Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: russwinter who wrote (49436)	1/11/2006 11:53:03 AM
From: Crimson Ghost	Respond to of 110194

Also housing stocks are enjoying a powerful rally despite mounting evidence that the bubble is topping out. A last gasp before a big plunge?

To: russwinter who wrote (49436)	1/11/2006 2:19:01 PM
From: Ramsey Su	Read Replies (1) \| Respond to of 110194

Speaking of risk ..... Every Tuesday, I have lunch with a bunch of old friends and a few new friends. Most were and some still are in the real estate business. Yesterday, we were reminiscing over the old times, the last real estate down cycle during the early 1990s. While I specialized in San Diego REOs only, one friend was the head REO honcho for a big bank. During that round, the numbers the single family loans were as follow: Property value - $100 Loan amount - 80% or $80 Avg foreclosure recovery - 65% or $65 $15 loss This does not include the cost of non performing asset. The markets today, in our opinion, are grossly underestimating the cost. Real estate are not like stocks. They cannot be sold with the push of a button. I got a million stories. This is one of my favorite. Upon inspecting a property as I usually do after foreclosure, I found this property totally stripped bare, which is not unusual. A nosy neighbor came up and started chatting, which is also not unusual. He told me that I should have been there the previous weekend, for the big garage sale. I asked him what so unusual about that? He said the guy was selling everything. I asked him again what so unusual about that? He said the guy was selling everything. There was a price tag on the water faucet, "$5 - you remove", drywall - "$1 a sheet - you remove", carpet, tile etc etc. I think many of the sellers of mortgage risk today may be surprised by how little equity they have, if any at all.