Posted on 08/27/2007 4:06:37 AM PDT by Notary Sojac
I know people are going to hate me for saying this, but I'm not sorry that foreclosures nearly doubled last month and are increasing every day.
I'm not sorry that real-estate prices are creeping down by the glut of desperate "for sale" signs all over Southern California.
I'm not sorry that all those developers building lofts downtown and in Hollywood and North Hollywood with no parking might have to eat their investment when they find they can't get half a mil for the 400-square-foot corner of a former sweatshop.
I'm not sorry that people who kept taking the "free" home-equity money from the banks beyond all reason are now finding out how not free that money was.
I'm certainly not sorry that the huckster mortgage companies and banks that thought it was a good idea to make subprime loans to people with bad credit ratings are now taking a bath. I only wish it involved some sort of public humiliation involving glue, sand and glittery body paint.
I'm not even sorry that people will lose their homes and be forced to give up the Hummer they bought with a home-equity loan, and move into a one-bedroom apartment in Panorama City or, worse, in with the in-laws in Porter Ranch because suddenly their adjustable home rates adjusted higher than they can pay and they can't unload their McMansions for $1.3 million, as was the plan, despite the newly installed horizon pool and cork flooring.
I tell people I am sorry, but I'm really not. I am, in fact, gleeful.
And I'm not the only one.
Most everyone who is not employed by a mortgage company or is not a real-estate agent or is not trying to sell a house or can't pay the mortgage anymore feels the same. We are secretly dancing little happy jigs because it seems that the insanity is about to, finally, end and the snake-oil hucksters will fold up their tents, take their sleazy subprime offers and slink out of town.
Then maybe life can slowly come back to normal, and regular people with regular incomes can buy regular houses again without agreeing to loans so abusive they ought to be handed out of the back of gangster bars. We don't even care that it means our own property values will drop, if it means we might avoid another block of luxury lofts.
It's a relief, too, because we all knew this was coming, just like you know the Poppin' Fresh dough carton is going to make that loud noise when you pull the tab, and you can't really relax until it comes. Even people like me with math anxiety could work out that at some point the hot real-estate market, built in part on risky loan deals, was someday going to reach critical mass and start to crumble.
Well, here we are, and it's beautiful. And that's why I must implore all the well-meaning politicians proposing bailout measures (You know who you are, Richard Alarcon and Hillary Clinton) to just go away and work on curing cancer, or something that will actually help humanity, not enable it to continue on its financially irresponsible path.
Homeowner bailouts, as warm and loving as they seem, are, in fact, bailouts for mortgage companies, and they don't deserve it. But bailouts play well on the news, and everyone from L.A.'s Alarcon to state legislators to U.S. senators are proposing deals to help people continue to pay their mortgages.
Sure, some poor grandmas and inner-city families will get to keep their homes, at least until the next rate shift on their interest-only loans, but at what price? Is it helping people to keep them tied to abusive mortgages that only help the abusers profit? (C'mon, Hillary, it's the other guys who are supposed to be helping big business exploit consumers.)
To Clinton's credit, she's also proposing penalties on mortgage companies, though it's hard to see the sense of punishing with one hand and rewarding with the other. Better to support restructuring of the loan industry and government-sponsored mass refinancing for at-risk homeowners.
It's hard for Democrats not to rush to the aid of the victimized homeowners. It's a good instinct, but sometimes it's in everyone's interest to step aside and let faulty systems fall apart. This is one of those times when we ought to let it burn. I'll bring the marshmallows.
http://mysite.verizon.net/vodkajim/housingbubble/shiller_graph.gif
The market is just doing what it always does when it overheats, coming back to earth.
....... because you are a FOOL. Aliens and Death Rays are REAL, man....!
Look, it's just not as bleak as you want to believe.
Furthermore, my God is such a loving God who is so bountiful, that if there is a Great Depression, I will become an apple millionaire.
OKIE,
Here is how it may playout in Michigan, as if we do not have enough problems.
Homebuilders have no work, no need for a new Utility pickup truck.
Those assembly lines effected bigtime, more layoffs.
Even worse, these are the "margin" vehicles that are paying for retire health care benefits.
This has the potential of making Michigans situation even worse, I have discussed this senario with friends in business and they agree.
BTW: Seven (your recollection) minus four (the facts) equals three.
You nearly doubled the timeframe of recession. This leads me to believe you are prone to overexaggerationaboveandbeyondtoomuch.
What's your opinion of the Partnership for Prosperity agreement and New Alliance Task Force?
What's your opinion of the FDIC allowing banks to accept Mexican Matricula Consular cards as valid ID to obtain bank accounts, home and auto loans?
No, by crossing the border illegally and by having an illegal-loving President in the White House.
What was the reason why Bush signed the Partnership for Prosperity agreement in 2001 or formed the New Alliance Task Force in 2003?
Sure, he tried to increase home ownership --among Mexican illegal aliens. That's why the banks put representatives in Mexican consulates and programs into place to educate the illegals about how to take advantage of the looser credit standards.
I have no sympathy for these people who speculated on houses, absolutely sure they could only increase in value (tulips, anyone?) - or those who bought homes they can't afford by using ARMs and other creative financing. How about those who used their home equity as an ATM and are now upside down and couldn't sell if they had to. These people abused the credit markets and now they're paying the price. And you're blaming the federal government? Who bought the houses? Who applied for a loan whose interest they KNEW could go nowhere but up?
Who cares? Not me - unless maybe I can capitalize on it.
In the meantime, I'm living in a decent house with a 6.5% fixed rate mortgage, have two paid-for older cars, zero credit card debt and scads of cash saved. Why? Because I wasn't greedy - trying to buy things I can't afford (like a house on option ARM). I don't think this makes me a 'winner' but I'm quite certain I'm not a 'loser'.
Everyone except those who see houses for what they are: a place to live.
A home is a liability not an investment. Its value may go up, may go down. But in the end it's a place to live and as long as you can make the payments, short-term swings in housing prices don't matter.
Everybody should care if they don't want to see our economy go in the toilet.
No it's not.
Investors in mortgage-backed securities are skittish because so many of the loans are going south. Despite almost record-low Fed funds rates, the credit markets won't loan the mortgage lenders the money they need to keep financing these types of loans. The money is there - nobody will take the risk.
The housing market isn't our economy. This is a bubble bursting just like the stock market bubble of the late 90s burst. It's not the end of the world to anyone whose savings are diversified.
Yes and no. If you own a second house for investment purposes it is an investment. But for the vast majority of us a house is our home. I look at it as a valuable family assest, not an investment.
That's true, but in that case most investors use it as a rental property. The drying up of easy mortgages should be good for the rental market.
Yep.
You haven't been watching the markets lately. News on US housing has been driving the world markets for the last month or so. It impacts retail, financial companies, techology stocks. Shoot, even defense stocks have been driven lower solely on negative news in our housing market. Stocks in China, Japan, and Europe move on our housing market.
LOL. I haven't been watching the markets? How would you know?
This is a cycle like any other. Stocks go up, stocks go down. Same with houses. The long term trend is up and this is a buying opportunity for those who kept some powder dry.
It is a great buying opportunity, but only if the fed cut next month. Otherwise we will see a sub 12,000 DOW.
That's the herd panicking. A downturn in defense stocks in reaction to a collapsing housing market is irrational panic on the part of the herd. There is little real connection between the two markets. You make money by observing the herd and generally doing the opposite. When the herd realizes its mistake, the defense stocks will recover and money will be made by the anti-herd.
Not if you got cash, at least enough for a good down.
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