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.

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

To: jim_p who wrote (8739)	3/26/2008 12:34:30 PM
From: RonMerks	Read Replies (4) \| Respond to of 50659

Thanks for the gloom & doom- where's the boom<vbg>? Japan's property values were more out of control than anything we've seen during this bubble in the US- by a longshot. I don't think we'll get anywhere near -65% drop in housing values. An interesting fact on CNBC the other day. We create 850,000 new 'households' via new immigration, or newly married young couples each year in the US. That 'push' will add 2 million new first time home buyers in the next 24-30 months alone. And during the S&L crisis, I actually had great years in my business. Here's what the DOW did during the S&L crisis. Up over 50% in 5 years- not too shabby, other than one big shakeout. The entire S&L bailout cost $160 billion. Less than the bill of just one year in Iraq, and about the same as this stimulus package. en.wikipedia.org Over 1000 S&L's went bust back then- and I think only like 35 banks so far. We just had our first positive housing news- in existing homes showed a year over year increase in sales. And they had a guy on Kudlow last night who is running foreclosure auctions and he said most are getting sold at 90% of current appraisal values. And as far as this point- 'Mortgage backed securities are history and no one has even come up with a solution or a new method to create, package and distribute credit yet.' Thats not a problem at all. Yes, the sleazeball i-banks will suffer. But, back in 'the day' you got your mortgage from the local bank. An entire industry of 'non depost/mortgage only' companies sprung up thanks to these securitization packages and mortgage bonds. The investment bankers will no longer be able to repackage and issue derivatives on this crap- as it will no longer exist. But, Wells Fargo and BANKS like it- with a depositor base, will see rapid growth and they will replace Countrywide and Thornburg. If they want to sell off some of their mortgage pool- insurance companies and pension companies will gladly step in and buy clean, legitimately originated and underwritten paper. And Fannie & Freddie will take up the slack. I honestly am begining to think the biggest problem to come out of this credit crisis- is the size of the tax bill that joe6pak the taxpayer is going to get stuck with. Why do you think they are easing capital requirements on Fannie Mae and Freddie Mac? And did you see the news this morning? They want the Federal Home Loan Bank Corp to write municipal bond insurance! They are just going to offload all the crap from Merrill, JPM, and Citi to the public GSE's. Jimmy Cayne keeps his $30 Million Dollar penthouse, Stan O'Neal gets to keep his $150 million for nearly bankrupting 'Mother Merrill', and all those 27 year old MBA bond traders from 'Jersey' get to keep their Ferrari's and $2 million dollar bonuses- so Fred and Ethel Mertz back in Peoria, Illinois can bail them out- by bankrupting social security, medicare and passing deficits onto their grandchildren. I think we see another -10% max drop in housing and many areas have alread bottomed. I also think that the recession will be short and mild- because the Fed will inflate its way out of it. And thats why I dont understand all this talk about DEFLATION! Bernanke has devoted his life to studying the deflation of the great depression and how to prevent it. The Japanese have been in the press 3, or 4 times lately about how the US should not make the same mistake they did- and should use public money to buy up this mortgage paper. And thats EXACTLY what they are going to do- and in fact, have already started to do. PUBLIC MONEY- your money and my money. Bend over and grab your ankles people. No deflation. Just anal penetration and inflation! The most insidious thing about inflation- is it SEEMS painless. The cost of inflation will be $5 gasoline by 2009, higher still food prices and a lower US Dollar. My grandaughter just returned from a class field trip where they toured the Fed and got to see Bernankes office, and she SWEARS this is what the plaque on his desk said- 'Print it and they will spend.' Ron