"noobligation". Is that no-obligation, or noob-ligation?
Wikipedia: a ligature is a device, similar to a tourniquet, usually of thread or string, tied around a limb, blood vessel or similar to restrict blood flow
noob: It can also be used for any other activity in whose context a somewhat clueless newcomer could exist.
"Lenders felt pressure to lessen their loan standards."
This really poor lying, like crazy third-world communist dictator poor lying. (Yes, it's a paraphrase of Mozillo, but the line he's taking is both bigoted and ridiculous.)
Mozillo has his cash. Why doesn't he wander off to die somewhere sunny?
Im dont understand why there is all this backlash against the banks and lenders.
I do understand that there was real "predatory lending" but it was not widespread. Also people could have been better informed of the implications of rate rise etc.
But in all these cases is it not the obligation of the buyer to be informed? Whats better - no money available at all for lending or capital to loan and poorly made decisions? If I buy a sportscar and crash it as it had too much power is it Ferrari's fault?
In any case, why is there all the anger at exactly the firms who are getting creamed by this.
This is not a troll, I really dont understand - and i'm a regular reader.
Mozilo set as a goal to help darker-skinned people, you see? So when he realized the potential of stock option compensation, he tought "It's not too late", went out and got himself a Tan.
Spooky, for me it is more about the moral hazard that has been produced by poor lending. If all the parties involved would just take their losses instead of trying to hide them and put them back on the tax payer I would have no issues.
RE: spooky's comment - if you're a regular on this blog then you're better informed than 95% (ok, you pick a large number) of the folks who bought homes in the last few years. As a relatively recent discoverer of this great blog myself (and almost ready for the 12-step program to end my addiction) I observe that what's obvious to its readers/commenters is "Greek" to the general public.
Yes, buying a home can't be treated lightly, but with so many friendly and personable "experts" helping you along ("Just sign here.") it's understandable that there was some misplaced trust.
Spooky - if you've really been reading here a long time then this phrase will make sense...
'privatize reward, socialize risk'
Tan Man was all for helping those po'folks so long as he would be able to walk with his stock options. Now that that's accomplished... those greedy sharks gotta pay!
And let's not forget the GSE's fault here. Lax underwriting standards? Those of us in the trenches noticed the loosey goosey DU and LP findings early on...but Hey! management said, If the GSE will buy it, then we're golden! Apparently, Morals and Ethics is just a 301 course in MBA programs nowadays.
There is more than enough blame to go around here. Starting with borrowers that were bound and determined to buy more house than they could afford and ending at Wall Street.
Owning a home used to be almost a rite of passage and in order to reach that goal one saved money (sometimes bringing proof of your $50 deposit each week into your loan officer!)and collected letters from landlords and employers about what a "good guy" you were.
In more recent history owning a home has become more of a right than a privilege. This may not be PC but frankly, not everyone in the world needs to be a homeowner. That statement has absolutely nothing to do with social or economic standing either. I have had clients with plenty of income and absolutely no left over money after paying for all of their toys and invariably, it is that client that is pissed at me when I tell them what they can really afford-bupkes!! (they made me stop talking to clients after that one!)
Yea, CFC and Mozilo worked really hard to "eliminate the gap". Fat freaking lot of good that did.
None of the bail out plans strike me as ultimately workable but if anyone can put a square peg in a round hole it would be the Fed.
Also, spook, if you are a long time reader I would think you would have seen earlier how Countrywide steered people into higher rate loans in order to maximize commissions and fees. Of course, they have also earned a rep for not being particularly eager to do workouts. I don't think Countrywide made all these loans out of some altruistic corporate philosophy. I also doubt that they were "guilted" into fleecing low income borrowers.
I remember when they hired an executive from Associates in 2001(yes the same Associates acquired by Citigroup that had the record setting settlement for abusive subprime lending practices) to run their Wholesale subprime division. I sure that was due to their purely egalitarian desire to expand homeownership. Of course this executive was dismissed about 4yrs later and now the subprime division has been "merged" with the prime division. I love the spin that all of the pressure was coming from "outside" the company.
I wonder how many of those Spanish people were capable of reading the terms and conditions of the mortgage papers? Oh well, I'm sure it was all explained in detail.
Spook,
I am 72 years old and have 2 degrees in engineering. Bought 3 houses in my time; own one free and clear and paid off the ex-girl friends house. I read CR and Tanta's stuff and think - god!, there is so much I don't know about buying and selling houses. I am red ridinghood in the woods who has just met the wolf or a cow being lead to slaughter. All of us in this life are at the mercy of professionals. You can shop opinions around but in the end you have to choose one to act on.
I understand your feelings about "people should have known better" but when the butcher blames the cow for walking into that slaughter house with its eyes open. That is a bit over the line.
I wonder how many of those Spanish people were capable of reading the terms and conditions of the mortgage papers? Oh well, I'm sure it was all explained in detail.
Plenty of their own people that made the commissions in their own language.
The point is that regardless of whether they are citizens or not, they can't be victims if they got in with no equity, they simply were renters that thought they were homeowners. In with nothing, out with nothing, no damages.
Not to say the bankers shouldn't be locked up, but that is for defrauding investors with sub prime CDO's.
Spooky, just stop and think for one moment about the impact of inflated appraisals. Does the first time homebuyer have a clue? Of course not. They don't even know what an appraisal is supposed to do.
Add to that those "layered" programs to help with stuff like no downpayments. Add to that "affordability" products for which you qualify on a low teaser rate, with a substantial adjustment up in a few years, such as the 2/28. But just tell them they can refinance when they ask you about that big payment shown on the TIL! Don't dwell on that hefty prepayment fee they'll have to pay to refinance! Add to that low/no doc loans, because of course, every subprime borrower, especially those with limited English, is really qualified to do their own underwriting.
The last thing in the world you do to help subprime buyers is aid them to get deeper in debt than they can possibly repay. These people need stability and control of debt, plus some savings in the bank. If they haven't learned to save, most of them will lose their homes anyway.
What's gone on is spooky. It's spookily unethical.
You have to understand that once most of these buyers got in on 2/28s, they were doomed to refi them at least 2 or 3 times. Few of them had the income increases they'd need to refi to a prime 30 year fixed. But oh, those prepayment charges kept the subprime MBS really paying off.
The reason this was all done was that outfits such as CW found a way to make it immensely profitable. The ways they found ensured that most of these buyers weren't going to succeed long term. You don't help a subprime buyer by getting them into a home on which they can't pay a 30 year fixed amortizing mortgage. You just don't.
What kills me about inflated appraisals is that they end up screwing up all future appraisals, regardless of the integrity of the appraisers, etc. Talk about opening Pandora's box!
