Nothing germaine to this argument over what issue is the "benchmark". The Thirty Year carries the largest risk premium regarding percieved solvancy worries. Period. And of course 10yr yields have fallen in the same fashion as have Long Bonds anyway. You don't understand markets do you? I'm going to start a thread in Trading on this so I'll be brief. Wall Street is not the cause of falling home prices-rather it's falling home prices that are the cause of Wall Street's problems. This "paper" you here about 24/7 is a de facto bet on higher real estate valuations. Knowing how weak prices already are and how much further they can sag means NOBODY is willing to buy asset backed paper. If I think your home will break 50% (mine is probably down 30-40% from it's peak) and I think you're a default risk then there's virtually no yield high enough to induce me to buy your mortgage. Or office complex or strip mall. Your article? My home in Florida had already topped before Gramm etal. The Democrats will get no where talking about predatory. Other than some Mexicans in Stockton it's a non-national issue. I've been saying this since the late 90's when a former classmate was indicted for using Chicago street gangs for mortgage fraud-the fraud FAR out paced the predatory. This was another blunder by Obama. Try trotting out Joe "I'm up big bankings ass" Biden on this issue.
You are right, to an extent. Falling prices DO hurt wall street, but the surge is housing supply was caused by the over-leveraged financial companies buying every bit of paper they could get their hands on, this led to thoe house of cards situation. It's now a vicious circle. Now we are in the situation you describe, but make no mistake it was the greed of few that caused the pain of many.
People need take responsibility for their own actions. I do and I'm sure you do to. How many unsolicited credit card offers do you receive? Weekly right? Why do banks offer you these cards? To make money, eh? Theoretically they make the spread between depository rates and the CC rate. Is that âgreedâ? Perhaps in a philosophical sense everything is greed. Why though is a lender who marks up money any more or less greedy than the guy marking up my burrito? Both of them are there to facilitate trade. That doesn't mean I have to make the trade. Arguing that the plentiful availability of capital caused higher asset prices is clearly true. It's akin to lowering margins. What's equally true is the proliferation of lenders and thus âpaperâ allowed borrowers to receive mortgages at rates which were the narrowest spread to Treasuries in history. Economic democracy. Wasn't it Democrats who argued for years that mortgages weren't accessible to lower income Americans? For every schmuck in Detroit who got over extended on the highs there's a black or Mexican who borrowed 150k in 2002 for a home in Watts or the Bronx and could flip it for 300k today.
IMAO: An Idea "I was thinking of a good strategy for President McCain. Anytime he needs to get something passed that the liberals will be in big opposition to (like anything useful for the war), he just needs to have Palin come out and give a televised speech. It can even just be here waving and saying, "Hi!" The left-wing nuts will all shriek and scream and fling poo in reaction and completely forget about whatever McCain is doing."
Whenever there are discussions that involve reported numbers like GDP and unemployment etc, I always wonder about the numbers themselves. Things like GDP and CPI have been altered in their calcs over the years for political reasons, so how do you create a proper foundation for comparison? Like the old computer programmer saying, "garbage in, garbage out".
Could that have anything to do with the non-stop fed interest rate reductions that were used as a crutch to unnaturally prop up the market? I'll be happen to listen to any education you wish to give. Just so long as you don't try to use an anecdote in your reasoning. Well that's an interesting theory, that the NINJA's (no income, no jobs, no assets) who were given mortgages and then defaulted caused the problems for wall street. But please god just don't try and buttress this deflecting theory with an anecdote... please... An anecdote!?! Dang it! I was really hoping we were making progress here... Well since McCain has just trotted it out you probably meant to say "McCain."
People need take responsibility for their own actions. I do and I'm sure you do to. How many unsolicited credit card offers do you receive? Weekly right? Why do banks offer you these cards? To make money, eh? Theoretically they make the spread between depository rates and the CC rate. Is that �greed�? Perhaps in a philosophical sense everything is greed. Why though is a lender who marks up money any more or less greedy than the guy marking up my burrito? Both of them are there to facilitate trade. That doesn't mean I have to make the trade. Thats true, however I'm not sure why in the world you are assuming the only people hurt by this debacle are the ones who made the "trade". Everyone has been affected, some more than others. But the economy as a whole has suffered, not just irresponsible borrowers. Let me tell you a personal situation I am in right now. I realize that this situation is very rare, but its just an example. I built a house and closed on a 30 year fixed loan (granted I'm 21, but i was mortgage broker for a while, it wasnt my first rodeo). The loan was CLOSED and SIGNED and was made to be put in affect upon the completion of the home. During the construction period all hell broke loose in the secondary market and basically the lender found out they would no longer be able to sell my loan. I closed at a fixed rate of 6.75%. The rate I got stuck with? 11%, on $695,000. The bank will not honor the contracts I've signed, and while I made the 11% payment for a while I have refused to, and they have threatned legal action. I now am involved in a lawsuit with a huge company, what exactly was I supposed to do? You may or may not believe me, but thats how the situation is. Honestly, back in my days as a broker, if I would have heard that story I wouldnt have believed it. This is just one example of how people can be affected and just happens to be my personal one. We could also go into inflation which is due in no small part to the fed dropping rates to boost an anemic stock market...anemic because these irresponsible companies are so large they impact the entire sector and market. Of course we could also mention the fact that builders were building as fast as possible, as housing were selling fast because loans were so easily attainable. Now we have all these excess houses, including the ones that are foreclosing-couple with the fact that now credit restrictions are so tight even well qualified people are having trouble-and you get a housing slump. That it turn carries over to pretty much every other aspect of our economy imaginable. Arguing that the plentiful availability of capital caused higher asset prices is clearly true. It's akin to lowering margins. What's equally true is the proliferation of lenders and thus �paper� allowed borrowers to receive mortgages at rates which were the narrowest spread to Treasuries in history. Economic democracy. Wasn't it Democrats who argued for years that mortgages weren't accessible to lower income Americans? For every schmuck in Detroit who got over extended on the highs there's a black or Mexican who borrowed 150k in 2002 for a home in Watts or the Bronx and could flip it for 300k today. I have closed a lot of subprime loans. So in this area I have some experience. Mortgages to unqualified minorities may be a part of the problem, but I PROMISE you, they do not constitute anywhere near the bulk of it. The lenders did not care. I never funded a loan for somebody who didn't know exactly what they were getting, so I have a clear conscience. But let me tell you this, I could have financed your cat. Not for small loans either, I'm talking 400,000+. The secondary market was buying everything in sight. I remember no doc loans. A lot of people think no doc loans mean you don't have to prove your income. HA! No doc means to leave the entire 1003 (loan application) BLANK (with the exception of the basic name, address, SS# info) and if the credit score is high enough, thats IT. Not only do you not prove your income, you dont even say what it is. The lenders didn't care because Wall street didn't care, now look at us.
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"People need take responsibility for their own actions. I do and I'm sure you do to." When you made your foolish and boastful incorrect S&P call, claiming that if you were wrong with that call... you would leave ET forever, did you take responsibility and stay true to your word? Or did you just change your handle and act as if nothing had happened...
I changed my handle. "Pabst" made the call. "Pabst" retired his screen name. On ET if I say "I" that's PP. In real life I'm not Pabst. Do you sign your checks as loZZZer?