Premier Rock Forum

I'm not "blaming" anything for anything - you apparently glossed over my introduction, in which I announced that everything to follow came from the mouth of my financial markets professor. Even he doesn't assign "blame" so much as he's just tracking things back to their origin. He's not saying NAFTA/tariff-lifts caused the sub-prime crisis, only that it made it possible. I completely agree with you placing blame on greed, because that's 100% what this is about.

Bonham lives! wrote:I'm not "blaming" anything for anything - you apparently glossed over my introduction, in which I announced that everything to follow came from the mouth of my financial markets professor. Even he doesn't assign "blame" so much as he's just tracking things back to their origin. He's not saying NAFTA/tariff-lifts caused the sub-prime crisis, only that it made it possible. I completely agree with you placing blame on greed, because that's 100% what this is about.

I agree with you, but you confuse things when you say that do not "blame" anyone and yet you blame "Greed". I've never met "Greed", have you? I've met greedy people, but never "Greed".

You have reading comprehension problems. My first sentence "I'm not blaming anyone..." was in response to your initial, falsely made accusation that I was. I then went on to correct your misunderstanding that those were my opinions, when in fact they were the opinions of my professor. That is, the first sentence was not meant to be dis-positive of my finding blame, but rather meant to point out your mis-attribution. As for my placing blame on an esoteric concept rather than tangible entities, well you're just nit-picking the shit out of my statement, which is pretty pathetic considering it is a point that you and I share.

Is your media still not mentioning the 'bubble' much? 'Cos in the UK it's becoming the norm - TV documentaries, national papers etc.

Rick Reuben wrote:Since the dollar depreciated about 7-10% in 2007, depending how you measure it, that means that homes lost close to 15% in real value in one year. No wonder buyers are content to wait.

That sure must suck. I just sold my home (after only 4 days on the market btw) and it appreciated in value by 14% in the one year I owned it. If you want to include the amount of depreciation you quoted it was still up by 4-7%, still a pretty good rate of appreciation and probably a more accurate reflection of the home's increase in value anyway. Its like this all over my county. Homes just don't stay on the market more than a few weeks. Unless they are the multi-million dollar eyesore mansions that have started appearing down the street from my house. I don't think you could give those things away.

The home I bought appreciated $10,000 between the time I signed the contract and the time it was appraised for a second time. Instant equity is nice.

My county, and maybe my state (except perhaps suburban Atlanta-any EAers from Georgia want to weigh in on the situation in your area?) seem to be bucking the trend of this real-estate collapse that is quite real in other states. I'll take it.

This is not an attack saying that this crisis isn't real (it is) Just a bit of good news amongst all the bad. I'm sure there are other EA people who live in areas where the real-estate market is doing quite well. However, if you live in a McMansiony area of California, I'm afraid you are just plain fucked.

o_d_m wrote: My county, and maybe my state (except perhaps suburban Atlanta-any EAers from Georgia want to weigh in on the situation in your area?) seem to be bucking the trend of this real-estate collapse that is quite real in other states. I'll take it.

My fiance and I just bought inside the perimeter of Atlanta, 30 year fixed, payments within our means providing neither of us gets laid off *knock wood* and my neighborhood seems to be holding steady at the moment. We looked at quite a few places in our area and homes were only staying available for weeks...not much more than a month or two.

My sister lives in a giant beige subdivision in Canton where every fourth house is for sale and they've been on the market for months if not over a year. It's definitely stagnating the farther out you go from Atlanta proper.

Yesterday they removed the borrowing caps on the finical organizations that borrow from the fed. This means that they can borrow in any amount including whatever would be needed month to month to make the payments on their debt from the month before.

It is getting like one of those old western sets where they build only the fronts of the buildings.

this article is a few months old, but it is still interesting to read:

http://www.thepolitic.org/index.php?opt ... &Itemid=38

Murmurs of bank failures, no big deal.

I'm surprised there's nothing up here about this yet (unless it was on another thread): according to MarketWatch and many other media, Carlyle Capital has been missing margin calls lately.

MarketWatch wrote:Carlyle Capital (CARYF 12.00, -12.00, -50.0%) shares were cut to sell by Citigroup analyst Donald Fandetti on Friday after the investment firm failed to meet margin calls and got a notice of default on one financing agreement. The agency mortgage securities that Carlyle Capital owns have dropped in value, prompting banks to ask for more cash or collateral to back their loans. While Carlyle owns only agency securities, which are considered safer than other types of mortgage securities, the firm holds so-called cap floaters, which are more vulnerable to price volatility and leverage constaints from the banks, Fandetti wrote in a note to clients.

Carlyle had been leveraging at a borrowing rate of (IIRC) 32 times their actual equity. As you no doubt know, leveraging will increase your returns many-fold in flush times, but it also greatly exacerbates your losses when the market sours. Severely leveraged investments were one of the main factors that caused Long-Term Capital Management to nearly sink the economy in 1998. How people could have ignored that lesson amazes me.