Make that the Nikkei down 444 atm, and bigger picture the yen at 110.5...could get a bit too interesting tomorrow if Asia closes with all exchanges painting a red tape as they are now and Europe picks up the baton.
As this post suggests, if you do your homework, you'll find that the Jesse Jacksons of the world pressured the banks into easy lending practices in order to "boost Minority Homeownership". They gave them what they wanted and now the Jesse Jacksons of the world are crying "Predatory Lending". This is what happens when weak kneed politicians cave to race hucksters..It could very well be the financial collapse of America
RE: Mozillo not asking for a public bailout. From the milkeninstitute symposium report that the main post refers to:
.... Mozilo said: ...
"We must take steps to create liquidity," he warned.
So far, he said, the federal government has done little to help the industry. The Fed has lowered rates, which has brought some relief. But there has been no program, no effort, no legislative breakthrough yet, such as allowing Fannie Mae and Freddie Mac to raise their caps on mortgage holdings. All he has seen is pressure on the lenders, he said. "No one is helping (the lenders)," he said. "The ones who are putting out the intellectual assets, the financial assets are the lenders, and no one else."
.....................
It reads like whining to me. Is there an implied special pleading for fed action ? You decide. I definitely find that its implied.
I'm just tracking on Bloomberg.com which currently shows turning down again at -386. Also currently shows U.S. market futures recovering to roughly even. Weird.
Banker - you're right, I've never heard Mozilo suggeset a public bailout.
So that marks him down from financial crook to plundering pirate who had so little regard for his customers that he didn't even worry about foisting their skeletons on the FedGov.
The guy should be in jail.
Everyone reading this blog saw this crash coming. and SuperGenius Mozilo didn't?
He should be fined $500 million and plopped into a jail for a couple of years.
Thanks F. Frederson.
Do you have a real time link to the S&P futures?
I think fair value is about 1475 (its never the close) and the data I saw from about 15 minutes ago showed futures down about 20-22 from fair value.
Oops, forgot to add that the Nikkei link seems to be 1-2 minutes delayed at most. Currently at -360.
Yahoo has all of the Asian markets, on delay: Major World Indices - Yahoo! Finance
‘weak kneed politicians cave to race hucksters.’
If Jackson and Sharpton were as powerful as the pundits claim, they would have been president by now. Neither could get even the Dem nomination. The guys in the corner offices changed the mortgage rules for their own financial reasons.
I just checked US futures about 4 minutes ago. S&P 500 up 1.25, Nasdq 100 down 2.00. Looks like the US traders are not so worried about the decline in the Yen.
Okay, futures ramping up while Nikkei's tanking? WTF is up with that?!? - tj
Friday vs Monday. Japan's market follows our market for the most part... so tonights sell off in Japan (Monday AM there) is a reflection of last Friday's sell off here. They'll be following our open Monday all day and that will drive their Tuesday action (we'll see it late Monday night)...
Been like that for awhile. More not-so-decoupling...
You have to understand that once most of these buyers got in on 2/28s, they were doomed to refi them at least 2 or 3 times. Few of them had the income increases they'd need to refi to a prime 30 year fixed. But oh, those prepayment charges kept the subprime MBS really paying off.
It was financial crack cocaine for mortgage brokers & bankers. Once they took a hit off those fees they were hooked...
=========================
last time it was this low, michelle wie was at canoe brook trying to qualify for the us open(mens)..
where is that girl now?
in dollar heaven without (yet?) fully living up to her sporting potential. She's wayyyyyyyyyyyyyyy better than me, and put in wayyyyy more effort at her chosen sport than I ever did so perhaps I should be more restrained in my criticism of her though.
tj and Bill -
All the futures action I see shows a down opening for tomorrow. Looks like S&P futures are down about 24 from fair value and NASDAQ futures are down about 72 from fair value. I'm sure Japan is following our Friday like dryfly says, but US futures action right now suggests a very ugly opening tomorrow. This could be a very rocky week for the markets.
By the way, the PPT may exist, but they havent been a player in this market. The hedging and program trading are massive and leading to much of the volatile behavior.
TJ and Bill -
The US futures are showing an ugly opening for Monday. S&P futures are down about 24 from fair value and NASDAQ futures are down about 72. Unless the oversees markets rally I'd be shocked to see anything but a huge drop at the open tomorrow. As it relates to the yen, the carry trade has lost much of its influence recently. Its still a factor and a strong yen will hurt the markets but not like this summer. We'll see...
Good luck.
"Ben Stein, in true Rovian (as in Karl) fashion has found a way to blame this mess on liberal infiltration in the board room"
That Stein is either completely clueless, or talking his book. I think it's both. As little as 1 month ago he was on Kumblow's program dismissing the mortgage credit mess (he called it subprime) as totally overblown and ridiculous and was insulted because he was wasting his time talking about it. It would blow over by winter and was of no consequence. What a dope. I hope he goes broke betting on the consumer.
Banker,
Mozillo won't ask for a "bailout of lenders", he'll "advocate for assistance to distressed borrowers in realizing the American dream".
Or, maybe he'll have some buddy in Congress do it for him.
Well the financial news is catching up with the story that there just might be a few more cockroaches under the banking sector MBS/SIV fridge... From AP via our beloved Yahoo...
Wall Street, Bracing for More Bad News From Banks, Also Awaits Retail Sales, Price Indexes
NEW YORK (AP) -- The stock market this week is hoping for signs that the economy is surviving the problems in the financial sector -- and that the Federal Reserve will come to the rescue if it's not.
Investors are slowly getting a clearer picture of how much in risky and deteriorating debt securities the world's major financial institutions are holding, and they don't like what they see.
No I suppose they don't like what they see... I don't think it will get prettier soon, MLEC or no MLEC.
"Yes, buying a home can't be treated lightly, but with so many friendly and personable "experts" helping you along ("Just sign here.") it's understandable that there was some misplaced trust."
picosec | 11.11.07 - 6:23 pm | #
I'm getting a little sick of portraying people as victims all of the time for any time THEY use bad judgment. I have always known BEFORE I went to the lender what was affordable...at that point I lowered my price point below that. People with $$$$ in their eyes were playing the lottery with their home purchase and they lost. I see FOOLS every day at the gas stations or grocery stores using their last fifty to buy scratch offs or a daily number. It may sound crass, but I don't have a whole lot of sympathy for them. I'm not one of the "wealthy" per se, but I've lived BELOW my means and because of that, am watching the train wreck from a distance. I don't consider myself unusually bright, just someone who exercises common sense.
