| Author |
Previous Topic | Next Topic |
nasdaq456
203 Posts |
 Posted - 07/10/2009 : 7:07:27 PM
|
Oh My! |
|
|
|
propertylender.c
1730 Posts |
Posted - 07/10/2009 : 7:55:41 PM
|
Well, Japan had a 6.6 downward trend in wholesale prices (worse than expected) and all they do is save.
All we do is borrow, so we are in deep S.....
Oh my is too soft. |
|
|
frank drigotas j
5613 Posts |
Posted - 07/10/2009 : 8:22:11 PM
|
We are not in a depression.
What do you have to back that up?
I assume you are not talking clinical here.
dollar |
|
|
fnihei
24 Posts |
Posted - 07/10/2009 : 9:13:05 PM
|
| A few months ago they were swearing up and down that we weren't in a recession either. Even though it was pretty obvious they were lying hoping for a self-fulfilling prophecy of recovery. |
|
|
frank drigotas j
5613 Posts |
Posted - 07/10/2009 : 9:28:52 PM
|
Back to the point:
we all know what defines a depression.
Are we in one now? That's what posters above are saying, right?
Try this as an analogy: we all know we are going to die. Are you dead, but don't know it?
dollar |
|
|
VVance
5700 Posts |
Posted - 07/11/2009 : 05:31:55 AM
|
I ran into a friend of mine who works in local government on foreclosure relief. She told me her case load is triple what she's ever seen before.
Depression? Depends on who you ask.
By statistical evidence? No. But anymore, can you trust the published statistics? |
|
|
benjamin
8244 Posts |
Posted - 07/11/2009 : 05:40:51 AM
|
| Visit Michigan, things are rosey. |
|
|
VVance
5700 Posts |
Posted - 07/11/2009 : 05:50:40 AM
|
quote:
Originally posted by benjamin
Visit Michigan, thimgs are rosey.
Like we've discussed many times, half the country could be starving and the Government Media Machine would be talking about "green shoots" and turn arounds coming very soon! |
|
|
homebroker@sbcgl
9092 Posts |
Posted - 07/11/2009 : 09:19:54 AM
|
I saw a home for sale in Michigan for $1000, after paying the minimum commission and closing costs the seller new was going to net minus $910 plus holding costs, why not give them away, it's cheaper.
quote:
Originally posted by benjamin
Visit Michigan, thimgs are rosey.
|
|
|
canoe
254 Posts |
Posted - 07/11/2009 : 10:34:51 AM
|
Remember even in the great depression 25% were unemployed, so 75% still had something to do. The one big difference is folks did not have consumer debt and only 35% to 40% of folks owned homes and many were free and clear. My grandfather used to tell me that food was the big issue, utilities were almost nothing, no car or medical insurance and the kids all walked to and from school.
The folks in the Real Estate industry are in a depression unless they have a spouse that is employed in a real job with benefits. The real unemployment in this business is probably over 65%, most are 1099 workers with no steady paycheck and no benefits, we cannot even get unemployment insurance, so it's a depression for many.
At the end of the boom I had about 55 loan officers I worked with, out of the 55 I know of 6 or 7 are living in bedrooms , one was seen on a main street pushing a basket, their wifes left them once the money dryed up. Some lived with family until they got fed up. Some of these guys where young men between 22 and 30 when they entered the mortgage boom, now 10 years later many are pushing 40 years old and cannot even get jobs at wal-mart, the problem is many had wifes who had been used to living the good life, new BMWs, MC-Mansions, Pools, vacations, breast implants, hair days, nail days, and lot's of parties.
How does a gal go from a BMW to a 1988 ford explorer, a 3,500 square foot home with custom pool to a 1 bedroom apartment, Dinner at no price steak houses to del-taco.
In summary "yes" this is a depression for many, the goverment would never call anything a depression anymore, the folks back in the day could handle bad news, today much of our culture simply cannot handle the truth as they were raised by helecoptor parents and school propaganda telling them that in America you cannot have a depression.
|
|
|
BrewCrewGuy
193 Posts |
Posted - 07/11/2009 : 12:35:27 PM
|
| You need to adapt to survive....there are still plenty of Sales Jobs out there that pay well...the problem is that there aren't any "order taker" jobs out there paying 150K per year. |
|
|
AndrewSoss
1276 Posts |
Posted - 07/11/2009 : 1:04:29 PM
|
quote:
Originally posted by BrewCrewGuy
You need to adapt to survive....there are still plenty of Sales Jobs out there that pay well...the problem is that there aren't any "order taker" jobs out there paying 150K per year.
I completely agree. I'm having my best year ever and all I had to do was adapt to the new reality. Anyone with half a brain and a little motivation can make 150k in this industry. |
|
|
BrewCrewGuy
193 Posts |
Posted - 07/11/2009 : 1:32:13 PM
|
| I am thankful that I am making the the people dance....because I don't dance that well....unless of course I have consumed a bunch o' beer!! |
|
|
BMill
629 Posts |
Posted - 07/11/2009 : 1:43:28 PM
|
When I don't have to speak to my credit card people in India or a person in Malaysia on a credit report issue that is creating a real problem for the borrower and is erroneous, then maybe things may get better.
