Market crash: are we there yet ?

[Rickm505]

Originally Posted by chucklesR

Do it again Rick ! Document how the present administration encouraged John and Mary to take a risk on a house that was too big for them to pay for, using a ARM etc..) Tell me how a politican with a approval rating of what, around 20 got so many people to do what they wanted. Show me the money man.
I love a good story. I'm getting popcorn.

Two words... Alan Greespan. This guy did it almost single handed. First, in reacting to 9/11 he dumped rates 5 points in 12 months. Some could argue this was necessary. What wasn't necessary was keeping them so low for as long as he did. This was the first step in the creation of the housing bubble.

Next ... 2 and 3 year ARMS. Again, if it wasn't Greespan's idea, it should have been as his Wall Street buddies rolled out these programs. This is was created the sub prime mess. I was working for a normal small bank at the time and we watched our volume took a nose dive as Wall ramped up their marketing program on the teaser loans and began systematically changing the way mortgages were made. It was a brand new ball game and if you wanted to play, you had to bring out the same products.

Bearn Stearns owned EMC mortgage
Lehman owned Aurora Loan services
Merrill Lynch owned First Franklin Mortgage

I forget who owned Option One

These investment banks were making money hand over fist in selling MBS to their investors and needed more and more mortgages to fill demand.

There were more but these are the guys who effectively changed the mortgage industry. The Bush administration took a hands off policy, no regulations at all governing these guys. Commercial Banks had regulations, but not Wall St.

more to come

[Rickm505]

Originally Posted by cardiacpaul

If the fed or bush himself were to have said... "hey, wait a second, theres something fishy going on..."
the same pigs would have screamed from the tops of the rafters about not allowing capitalism, they would have bitched to high heaven about the restraints... thats why.

Careful, these 'Pigs' are the same guys who contributed big time to Bush relection campaign and all have White House access. They're Bush buddies so to speak. Hell, he even hired one of them to become his Treasury Secretary.

Sometimes I wonder if you even read my posts, as you keep trying to make the same points which were previously addressed.

[Rickm505]

Originally Posted by Sailormon6

Silence.......

Sck5? Rick? Anyone?

I just was away, not ducking the question.

You are correct of course. Clinton was no prize either. It's just that compared to the idiot occupying the whitehouse these days, Clinton doesn't look so bad.

What's been happening in certain financial areas transcends administrations

[Rickm505]

Originally Posted by chucklesR

Now, once again into the fray - when the BANKING REGULATORS advise not to invest in these and "Roll the Dice Investments Inc" does it anyway - why, oh why should the fed step in and 'fix' it for them?

Ummm... Banking regulators regulate commercial banks, not investment banks.

Actually until last week, the Fed only controlled Commercial banks as well. Now they opened up to investment banks which hasn't happened since the Great Depression.

[Rickm505]

quote=cardiacpaul;287733]So it would seem to the untrained, clearly stoopid simpleton boobs that don't understand why the sky is falling... anyone care to es-plain?[/quote]


Well, the sky obviously isn't falling in your reality. You have to be the most pollyana poster in this thread. For our reality things are much dfferent. So much so that the Fed is panicing. Now why do you think that's happening?

$480 Billion in loans and bailouts

and

350 basis points in rate reductions
8/17/2007 50
9/19/2007 50
10/31/2007 25
12/12/2007 25
1/22/2008 75
1/30/2008 50
3/18/2008 75

I wonder if this has something to do with it?

March 26 (Bloomberg) -- Orders for U.S. durable goods unexpectedly fell in February, led by the biggest slump ever in demand for machinery that indicates companies are becoming more reluctant to invest as the economy heads into a recession.

And there's no conspiracy... the Bloombergs are still good republicans.......

Now maybe if you whirl around three times real fast and click your heels 10 times, this recession will disappear. Or maybe you'll at least end up in Kansas.

[Rickm505]

Originally Posted by chucklesR

Amazing what the press can do isn't it.

I'm not positive, but I think that he misquoted

Housing Prices dropped Nationwide 11%

Not that it wouldn't be the first time someone did that in this thread.....

[Rickm505]

Originally Posted by xort

We see that Clinton passed laws that deregulated the banking industry. That had a direct effect on the current crisis. Ricky then posts "We all should thank Mr. Bernacke as he's shoveling cash into the problem areas and bailing out everyone in sight. We are fortunate to have him."
We know that Bernanke was a Bush appointment. And yet ricky still wants to blame Bush for the crisis. Duhhh?

Xort... Bernacke is a bush appointee.... But what does one have to do with the other? I've already posted how it happened, it's not my fault if you don't read the posts you are supposed to be responding to.......

You'd be better off if you went back to your comic books

[Rickm505]

Originally Posted by sailaway21

So we've got a national foreclosure rate, admittedly trending higher, of less than 1%. Less than 6% are behind on their payments. Which means that, as of the end of the year, over 94% of home owners were paying their mortgage on time..

Almost a good post sailaway.....

Email me your address and I'll send ya a new calculator for your birthday. What does 6% of all real estate transactions add up to? How many trillions? Now multiply that times a number between 30 and 50. This is the leverage the investment houses use when they borrowed against the MBS's. Your number should be between $500 and $775 Trillion.

Now if you want those to default, you better buy a generator, a gun and a couple of thousand rounds of ammo.

Do you really think Bernacke has a choice?

[Rickm505]

This is rapidly becoming a useless thread. Paul thinks world is great and wondering what all the fuss is about. The rest of you are still trying to win the recession argument, which has already begun or is in progress by anyone's measure.

And everyone posting here ignores the facts.

I wish you guys well in your reality. i hope it all comes out alright in the end.

I'm done here, I just don't have time for it these days.

[chucklesR]

Originally Posted by Rickm505

Almost a good post sailaway.....

Email me your address and I'll send ya a new calculator for your birthday. What does 6% of all real estate transactions add up to? How many trillions? Now multiply that times a number between 30 and 50. This is the leverage the investment houses use when they borrowed against the MBS's. Your number should be between $500 and $775 Trillion.

Now if you want those to default, you better buy a generator, a gun and a couple of thousand rounds of ammo.

Do you really think Bernacke has a choice?

Off by a factor of a bit, the below is a bit old (2004 data) says the ENTIRE market, not just the 6% defaulting is oh, 1000 times smaller than the 775 TRILLION you quote:

The MBS market:

The high liquidity of most mortgage-backed securities means that any investor wishing to take a position need not deal with the difficulties of theoretical pricing described above; the price of any bond is essentially quoted at fair value, with a very narrow bid/offer spread.

Reasons (other than speculation) for entering the market include the desire to hedge against a drop in prepayment rates. (This is a critical business risk for any company specializing in refinancing.)

Total market value of all outstanding MBS at the beginning of 2004 was reported to the National Secondary Market Conference ([1]) at over USD 2.75 trillion. This is much larger than the market value of outstanding asset-backed securities The MBS market overtook the market for US Treasury notes and bonds in 2000.

According to Thomson Financial League Tables, US issuance was:

· 2004: USD 729 billion (1,121 issues)

· 2003: USD 904 billion (1,203 issues)

· 2002: USD 767 billion (980 issues)

· 2001: USD 586 billion (837 issues)

Mortgage Backed Securities – Definition and Other Information

I'll go with these numbers vs pie in the sky estimates. Still bad, but not expecting sky chunks to behead me.