Originally Posted By friendofdd >>>Wow. Fortunate timing! (you likely saved yourself 40-50 percent loses by now...assuming junior pays ya back someday)<<< As of last week, it was 46% I saved. Even though it is an interest free loan, I will come out well on it. Lulu, I have no idea what I'm talking about, but I am calling for stagflation rather than inflation.
Originally Posted By Mr X ***Even though it is an interest free loan, I will come out well on it.*** Wow, interest free!? Can I be your kid too? Anyway, YES..you were very fortunate to get out when you did. I'm very happy to hear that!
Originally Posted By Mr X ***This real estate nonsense is so pervasive... I can't believe it *won't* affect the overall economy. I agree, I hate the "bailing out" idea, but I guess the gov't wants to spread the pain around. No personal consequences for individual stupidity/greed.*** Wow. Lulu. Either you went to Hogwarts School, or else the Jedi Academy. You obviously have an amazing talent for predicting the future (perfectly, in fact!).
Originally Posted By A Happy Haunt <<I agree, I hate the "bailing out" idea, but I guess the gov't wants to spread the pain around. No personal consequences for individual stupidity/greed.***>> I AM SO MAD OVER THIS!!! So because I'm a responsible person that lives in thier means I get NOTHING!!
Originally Posted By davewasbaloo But whether we like it or not, the everyone for themselves mentality will not get us out of this. We globally need to pull together and where we can, ensure those responsible for this are held accountable.
Originally Posted By A Happy Haunt I AM SO MAD OVER THIS!!! I AM SO MAD OVER THIS!!! I AM SO MAD OVER THIS!!! I am a Realtor here is Ma. This morning I showed a property (to a friend). The Owner had 3 mortages on this home (nice place). After the bank foreclosed he broke in STOLE all the appliances, the heating system, a broke the sewage pipe in the basement so now there is raw sewage leaking in the basement!! This was a $400,000, 2700 sq. ft home!! Now it's $227,ooo!! I'm trying to talk my friend out of it!! THIS GUY SHOULD GO TO DEBTERS PRISON!!! believe it or not, this bank owned prop was in better shape than most!! No wonder the Banks can't resell these properties!! The homeowners are so mad at the banks for throwing them out (out of homes the bank told them they could afford) that now they are screwing the banks!! I am finished my rant, I could go on all day!!
Originally Posted By LuLu Sorry Happy Haunt. Yes, us responsible people, who bought houses we actually could afford, or rented, get no bennies. I don't think it's possible to even identify ALL those responsible for this mess, let alone hold them accountable. The people who bought houses "the bank told them they could afford" were often greedy or foolish, but they don't deserve to bear virtually ALL the retribution for this catastrophe. But many of them will. The mortgage brokers, bankers, stock brokers etc will get off largely scot-free for their roles in the debacle. Of course, many are out of work - but they won't be "punished" per se.
Originally Posted By fkurucz <<So X, please tell us, are we in for a depression or hyperinflation? >> A very good question. Probably both. We will probably have negative to stagnant real economic growth for many years. And it appears that we are headed for strong inflation, courtesy of the probable never ending stream of stimulous packages the next few years. FWIW, the Chinese are very worried about hyperinflation in the US, which would make all of their USD denominated financial instruments (gov't and corporate bonds) lose a great deal of real value. Some are even talking about a bond bubble these days, as many have run to the relative safety of US Treasuries. Once inflation kicks in the Federal reserve will be facing a dilemma with interest rates: 1) Leave them low and watch inflation burn everything away. Current bonds paying low rates will lose real value as the interest they pay fails miserably to offset inflationary losses. 2) Raise the rates to slay inflation. Current bonds paying low rates will see their value plummet as their net present value collapses. To illustrate: let's say you have two zero coupon, 5 year, $1000 (par value) bonds. One pays %5 interest per year and the other 50%. Since they are zero coupon you don't get paid anything until maturity. 5 years later bond #1 pays you back $1250, while bond #2 will pay you back $3500. So if hyperinflation were to kick in to the point of 50% interest rates it would stand to reason that those 5% interest bonds would lose about 2/3 of their real value upon maturity, which would be reflected in their current price if you tried to sell them. After all, why buy a 5% bond for the same price as a 50% bond? We are between a rock and a hard place.
Originally Posted By fkurucz <<***Mr X is quite right. The real estate bubble is starting to pop, and its going to be spectacular. And its not just "sub-prime" that will go down the tubes. There is speculation that the overwhelming majority of mortgages that were made in the past 4 years are going to default.*** Courtesy of fkurucz, 8/5/2007... If people wanted to look 2 years into the future, better to listen to KooRUtz than Cramer! Talk about some serious forwarnings!!>> To give credit where credit is due, I learned a great deal about what was happening (and about to happen) at www.thehousingbubbleblog.com. There are some tinfoil hat types there, but many more are not and back up their posts with hard data.
Originally Posted By mawnck ... and it was met with crickets when I posted it in community, but these three episodes of the radio show "This American Life" ... <a href="http://www.thisamericanlife.or...sode=355" target="_blank">http://www.thisamericanlife.or...sode=355</a> <a href="http://www.thisamericanlife.or...sode=365" target="_blank">http://www.thisamericanlife.or...sode=365</a> <a href="http://www.thisamericanlife.or...sode=375" target="_blank">http://www.thisamericanlife.or...sode=375</a> ... explain things so dang well that they ought to be required listening for everybody. They won't answer what, exactly, we are in for - too many variables for that - but they sure as heck will answer why.
Originally Posted By mawnck Curses. Let's try that again. <a href="http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355" target="_blank">http://www.thisamericanlife.or...sode=355</a> <a href="http://www.thisamericanlife.org/Radio_Episode.aspx?episode=365" target="_blank">http://www.thisamericanlife.or...sode=365</a> <a href="http://www.thisamericanlife.org/Radio_Episode.aspx?episode=375" target="_blank">http://www.thisamericanlife.or...sode=375</a>
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