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US Depression Tremors: Subprime Lenders in Meltdown

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posted on Mar, 13 2007 @ 05:51 PM
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One of the things that I find most fascinating about the most recent hiccup in the world financial markets is the terminology used to describe it's causes.
Almost every report or analysis (as the one provided by the OP) uses the words fear, worries, hope, belief, etc., etc.
Now, we are all familiar with the various institutions that are supposedly safe-gaurding against a panic, ( e.g. FDIC and Federal Reserve), that assuage investors fears that "Black Monday" can never happen again. But it seems to me that the dirty little secret here is that the world markets are still held together by wishes and dreams. Given how fragile and unpredictable the human psyche is...
Can it be very long before something does tip the scale to a full scale panic?




posted on Mar, 13 2007 @ 06:05 PM
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Good point, Just like religion, Large corporations, Government, etc...all fear driven that is the easiest way to control the masses.



Originally posted by passenger
One of the things that I find most fascinating about the most recent hiccup in the world financial markets is the terminology used to describe it's causes.
Almost every report or analysis (as the one provided by the OP) uses the words fear, worries, hope, belief, etc., etc.
Now, we are all familiar with the various institutions that are supposedly safe-gaurding against a panic, ( e.g. FDIC and Federal Reserve), that assuage investors fears that "Black Monday" can never happen again. But it seems to me that the dirty little secret here is that the world markets are still held together by wishes and dreams. Given how fragile and unpredictable the human psyche is...
Can it be very long before something does tip the scale to a full scale panic?



posted on Mar, 13 2007 @ 07:58 PM
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Originally posted by infinite
Asia stocks open up soon...

expect them to take a hit, Europe will follow heavy too


The bleeding has already started. China's numbers are the recent close, it's not open yet.

Major Asian Indices



posted on Mar, 13 2007 @ 10:31 PM
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Ouch..

If you add all of the huge drops for China alone in the past few weeks, it is pretty grim looking. The first big drop alone was the worst in over a decade.

I personally wouldn't mind a housing market crash, I am looking to buy in about 2-3 years and if the market is down, I will be more likely to affoard it. Right now on the west coast for a nice family home is like 3-400k .. out of this world...



posted on Mar, 14 2007 @ 04:30 AM
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Asian markets are all red this morning, so it looks like the US markets will open lower. Easy money in yen carry trades are unwinding too. There's going to be a ship load of margin calls this week.

One thing to keep in mind is that a large number of subprime buyers going bankrupt will impact the entire housing market from HUD homes to even McMansions.

Foreclosures and delinquencies by regions


Lenders initiate foreclosures at record pace Reuters
Lenders launched foreclosure actions against more than one of every 200 U.S. mortgage borrowers in the fourth quarter of 2006, the biggest share of homes at the start of the repossession process on record.

Please visit the link provided for the complete story.


No one listened:
Fed, Comptroller Publicly Chastised Few Banks Before Mortgage Bubble Burst

Up next on the red ink channel:
European Stocks Slide on U.S. Growth Concern

Question of the day is based on the Evo Morales' dilemma:
So what do Americans do when a gang of thieves sells their country to foreigners, guts the production industry, pockets the proceeds, flees, and leaves them with no assets and crushing debt?



[edit on 14-3-2007 by Regenmacher]



posted on Mar, 14 2007 @ 04:57 AM
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This is the end result of giving loans to people that
1. Don't have the ability to pay.
2. Don't want to pay.
It's bad enough to give people with bad credit auto loans and credit cards. It is fact that stiffs will always be stiffs. The rest of us will have to pay the difference in the form of higher intrest rates and taxes from gov bail outs.



posted on Mar, 14 2007 @ 07:29 AM
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Originally posted by fiveangelsfrank
This is the end result of giving loans to people that
1. Don't have the ability to pay.
2. Don't want to pay.
It's bad enough to give people with bad credit auto loans and credit cards. It is fact that stiffs will always be stiffs. The rest of us will have to pay the difference in the form of higher intrest rates and taxes from gov bail outs.


FAF, have to disagree a little here. Don't count out the speculation factor of this housing bubble. That is one reason for a portion of the interest only or roll in your closing cost loans. There were lots of people who looked to use those loans as bridge financing while they bought a home, held it for mere months and flipped it for $100,000 more. To them, paying interest only meant nothing, I mean, what's a couple thousand spent to net close to $100,000 after resale. I don't look at those people as stiffs. I look at them as speculators lured by greed and predatory lending.

The problem is, those speculators are now finding themselves in the same boat as those who bought for legitimate reasons. Rates are going up and exorbitant values are starting to lose steam.

Here's an example of an out of control market. A very good friend of mine moved to San Diego once married to live close to his mother-in-law (what was he thinking, I know...). The mother-in-law paid $18,000 for her home in the 1960s. It sits on the lower third of a mountain/hill facing the ocean, roughly 20 miles from the ocean I believe. The last time I talked to my friend that home was worth $850,000.



posted on Mar, 14 2007 @ 07:45 AM
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I hear you. Here in Vegas the prices climed so high and fast that now we have a 20K homes for sale. The sellers are upside down and in trouble with ARM's due. Homes that were only 150K 4 or 5 years back were going for 400K and now they aren't worth that. I heard somewhere that the forcloser rate is up 80+% from last year. The Vegas boom began when people in cali were selling homes they bought 20 years ago. They were getting millions for a house they paid maybe 100 grand for so they would come here and offer more then the asking price. Who does that where I am from we offer less and go up.

