Is this as bad as it seems?

Post by **Wes** » Sun Mar 16, 2008 9:04 pm

http://www.kentucky.com/522/story/348710.html

Is this a really bad sign of what is going on in general, or is it just one investment bank gone bad? And why is the gov't so willing to bail them out?

Post by **pigsteak** » Sun Mar 16, 2008 9:13 pm

bail outs suck, in any form. the gov't should let these greedy bastards die, and imprison them if they did any thing illegal.

farm subsidies also suck.

free markets baby.

Post by **ynot** » Sun Mar 16, 2008 9:29 pm

Think about it. When your house isn't worth as much as it was a year ago. Property should always increase in value. And you will be hard pressed to sell today. home equity drives lending. I lost my job a year ago when new homes quit selling. I bounced back but I don't like where its going and it will get worse until the election. maybe even worse after that. The story sounds like the big dogs eating the smaller ones. Hope it all don't fold. We'll all be in a world of crap.
ceo's playing golf and bridge while thier company collapses. Bet he retires filthy rich too like the airline execs.

Post by **Shamis** » Sun Mar 16, 2008 9:48 pm

I just posted a similar thread in the whatever forum. I think the market is going to crash this week.

Post by **L K Day** » Mon Mar 17, 2008 12:21 am

Here's what Kudlow has to say: http://corner.nationalreview.com/post/? ... JlNDI3MTk=

and David Bernstein:

"I've said it before (e.g.), and I'll say it again. I simply didn't, and still don't, understand how anyone could have thought that giving people, often people with terrible credit histories, mortgages with no money down and often with no documentation of income--and after an unprecedented increase in prices left the market especially vulnerable to a downturn in prices--was a good idea. Maybe if I had studied for an MBA in Harvard and worked my way up to the top of the investment banking industry it would somehow have made sense to me."

Post by **L K Day** » Mon Mar 17, 2008 12:29 am

ynot wrote:Think about it. When your house isn't worth as much as it was a year ago. Property should always increase in value. And you will be hard pressed to sell today. home equity drives lending. I lost my job a year ago when new homes quit selling. I bounced back but I don't like where its going and it will get worse until the election. maybe even worse after that. The story sounds like the big dogs eating the smaller ones. Hope it all don't fold. We'll all be in a world of crap.
ceo's playing golf and bridge while thier company collapses. Bet he retires filthy rich too like the airline execs.

Think about it. Unprecidented easy credit brought a flood of new buyers into the market. This resulted in inflated home values (law of supply and demand). Then, when those who were not credit worthy in the first place defaulted, the market collapsed. This too shall pass.

Post by **Shamis** » Mon Mar 17, 2008 1:11 am

L K Day wrote:Think about it. Unprecidented easy credit brought a flood of new buyers into the market. This resulted in inflated home values (law of supply and demand). Then, when those who were not credit worthy in the first place defaulted, the market collapsed. This too shall pass.

I think it was the decreasing demand for houses that caused the defaulting to snowball though.

I think that when the market started to not look so good after 2000, lots of people cashed out with tons of money, and were looking for investments. They saw houses were going up, so they bought houses as investments. This increased demand, so people built more houses, and investors bought them. This caused prices to skyrocket, and the fact that prices were skyrocketing is what allowed those bad loans to go through (under the premise that refinancing would dig them out of any trouble they got into). But once the investors started to realize that the artificially high prices they had created with their own demand had nothing to do with the real demand of actual families to buy and live in all these new houses...they started to bail out. Then the value of the houses plummeted, which made it impossible for the poor homeowners to bail themselves out with refinancing, and it all fell apart from there.

Post by **Danny** » Mon Mar 17, 2008 1:38 am

L K Day wrote: Then, when those who were not credit worthy in the first place defaulted, the market collapsed. This too shall pass.

Err .. woops. Sorry bout that Larry. I must have gotten abducted by a phychotic alien

Post by **L K Day** » Mon Mar 17, 2008 8:31 am

Danny, sorry but I have no idea what you're talking about. You're way too smart for me dude. But, for those who care, what shamis says...

Shamis wrote:
I think it was the decreasing demand for houses that caused the defaulting to snowball though.

I think that when the market started to not look so good after 2000, lots of people cashed out with tons of money, and were looking for investments. They saw houses were going up, so they bought houses as investments. This increased demand, so people built more houses, and investors bought them. This caused prices to skyrocket, and the fact that prices were skyrocketing is what allowed those bad loans to go through (under the premise that refinancing would dig them out of any trouble they got into). But once the investors started to realize that the artificially high prices they had created with their own demand had nothing to do with the real demand of actual families to buy and live in all these new houses...they started to bail out. Then the value of the houses plummeted, which made it impossible for the poor homeowners to bail themselves out with refinancing, and it all fell apart from there.

is actually what the biggest part of the problem was. Here in Bozeman, where, just like most places, the market was booming, and prices were skyrocketing, I knew the end time was on us when I started hearing people say they were going to buy a place and flip it for the (presumed easy) profit.

Post by **Josephine** » Mon Mar 17, 2008 8:46 am

found this press release in my inbox this morning

http://investor.shareholder.com/jpmorga ... pe=Current

glad i work for jpm Chase and not bear stearns.