Lenders looking for bailouts are just the same as these self proclaimed "victims", they're just incorporated. Let them both experience ramifications of their poor, senseless decisions.
Its still a factor and a strong yen will hurt the markets but not like this summer. We'll see...
Good luck.
Anonymous
at every point along the curve, the carry trade is profitable, considering rates, as long as the currency trades in your favor...
so, someone can place the trade at 110, and carry other position's ... as long as it's stable at 110..
if it strenhthen's towards a stronger dollar, as it did the last from june06 til july 07, all is good
barely, Ben Stein is not a dope . . . he is an asshole.
Which reminds me of a joke. A man has just suffered through a painful litigation and heads to a bar to drown his sorrows. After a few libations, he takes to his feet and announces, 'All lawyers are assholes!"
At this, the man next to also stands and says, "I take personal offense to that!"
Veteran's day holiday tomorrow, no bond market trading, and probably light volume. Tends to amplify any volatility. That small J6P investors may be ready to go to cash and move to the sidelines in this decidedly down trending market.
We'll see. I like a market that moves around a lot and has a bias one way or the other. COF disclosed last week Credit Card delinquencies are accelerating. COuld be the next subprime market, since CC & auto loan CDOs are beginning to stink up the street too. COF had a nice $9.25 move down on Tues. Could give back some more.
does anyone know if the mid to small banks like DSL, BKUNA, FHN, CNB or any others have exposure to cdo's? seems to me these relatively small players do not have anywhere near the cushion or Paulson support (MLEC) that the big banks do. are we on the cusp of multiple BK's for these guys. i am short all the above.
looking at those candidates more on the basis of exposure to bubbly RE markets, massive condo lending and the like...no info on the CDO front, may regret taking some money off the table tomorrow lol
so, someone can place the trade at 110, and carry other position's ... as long as it's stable at 110..
Carry is nutz.
Given exchange rate stability the key factor is the interest rate differential... even if the currency exchange rate was 1:1 JPY:USD they'd make money just so long as (1) the interest rate differential was favorable AND (2) the currency exchange rate didn't shift against you after you locked in the trade.
But the exchange rates aren't that stable anymore... volatility has returned.
There has to be a lot of folks who locked in at say 120 yen/$ and now are looking at 110 yen/$ and wondering how soon (if ever) will it get back to 120?
At 120 yen/$... if you took out a loan of 120,000 yen at 1% (costs you 1,200 yen per year) to buy a $1000 bond at 5%. The bond generates $50/year or 6,000 yen/yr. Easy to understand why they'd do that... it generates a 4,800 yen net income or 'carry' every year.
But if the yen goes to 110 AFTER they did the trade... the same $1000 now generates 5,500 yen and a positive 4,300 yen carry BUT they've also now experienced a large principal loss, at least on paper... The $1000 is now only worth 110,000 yen so they have a negative 10,000 yen principal 'carry loss' if they were to sell out of that position today... If the 110 yen/$ exchange rate holds it will take them almost two years at 5% just just to return the nominal principal invested in yen.
I bet a lot of Japanese housewives are doing that math every night and not too happy about how its been working out.
They don't have to decide immediately 'cause they still have positive carry from the interest rate differentials but they sure have to be watching the FX pretty tight and at some point many will pull the trigger to get out.
However if the yen weakens then they get BOTH interest carry AND currency appreciation. I don't think that is going to happen soon - but I've sure been wrong before... especially once the BOJ steps in. I would never advise anyone getting out in front of the BOJ.
Goldman Sachs has begun to cut exposure to emerging markets, fearing that turmoil in the global credit markets risks triggering a "painful" correction in the high-flying assets of Latin America, Eastern Europe and parts of Asia.
In a series of client notes over recent days, the US investment bank has advised cashing in profits as a precautionary "near-term" measure. The MSCI emerging markets index has risen 28pc since the credit crunch in mid-August.
The warnings are likely to raise eyebrows in banking circles since Goldman Sachs has led the charge into the frontier economies, coining the terms "BRICS" to describe the quartet of Brazil, Russia, India and China.
The bank has closed its positions on Brazilian and Mexican stocks after reaping fat rewards in the latest rally, hoping to buy back later.
"We see ongoing vulnerability. As the August pullbacks showed, the market could easily begin to worry more about the transmission of the latest financial problems to US and global growth. While contamination to emerging market equities in that episode proved short-lived, it was painful. We think it is prudent to book a gain," it said.
THAT is the question and maybe the play from where TS is sitting...if the unwind gets cranked up there is a feedback loop the BOJ would be obligated to try and disrupt.
if the unwind gets cranked up there is a feedback loop the BOJ would be obligated to try and disrupt.
My Japanese 'friends' - the Japanese guys working in the US transplants I talk to - would agree. But then they expect the BOJ to save them by stepping into the ForEx even when fundamentals don't justify it... JUST LIKE our financial folks expect the Fed to step in and save their ass with rate cuts even when the fundamentals don't justify it.
oh do not mistake me please - I am not saying they should intervene - just that they will feel obligated...
I hear ya... oh how I hear ya. You should see the quotes coming over from Japanese suppliers I compete against... combine goofy transfer pricing & forex monkey business and you get some crazy stuff.
In a series of client notes over recent days, the US investment bank has advised cashing in profits as a precautionary "near-term" measure. The MSCI emerging markets index has risen 28pc since the credit crunch in mid-August.
Great news, I shorted the emerging markets with the DXESX fund last week its a 2x bear fund, I would rather it be a steady down draft
then these large hits but my guess was that margin calls and protecting profits might work for me on this trade. Well see if the down draft continues, would be nice.
Globex and Bloomberg both have s&p futures down only 6, so some of the Asian sell off is follow-on from Friday. Remember that futures tanked our markets in the last half hour or so, so its not surprising to see less of a feedback loop from overnight.
Its important to remember that overnight fear is often reversed in NY in the morning.
But behind the scenes, with all carry trades (including gold) hurting, it seems the hedge funds will reappear as an issue. We saw this in NY on Friday as the short financials/long momentum HF trade was punished.
They (the hedge funds) have been quiet as church mice lately, but something tells me they will be the next shoe to drop.
BTW, apologies to all for mixing metaphors (did the last shoe belong to the church mice? in the last sentence above. Tanta would rightfully heap scorn on that post.
If I place some orders for "Puts" tonight at the Ask price from last Friday night, are they likely to transact, given the overseas action? Or will the Ask price in the morning likely move up too fast to fill the orders?
Where housing is headed. Fortune's exclusive calculations show that big declines are needed in markets around the country to bring home prices back to their historical relationship to rents. Housing Woes - Fortune Magazine
BTW, apologies to all for mixing metaphors (did the last shoe belong to the church mice? in the last sentence above. Tanta would rightfully heap scorn on that post.