As long as we are outsourcing our good jobs and not giving tax relief to companies here in the US to keep the jobs here, any recovery will be a jobless one. |
|
|
propertylender.c
1730 Posts |
Posted - 07/11/2009 : 1:52:23 PM
|
quote:
Originally posted by frank drigotas jr
We are not in a depression.
What do you have to back that up?
I assume you are not talking clinical here.
dollar
Be definition, when prices come down and come down sharply while the economy is bad (i.e. depression.)
A recession is when prices are up and up sharply. (late 70's and early 80's) while the economy is doing bad.
Let's take some examples:
Prices on real estate are down an average 30% (deflation)
Prices at the supermarkets are being cut dramatically (deflation)
Prcies on expensive goods and products (my wife buys her shoes from Saks. Prices that were $650 are down to about $250 per pair) There are reductions on cloths, as much as 70% percent off. (Deflation).
Are in in the equivelent of The Great Depression of the 1930's?
No.
However, the real employment rate when you count those people who have given up looking for jobs is around 16%. The Great Depression had around a 30% umemployment rate.
The only reason (in my opinion) is that interest rates are so low (when you account for the high debts) is because the economy is so bad, investors really have no where to park their money.
|
|
|
homebroker@sbcgl
9092 Posts |
Posted - 07/11/2009 : 5:09:58 PM
|
In other words there will be no recovery, we have to adapt to our new way of life. Some countries have seen 10+ unemployment for years, it as good as it gets.
If we continue to depend on our government to save us we are doomed, we have to have the mindset "what am I going to do to be successful in this environment". Sadly many people are sitting at home waiting for Obama to save them, I think they are going to be waiting for a very long time.
quote:
Originally posted by BMill
As long as we are outsourcing our good jobs and not giving tax relief to companies here in the US to keep the jobs here, any recovery will be a jobless one.
|
|
|
toddblue
4918 Posts |
Posted - 07/11/2009 : 5:44:21 PM
|
Frank,
I never like using Wiki for a source of info. But their definition of depression is in line with most economic definitions available. I've highlighted what I believe were are currently experiencing in red, paranthetical remarks are my commentary:
"In economics, a depression is a sustained, long downturn in one or more economies. It is more severe than a recession, which is seen as a normal downturn in the business cycle (we are already there).
Considered a rare and extreme form of recession, a depression is characterized by abnormal increases in unemployment (actual unemplyment figures are arguably under reported and as high as double that reported), restriction of credit (no brainer here), shrinking output and investment (ditto and ditto), numerous bankruptcies (and/or foreclosures), reduced amounts of trade and commerce (GDP is way off), as well as highly volatile relative currency value fluctuations, mostly devaluations (look at the various world currencies competing to become the reserve currency instead of the dolar). Price deflation (oil, homes, autos, durable goods) or hyperinflation (if we keep printing money are also common elements of a depression."
It may not be a full on '30's great depression, yet. Hopefully, it will not become one. But I believe if you look at the economic evidence, it is currently a mild depression.
The definition of a recession, when your neighbor loses his job. The definition of a depression, when you lose your job. You're fortunate to be retired.
quote:
Originally posted by frank drigotas jr
We are not in a depression.
What do you have to back that up?
I assume you are not talking clinical here.
dollar
|
|
|
MARKJOLLIFF
493 Posts |
Posted - 07/11/2009 : 5:54:34 PM
|
| Someone posted that during the Great Depression that people didn't have debt. What an excellent point. I had never thought about that. Maybe unemployment isn't at the levels during the Depression but I think I would rather be unemployed and debt free than have a mediocre dead end job and a load of debt. It must be easier to find a job and solve your main problem than it is to pay off debt at %25 interest. So if you guys had the choice which would you prefer? |
|
|
frank drigotas j
5613 Posts |
Posted - 07/11/2009 : 6:03:17 PM
|
Toddblue,
I hesitate to use Wiki as a source also, but it can be a good start. What you have posted is a decent guideline, including your description at the end.
I can picture someone, say in the hills of New Mexico for example, living off the land, maybe with a few critters and goats, having a job nearby, as wondering what all this depression/recession talk is about.
I can also picture an old retired guy saying the same thing.
I suspect that we are both relatively lucky.
But luck changes in a flash, right?
Survival is always in relation to the present.
dollar
|
|
|
toddblue
4918 Posts |
Posted - 07/11/2009 : 6:09:06 PM
|
quote:
Originally posted by frank drigotas jr
Toddblue,
I hesitate to use Wiki as a source also, but it can be a good start. What you have posted is a decent guideline, including your description at the end.
I can picture someone, say in the hills of New Mexico for example, living off the land, maybe with a few critters and goats, having a job nearby, as wondering what all this depression/recession talk is about.
I can also picture an old retired guy saying the same thing.
