years of Congress under Bush. They betrayed all the principles Repubs are supposed to stand for regarding fiscal responsibility.
My point was that since the Dems control Congress NOW....they had the ability to block the bailout and did not do so. SO...I blame BUSH and the DEM Congress AND the repubs that voted with the Dems for the bailout.

[SailorMitch]

Originally Posted by sailaway21

Why I'm neither worried nor panicky.
Jerry Bowyer on the Sub-Prime Mortgage Crisis on NRO Financial

Yes i am having fun looking at some old posts on this thread. somehow the value of the sub-prime debacle has grown exponentially from back when Sway was neither worried nor panicky--perhaps because the financial world was doing more risky stuff than first realized. I have not kept a running total of the losses due to these mortgage "devices" but in doing a bit of googling it's apparent no one can figure the bottom line because so many of these mortgages have an unkown market value right now. How can you estimate the value of repossed homes in the hardest hit parts of the country--or in the loss of wealth suffered by each and every home-owner in the country due to the sharp decline in real estate values 9in the trillions of dollars)? The potential tax-payer liability for the Bear-Sterns bailout is estimated to be about $30 billion. Merrill Lynch just lost 4.65 billion in the second quarter and estimates it alone still has over 9 billion in "soured" mortgage investments. a Freddie Mac bailout could cost tax payers nearly $300 billion. that does not include FannieMae, which is in slightly better shape than Freddie.

It sure adds up fast, huh?

[wind_magic]

The best thing to come out of falling real estate prices is that local governments are reducing the high appraisal values that they were using as a tax basis during the real estate bubble. Remember when your property taxes doubled ? Well, at least they are lowering appraisals all over the country to lower your taxes this year.





( and I have a bridge I'd like to sell you too ...)

[Rickm505]

That ridiculous CPI number was released today. According to our government inflation is running at 5.6% when compared to 2007. I've commented on their track record many times in this thread, suffice it to say that real inflation is much higher. Also from Bloomberg:

"Today's figures also showed wages decreased 0.8 percent after adjusting for inflation following a 0.9 percent drop in June. They were down 3.1 percent over the last 12 months, the biggest year-over-year decline since 1990. The drop in buying power is one reason economists forecast consumer spending will slow."

To recap: wages are dropping like a stone, prices are rising like a kite. Consumer spending is 70% of our economy and will decrease, because it has to... Yet, the polyanna's in this thread still won't concede there's a recession and believe everything is just peachy.

It's no wonder Chuckles and Sailaway21 have me on ignore. If I were them I sure wouldn't want my nose rubbed into their somewhat less than accurate predicitions. Although when you compare their predictions to the job the Bush administration has done, our conservative posters offered better insight and grasp of the situation. Unfortunately they still managed to read the data incorrectly and stubornly refused to admit their mistakes... Oh... wait.. that's a republican plank in their platform (grin).

I think I'll wander into some other threads and see what our neocon buds are preaching elsewhere these days as they apparently won't post here any longer. I can't say that I blame them..

[PBzeer]

I don't think anyone is saying things are "peachy". At least from what I'm reading. And while I'm in no way an economist, it doesn't take a rocket scientist to understand that when prices spiral up, as they did in real estate, that sooner or later they have to drop back down to a more realistic number. To assume it won't cause dislocation and discomfort would be naive. But to think the world is going to end, is going off the deep end in the other direction.

What we are seeing, just as in the dot com bubble, is greed and instant gratification replacing common sense. And while economic policy can contribute to that, it is the underlying human nature that causes the problem.

Economies are, and always will be cyclical, and to think otherwise is unwise. The current correction is long overdue, and in my mind, it is a big mistake to try to control it with legislation or other government interference.

[xort]

The sky is falling, The sky is falling

News flash, ricky is posting on another thread!!!!!!!!!!!!!!!!

[Rickm505]

Originally Posted by xort

The sky is falling, The sky is falling

LOL... It already fell.. are these guys this disconnected??

Originally Posted by xort

News flash, ricky is posting on another thread!!!!!!!!!!!!!!!!

Nah, I said I'd wander by and have a look.

[Rickm505]

Originally Posted by PBzeer

I don't think anyone is saying things are "peachy". At least from what I'm reading. And while I'm in no way an economist, it doesn't take a rocket scientist to understand that when prices spiral up, as they did in real estate, that sooner or later they have to drop back down to a more realistic number. To assume it won't cause dislocation and discomfort would be naive. But to think the world is going to end, is going off the deep end in the other direction.

Well, I have to respectfully disagree. The mortgage market as we know it has ended. It's been federalized.

2000 banks are on the edge of failing and would have failed already had the Treasury not changed the banking rules to keep them afloat. These two areas alone are enough to bring America into a prolong recession. Looking outward, one of our allies was invaded and all we could do is pound on the proverbial table. America has neither the money, the troops or enough friends in the world to defend our beliefs.

Things are changing John, where we disagree is that I believe that stating the fact is not being an alarmist.

It's more like "Welcome to our new reality".

[PBzeer]

Reality is in part, a function of perception. And America, as a whole has always maintained a can-do, will-do attitude, and that, I think, is where myself and others are at disagreement with your position.

Whether meant or not, you come across as defeatist. And positive results, require a positive outlook.

(I doubt Bush checked the bank balance before deciding what to do about the Georgia situation, nor will the next president if put in a similar situation)

[chucklesR]

Rick,
I don't have you 'on ignore' I just ignore you. I prefer to be an ostrich to a chicken little. So far my way has proven the better way for me and mine.

I'm making more this year than last year, more last year than the year before, far out pacing 'inflation' by anyone's (even your) scale.
The very real dirty secret - I work for an honest living.

You were hollering about bank failures a year ago. Here's the deal the bank can write me a loan for 500k on my house, which then falls in value by 100k. Now the bank shows a 100k loss of assets - ON PAPER.
The real deal is I'm making my payments on time and the bank hasn't lost a single freaking penny.
Multiply that by the 100's of thousands of guys like me and banks don't fail.
Get over it.
Eventually, chicken littles run out of steam, get a real job and earn some money and start buying houses again. My property goes back up in value and all I really lost was time.
It's called a 'cycle' because it's like a circle, what comes around goes around. Right now you are confused and upset because you are in the 'you had it coming to you' stage of the circle still.
Real investors as opposed to chicken little ex-mortgage brokers understand that.

And now back to threads with a 'sailing' theme, something you never visit on this forum (another thing to make you go hmmmm).