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Politics : Welcome to Slider's Dugout -- Ignore unavailable to you. Want to Upgrade?

To: Mrs. OMalley who wrote (6097)	8/20/2007 12:33:50 PM
From: Broken_Clock	Read Replies (3) \| Respond to of 50526

Sorry. That analysis is so flawed I'm not sure where to begin. It leaves out entirely how many derivatives were created and sold based on subprime. That pool is vastly larger than the subprime pool. Witness the dozen or so hedge funds wiped out the past month. It leaves out entirely Alt A, Pay Option Arm, etc. Rates for mortgages are driven solely by the Fed. Confidence or lack there of in the USD is a much larger factor. You can lower rates all you want and still not be able to refi a home with negative equity...which most homes bought in 05/06 are presently at.

To: Mrs. OMalley who wrote (6097)	8/20/2007 12:48:59 PM
From: jim_p	Respond to of 50526

I like the way the Statfor report puts things into perspective and I agree with a lot of what they are saying. For many of the same reasons they list in their report, it's obvious that the reckless lending standards go far beyond the relatively small $500 billion subprime market. There has been no accountable for virtually all debt including credit card debt, auto loans, all types of mortgages, business loans and most of all for the recent explosion in LBO debt. For the same reasons they list on why the subprime debt became a problem, this applies equally to any debt that can be packaged up and sold to third parties without any recourse to the originator and that applies to just about every type of debt. The system changed from what was in place back during the S&L crisis and we are now in the early stages of seeing the results of the new system that took its place. The big change to the new system took place over the last several years when Structured Finance got involved and started doing some very creative packaging to obtain higher credit ratings on lower quality debts. I’ve working with these guys at a number of different investment houses and they are some of the most brilliant people I know combined with the brightest minds in the legal profession today. The subprime is just the most obvious and the first to surface mostly due to the teaser rates getting triggered higher. I agree that it is a little early to call if this is an event that changes the general direction of the market, but I believe it is and it will continue to expand over time. Jim

To: Mrs. OMalley who wrote (6097)	8/24/2007 6:14:52 PM
From: SwingTrader2006	Respond to of 50526

Mrs. Omalley, While I agree with your DOW target (just not that soon), you can't honestly think that housing and mortgage origination will resurge soon, can you?? There's a massive portion of the population who will be UNABLE to buy a home due to tightened underwriting. No more 100% financing on marginal FICO's. BAM!! You've just wiped out a significant portion of the US homebuyer! They have a ZERO savings rate now. How do you suppose they'll come up with 20% down on a normal 80% LTV purchase loan...AAAAAAAAAAAAAAAAAND have to VERIFY their income to qualify for the loan? No way, Jose. Stick a fork in the real estate market for now. Home prices have only just begun to head south...the patient investor will get real estate for much cheaper in a couple of years. Interest rate cuts ain't gonna save it. You had better hope for something much larger than .75 bp cuts....that ain't gonna do the trick and will serve as a temporary blip only. Just my opinion.