I suspect that we are both relatively lucky.
But luck changes in a flash, right?
Survival is always in relation to the present.
dollar
Frank, right as usual. Especially about the luck. It turns on a dime. |
|
|
wadeger
641 Posts |
Posted - 07/11/2009 : 6:13:46 PM
|
by all means, as toddblue adequately displayed, we are in Depression. Does that mean that some of us still cant make a comfy living, as a few bragged about in this thread, but the OP stated "Its a Depression", and you cant argue that we are not in a Depression.... we the public are constantly snowed over by erroneous rosey reports about the economy, but the BO'ers know better... so many backloggged Foreclosures, massive amount of squatters throughout the nation.... Credit is tighter than my buddy Darren when it comes to buying a round of beers... continuous downturn in Housing Prices just about everywhere you turn. Here in California, we are issuing IOU's nowadays. I wonder what will happen to so many people when the Unemployment Benefits run out. This is going to being the worst Economic Disaster we will live through. In the meantime, grind out the business that you can grab. Am lucky to still be closing some deals, but nowhere close to the level I did in past years.
If I were President, I would institute the following policies immediately;
1. Bring the Troops Home
2. Default on all Foreign Debt
3. Kick Out all Illegal Aliens
Who knows what the best plan is for Our Country, but the current state of the Nation is on the wrong track. |
|
|
Managing Prime
2973 Posts |
Posted - 07/11/2009 : 6:13:59 PM
|
I would agree that it's a mild depression. I also think that in the long run it's going to get much worse. No one is seriously talking about what we need to do to fix this economy.
Watched this documentary in prague...it's not earth shattering by any means for people that understand the problems, but it gives a decent big picture view.
http://www.iousathemovie.com/
Warren Buffet breaks down the main point quite well:
http://www.youtube.com/watch?v=5DvuyvuHmJI |
|
|
homebroker@sbcgl
9092 Posts |
Posted - 07/11/2009 : 6:54:01 PM
|
What I don't understand is Warren wants to see another bailout or stimulus package?
quote:
Originally posted by Managing Prime
[br
Warren Buffet breaks down the main point quite well:
http://www.youtube.com/watch?v=5DvuyvuHmJI
|
|
|
Managing Prime
2973 Posts |
Posted - 07/11/2009 : 7:24:39 PM
|
quote:
Originally posted by homebroker@sbcglobal.net
What I don't understand is Warren wants to see another bailout or stimulus package?
quote:
Originally posted by Managing Prime
[br
Warren Buffet breaks down the main point quite well:
http://www.youtube.com/watch?v=5DvuyvuHmJI
Spent properly I would not be against another bailout/stimulus myself. I do agree though, it's a bit inconsistent. |
|
|
nasdaq456
203 Posts |
Posted - 07/11/2009 : 7:29:06 PM
|
WE NEED TO ABOLISH THE FEDERAL RESERVE.
http://www.barefootsworld.net/prophesy.html
GO RON PAUL !!!!!!!!!!!!!!!!!!!!!!!
http://www.youtube.com/watch?v=_6e_54Q5X1I
WAKE UP AMERICA !!!!!!!!!!!!!!!!!!! |
|
|
benjamin
8244 Posts |
Posted - 07/11/2009 : 7:38:45 PM
|
| Wade, I like that. |
|
|
homebroker@sbcgl
9092 Posts |
Posted - 07/11/2009 : 7:51:28 PM
|
I think a stimulus package would go directly to low interest loans to small business entrepreneurs, say at $25,000, $50,000 and $100,000 a pop.
$750B would fund a lot of business, they would hire employees and they have to have solid business plans, it not a freebie. I think that is the only was a Stimulus would go directly into a recovery, this last stimulus had to much pork and waste.
Small business wold again be the backbone of the country, divide up $50,000 by $750 Billion, that is 15,000,000 new businesses, yes 15 MILLION new businesses! Let say they employee on average the entrepreneur/owner plus two employees at each small business, that is 45,000,000 jobs created with one stimulus, now that makes since, not this Obama package nonsense we saw in the last stimulus.
quote:
Originally posted by Managing Prime
quote:
Originally posted by homebroker@sbcglobal.net
What I don't understand is Warren wants to see another bailout or stimulus package?
quote:
Originally posted by Managing Prime
[br
Warren Buffet breaks down the main point quite well:
http://www.youtube.com/watch?v=5DvuyvuHmJI
Spent properly I would not be against another bailout/stimulus myself. I do agree though, it's a bit inconsistent.
|
|
|
Managing Prime
2973 Posts |
Posted - 07/11/2009 : 8:11:03 PM
|
Your on the right track, but would these be small businesses that provide goods and services to americans or to our trade partners?
We need to have a trade surplus. Not only is that going to take some major investment seeing as how no one has even tried this in some time, it's also going to take some real ingenuity.