Your posts are always appreciated mix metaphor or not!
Thanks. I had some bids fail to find takers recently, but I also had some go through with offers I made that were closer to the bid price.
However, at this point I don't want the market to get away from me. After all, the stuff I'm buying is Jan '09 so I don't care TOO much about small price differences today.
I have a question... when, exactly, did people stop treating their homes like places to live in and raise a family, and like ATM's instead?
Why is this behavior taken as NORMAL? It's fricking ABNORMAL
When?
About the same time that bankers and brokers realized that there was a whopping fee-based transaction to be had, the Federal regulators were under the thrall of Ayn Randism, and credit risk could be seemingly 'absorbed' magically into the global system, somewhere over the rainbow. But, they kept their fat, easy US Pesos.
And thus arrived the enormous, professional, relentless and successful marketing campaign to convince people that this was normal, sensible, a good prudent idea especially if you used it to increase the value of your house or, better yet, buy another, now just sign right here.
In a supporting role, widespread propaganda about "how great the economy was doing", even as median wages declined (unprecedented in an expansion), and since everybody else looked rich somehow, we gotta find a way to keep up, and hey this house money is free anyway.
This is what happens when weak kneed politicians cave to race hucksters..It could very well be the financial collapse of America
Anonymous | 11.11.07 - 8:29 pm | #
Yeah anon, when you think about it, what advantage have white people in this country had anyway?
PS -- Why waste your time on CR when you can find some like-minded company on Ya-hateful.
Mozilo sits hunched over on the couch in his office with the lights dimmed, a scotch in his hand, and a photo album on his lap, playing "Memories" on the stereo and weeping gently as he looks at pictures of his first 2/28, his first Home America branch. He sees a picture of his first Rolls and remembers the time he got lost in South Central on the way to receive another humanitarian award, and a slight smile comes to his chapped lips as he pictures himself yelling at the driver: "How did we end up in fucking Mexico?" Then he gets a cold, distant look in his eye and takes a crisp $100 bill out of his pocket and lights it on fire with the tip of his cigar, muttering, "I'll see you in hell, poor people..."
What's stupid is that they also try to take credit for the same thing "we help minorities to achieve their American dream"!
Now, they are blaming them.
Have your cake and eat too!
Poor people are what's wrong with America. Stamp out poor people and everything will be fine.
"noobligation". Is that no-obligation, or noob-ligation?
Wikipedia: a ligature is a device, similar to a tourniquet, usually of thread or string, tied around a limb, blood vessel or similar to restrict blood flow
noob: It can also be used for any other activity in whose context a somewhat clueless newcomer could exist.
Bravo Tanta! You beat the press, yet agai
"Lenders felt pressure to lessen their loan standards."
This really poor lying, like crazy third-world communist dictator poor lying. (Yes, it's a paraphrase of Mozillo, but the line he's taking is both bigoted and ridiculous.)
Mozillo has his cash. Why doesn't he wander off to die somewhere sunny?
Hi
Poor people are what's wrong with America. Stamp out poor people and everything will be fine.
arbogast |
I totally agree and I would move if I had the money.
I hope no rich folks were injured during Mozilo rant.
Didn't Mozilo cash out to tune of 500M?
jo6pac
Does your neck count as a limb?
Good detective work, once again.
"I would have gotten away with it, too if it weren't for those meddling bloggers!" -Angelo Mozillo, Winter 2008
And I've spotted him two "l"s he didn't deserve or earn. Bastard.
Im dont understand why there is all this backlash against the banks and lenders.
I do understand that there was real "predatory lending" but it was not widespread. Also people could have been better informed of the implications of rate rise etc.
But in all these cases is it not the obligation of the buyer to be informed? Whats better - no money available at all for lending or capital to loan and poorly made decisions? If I buy a sportscar and crash it as it had too much power is it Ferrari's fault?
In any case, why is there all the anger at exactly the firms who are getting creamed by this.
This is not a troll, I really dont understand - and i'm a regular reader.
Now it all make sense!!
Mozilo set as a goal to help darker-skinned people, you see? So when he realized the potential of stock option compensation, he tought "It's not too late", went out and got himself a Tan.
Spooky, for me it is more about the moral hazard that has been produced by poor lending. If all the parties involved would just take their losses instead of trying to hide them and put them back on the tax payer I would have no issues.
Ministry is the "moral hazard" the notion that there is a "greenspan put" for lenders?
I think people might be overestimating the moral hazard here.
Here's a song that should take our mind off all of this and prepare us for the upcoming holiday season.
(Then again, I might just be a bit sarcastic.
)
"In any case, why is there all the anger at exactly the firms who are getting creamed by this."
Creamed? HS Graduates employed as mortgage reps were pulling in six figure salaries and Mozillo pocketed over 100 million dollars since January.
It was parasitism pure and simple.
Too bad the host just died.
Smack!
Miss Tanta does it again.
RE: spooky's comment - if you're a regular on this blog then you're better informed than 95% (ok, you pick a large number) of the folks who bought homes in the last few years. As a relatively recent discoverer of this great blog myself (and almost ready for the 12-step program to end my addiction) I observe that what's obvious to its readers/commenters is "Greek" to the general public.
Yes, buying a home can't be treated lightly, but with so many friendly and personable "experts" helping you along ("Just sign here.") it's understandable that there was some misplaced trust.
Spooky - if you've really been reading here a long time then this phrase will make sense...
'privatize reward, socialize risk'
Tan Man was all for helping those po'folks so long as he would be able to walk with his stock options. Now that that's accomplished... those greedy sharks gotta pay!
And let's not forget the GSE's fault here. Lax underwriting standards? Those of us in the trenches noticed the loosey goosey DU and LP findings early on...but Hey! management said, If the GSE will buy it, then we're golden! Apparently, Morals and Ethics is just a 301 course in MBA programs nowadays.
Awesome post, as usual, Tanta.
There is more than enough blame to go around here. Starting with borrowers that were bound and determined to buy more house than they could afford and ending at Wall Street.
Owning a home used to be almost a rite of passage and in order to reach that goal one saved money (sometimes bringing proof of your $50 deposit each week into your loan officer!)and collected letters from landlords and employers about what a "good guy" you were.
In more recent history owning a home has become more of a right than a privilege. This may not be PC but frankly, not everyone in the world needs to be a homeowner. That statement has absolutely nothing to do with social or economic standing either. I have had clients with plenty of income and absolutely no left over money after paying for all of their toys and invariably, it is that client that is pissed at me when I tell them what they can really afford-bupkes!! (they made me stop talking to clients after that one!)
