lineup32 Posted March 23, 2009 Report Share Posted March 23, 2009 that's the idea. If we got housing value back in line with wages we'd have a healthy market. The issue is now, who's going to take the losses generated by this adjustment? Leave it on the note holders book or pass it off to taxpayers via the FDIC/Treasury? This was always about who is going to take the losses and the bank preferred share holders and other bank credit investors behind the curtains have always looked to dump it on the taxpayers but the numbers are so vast that even the Fed gov't cannot swallow these numbers. Mortgage debt of 12 Trillion is concentrated in 2/3 of the homeowners, while 1/3 own their home free and clear and the average person moves every 7 years with the government the only serious player left in mortgage funding the problems trying to refi and finance mortgages on the 12 trillion rollovers let alone take on large default losses looks like a tall order. The only viable solution is for the banks to go BK and the creditors to pick over the corpse's with a return of strict lending requirements getting rid of Fannie and Freddie and the entire lets make it easy to buy RE thereby generating a healthy market for investor capital to return otherwise the mortgage market eats its own. Pain and suffering for all no easy out. Link to comment Share on other sites More sharing options...
Dr.Correll Posted March 23, 2009 Report Share Posted March 23, 2009 Does anyone here use amazon.com to sell anything regularly? I have a question, please PM me. Dr. C Link to comment Share on other sites More sharing options...
Takachi Posted March 23, 2009 Report Share Posted March 23, 2009 If Treasury yields are positive real, stocks get destroyed. Pretty simple. I was in the business in the 70s. It was a frigging disaster. Stocks did horribly, except for energy and metals, and bonds got killed too as the Fed printed. Every Thursday we stood watch over the tickers waiting for the money supply data to come out. Every week it was up, and every week bonds went down and most stocks did too. That was nominal. They did even worse in real terms as inflation ratcheted higher month after month. It was horrible. Anyone who thinks Fed money printing is automatically bullish, wasn't around in the seventies. The only way this time will be different is if they can boost the inflation rate without bond yields ratcheting higher. Negative real interest rates could create an environment where stocks might rally in nominal terms. Not a bet I'd want to make until I saw some proof. The market is always late in figuring these things out. Never a need to rush in. \ When Argentina collapsed a few years ago because they tried to hold the dollar peg, there was the Crash and then solid assets took off like a rocket as people looked for anything solid that might hold some value in a flight from paper. In the 70s there was no "confidence crisis" and the printing press still worked (at least til Volker shut it off). (Consider what happens if Volker follows a disgraced Timmy) The Argentina problem was said to be impossible to happen here because the dollar was the reserve currency of choice and there was nothing to which the dollar needed or could be pegged to. That scenario is fast approaching where the dollar loses its credibility and no one wants the paper. At that point, do you want to hold a CD at 3% or a hold a share in a steel company that at the end of economic tunnel can still make steel and has some residual value...... or better yet a miner or nat gas company that is still standing at the end of the malaise. There is no other currency to peg the dollar to, but there is the mythical basket of stuff that gets dearer and dearer. Link to comment Share on other sites More sharing options...
Jimbo Posted March 23, 2009 Report Share Posted March 23, 2009 TOXIC ASSETS - TRY TOXIC AGENDA's I think Goldman Sachs ownership of the United States economic policy is seroisly threatened. The sheeple are finally wakening up to the fact that the bails out has fall streets agenda printed all over it. The agenda of the people is to minimize the taxpayers loss. The GS/Geithner agenda is to minimize fall streets losses by maximizing the taxpayers losses. (And also protect the bonuses !!!!!!!! protect the bonuses!!!!!!) Therefore there is an obvious agenda conflict. Link to comment Share on other sites More sharing options...
mdporter Posted March 23, 2009 Report Share Posted March 23, 2009 When times are good, the alligator (or whatever logo) makes you look cool (according to some), but in times like these it just makes you look like a dick. To really be a douche, turn the collar up. Link to comment Share on other sites More sharing options...
howard in nyc Posted March 23, 2009 Report Share Posted March 23, 2009 (Consider what happens if Volker follows a disgraced Timmy) our best shot at sorting out the mess? Link to comment Share on other sites More sharing options...
Cassiopeia Posted March 23, 2009 Report Share Posted March 23, 2009 Direction for heading into Monday open is UP for ESM09. Still have leftover up Divie from Friday. Directional system has been hitting the right notes (directional play on the open) Tonight: ESM09 is +4.25 768.25 NQM09 is +4.75 1192.75 bools **whoops, "M" ESM09 +14 NQM09 +20 Dow Futures +110 Link to comment Share on other sites More sharing options...
TrendIsDown Posted March 23, 2009 Report Share Posted March 23, 2009 Coming Soon Link to comment Share on other sites More sharing options...
bubbadropping Posted March 23, 2009 Report Share Posted March 23, 2009 Shorty, that post on whipsawed bears is an absolute classic. It reminds me of something right out of Saturday morning Loony Toons. Wily Coyote always getting the anvil drop from 1500 ft. above. Very funny stuff and only because its true. Bears growl the loudest right at the bottoms. Bulls rut shamelessly like Turks in a harem at the very top. Only fools and masochists chase options into OExpiration, they want to lose their money. i know all of it. Been there, done that. I must confess. Link to comment Share on other sites More sharing options...
Jimbo Posted March 23, 2009 Report Share Posted March 23, 2009 MORE SUBPRIME LENDING TO FIX SUB PRIME LENDING PROBLEM OR WHY TALF IS GOOD FOR YOU TALF is just more subprime lending - but now uncle sam is going to be the patsy - and everyone knows it. Whoever buys the assets and takes on the loans is going to default. They will lose what ever sliver of equity will be put in. But they dont care because that equity will be provided under the table by a grateful seller. :ph34r: Unlce sam will be left holding the bag. What this is is just an underhanded and more palatable way to get the taxpayer to eat the losses. Link to comment Share on other sites More sharing options...
shorty Posted March 23, 2009 Report Share Posted March 23, 2009 No. It really isn't. How'd that hedge work during the 1970s? On a nominal basis, stocks didn't recover their 1966 peak until something like 1980. On a real basis, 1966 investment didn't get back to even until 1992. If you demand the citation, I will get it - it's form Shiller. this ain't the 1970's look....all green now in the 1970's bonds were comp fer stocks not now, rates too low stocks only game in town on sale, half price or less why not git sum? EOQ rampjob comin' right atcha Link to comment Share on other sites More sharing options...
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