We are in a brave new world. Who knows...maybe america can't hack it and we just need to resolve ourselves to the new world order.
quote:
Originally posted by homebroker@sbcglobal.net
I think a stimulus package would go directly to low interest loans to small business entrepreneurs, say at $25,000, $50,000 and $100,000 a pop.
$750B would fund a lot of business, they would hire employees and they have to have solid business plans, it not a freebie. I think that is the only was a Stimulus would go directly into a recovery, this last stimulus had to much pork and waste.
Small business wold again be the backbone of the country, divide up $50,000 by $750 Billion, that is 15,000,000 new businesses, yes 15 MILLION new businesses! Let say they employee on average the entrepreneur/owner plus two employees at each small business, that is 45,000,000 jobs created with one stimulus, now that makes since, not this Obama package nonsense we saw in the last stimulus.
quote:
Originally posted by Managing Prime
quote:
Originally posted by homebroker@sbcglobal.net
What I don't understand is Warren wants to see another bailout or stimulus package?
quote:
Originally posted by Managing Prime
[br
Warren Buffet breaks down the main point quite well:
http://www.youtube.com/watch?v=5DvuyvuHmJI
Spent properly I would not be against another bailout/stimulus myself. I do agree though, it's a bit inconsistent.
|
|
|
benjamin
8244 Posts |
Posted - 07/11/2009 : 8:28:07 PM
|
Money for Americans to create jobs for Americans.
Not for someone to set up an import business, or to start up here and hire an overseas call center.
Made in America. |
|
|
VVance
5700 Posts |
Posted - 07/11/2009 : 8:35:01 PM
|
quote:
Originally posted by ZF
Loving it.
While you people are in doom & gloom, I'm taking your clients and letting them know everything is ok. Yes, we are in a bad situation, but its still up to us to make something happen. People we are salespeople, not bankers. We have the ability to go to a home and make people dance. Why would you want them to sense doom & gloom? Don't they already have enough of that. Forget the politics, we can't cvange them, but we can take a bad plan and make something wonderful out of it. It starts with you.
Welcome Back CountryWideCan! |
|
|
homebroker@sbcgl
9092 Posts |
Posted - 07/11/2009 : 8:43:12 PM
|
The problem is am American making a union wage to manufacture something at $20.hour trying to compete with a $10/day Chinese employee.
Maybe our manufacturing jobs need to pay Wal-Wart wages then add the cost of importing from China and we are competitive with them, I don't know what that number would be? Certainly an American manufacturing plant paying $20+ an hour is not even close to being competitive with China, and China does not plan on increasing their wages any time soon.
China has the typical system of 80 percent are poor and 20% rich controlling the businesses. The Chinese we see here in the USA buying up property are most certainly part of the 20%, most of their population is dirt poor. Here is something scary, the average Chinese makes $300/USD a month and still manages to save $100/month.
quote:
Originally posted by Managing Prime
Your on the right track, but would these be small businesses that provide goods and services to americans or to our trade partners?
We need to have a trade surplus. Not only is that going to take some major investment seeing as how no one has even tried this in some time, it's also going to take some real ingenuity.
We are in a brave new world. Who knows...maybe america can't hack it and we just need to resolve ourselves to the new world order.
[/quote]
[/quote] |
|
|
peter
7512 Posts |
Posted - 07/11/2009 : 9:01:48 PM
|
I just saw a statistical commentary on Fox News yesterday that
the real unemployment rate in certain areas of Michigan is actually
20% already. I was shocked to hear that and the revelation made
me think about the moribund auto industry and the movement of
manufacturing businesses to overseas. With our new tax policies
and other measures discouraging businesses, more and more jobs will
go to China or India for the simple economics.
I don't see any impetus to real economic recovery really, do you?
Falling asset prices and increasing delinquencies are a vicious cycle
that will further restrict bank lending. Latest news are that there
were 22% more foreclosures in the first half of 2009 and last week
there were reports on surging delinquencies on home equity lines of credit
as well as unit rental properties.
The proposed 2nd Stimulus would be like throwing good money into
a black hole. Why should we support falling assets which indirectly
support the banks? Nouriel Roubini expounded the idea recently in
Hong Kong (see my thread on Roubini's interview in Hong Kong for
the Atlantic Monthly) that banks should be taken over thru
nationalization, get cleaned up, and turn them over to the private
sector. We must allow some banks to be taken over as the stress tests
are not good enough to take care of the more severe problems that are
coming into 2010 thru 2012 when trillions of ALT-A loans become due.
And the Depression will deepen further into 11% jobless rate by
early next year as many have predicted causing the further fall of
asset prices and the more restricted bank lending.
The worst is yet to come.
Peter |
|
|
Managing Prime
2973 Posts |
Posted - 07/11/2009 : 9:43:08 PM
|
Here's another statistic over three billion people (about half the worlds population) live on less than $2.50/day.
About one-third of the worlds population has TB.
We have a long way to fall before we are in a situation anything like the one that the majority of humanity faces.
I am pretty sure that we are progressing towards an equilibrium. That's good for humanity and bad for rich nations like our own. If we continue to play this zero sum game of ours the shock of these changes are only going to be more severe.
