Market crash: are we there yet ?

[Rickm505]

Originally Posted by PBzeer

Funny about that Rick, I guess being an attorney in real estate isn't much of a knowledge base, huh?

That's correct. They close the loans and they're done with them. They are experts at closing loans but have no need to know what happens to the paper after it leaves the closing table.

[sailhog]

Wind,
Thanks for the thoughtful explanations. I think I've got my mind around it, but I'm going to re-read your post later when I have more coffee in my blood. Don't be surprised if I have another question for you later... Ar, ar, ar! Thanks, Cap'n!

[PBzeer]

Rick, you're priceless. You'll accept the pronouncements of a constitutional lawyer on real estate, but not someone who's had anything to do with the business. Somehow I doubt that any law school offers a degree in closings, or even a major. I suspect, one has to exhibit a slightly greater range of knowledge.

So, you disagree with the assertion that bad debt is at the root of the current financial situation?

[wind_magic]

Originally Posted by sailhog

Wind,
Thanks for the thoughtful explanations. I think I've got my mind around it, but I'm going to re-read your post later when I have more coffee in my blood. Don't be surprised if I have another question for you later... Ar, ar, ar! Thanks, Cap'n!

It's fun stuff.

One more example short trade that has actually happened a lot lately -

Banks have been going up and down in price so much that it is difficult for many traders to go long or short because they have no idea from day to day what is going to happen. But what they DO know, is that Bank ABC is going to do worse than Bank DEF. So what they do is short ABC and use the proceeds to buy long DEF. That way it doesn't matter if banks go up and down in $us price, all that matters is that Bank ABC falls in price more than DEF and doesn't gain price as much when prices rise. Sort of a, "I don't have to run faster than the tiger ..." trade.

[Rickm505]

Originally Posted by PBzeer

Rick, you're priceless. You'll accept the pronouncements of a constitutional lawyer on real estate, but not someone who's had anything to do with the business. Somehow I doubt that any law school offers a degree in closings, or even a major. I suspect, one has to exhibit a slightly greater range of knowledge.

So, you disagree with the assertion that bad debt is at the root of the current financial situation?

Of course not.. Bad mortgage products are the root cause of this. Frankly, I think we're fortunate to have Secretary Paulson and Ben Bernacke as the people tasked with resolving the crisis.

They will solve it....

This has nothing to do with an attorney who can only make a living closing loans and when that ended became a right wing talk show host. From the knowledge he exhibited in that article, I'm surprised he ever passed a bar exam. Not that morgage knowledge is a requirement..Learning is.

[smackdaddy]

Originally Posted by Sonofasonofasailor

Rick, I realize the mortgage game is slow right now but you should find something more productive to do with your time than regurgitate political & economic blogs on Sailnet.

If you were even 10% as learned on the matter as you think you are then you wouldn't have the time to be here 24/7.

Dude - do you just crap on everybody, in every thread, everywhere, that has an actual opinion on something?

[PBzeer]

You agree with his assertion, yet claim he has no right to make it. And if you go back through the Congressional Quarterly since '98, you will see there was a concentrated effort to make mortgages available to people without sufficient means to ultimately pay for them, which resulted in the subprime market.

[jrd22]

Arrrrrgh... short sellin be simple matey's. Ye jest call yer slimey broker and yell " sell 10 contracts of Feb. bellies at the maket, ya lubber!!!". Then ya jest wait till ya have made enough if the price goes to the bottom and buy 'em back, or if the dirty buggers run the price up agin ya, ya scream at yer bloody broker "Buy,Buy,Buy em back ya scrub!!!" Tis lot's of fun.

It's talk like a pirate day, case ya dinna know. Arrrrgh.

[PBzeer]

Now I'm confused again. Seems the root problem of the present financial difficulties is bad loans. I read that from the left, the right and the center. Seems to be pretty much agreed on (shoot, even Rick agrees). So who can explain to my why it's Bush's fault or the fault of deregulation, that lenders made all of these bad loans?

[wind_magic]

Originally Posted by PBzeer

Now I'm confused again. Seems the root problem of the present financial difficulties is bad loans. I read that from the left, the right and the center. Seems to be pretty much agreed on (shoot, even Rick agrees). So who can explain to my why it's Bush's fault or the fault of deregulation, that lenders made all of these bad loans?

My thought on this is that after at least a thousand years of economic boom and bust cycles we should pretty well realize that there are going to be boom and bust cycles.

Credit expansion begets credit contraction. That's just how it is.

To everything there is a season ...