Yea, CFC and Mozilo worked really hard to "eliminate the gap". Fat freaking lot of good that did.
None of the bail out plans strike me as ultimately workable but if anyone can put a square peg in a round hole it would be the Fed.
Nikkei 225
just opened down 200 pts.
Oh, and Morals and Ethics in big money lending (or any big money business for that matter) that is like going on a snipe hunt!
Angelo R. Mozilo considers himself and his company to be the victims of financial forces beyond their control.
Countrywide’s Chief Salesman and Defender - New York Times
I really wouldn't be surprised if someone takes this lying sack of shit out!
Also, spook, if you are a long time reader I would think you would have seen earlier how Countrywide steered people into higher rate loans in order to maximize commissions and fees. Of course, they have also earned a rep for not being particularly eager to do workouts. I don't think Countrywide made all these loans out of some altruistic corporate philosophy. I also doubt that they were "guilted" into fleecing low income borrowers.
Hold on a sec...
Those two statements are not necessarily mutually exclusive.
The way I read the first, he was pressured by the feds to make those moves. Not the other way around, as most are reading it.
No?
Now its down over 300 points.
What a difference a minute makes.
I remember when they hired an executive from Associates in 2001(yes the same Associates acquired by Citigroup that had the record setting settlement for abusive subprime lending practices) to run their Wholesale subprime division. I sure that was due to their purely egalitarian desire to expand homeownership. Of course this executive was dismissed about 4yrs later and now the subprime division has been "merged" with the prime division. I love the spin that all of the pressure was coming from "outside" the company.
I have a question... when, exactly, did people stop treating their homes like places to live in and raise a family, and like ATM's instead?
Why is this behavior taken as NORMAL? It's fricking ABNORMAL.
I wonder how many of those Spanish people were capable of reading the terms and conditions of the mortgage papers? Oh well, I'm sure it was all explained in detail.
Ben Stein, in true Rovian (as in Karl) fashion has found a way to blame this mess on liberal infiltration in the board room.
In other words, had corporate America not caved pressure to make boards more representative we would have had much better oversight.
Nice catch, Tanta. Nice.
S&P 500 DEC07 1456.20 +130
E-MINI DEC07 1456.25 +125
E-MINI MAR08 1465.50 A +150
NSDQ100 DEC07 2043.00 A +125
E-NASDAQ DEC07 2042.75 +100
siv saves
Investment Trusts Focused On U.S. Securities Losing Popularity
(The above from Japan's Headline News).
I thought crushing the dollar was supposed to bring in a flood of overseas capital.
Spook,
I am 72 years old and have 2 degrees in engineering. Bought 3 houses in my time; own one free and clear and paid off the ex-girl friends house. I read CR and Tanta's stuff and think - god!, there is so much I don't know about buying and selling houses. I am red ridinghood in the woods who has just met the wolf or a cow being lead to slaughter. All of us in this life are at the mercy of professionals. You can shop opinions around but in the end you have to choose one to act on.
I understand your feelings about "people should have known better" but when the butcher blames the cow for walking into that slaughter house with its eyes open. That is a bit over the line.
Nikkei, why stop at -300? -409 at the moment.
I wonder how many of those Spanish people were capable of reading the terms and conditions of the mortgage papers? Oh well, I'm sure it was all explained in detail.
Plenty of their own people that made the commissions in their own language.
The point is that regardless of whether they are citizens or not, they can't be victims if they got in with no equity, they simply were renters that thought they were homeowners. In with nothing, out with nothing, no damages.
Not to say the bankers shouldn't be locked up, but that is for defrauding investors with sub prime CDO's.
Try -433, or 2.8%. Yen rallying sharply against the dollar.
Tanta
I checked out Countrywide's "House America" site at
Countrywide Home Loans
and that led me to thc California Housing Finance Agency at
CalHFA - First-time Homebuyers
Both sites still promoting no-down and income only loans.
Your reaction?
"Mozillo has his cash. Why doesn't he wander off to die somewhere sunny?"
Because he doesn't have his legacy. Like Ken Lay, he'll be remembered in history books as a crook.
Okay, futures ramping up while Nikkei's tanking? WTF is up with that?!?
Spooky, just stop and think for one moment about the impact of inflated appraisals. Does the first time homebuyer have a clue? Of course not. They don't even know what an appraisal is supposed to do.
Add to that those "layered" programs to help with stuff like no downpayments. Add to that "affordability" products for which you qualify on a low teaser rate, with a substantial adjustment up in a few years, such as the 2/28. But just tell them they can refinance when they ask you about that big payment shown on the TIL! Don't dwell on that hefty prepayment fee they'll have to pay to refinance! Add to that low/no doc loans, because of course, every subprime borrower, especially those with limited English, is really qualified to do their own underwriting.
The last thing in the world you do to help subprime buyers is aid them to get deeper in debt than they can possibly repay. These people need stability and control of debt, plus some savings in the bank. If they haven't learned to save, most of them will lose their homes anyway.
What's gone on is spooky. It's spookily unethical.
You have to understand that once most of these buyers got in on 2/28s, they were doomed to refi them at least 2 or 3 times. Few of them had the income increases they'd need to refi to a prime 30 year fixed. But oh, those prepayment charges kept the subprime MBS really paying off.
The reason this was all done was that outfits such as CW found a way to make it immensely profitable. The ways they found ensured that most of these buyers weren't going to succeed long term. You don't help a subprime buyer by getting them into a home on which they can't pay a 30 year fixed amortizing mortgage. You just don't.
Tradingstats,
Hmmm... futures are DOWN now. Must've taken notice of the Nikkei (now -425).
Spooky - if you've really been reading here a long time then this phrase will make sense...
'privatize reward, socialize risk'"
As a mortgage banker, I kindly take issue with this statement.
No where I have seen Mozilo state there should be a public bailout. Certainly the risk being absorbed by MBS is all private sector.
MOM,
What kills me about inflated appraisals is that they end up screwing up all future appraisals, regardless of the integrity of the appraisers, etc. Talk about opening Pandora's box!
Jane,
Make that the Nikkei down 444 atm, and bigger picture the yen at 110.5...could get a bit too interesting tomorrow if Asia closes with all exchanges painting a red tape as they are now and Europe picks up the baton.
energyecon,
Bloomberg shows the Nikkei moving up to -364. Maybe the PPT called their Japanese counterparts?