Manufacturing cars is not the answer...not by a long shot. I don't know what it's going to take other than americans (or anyone else for all I care) taking the lead again in a big way...in a way that benefits the whole of humanity, in a way that inspires awe and respect.
People need to start thinking big and I'm not hearing any big coming from people in a position to do anything...the new GM is going to sell cars on ebay...whoop de effing do.
Obama head faked that he was going to spear head something big and obviously he had the support of the American people, but what's he doing now?
We need something 2 or 3 times the magnitude of Kennedy saying we are going to the moon this decade...that, whatever it is, might do the trick.
|
|
|
BrewCrewGuy
193 Posts |
Posted - 07/12/2009 : 07:57:53 AM
|
| The credit crunch led this going into this mess...it will lead the way coming out. Right now whats holding us back is lack of general morals & responsibility among the general public. There is still a large portion of the public that can pay their bill or portion their bills....however they arent't paying the mortgage, revolving debt, car payments ect. They are simply hoarding the cash or spending it elsewhere. They have completing lived outside their means for many years & now have shifted priorities to continue a lifestyle. There is no fear of consequences and most feel they are entitled to a free ride....it's just not their fault. They are are making no effort to resolve their problems. Those of us involved in the loan mod game know exactly what I am talking about. The press has done a horrible job filling everyones head with a false sense of assurity and entitlement. Once the citizens of this country start making an honest attempt to help themselves, then the recovery process will begin. I have been working with clients in distressed financial & credit situations for 21 years. I never thought I would see the day that people felt it was "OK" to be delinquent on their bills. Dramatic consequences are going to have to hit main street in large numbers & be exposed by the press....we will then start seeing a turn around. |
|
|
homebroker@sbcgl
9092 Posts |
Posted - 07/12/2009 : 08:10:37 AM
|
Everyone expects the government to come in and save the day, when people as you say help themselves, only then we will start to even start to see the slightest recovery.
quote:
Originally posted by BrewCrewGuy
Once the citizens of this country start making an honest attempt to help themselves, then the recovery process will begin. I have been working with clients in distressed financial & credit situations for 21 years. I never thought I would see the day that people felt it was "OK" to be delinquent on their bills.
|
|
|
ronmill
4 Posts |
Posted - 07/12/2009 : 8:10:47 PM
|
SIVA JUMBO to $5M (Currently available in S. Diego, Ventura, LA, S. Barbara, and Orange Counties ONLY)
3/1, 5/1 ARM starting in the low 5's% (rebate not available)
70% max LTV purchase
65% max LTV R/T refi
60% max LTV C/O refi ($250k max amount) (Subtract 5% from LTV max for second homes. Subtract 10% from LTV max for NOO units. Max for condos is 60%.)
720 FICO
43% DTI
No 4506-T
Minimum loan $400k
No PPP
NOO is okay for 3-4 units only
No limit on number of properties owned
Self-employed business owners only- no 1099's, no real estate industry personnel
No FTHBs
No purchases contingent upon sale of another property
Max $50k credit card debt (may pay off to qualify)
12 months stated income liquid reserves
SIVA "High Balance Conforming" to $625k (available in CA, CO, WA and HI)
3/1, 5/1, 7/1 ARMS, 30 Year Fixed from 4.5%-6.5% (rebate not available)
80% max LTV purchase OO
75% max LTV purchase NOO (or to 80% with a 3 point hit)
Wage earners only!
700 FICO
No PPP
Minimum loan size $250k
Uses DU findings for approval
No more than four properties on credit report
4506-T signed but not executed
Paystubs required, but income info can be crossed out
VOE verifies length of employment and position title only
No retired borrowers
50% DTI
JUMBO to $5M (available in CA)
30 Year Fixed, 3/1, 5/1, 7/1 ARM, from 5.125% - 6.375% at par
Full-doc only
75% max LTV Purchase, R/T to $3M, 65% max LTV to $5M
65% max LTV C/O to $3MM (max cash $500k)
must have reasonable reserves for income level
680 FICO
no PPP
40% DTI
SUPER JUMBO to $20M (available Nationwide)
3/1 ARM or 1 mo. LIBOR, rates under 5%
65% max LTV
must have reasonable reserves for income level
Aaron Miller
amiller@firststatelendinginc.com
quote:
Originally posted by nasdaq456
Oh My!
|
|
|
frank drigotas j
5613 Posts |
Posted - 07/12/2009 : 9:21:00 PM
|
This is the point at the party where I whisper to my wife...
let's go over there.
dollar |
|
|
peter
7512 Posts |
Posted - 07/12/2009 : 10:05:59 PM
|
I just read an interview of James Dimon, president of JP Morgan Chase,
in Fortune this month. He predicted that bank lending will resume
in about 5 years from now.
This means that with all the credit delinquencies and foreclosures
still going strong in the economy, banks may not ease the credit
crunch until the next 5 years.
