Market crash: are we there yet ?

[eryka]

Originally Posted by sailaway21

The second thought; "there's no cure for stupid".

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SWAY, your whole post was nicely put, and I'm a big believer in Darwin awards

OTOH, if there's a housing bust, hence fewer construction jobs, it may change the dynamic of the 'illegal immigration' discussion

[Sapperwhite]

Originally Posted by sailaway21

Plan long term, plan conservative, live within your means, and remember that today's business page is tomorow's bird cage liner.

Hahahaha
You're talking to a bunch of guys that buy the biggest boat they can afford.

[Sapperwhite]

Originally Posted by Cruisingdad

THe housing market is NOwhere NEAR correcting, in my opinion. I have seen both sides. I was in FLorida before it took off and at the beginning of the end. People there kept saying, "Oh... it has bottomed out." Whatever, dream on.

Thats what people need to take into account here, that housing bubbles don't pop in a a year or two, they fizzle for about 15 years. And yes, people will stop spending because they've invested everything they have into one thing, a house they couldn't afford.

[Sapperwhite]

AH HAAA
Lookie lookie, I've got a cookie.

"The Federal Reserve, trying to calm turmoil on Wall Street, announced Friday that it will pump as much money as needed into the U.S. financial system to help overcome the ill effects of a spreading credit crunch."


Pump as much money as needed............ready to see the value of your dollar go down? Kinda starting to look like pre Hitler Germany. Ready to stack all your cash in a wheel barrow to go down to the store and buy three turnips to boil with your old shoe leather...for taste of coarse.

http://finance.comcast.net/www/news...._creditturmoil

[sailingdog]

Of course such inflation is very common among fascist regimes.

[PBzeer]

The sky is falling, the sky is falling. I wonder how many of you realize the stock market is based largely on intuition? On how the Fed says something? Not what they say, but how they say it and what it really means, which no one but they know for sure. While it certainly flucuates on factual information, most of the real spikes, up or down, occur based on perceptions.

And this in a country where they spend the entire budget of many third world countries on the Super Bowl Halftime Show. A country where a person can work and learn their entire life, and be demonized for making the same kind of money a second string football player makes. When's the last time you read about the inequity of sports or celebrity salaries? For something that is really no more than a blessing of genes.

In many ways, the biggest problem in this country is a lack of perspective. People bemoan $3 dollar a gallon gas, while they drink a $5, 20 OUNCE, latte.

SD - "fascist regime"? What self respecting fascist would allow a Cindy Sheehan to live, much less protest? Or allow the NYT's to actually solict suggestions on how best for a terrorist to attack us? Or .... to even allow you the venue to call them fascist? The list is endless, from the ACLU to MoveOn.org, none of which would be allowed in the totalitarian "regime" you so frequently cite.

I don't say this in any way as any thing personal. People are bombarded by those talking points daily. Just like "evil oil", bad big business", etc., etc., ad nauseum. Then they are presented with an Al Gore, a blatant hypocrite, as a role model.

__________________________________________________ __________

Perspective people, perspective. Perspective and context. Realize that your family and friends are what come first, and then understand that there is nothing worth sacrificing them for. Then you can look around and see what is truely of value and significance.

Ok, enough preaching. I never expect people to agree with me, only that they think ...... actually think about what they believe. Here though, is what I believe the real difference between the Left and Right is: The Left tries to refute facts with feelings, the Right tries to refute feelings with facts.

[sailingdog]

Originally Posted by PBzeer

SD - "fascist regime"? What self respecting fascist would allow a Cindy Sheehan to live, much less protest? Or allow the NYT's to actually solict suggestions on how best for a terrorist to attack us? Or .... to even allow you the venue to call them fascist? The list is endless, from the ACLU to MoveOn.org, none of which would be allowed in the totalitarian "regime" you so frequently cite.

Fascist regimes never start out as totalitarian regimes... that takes time.

[Artwerke]

This Real estate thing is kinda hard to figure, I saw an 1200 sq ft bungalow in L.A. selling for $800,000, on HGTV last week, There's a very similar looking house a mile away from me selling for $35,000. We've got 3.5% unemployment here, so it's not a depressed Ghost town.I guess it must be worth 3/4 of a million to see Hollywood Hills in the distance instead of the McKinzie Mts. Go figure. Art.

[sailaway21]

Another history lesson.

Rampant inflation is not common in fascist regimes; out of control inflation is what causes fascist regimes to be brought to power. A difference not without distinction.

[Rickm505]

As a guy who makes his living in the mortgage industry, I feel compelled to post on this subject. On Aug 4th the secondary mortgage market shut down completely. Those of you who understand the ramifications... enough said.

For those of you who aren't familiar... all mortgage lenders make loans and then either sell that mortgages or securitize them. This brings the money back to them so they can loan the money out again. Last week no one anywhere on the planet would buy those securities. Our entire credit market has come to a halt. Thursday and Friday of this week, the FED pumped in $34 billion to bolster liquidity, accepting those very same Mortgage Backed Securities as collateral. These MBS are the very same bonds no one else would touch. This stemmed the stock market crash. The problem is that this injection of cash was done as a 3 day loan. That's right, the banks have to pay it back on Monday. Not only is this crisis not over, it hasn't even started yet. The DOW will be below 12000 in two weeks as there is no easy way out of this mess.

What this means to people on Main St. as opposed to Wall St.

Loan products are being sharply curtailed as we sit here and type. My product line has been reduced by 60% over the last 4 days, and I'm not talking about sub prime here. I'm talking normal mortgages. Many banks have folded already as they can no longer find any money to lend no matter how credit worth their borrower is. My company may not survive this credit crunch. This situation is getting worse every day.

What started this mess is that for some unknown reason Moody's decided to rate subprime MBS's as AAA grade paper. When sub prime loans started defaulting the large institutions were rightfully pissed. What they thought were high yield safe investments turned into valueless junk. When this happened the entire market got out of these investments as fast as they could and today no one trusts any MBS regardless of it's quality. Trust has been broken. If no one buys these things, banks can't make loans. FNMAE and Freddie Mac are regulated by law as to how much they can lend. They are already maxed out. If very few can borrow, this sinks the entire real estate market which is 30% of our economy.

Is this serious? You do the math.

As for ARMS. There were good reasons for offering those products.... at the time. It's true that with the real estate market tanking, home values in most markets are contracting. This situation makes it impossible for those people with ARMs to refinance. Those loans are recasting now. The borrowers can't afford the payments. You know what happens next.

Cruising Dad has it right. The system is collapsing because real income has shrunk the last 3 years. Americans make less today than they use to. This isn't opinion, these are the numbers.

Our economy is a house of cards and someone just pulled one of the supports out from under it. All we can do is watch and see what happens.

I've edited my post and added this link to a Bloomberg article which explains what's going on much more elegantly than I can. One more comment. If you are investing in the stock market. Sell everthing and buy treasury notes until this settles out.

http://www.bloomberg.com/apps/news?p...ZCk&refer=home