As this post suggests, if you do your homework, you'll find that the Jesse Jacksons of the world pressured the banks into easy lending practices in order to "boost Minority Homeownership". They gave them what they wanted and now the Jesse Jacksons of the world are crying "Predatory Lending". This is what happens when weak kneed politicians cave to race hucksters..It could very well be the financial collapse of America
RE: Mozillo not asking for a public bailout. From the milkeninstitute symposium report that the main post refers to:
.... Mozilo said: ...
"We must take steps to create liquidity," he warned.
So far, he said, the federal government has done little to help the industry. The Fed has lowered rates, which has brought some relief. But there has been no program, no effort, no legislative breakthrough yet, such as allowing Fannie Mae and Freddie Mac to raise their caps on mortgage holdings. All he has seen is pressure on the lenders, he said. "No one is helping (the lenders)," he said. "The ones who are putting out the intellectual assets, the financial assets are the lenders, and no one else."
.....................
It reads like whining to me. Is there an implied special pleading for fed action ? You decide. I definitely find that its implied.
-K
off topic
"John P. Hussman, Ph.D.
All rights reserved and actively enforced.
Reprint Policy
Expecting a recession"
I agree!
tj & bear,
Yes! How the heck do you spell 'PPT' in Kanji anyways?
(Yahoo reads on a 20 minute delay so you must have real time)
energyecon,
I'm just tracking on Bloomberg.com
which currently shows turning down again at -386. Also currently shows U.S. market futures recovering to roughly even. Weird.
Anonymous 8:29, why not choose a handle . . . "Cowardly Racist" is available.
Nikkei.com - Market Live
Banker - you're right, I've never heard Mozilo suggeset a public bailout.
So that marks him down from financial crook to plundering pirate who had so little regard for his customers that he didn't even worry about foisting their skeletons on the FedGov.
The guy should be in jail.
Everyone reading this blog saw this crash coming. and SuperGenius Mozilo didn't?
He should be fined $500 million and plopped into a jail for a couple of years.
Thanks F. Frederson.
Do you have a real time link to the S&P futures?
I think fair value is about 1475 (its never the close) and the data I saw from about 15 minutes ago showed futures down about 20-22 from fair value.
Oops, forgot to add that the Nikkei link seems to be 1-2 minutes delayed at most. Currently at -360.
Yahoo has all of the Asian markets, on delay: Major World Indices - Yahoo! Finance
If Countrywide thinks poor people are the problem, why did they create so many of them?
from mar and a must read considering current events-
JPMorgan Chase, Large U.S. Banks Have Ratings Raised by Moody's - Bloomberg.com
JPMorgan, Wells Fargo May Receive Top Moody's Ratings (Update1) - Bloomberg.com
‘weak kneed politicians cave to race hucksters.’
If Jackson and Sharpton were as powerful as the pundits claim, they would have been president by now. Neither could get even the Dem nomination. The guys in the corner offices changed the mortgage rules for their own financial reasons.
I just checked US futures about 4 minutes ago. S&P 500 up 1.25, Nasdq 100 down 2.00. Looks like the US traders are not so worried about the decline in the Yen.
Okay, futures ramping up while Nikkei's tanking? WTF is up with that?!? - tj
Friday vs Monday. Japan's market follows our market for the most part... so tonights sell off in Japan (Monday AM there) is a reflection of last Friday's sell off here. They'll be following our open Monday all day and that will drive their Tuesday action (we'll see it late Monday night)...
Been like that for awhile. More not-so-decoupling...
You have to understand that once most of these buyers got in on 2/28s, they were doomed to refi them at least 2 or 3 times. Few of them had the income increases they'd need to refi to a prime 30 year fixed. But oh, those prepayment charges kept the subprime MBS really paying off.
It was financial crack cocaine for mortgage brokers & bankers. Once they took a hit off those fees they were hooked...
yen 110.12
last time it was this low, michelle wie was at canoe brook trying to qualify for the us open(mens)..
where is that girl now?
=========================
last time it was this low, michelle wie was at canoe brook trying to qualify for the us open(mens)..
where is that girl now?
in dollar heaven without (yet?) fully living up to her sporting potential. She's wayyyyyyyyyyyyyyy better than me, and put in wayyyyy more effort at her chosen sport than I ever did so perhaps I should be more restrained in my criticism of her though.
-K
tj and Bill -
All the futures action I see shows a down opening for tomorrow. Looks like S&P futures are down about 24 from fair value and NASDAQ futures are down about 72 from fair value. I'm sure Japan is following our Friday like dryfly says, but US futures action right now suggests a very ugly opening tomorrow. This could be a very rocky week for the markets.
By the way, the PPT may exist, but they havent been a player in this market. The hedging and program trading are massive and leading to much of the volatile behavior.
Odd... Bloomberg has the Nikkei flatlining at -374 for over an hour now.
U.S. market futures down slightly.
Most interestingly, oil, gold & NG futures all down over 1% despite the stronger yen.
TJ and Bill -
The US futures are showing an ugly opening for Monday. S&P futures are down about 24 from fair value and NASDAQ futures are down about 72. Unless the oversees markets rally I'd be shocked to see anything but a huge drop at the open tomorrow. As it relates to the yen, the carry trade has lost much of its influence recently. Its still a factor and a strong yen will hurt the markets but not like this summer. We'll see...
Good luck.
TJ - the TSE takes a 1.5 hr break every day.
"Ben Stein, in true Rovian (as in Karl) fashion has found a way to blame this mess on liberal infiltration in the board room"
That Stein is either completely clueless, or talking his book. I think it's both. As little as 1 month ago he was on Kumblow's program dismissing the mortgage credit mess (he called it subprime) as totally overblown and ridiculous and was insulted because he was wasting his time talking about it. It would blow over by winter and was of no consequence. What a dope. I hope he goes broke betting on the consumer.
Banker,
Mozillo won't ask for a "bailout of lenders", he'll "advocate for assistance to distressed borrowers in realizing the American dream".
Or, maybe he'll have some buddy in Congress do it for him.
Well the financial news is catching up with the story that there just might be a few more cockroaches under the banking sector MBS/SIV fridge... From AP via our beloved Yahoo...
Wall Street, Bracing for More Bad News From Banks, Also Awaits Retail Sales, Price Indexes
NEW YORK (AP) -- The stock market this week is hoping for signs that the economy is surviving the problems in the financial sector -- and that the Federal Reserve will come to the rescue if it's not.
Investors are slowly getting a clearer picture of how much in risky and deteriorating debt securities the world's major financial institutions are holding, and they don't like what they see.
No I suppose they don't like what they see... I don't think it will get prettier soon, MLEC or no MLEC.
