BodybyFisher Posted October 7, 2008 Report Share Posted October 7, 2008 In post #8 here: http://caddyinfo.ipbhost.com/index.php?sho...&hl=WarrenJ I posted a link to an informative and also interesting link to a PBS radio broadcast explaining Wall Street's involvement in the crisis. Surprisingly, it very entertaining. LINK: http://www.thisamericanlife.org/Radio_Epis...spx?episode=355 "A special program about the housing crisis produced in a special collaboration with NPR News. We explain it all to you. What does the housing crisis have to do with the turmoil on Wall Street? Why did banks make half-million dollar loans to people without jobs or income? And why is everyone talking so much about the 1930s? It all comes back to the Giant Pool of Money." It's important to note it completely leaves out any mention of Congress' involvement. I view that as an oversight, perhaps even a fraudulent one. Nevertheless I think the program is accurate as far as it goes. Regards, Warren Actually given that its NPR and given that it was on All Things Considered (WBAI 99.5 FM, NY), I am SHOCKED that the congress was not mentioned. All the information I have purely implicates congress, with wanting to provide affordable housing to minorities. They prefer we only hear about the thousands of foreclosures and the woman who shot herself in her head because she was foreclosed on. Maybe its not odd that an extremely liberal station would air it preferring that congress lowered standards to provide affordable housing not be mentioned, no doubt they focused on corporate greed, but I have to watch it. It seems to me, that they want their cake and they want to eat it also. We will give them loans but the only way is to totally ignore their lending criteria. For the last couple of years I have been asking over and over how can these loans be going belly up, the banks have lending criteria! When I graduated college, I did residential lending at a Saviings and Loan. We ran credit checks, questioned late payments, checked employment and got letters from them verifying so, the payment could not be more than 25% of their gross monthly salary and their payment plus obligations could not be more than 33% of their gross monthly salary, and the loan could not be more than 75% of the reviewed appraised value or PMI was required..that was prudent lending. Now I know how it happened, no credit checks, no job required, bad credit all OK, because the government (read that Democrats) put pressure on FNMA/FHLMC to accept lower standards, banks followed directions, because banks are SUPPOSE to follow a procedure, it was FNMA/FHLMC , who was pressured by the democrats that dropped their standards... Look at the cast of characters that were working at FMNA/FHLMC they are out of the Clinton Administration, one of which was Jamie Geralik who was responsible for putting up the walls between the intelligence departments so they could NOT share data. I will do some research on the cast of characters and post it in the thread I started. In the 70's and early 80's I did residential lending and FNMA/FHLMC had strict guidelines, if I recall they required mortgage insurance to lower the loan to value ratios down to 80%, firms like MGIC were mortgage insurers. The other thing that no one is addressing here is the low interest rate environment and the impact that had on driving purchase prices upward and notice that I did not say values, I said purchase prices. Because buyers could naturally pay a higher payment because the interest rate was at historical low rates, we had a continued appreciation of home prices, that was in my opinion false appreciation. The appreciation was driven by low rates and the availablity of capital. Toward the end of the commercial boom, too much money was chasing too little deals, the demand for product was great and the prices of apartment buildings and office buildings went through the roof, unheard of cap rates in NYC of 3 to 5% and probably lower, and sales prices of office buildings over $1,000 per square foot are outrageous figures. Toward the end, I was hearing stupid *smurf* like, >> insert high and mighty tone here>> Well you know, New York City is a bargain compared to London and Tokyo... HUH?, and who cares?, but.... that is the way they were and probably are thinking. Globally. And appraisers, they are suppose to be the caps and they ride the markets up and they ride the markets down with no ability to put the brakes on because the lenders will stop giving them work. They tell you that you are suppose to reflect the market, which is correct, but when the market becomes illogical its time to raise your hand. Which as many of you know I would, I raised my hand and said, I