[edit on 14-3-2007 by fiveangelsfrank]



posted on Mar, 14 2007 @ 08:50 AM
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Originally posted by Regenmacher

Question of the day is based on the Evo Morales' dilemma:
So what do Americans do when a gang of thieves sells their country to foreigners, guts the production industry, pockets the proceeds, flees, and leaves them with no assets and crushing debt?



That's easy. Form a team of special prosecutors, what else?



posted on Mar, 14 2007 @ 08:54 AM
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Originally posted by psyopswatcher
That's easy. Form a team of special prosecutors, what else?


I think the "whatelse" might come in the form of better citizenship. For too long, our leaders have practiced a divide-and-conquer strategy against the American people. By demanding more from ourelves, we can demand more from them. They'll hate us for it, but we should be used to that by now.



posted on Mar, 14 2007 @ 11:05 AM
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The US markets have just gone into the red..

All of Europe have taken a HUGE dive.



posted on Mar, 14 2007 @ 11:31 AM
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Europe is now heading for a 3% loss

Dow Jones is now down by 1%



posted on Mar, 15 2007 @ 01:37 AM
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Can somebody in Europe tell us what the local mood is on this topic? I'm googling, but I don't see a lot. What's on local newspapers and t.v.?



posted on Mar, 18 2007 @ 04:16 AM
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MOSCOW (Reuters) - Commodities investment guru Jim Rogers stepped into the U.S. subprime fray on Wednesday, predicting a real estate crash that would trigger defaults and spread contagion to emerging markets.

"You can't believe how bad it's going to get before it gets any better," the prominent U.S. fund manager told Reuters by telephone from New York.

"It's going to be a disaster for many people who don't have a clue about what happens when a real estate bubble pops.

"It is going to be a huge mess," said Rogers, who has put his $15 million belle epoque mansion on Manhattan's Upper West Side on the market and is planning to move to Asia.

Worries about losses in the U.S. mortgage market have sent stock prices falling in Asia and Europe, with shares in financial services companies falling the most.

Some investors fear the problems of lenders who make subprime loans to people with weak credit histories are spreading to mainstream financial firms and will worsen the U.S. housing slowdown.

Full story - Reuters


This article describes perfectly what the problem is, people have no single clue of the consequences it will have. To the vast majority this and the Dollar collapse will come unexpectedly.

Just search google news for dollar diversification. China has a serious problem.

More or less related:
Bill Gates - The Ol' Dollar It's Gonna Go Down



posted on Mar, 18 2007 @ 06:07 AM
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Originally posted by Justin Oldham
Can somebody in Europe tell us what the local mood is on this topic? I'm googling, but I don't see a lot. What's on local newspapers and t.v.?


BBC said a special report about it the other night,
fears are that a US housing market crash will crash the UK market too. I think the mood is the same across Europe, especially Ireland.

Europe is concerned.



posted on Mar, 18 2007 @ 06:08 AM
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One of the firms hit by woes in the US sub-prime lending market has struck a deal to sell some of its loans.

Accredited Home Lenders Holding said it had agreed to pass on $2.7bn of money loaned - at a heavy discount - in order to generate some cash.

There are major concerns about the US home lending market. Late mortgage payments are at a record high.

And former Federal Reserve chairman Alan Greenspan said that the worries "were not a small issue".


Please visit the link provided for the complete story.


news.bbc.co.uk...



posted on Mar, 18 2007 @ 06:14 AM
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This heere feenomenon is known as su-scyllic approachment.

This lack-luster performance within the economic sector is a result directing from Am.'s gov't and procedural differences, all within the encumbrance of cast about fears of.

The raping of the World as a whole will have the spoke of Domino Effect, and we're just in the first of the bounced back ripples.



posted on Mar, 18 2007 @ 04:32 PM
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Fed May Lower Rates Three Times on Housing Woes, Options Show





March 19 (Bloomberg) -- Options traders are starting to say the Federal Reserve may cut interest rates three times this year as the housing slump threatens the economy's growth.

Options on Federal Fund futures at the Chicago Board of Trade show a 24 percent likelihood the central bank will lower its target rate for overnight loans to 4.5 percent from the current 5.25 percent. Just seven weeks ago, options prices suggested no chance of that large a reduction this year.

Traders in options anticipate lower borrowing costs than economists or futures contracts, the most widely used barometer of Fed policy, amid increasing concerns about mortgage defaults. Futures show rates will fall to 4.75 percent by year-end and economists expect 5 percent, according to the median in a Bloomberg survey 73 forecasters from March 1 to March 7.


Please visit the link provided for the complete story.


Bloomberg



posted on Mar, 18 2007 @ 04:48 PM
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I hope they do lower it...I've got an ARM second mortgage on my apartment, and it's gone up a lot over the last year or so. I think the percentage is still less than the fixed first mortgage though.



posted on Mar, 18 2007 @ 05:05 PM
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They cut the rates and the dollar will tank, the DOW will fall, the spread of high risk contamination will continue and bring us closer to a depression. These quick fix gimmicks to juice the economy will have severe blowback and do more damage than letting the market adjust itself.

China raises interest rates Financial Times, UK

The US bear market cometh...





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