"Yes, buying a home can't be treated lightly, but with so many friendly and personable "experts" helping you along ("Just sign here.") it's understandable that there was some misplaced trust."
picosec | 11.11.07 - 6:23 pm | #
I'm getting a little sick of portraying people as victims all of the time for any time THEY use bad judgment. I have always known BEFORE I went to the lender what was affordable...at that point I lowered my price point below that. People with $$$$ in their eyes were playing the lottery with their home purchase and they lost. I see FOOLS every day at the gas stations or grocery stores using their last fifty to buy scratch offs or a daily number. It may sound crass, but I don't have a whole lot of sympathy for them. I'm not one of the "wealthy" per se, but I've lived BELOW my means and because of that, am watching the train wreck from a distance. I don't consider myself unusually bright, just someone who exercises common sense.
Lenders looking for bailouts are just the same as these self proclaimed "victims", they're just incorporated. Let them both experience ramifications of their poor, senseless decisions.
Its still a factor and a strong yen will hurt the markets but not like this summer. We'll see...
Good luck.
Anonymous
at every point along the curve, the carry trade is profitable, considering rates, as long as the currency trades in your favor...
so, someone can place the trade at 110, and carry other position's ... as long as it's stable at 110..
if it strenhthen's towards a stronger dollar, as it did the last from june06 til july 07, all is good
TJ - the TSE takes a 1.5 hr break every day.
Cool.
Sub 110 yen...
support at 109.5 or so...
scoopppppppppp it !
barely, Ben Stein is not a dope . . . he is an asshole.
Which reminds me of a joke. A man has just suffered through a painful litigation and heads to a bar to drown his sorrows. After a few libations, he takes to his feet and announces, 'All lawyers are assholes!"
At this, the man next to also stands and says, "I take personal offense to that!"
Oh I'm sorry, are you a lawyer?
No, I'm an asshole!
I apologize to Tennis_8 for the salty language.
Veteran's day holiday tomorrow, no bond market trading, and probably light volume. Tends to amplify any volatility. That small J6P investors may be ready to go to cash and move to the sidelines in this decidedly down trending market.
We'll see. I like a market that moves around a lot and has a bias one way or the other. COF disclosed last week Credit Card delinquencies are accelerating. COuld be the next subprime market, since CC & auto loan CDOs are beginning to stink up the street too. COF had a nice $9.25 move down on Tues. Could give back some more.
hey barely
that BSC trade is working out pretty good for me so far. i added shorts on MER and JPM. what do u think about their future?
idoc, I think they look good tomorrow. All US banks.
UPDATE 1-RESEARCH ALERT-CIBC downgrades large-cap US bank sector
| Reuters
I am short LEH at $59.
HOLD ONTO YOUR HATS!!!
Nikkei now flashing -507.
tomorrow is going to be a good example of ugly.
U.S. market futures going down again, too.
Guess I'll hold onto those puts!
I apologize to Tennis_8 for the salty language.
Gary |
Don't apologize to Tennis_8. He is a troll.
does anyone know if the mid to small banks like DSL, BKUNA, FHN, CNB or any others have exposure to cdo's? seems to me these relatively small players do not have anywhere near the cushion or Paulson support (MLEC) that the big banks do. are we on the cusp of multiple BK's for these guys. i am short all the above.
idoc,
looking at those candidates more on the basis of exposure to bubbly RE markets, massive condo lending and the like...no info on the CDO front, may regret taking some money off the table tomorrow lol
109.60 ...
124 to 109.5 in 4 months...
imo, that's the range, for now...
scoop it to your hearts content..
TradingStats,
Are you saying IYO that the dollar won't fall much more against the yen in the short term?
Bloomberg.com says Nikkei -566.22
Futures diving, too.
dryfly, looks like we may be getting a little feedback loop going this time.
y, imo...
just another worthless internet blog opinion.
just like the one i posted over the summer at 123.55 , fade it hard... lol
good luck...
a trader is always allowed to change his opinion, after he's sold , and left someone else to hold the bag
so, someone can place the trade at 110, and carry other position's ... as long as it's stable at 110..
Carry is nutz.
Given exchange rate stability the key factor is the interest rate differential... even if the currency exchange rate was 1:1 JPY:USD they'd make money just so long as (1) the interest rate differential was favorable AND (2) the currency exchange rate didn't shift against you after you locked in the trade.
But the exchange rates aren't that stable anymore... volatility has returned.
There has to be a lot of folks who locked in at say 120 yen/$ and now are looking at 110 yen/$ and wondering how soon (if ever) will it get back to 120?
At 120 yen/$... if you took out a loan of 120,000 yen at 1% (costs you 1,200 yen per year) to buy a $1000 bond at 5%. The bond generates $50/year or 6,000 yen/yr. Easy to understand why they'd do that... it generates a 4,800 yen net income or 'carry' every year.
But if the yen goes to 110 AFTER they did the trade... the same $1000 now generates 5,500 yen and a positive 4,300 yen carry BUT they've also now experienced a large principal loss, at least on paper... The $1000 is now only worth 110,000 yen so they have a negative 10,000 yen principal 'carry loss' if they were to sell out of that position today... If the 110 yen/$ exchange rate holds it will take them almost two years at 5% just just to return the nominal principal invested in yen.
I bet a lot of Japanese housewives are doing that math every night and not too happy about how its been working out.
They don't have to decide immediately 'cause they still have positive carry from the interest rate differentials but they sure have to be watching the FX pretty tight and at some point many will pull the trigger to get out.
However if the yen weakens then they get BOTH interest carry AND currency appreciation. I don't think that is going to happen soon - but I've sure been wrong before... especially once the BOJ steps in. I would never advise anyone getting out in front of the BOJ.
Note - this is NOT investment advice.
Goldman Sachs has begun to cut exposure to emerging markets, fearing that turmoil in the global credit markets risks triggering a "painful" correction in the high-flying assets of Latin America, Eastern Europe and parts of Asia.
In a series of client notes over recent days, the US investment bank has advised cashing in profits as a precautionary "near-term" measure. The MSCI emerging markets index has risen 28pc since the credit crunch in mid-August.
The warnings are likely to raise eyebrows in banking circles since Goldman Sachs has led the charge into the frontier economies, coining the terms "BRICS" to describe the quartet of Brazil, Russia, India and China.
The bank has closed its positions on Brazilian and Mexican stocks after reaping fat rewards in the latest rally, hoping to buy back later.
"We see ongoing vulnerability. As the August pullbacks showed, the market could easily begin to worry more about the transmission of the latest financial problems to US and global growth. While contamination to emerging market equities in that episode proved short-lived, it was painful. We think it is prudent to book a gain," it said.