In the meantime, the banks are hoarding money or using their liquidity
to improve their organizations for the shareholders and for the
executives who run them. The banks are not an effective instrument
to accomplish the overriding economic and social policy of reviving
the economy thru lending more aggressive. The banks will lend even
more judicially and conservative in tandem with deteriorating market
conditions.
The problem is that the U.S. Treasury is not forceful enough to
set mandatory lending targets and timetables for banks to achieve.
Moral suasion has never been working with banks and we need stronger
measures for banks to invest their retained earnings into lending
and modifying loans by reducing the homeowner's outstanding principal
balances on the loans that these banks were the culprit originators
in the past years. For example, a recasting pic-a-pay loan with
a 130% overequity balance should be modified or refinanced and the
30% overequity be written off the bank's asset loss provision.
We must step in and nationalize the lending functions of these banks
and even if they create losses to accomplish the broader economic
and social goals they must do it as otherwise housing slump will feed
on itself for years.
This was also the major problem in Japan for her "Lost Decade"
because the Japanese government softpedaled the Japanese banks
and big businesses at the expense of their citizens's wellbeing.
Can you imagine the 10-year stagnation starting with 2007 and
ending in 2017? The tail end of this tragedy will be the enormous
social costs and the impoverishment of millions of homeowners as well
as others.
The U.S. can easily go thru a "Lost Decade" like Japan in our
soon-to-be The Second Great Depression!
Peter
|
|
|
financeone
2562 Posts |
Posted - 07/12/2009 : 10:11:07 PM
|
quote:
Originally posted by peter
I just read an interview of James Dimon, president of JP Morgan Chase,
in Fortune this month. He predicted that bank lending will resume
in about 5 years from now.
This means that with all the credit delinquencies and foreclosures
still going strong in the economy, banks may not ease the credit
crunch until the next 5 years.
In the meantime, the banks are hoarding money or using their liquidity
to improve their organizations for the shareholders and for the
executives who run them. The banks are not an effective instrument
to accomplish the overriding economic and social policy of reviving
the economy thru lending more aggressive. The banks will lend even
more judicially and conservative in tandem with deteriorating market
conditions.
The problem is that the U.S. Treasury is not forceful enough to
set mandatory lending targets and timetables for banks to achieve.
Moral suasion has never been working with banks and we need stronger
measures for banks to invest their retained earnings into lending
and modifying loans by reducing the homeowner's outstanding principal
balances on the loans that these banks were the culprit originators
in the past years. For example, a recasting pic-a-pay loan with
a 130% overequity balance should be modified or refinanced and the
30% overequity be written off the bank's asset loss provision.
We must step in and nationalize the lending functions of these banks
and even if they create losses to accomplish the broader economic
and social goals they must do it as otherwise housing slump will feed
on itself for years.
This was also the major problem in Japan for her "Lost Decade"
because the Japanese government softpedaled the Japanese banks
and big businesses at the expense of their citizens's wellbeing.
Can you imagine the 10-year stagnation starting with 2007 and
ending in 2017? The tail end of this tragedy will be the enormous
social costs and the impoverishment of millions of homeowners as well
as others.
The U.S. can easily go thru a "Lost Decade" like Japan in our
Peter
Not too surprised by your response Peter, given that last name in your profile... LOL. |
|
|
propertylender.c
1730 Posts |
Posted - 07/12/2009 : 10:33:04 PM
|
quote:
Originally posted by homebroker@sbcglobal.net
What I don't understand is Warren wants to see another bailout or stimulus package?
quote:
Originally posted by Managing Prime
[br
Warren Buffet breaks down the main point quite well:
http://www.youtube.com/watch?v=5DvuyvuHmJI
Basically, yes |
|
|
propertylender.c
1730 Posts |
Posted - 07/12/2009 : 10:35:18 PM
|
quote:
Originally posted by peter
I just saw a statistical commentary on Fox News yesterday that
the real unemployment rate in certain areas of Michigan is actually
20% already. I was shocked to hear that and the revelation made
me think about the moribund auto industry and the movement of
manufacturing businesses to overseas. With our new tax policies
and other measures discouraging businesses, more and more jobs will
go to China or India for the simple economics.
I don't see any impetus to real economic recovery really, do you?
Falling asset prices and increasing delinquencies are a vicious cycle
that will further restrict bank lending. Latest news are that there
were 22% more foreclosures in the first half of 2009 and last week
there were reports on surging delinquencies on home equity lines of credit
as well as unit rental properties.
The proposed 2nd Stimulus would be like throwing good money into
a black hole. Why should we support falling assets which indirectly
support the banks? Nouriel Roubini expounded the idea recently in
Hong Kong (see my thread on Roubini's interview in Hong Kong for
the Atlantic Monthly) that banks should be taken over thru
nationalization, get cleaned up, and turn them over to the private
sector. We must allow some banks to be taken over as the stress tests
are not good enough to take care of the more severe problems that are
coming into 2010 thru 2012 when trillions of ALT-A loans become due.
