Re: Honey, I Blew Up the Mortgage!

On Jul 14, 3:06 am, Martin Brown <|||newspam...@xxxxxxxxxxxxxxxxxx>
wrote:

[... acting on the crimes in mortgage melt down...]
But you can bet your bottom dollar that they won't be. Far too much
dirty banking linen out there to be washed in public.

Also if you look at the list of foxes and chicken coop guards you will
find a lot of last names in common. This is no accident. In many
cases, you will also notice that the first names are the same too.
You will also see some family members on the opposing sides. One
example is Phil Gramm's wife, Wendy Gramm, was on Enron's board while
Phil Gram was making the "Enron loop hole", so she was the fox while
he was the chicken coop guard. He then went and got a job with EBS
before he took the job with McCain.

Free markets work a lot better when those involved are kept honest and
things are kept in the open. This is a case where they weren't kept
honest and an obvious failure happened. In other cases dishonesty has
just resulted in smaller losses or less growth than there would have
been otherwise.

[....]
Indymac is effectively already nationalised. How many more will follow?http://seattletimes.nwsource.com/html/nationworld/2008050120_indymac1...

FanyMae and FredyMac were national when they started. They privatized
their profits and kept the risk public. They were supposed to make
safe investments to have the money to cover the risk they were taking
in the mortgages. Unfortunately, they invested in mortgage funds as
their "safe investment". It was less safe but in made them more
earnings. Since they are "too big to fail" the tax payers have
assumed the risk.

[....]
A few very smart hedge fund managers will likely make a mint by shorting
some of these low confidence stocks - considerably amplifying the damage
to the market and taking a hefty profit cut for themselves.

I doubt that there is much to be made that way. We are seeing a
reduction in the total paper wealth. This means that there is no
growth to take a hunk of. The biggest thing that the smart folk will
be doing is making sure that it is others who take the loss.

[....]
And also a buyers problem if they find they are out of a job due to the
recession. The cheapest houses on sale in the USA are now apparently
down to under £3000 - in places where the main corporate employers have
just closed.

There have always been towns like that. The number of those is small
so while it is sad for that few that isn't the big story. It is the
large cities that are seeing a 20% drop in the prices of houses that
have 90% mortgages on them that are the bigger story. There are now
many people who have lost what little down payment they had. Some of
these have also had to move down the job market at the same time. For
them life will be rough. They may not have enough to send their
children to college resulting in a long term loss of growth to the
family.


If you are stuck with negative equity then there is no easy answer. And
the flood of repossessed homes drives down the prices even further.

Where I am the house prices have not dropped significantly if at all.
In a nearby city (Tracy Calif) they are dropping quite a bit. Tracy
is where the new growth in houses was. It is also where the long
commutes are seen. The high price of gas is also involved in the
decline of house prices. It isn't all due to the "mortgage crisis".



.

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