Goldman alert over emerging markets - Telegraph
dry,
THAT is the question and maybe the play from where TS is sitting...if the unwind gets cranked up there is a feedback loop the BOJ would be obligated to try and disrupt.
if the unwind gets cranked up there is a feedback loop the BOJ would be obligated to try and disrupt.
My Japanese 'friends' - the Japanese guys working in the US transplants I talk to - would agree. But then they expect the BOJ to save them by stepping into the ForEx even when fundamentals don't justify it... JUST LIKE our financial folks expect the Fed to step in and save their ass with rate cuts even when the fundamentals don't justify it.
Unfortunately both usually get what they want.
oh do not mistake me please - I am not saying they should intervene - just that they will feel obligated...
CR, if you're out there you should post on that link that barely put up.
dryfly, looks like we may be getting a little feedback loop going this time. - tj
Entertain the gov't employees staying home for the 'holiday' - oh my, sure glad I have a pension instead a 401K.
Think Ben & Hank taking Vets Day off? Probably not...
Question,
Are losses incurred by Citi, MER realized (after selling) or are they just mark down of asset values?
Thank you.
oh do not mistake me please - I am not saying they should intervene - just that they will feel obligated...
I hear ya... oh how I hear ya. You should see the quotes coming over from Japanese suppliers I compete against... combine goofy transfer pricing & forex monkey business and you get some crazy stuff.
Don't forget the bank employees . . . while the IBs have to work, commercial banks have a day off.
And for the record, my apology to Tennis_8's virgin eyes was purely facetious.
hey boys; yet another target...
New ETF lets investors profit if China's stock market tumbles ETF Investing - MarketWatch
Nikkei seems to have support at 15000. Will it last?
In a series of client notes over recent days, the US investment bank has advised cashing in profits as a precautionary "near-term" measure. The MSCI emerging markets index has risen 28pc since the credit crunch in mid-August.
Great news, I shorted the emerging markets with the DXESX fund last week its a 2x bear fund, I would rather it be a steady down draft
then these large hits but my guess was that margin calls and protecting profits might work for me on this trade. Well see if the down draft continues, would be nice.
those Profunds are getting quite popular!
Chinese officials raised reserve requirements again on Saturday.
What happened to Maria Bartiromo's global growth and liquidity bonanza from early summer?
Where are YOU putting your money to work TODAY? LMAO!
Watch out. Options expiry this week and with NIKKEI meltdown, don't think for a second the PPT takes bonecrushing the shorts lightly.
Where are YOU putting your money to work TODAY?
Shorting gold.
Globex and Bloomberg both have s&p futures down only 6, so some of the Asian sell off is follow-on from Friday. Remember that futures tanked our markets in the last half hour or so, so its not surprising to see less of a feedback loop from overnight.
Its important to remember that overnight fear is often reversed in NY in the morning.
But behind the scenes, with all carry trades (including gold) hurting, it seems the hedge funds will reappear as an issue. We saw this in NY on Friday as the short financials/long momentum HF trade was punished.
They (the hedge funds) have been quiet as church mice lately, but something tells me they will be the next shoe to drop.
1375 defense
Called_Bluff | 08.16.07 - 7:22 am |
anybody remember this day?
I do...
BTW, apologies to all for mixing metaphors (did the last shoe belong to the church mice? in the last sentence above. Tanta would rightfully heap scorn on that post.
Novice question,
If I place some orders for "Puts" tonight at the Ask price from last Friday night, are they likely to transact, given the overseas action? Or will the Ask price in the morning likely move up too fast to fill the orders?
SC,
Been there, done that. Limit trades will almost certainly fail -- unless the market's going the wrong way.
Where housing is headed. Fortune's exclusive calculations show that big declines are needed in markets around the country to bring home prices back to their historical relationship to rents.
Housing Woes - Fortune Magazine
BTW, apologies to all for mixing metaphors (did the last shoe belong to the church mice? in the last sentence above. Tanta would rightfully heap scorn on that post.
Your posts are always appreciated mix metaphor or not!
tj,
Thanks. I had some bids fail to find takers recently, but I also had some go through with offers I made that were closer to the bid price.
However, at this point I don't want the market to get away from me. After all, the stuff I'm buying is Jan '09 so I don't care TOO much about small price differences today.
Thanks again.
"What happened to Maria Bartiromo's global growth and liquidity bonanza from early summer?"
And what happened to John Chambers and "the greatest world economy ever." ?
Reality.
SC,
I'm no guru, but I've learned some hard lessons quickly. You just stated one -- if you're looking long-term, don't sweat a few pennies difference.
Bloomberg on Super-SIV agreement:
- Bloomberg.com
I have a question... when, exactly, did people stop treating their homes like places to live in and raise a family, and like ATM's instead?
Why is this behavior taken as NORMAL? It's fricking ABNORMAL
When?
About the same time that bankers and brokers realized that there was a whopping fee-based transaction to be had, the Federal regulators were under the thrall of Ayn Randism, and credit risk could be seemingly 'absorbed' magically into the global system, somewhere over the rainbow. But, they kept their fat, easy US Pesos.
And thus arrived the enormous, professional, relentless and successful marketing campaign to convince people that this was normal, sensible, a good prudent idea especially if you used it to increase the value of your house or, better yet, buy another, now just sign right here.
In a supporting role, widespread propaganda about "how great the economy was doing", even as median wages declined (unprecedented in an expansion), and since everybody else looked rich somehow, we gotta find a way to keep up, and hey this house money is free anyway.
Roubini 11/11/07- "Expect Q4 growth to be 1% or below and this growth further to accelerate into negative territory by H1 of 2008."
Conjure Bag says, "I re-affirm my long-standing Q1-08 forecast."
This is what happens when weak kneed politicians cave to race hucksters..It could very well be the financial collapse of America
Anonymous | 11.11.07 - 8:29 pm | #
Yeah anon, when you think about it, what advantage have white people in this country had anyway?
PS -- Why waste your time on CR when you can find some like-minded company on Ya-hateful.
Mozilo sits hunched over on the couch in his office with the lights dimmed, a scotch in his hand, and a photo album on his lap, playing "Memories" on the stereo and weeping gently as he looks at pictures of his first 2/28, his first Home America branch. He sees a picture of his first Rolls and remembers the time he got lost in South Central on the way to receive another humanitarian award, and a slight smile comes to his chapped lips as he pictures himself yelling at the driver: "How did we end up in fucking Mexico?" Then he gets a cold, distant look in his eye and takes a crisp $100 bill out of his pocket and lights it on fire with the tip of his cigar, muttering, "I'll see you in hell, poor people..."
I can't believe it...really...is someone trying to place this problem at the feet of the poor?