And the Depression will deepen further into 11% jobless rate by
early next year as many have predicted causing the further fall of
asset prices and the more restricted bank lending.
The worst is yet to come.
Peter
Wait until Cap and Trade kicks in. |
|
|
peter
7512 Posts |
Posted - 07/12/2009 : 10:46:32 PM
|
As often in any crisis, there are people who cling to see dry rots
as green shoots! Some are the media people writing to sell HOPEs to
readers in magazines like Money, Smart Money, Invest Today, etc.
There is a contrarian school of thought that cites one-time statistics
that show improvment in housing, in consumer spending, in lower weekly
filings of unemployment claims, etc. to back up their thesis that
we are on the way to the recovery.
If you look broadly and since we are in our housing business we can
look that the problem loans in the past, including the coming implosion
of the ALT-A as well as the 22% increase in foreclosure rates (which
included FHA 3.5% down purchase loans as well), we can at best become
more and more skeptical of the contrarian school of thought.
I wish the contrarians would be right and I am proven wrong, that
the recovery is on the way.
Of course, a dying patient in an ambulance needs a reassuring voice
in his ears "You're alright. The doctor is on the way ..."
And that patient is today's the distressed homeowner who has also
lost his job.
Peter |
|
|
propertylender.c
1730 Posts |
Posted - 07/12/2009 : 10:47:09 PM
|
quote:
Originally posted by peter
I just read an interview of James Dimon, president of JP Morgan Chase,
in Fortune this month. He predicted that bank lending will resume
in about 5 years from now.
This means that with all the credit delinquencies and foreclosures
still going strong in the economy, banks may not ease the credit
crunch until the next 5 years.
In the meantime, the banks are hoarding money or using their liquidity
to improve their organizations for the shareholders and for the
executives who run them. The banks are not an effective instrument
to accomplish the overriding economic and social policy of reviving
the economy thru lending more aggressive. The banks will lend even
more judicially and conservative in tandem with deteriorating market
conditions.
The problem is that the U.S. Treasury is not forceful enough to
set mandatory lending targets and timetables for banks to achieve.
Moral suasion has never been working with banks and we need stronger
measures for banks to invest their retained earnings into lending
and modifying loans by reducing the homeowner's outstanding principal
balances on the loans that these banks were the culprit originators
in the past years. For example, a recasting pic-a-pay loan with
a 130% overequity balance should be modified or refinanced and the
30% overequity be written off the bank's asset loss provision.
We must step in and nationalize the lending functions of these banks
and even if they create losses to accomplish the broader economic
and social goals they must do it as otherwise housing slump will feed
on itself for years.
This was also the major problem in Japan for her "Lost Decade"
because the Japanese government softpedaled the Japanese banks
and big businesses at the expense of their citizens's wellbeing.
Can you imagine the 10-year stagnation starting with 2007 and
ending in 2017? The tail end of this tragedy will be the enormous
social costs and the impoverishment of millions of homeowners as well
as others.
The U.S. can easily go thru a "Lost Decade" like Japan in our
soon-to-be The Second Great Depression!
Peter
That means my prediction of 2012 bottome was too rosey. |
|
|
peter
7512 Posts |
Posted - 07/12/2009 : 11:06:48 PM
|
Al, your prediction is optimistic but I wouldn't say that it's wrong.
Let us consider the coming problems in 2010.
1) The consensus that unemployment will be anywhere from 10% to 11%.
As a result, there will logically be more defaults on mortgages,
credit cards, personal loans, business loans, etc. across the
board.
2) The gradual implosion of the ALT-A loans estimated to be in
the trillions of dollars. Adding on to this is the recasting of
the Option Arms, the ARMs, and the 90% to 100% CLTVs heloc 2nds
and fixed 2nds. The 105% DU Refi Plus, as we all know, only helped
some 80,000 homeowners who are upsidedown instead of helping at
least a million. It is by statistic a policy and an implementation
failure, just like the FHA Secure and the other predecessors.
Look around, how many homeowners are upsidedown by only 5% and
still have enough income and reasonable debt levels to qualify?
Even if they did qualify, the LLPA add-ons as risk premiums by
Fannie and Freddie make no sense for them to refi.
3) Upsidedown homeowners are getting clever and the ethics of paying
debts on time in our historical American tradition have already died
or are dying. Banks are willing to negotiate and to give reprieve
to delinquent homeowners who missed several payments, even willingly,
but they won't give an inch to the homeowners who have been paying
on time as agreed. The prevailing banking practice rewards delinquency
and punishes honesty!
We are in an economic vicious circle in which as housing values fall
banks have to restrict credit. And as credit is restricted, lending
is limited to only one sector of the economy while the other sectors
that are ailing and needing help are being ignored by banks.
It's like a night nurse in an emergency room. She goes around and
treats the wounds of the patients who look strong and breathing well.
Those who are unfortunate to have deeper wounds and are breathing
haltingly must be ignore as these patients are not qualified for
the needed medicine.