am not comfortable with these cap rates and I was lambasted and thrown off their list and never got work again. Can't have anyone who stops to think you know. I showed them NEGATIVE RETURN to EQUITY and they shut me down and threw me off the list. Well he who laughs last laughs best, that bank is out of business and the guys who gave me a hard time stand to lose their jobs. Another bank I used to do work for NEVER asked ONE intelligent question about the report related to the value, all the reviewer would call about was, stuff like, ARROWS not PLACED CORRECTLY on LOCATION MAPS, I would be like, HUH? You mean there are NO mistakes in that report? LOL... I wanted to be reviewed, it makes you better! I used to be a review appraiser and would ONLY call if the issue had to do with value as I did not want to waste the appraisers precious TIME... Ill tell you how bad it got, I have a friend who is a great guy, big heart. Well he has sold cars, boats, fuggie wuggie ice cream bars on the beach, books on ebay, coffee route, and other assorted methods of earning income, I admire his entreprenurship, HE, became a mortgage broker complete with office space... I was STUNNED... Sorry for the run on paragraph, Pre-1995 - DTC codes OBD1 >> 1996 and newer - DTC codes OBD2 >> https://www.obd-codes.com/trouble_codes/gm/obd_codes.htm How to check for codes Caddyinfo How To Technical Archive >> http://www.caddyinfo.com/wordpress/cadillac-how-to-faq/ Cadillac History & Specifications Year by Year http://www.motorera.com/cadillac/index.htm Link to comment Share on other sites More sharing options...
WarrenJ Posted October 7, 2008 Report Share Posted October 7, 2008 As long as your post was, I couldn't find any fault with it. I got out before the dot.com boom a few years ago and I (largely) got out before the current bust. What bothers me, is how I saw it coming from a few miles (months or years) off, and so many others said, "no, there's more to go; no problem" It was simply common sense: NI and NINA loans were nothing less than suicidal! Why was that so hard to see? There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises Link to comment Share on other sites More sharing options...
BodybyFisher Posted October 7, 2008 Report Share Posted October 7, 2008 As long as your post was, I couldn't find any fault with it. I got out before the dot.com boom a few years ago and I (largely) got out before the current bust. What bothers me, is how I saw it coming from a few miles (months or years) off, and so many others said, "no, there's more to go; no problem It was simply common sense: NI and NINA loans were nothing less than suicidal! Why was that so hard to see? Good for you.... that was smart. When the dynamics no longer work or they are illogical that is a sign of risk and its time to bail out, its called wisdom I think. We have been through a few real estate cycles and know it comes to an end. Real Estate has a 5 year cycle but a 3 year memory Pre-1995 - DTC codes OBD1 >> 1996 and newer - DTC codes OBD2 >> https://www.obd-codes.com/trouble_codes/gm/obd_codes.htm How to check for codes Caddyinfo How To Technical Archive >> http://www.caddyinfo.com/wordpress/cadillac-how-to-faq/ Cadillac History & Specifications Year by Year http://www.motorera.com/cadillac/index.htm Link to comment Share on other sites More sharing options...
WarrenJ Posted October 8, 2008 Report Share Posted October 8, 2008 Real Estate has a 5 year cycle but a 3 year memory I LIKE that; never heard it before. Of course, I've never been in that business. At work today I watched, along with a colleague, a news report about the Iranians harassing a U.S. ship in the Strait of Hormuz. I assume it was an attempt to drive oil prices up; could be wrong, of course. He didn't miss a beat; he quickly replied that the Strait of Hormuz should be widened, "we could do it in under 20 minutes!" Sometimes the obvious solution easily escapes us! Regards, Warren There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of a voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved. - Ludwig von Mises Link to comment Share on other sites More sharing options...
Marika Posted October 12, 2008 Report Share Posted October 12, 2008 Zeitgeist Addendum (2008) A 2 hour movie about the Federal Reserve. Very interesting. If you really want to make people safe drivers again then simply remove all the safety features from cars. No more seat belts, ABS brakes, traction control, air bags or stability control. No more anything. You'll see how quickly people will slow down and once again learn to drive like "normal" humans. Link to comment Share on other sites More sharing options...
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