Early signs of a 'double dip' in housing prices

Discussion in 'Economics' started by universaller, Feb 10, 2010.

  1. wave

    wave

    Here is some Credit Default Swaps data.

    Week ending: 2010-01-29
    Term Date Gross Notional Contracts
    2010 1,742,288,036,441 234,074
    2011 1,896,398,921,679 257,526
    2012 3,016,463,113,673 384,312
    2013 2,908,914,629,169 393,936
    2014 2,503,982,094,272 392,031
    2015 818,437,633,724 130,094
    2016 726,867,601,173 127,455
    2017 830,408,809,245 145,579
    2018 313,082,888,274 32,986
    2019 125,181,012,302 10,287
    2020 21,140,420,656 1,169

    Look at all those CDS up until 2014 betting that that reference security behind it would go into default.

    Who has gained the most from the massive defaults in mortgage loans? Who were the parties that purchased these CDSs but had nothing at risk?

    Think about it. If you took out fire insurance on your neighbor's house and it caught fire? Would you help the fire along or go grab your water hose?

    We've a ways to go before seeing bottom in home prices. Anyone who recently bought or buying now is just plain ignorant.
     
  2. wave

    wave

    You see folks, Big Ben knows the Great Depression like the back of his hand. He sees the data, he understands what it is saying. He is a very smart man and trying to stave off what may have already started or about to hit the USA. Great Depression II. The charts say it's coming, I think Big Ben's eyes caught it as well. Go look at 1929-1930 and compare it to 2008-2009.
     
  3. GTS

    GTS

    You really can't draw any conclusions about home prices until the gov't stops messing with the market. That includes gov't MBS purchases, home buyer tax credits, gov't mandated deferred/delayed foreclosure programs, mortgage term modification programs, mortgage principle reductions/cramdowns, et al.

    The sooner the free market is allowed to operate the sooner the real bottom will be found and then it can recover at a normal pace.

    Of course the average citizen doesn't want to hear that, they are on the 6 oclock news crying that they are losing their house so politicians rush in to do 'something' even if it is counter-productive in the long-term.

    Sooner or later prices will have to be determined by market forces and not gov't intervention. We are nowhere near there yet.
     
  4. I am shocked ben is talking about reeling in stimulus measures.... We're about to revisit Great recession 2.0
     
  5. jorgez

    jorgez

    US elevated consumption beyond production and siliconed the difference with credit

    therefore the old manta was ..... 2008 and before ... find some credit, spend some credit

    and now the new mantra is ....2010 and beyond ... earn some money, save some money

    it was fun fun fun until daddy took the credit away.

    and now deleveraging is the new game in town ... it is as though the gov. is responding in a manner completely opposite to the population and the gap is being siliconed with untruths.

    my money is on the people because their power lies in being the only productive engine in the country
     
  6. wave

    wave

    The data says it all. We are nowhere near a bottom.

    Anyone thinking of buying now needs to realize what the attached chart is saying!

    Now the way to play this is to figure out who will be the next Bear Stearns/AIG?

    That detailed corporate CDS data is closely guarded. Which entities will be left standing after this next wave of defaults?

    It can't be made any clearer than that chart. This is the data they don't want the sheep to see. That chart has Benny losing sleep.
     
  7. jorgez

    jorgez

    as I say, "deleveraging is the new game in town.
     
  8. achilles28

    achilles28

    I've said this for a long time here. Nobody listened.

    The math doesn't add up.

    Somebody is making a killing in CDS and it's not showing up on their books.

    If you suggest that large banks bought credit protecting against these MBS and CDO's going under, then restricting consumer access to credit, or at least as a hedge, well yea. The FED made them near whole on the junk they offloaded, they buy protection, which, in essence, is like buying back the tranche from the FED for pennies on the dollar, restrict credit, watch the tranche default, then get a full payout from whomever sold the protection. Soon, the banks are magically "recapitalized". Not just made whole on worthless debt. But DOUBLED their money!!! And who sold that protection, I wonder? I wonder if the FED is operating in these markets too. Perhaps a protection seller??? Just another avenue to clandestinely channel taxpayer monies to even more Wallstreet buddies in the dark.
     
    #10     Feb 10, 2010