Why Mortgages Blew Up

"And I wanted to note, that Ex-Texan has predicted all of these, for several years, on this forum, perfectly accurately. Many people appreciated the tip - but some gave nothing but abuse and complaints toward Ex-Texan, who was telling them common-sense that they didn’t want to hear. I hope they are wiser now."

I am in total agreement with your overview of Ex-Texan's repeated warnings over the last few years concerning future, major market problems, triggered by the economically dangerous subprime banking loan schemes.

In terms of those dishonest, commission greedy, lurking parrots for the real-estate & banking industry which viciously mocked, hacked and feebly attempted to discredit every warning Ex-Texan issued about the pending issues which evolved into today's market realities - what do you state now?

To the previously exposed cyber subprime loan racketeers who still lurk on here, come out and state,, as you did before that the following headlines are 'all lies', ' it's all nonsense', 'just keep flipping houses' and 'it will never happen'.......

U.S. Economy: Housing Starts Slump to 10-Year Low (Update2)

Japan market tumbles 5.4%

Worst banking crisis in decades, says Blue Planet IM

Run on Treasury Bills Spurred by Subprime Contagion (Update5)

“In the scramble for liquidity everything gets sold, including gold. Cash is king in a credit crunch.”

Thanks for that excellent reminder. Gold/silver index is down again this morning.

I think that we will see these scrambles going on for years. A couple of weeks ago, my wife went to lunch with a group of women (they and their husbands should know better), and everyone but a real estate broker and my wife had huge interest only loans. The husbands and often the wives have good paying jobs, yet they opted for extreme luxuries now. Luxuries like 100,000 $ kitchens, $30 to 50k outside cooking/dining areas,new BMers, Mercs, Lincoln Navigators, 25,000 $ Rolex’s, long cruises on the QE2 in suites and on and on.

The adjustable rate mortgage trap caught 3 women in my wife’s office. They and their husbands could only get interest loans, and they are sitting on time bombs.

Yesterday during a phone call to a friend in Sacramento, he is seeing the same thing in his upper blue collar neighborhood. Sac’s market is in the dumps and will stay there for awhile. New swimming pools, new carpet torn out for wooden floors or new carpet going over 2-3 year old wooden floors. Yard landscapings ripping and tearing out fairly new plants and putting in new plants, irrigation systems and expensive outdoor cooking stations and dining areas. Sac from May through Sept is often too hot to eat or cook outside.

So your cash is king scene will be repeated for years out here in Californicator.

Until.........someone cuts rates. Not complicated.

Hardly. The big lenders that funded the likes of Countrywide aren't going to change their minds because of a Fed rate cut. They no longer trust the risk ratings on American mortgage paper. It's not a problem of interest rates, it's a problem of protecting capital.

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