I see the coming of the Second Great Depression that will go on
for at least 5 more years like what James Dimon, the Chase chief
has predicted in his Forbes interview. But I take cognizance of
the probability that given the worst scenario, we could also have
"The Lost Decade" just like Japan.
Peter |
|
|
lucky1s
4071 Posts |
Posted - 07/13/2009 : 09:17:37 AM
|
quote:
Originally posted by miller1707
Very good post Glenn. About 90% of the Loan Officers/Brokers I knew are now making zero a month.
Good post.
I am making close to zero a month and dont show on anybody's radar as "out of work".
I spend most oy my time now aiding my spouse in their real estate career and pretty much declining every loan that comes my way.
We have always lived a modest lifestyle and shouldnt end up pushing a shopping cart or living under a bridge.
Though I am not ashamed to admit that we volunteer to feed the hungry once a month and this month we took a bag for ourselves.
We are burning through our savings to keep our doors open so the agents have a place to come earn a living and all they do is bi*tch.
Depression? In my world I would say so.
|
|
|
VVance
5700 Posts |
Posted - 07/13/2009 : 09:24:48 AM
|
quote:
Originally posted by lucky1s
quote:
Originally posted by miller1707
Very good post Glenn. About 90% of the Loan Officers/Brokers I knew are now making zero a month.
Good post.
I am making close to zero a month and dont show on anybody's radar as "out of work".
I spend most oy my time now aiding my spouse in their real estate career and pretty much declining every loan that comes my way.
We have always lived a modest lifestyle and shouldnt end up pushing a shopping cart or living under a bridge.
Though I am not ashamed to admit that we volunteer to feed the hungry once a month and this month we took a bag for ourselves.
We are burning through our savings to keep our doors open so the agents have a place to come earn a living and all they do is bi*tch.
Depression? In my world I would say so.
You are not alone. Having been in this industry forever, I do have lots of friends in the business. I can tell you that most are really suffering. The most frustrating thing of all, the moves Government could take to encourage a turn-around they refuse to do. |
|
|
Coffee Is 4 Clos
1750 Posts |
Posted - 07/13/2009 : 10:12:27 AM
|
| I am doing very well right now but I've been wise for sometime now that this will not last. I have now focused on being zero debt - which I accumulated after the bust. But, I have no mortgage, no fancy car - just CC's that I used after the many years I was used to taking time off during the winter, racked up CC debt, and then pay it off in the spring... well, it didn't happen and used those damn things all throughout 2007. My goal is to focus on my fiancee's career in healthcare therapy... a lot of money to be made in being an agency. But, now I'm concerned about that since the Obama admin may make some (good and not so good) changes to that industry as well. whatever happens, happens and all anyone can do is TRY. |
|
|
peter
7512 Posts |
Posted - 07/13/2009 : 10:15:44 AM
|
I supplement my income by referring customers to realtors and
loan modification experts. I just got a referral fee of $200
which I gave all to my full-time processor. I am paying her
monthly out of my savings because I am committed to taking care
of her and her family in this tough economic time. Even if I am
making zero, it will be alright as I do have other incomes from
social security, pension, and rental incomes. But believe me
taking losses to support a vague future may be a stupid thing
to do. But sometimes, you have to do stupid things for the sake
of helping those who have helped you in the past.
We must improve our situation by doing referral business and
focus on small conforming loans whose rates are getting better daily.
Good Luck to those who speak out with candor.
Peter
|
|
|
benjamin
8244 Posts |
Posted - 07/13/2009 : 10:28:44 AM
|
Good luck everyone. The best that I can see is an eventual bottom in real estate, maybe in a few years, then flat line Housing values for a decade or two.
Remember, Baby boomers are starting to retire. There will be millions of houses available soon, over and above the existing supply. There really is no need for new housing, other than personal preferrence. |
|
|
Coffee Is 4 Clos
1750 Posts |
Posted - 07/13/2009 : 10:29:02 AM
|
| Peter- that's a very classy action with your processor. I have to admit that many out there would not do the same. |
|
|
VVance
5700 Posts |
Posted - 07/13/2009 : 10:40:44 AM
|
quote:
Originally posted by lucky1s
quote:
Originally posted by miller1707
Very good post Glenn. About 90% of the Loan Officers/Brokers I knew are now making zero a month.
Good post.
I am making close to zero a month and dont show on anybody's radar as "out of work".
I spend most oy my time now aiding my spouse in their real estate career and pretty much declining every loan that comes my way.
We have always lived a modest lifestyle and shouldnt end up pushing a shopping cart or living under a bridge.
Though I am not ashamed to admit that we volunteer to feed the hungry once a month and this month we took a bag for ourselves.
We are burning through our savings to keep our doors open so the agents have a place to come earn a living and all they do is bi*tch.
Depression? In my world I would say so.
In thinking about this, even though it doesn't happen too often anymore, I will make it a point to refer you my next lead in CA. Might as well make this forum work for a worth while purpose. |
|
|
|
Previous Topic | Next Topic |
|
Search for: 
