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Disappearing Now: $6 Trillion In Housing Wealth

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posted on Apr, 30 2008 @ 07:56 PM
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The losses in Real Estate will unwind the Derivatives that were created by speculating on it. Just as the 6 Trillion never really existed, neither does the 164 Trillion held by US banks.

There is a new report from the Comptroller of the Currency titled "OCC's Quarterly Report on Bank Trading and Derivative Activities, Fourth Quarter 2007", which shows that total bank holdings of derivatives is estimated to be "only" $164.2 trillion, whereas I seem to remember that the global glut of derivatives is upward of $700 trillion, which are both numbers so big that I cannot even begin to comprehend the enormity of them.

www.dailyreckoning.com.au...

As these banks lose those derivatives, our Privately Owned Central Bank will print money to try and replace the losses. Why do you think they're already mentioning $10 dollar a gallon gas? That will only be a pit stop on the way up. 164 Trillion is on the order of 10 times or more US GDP! Trying to Inflate the currency even a fraction of that will be disastrous. Don't expect Wall Street to take notice though, at least not the main stream dolts. That's why they have Crashes, because they do Denial and Greed so well.


And another horror is that the stock market went up, which is Pretty Freaking Strange (PFS) since Barron's reports that the earnings of the Dow Jones Industrials went down, dropping to $225.53 from $234.49. This has produced the unbelievable price-to-earnings ratio of 57! Earnings are going down, but the stocks are going up! To a P/E of 57! Un-freaking-believable!




posted on Apr, 30 2008 @ 09:46 PM
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As an Oakland park Fl resident who currently rents, Im drooling at the local real estate market. I have'nt seen a buying opportunity this big since the 02-03 stock market.



posted on Apr, 30 2008 @ 10:02 PM
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reply to post by Shazam The Unbowed
 


It's only gonna get better. The problem with Stagflation (Deflating Assets/ Increasing cost of Basics) is that the costs of everyday living eats up diposable income that one would put towards a Home. At the same time Banks are requiring more Down to reduce their risk since they have bad debt up to their eyes already. If you are trying to save money for a Down Payment, your money is becoming worth less do to Inflation by the FED. It's like running in place. Thus, the Stagnant in Stagflation.

If you lose your job, you're really screwed!



posted on Apr, 30 2008 @ 10:04 PM
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Originally posted by HimWhoHathAnEar


The problem with Stagflation


I dont buy the stagflation argument. Our tax burdens have become uncompetitively high, especially corporate and cap gains.



posted on Apr, 30 2008 @ 10:07 PM
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reply to post by Shazam The Unbowed
 


Are we not having Inflation as well as Deflation in Real Estate at the same time? That would be the definition of Stagflation.



posted on Apr, 30 2008 @ 10:08 PM
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reply to post by Shazam The Unbowed
 


hey another south floridian
Drooling... not quite yet. I think there's more falling to come. I'm also wary about buying a house right now, I keep hearing of people who are foreclosed trashing the place severely and the banks selling as is.. And those who are still maintaining their homes are refusing to budge on prices, and oh don't forget those taxes.



posted on Apr, 30 2008 @ 10:13 PM
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I'm already keeping track of and watching foreclosures and shortsales. FInd someone whose upside-down, offer them just enough to get out , and boom; even in todays depressed market, instant equity.



posted on Apr, 30 2008 @ 10:18 PM
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reply to post by Shazam The Unbowed
 


But if you get in before the market bottoms aren't you in the same position. Possibly losing you 'instant equity' and getting upside down yourself?



posted on Apr, 30 2008 @ 10:39 PM
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Don't worry, once the US economy crashes, and the one world order has been implemented, you can invite all them wealthy Chinese over to buy your homes, and they'll have the resources to start China-Mart factories here too, and they can hire Americans so they'll have jobs once again, so you can start buying more China-Mart junk again. A Win-Win solution, huh?



posted on Apr, 30 2008 @ 10:40 PM
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Originally posted by HimWhoHathAnEar
reply to post by Shazam The Unbowed
 


But if you get in before the market bottoms aren't you in the same position. Possibly losing you 'instant equity' and getting upside down yourself?


If theres one thing I have learned its not to try and time bottoms. Just look for a good value, and the market will recognise it. The trick is simply to compare values on a more stable baseline, say the historical level of house values to incomes in a neighborhood, to determine true value, and then try and buy below it.



posted on May, 1 2008 @ 02:10 AM
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Most money is nothing but an entry on a bank ledger, and the money supply is expanded and contracted through loans. When the loans start to fail, the money supply contracts quickly, falling like a house of cards.

People getting ready for retirement are the ones who will get hit the worse, but anyone with a great deal of money invested in the markets will loose a lot of money very quickly.

In the nineties, around 1993 the real estate market took a huge hit and prices declined until around 96 and didn't recover until 99, but this time the situation is much worse. There hasn't been this much public and private debt ever, the last time debt was anywhere nearly as bad as it is now, is in 1933. This economic dowturn could last a very long time.

Not only is real estate upside down, but savings accounts and bonds are not paying enough interest to keep up with the real rate of inflation that is being grossly under reported. In an economy built on debt, when the credit rates are maxed out, as is our current situation, deflation becomes inevitable. Once deflation sets in, as it has in the housing market, the real disaster begins.



posted on May, 1 2008 @ 06:14 AM
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Originally posted by BlackOps719


How do you tell a 75 year old woman that because she listened to her kncukle head loan officer and decided to take that adjustable rate thet her loan will soon go into forebearance and her payment will jump $1200 in the next month due to the first adjustment taking place.


Huh?? Whose payment jumps $1200 a month unless their original payment was like 6k a month to begin with?? That would have to be a million dollar house wouldn't it?

I am one of those people who currently has an ARM and can't refi because home values in my area have dropped so drastically in the past year. I paid 214k for my townhouse and now they are selling for 200-210k in my neighborhood and most are bank auctions. My town got taken over by illegal aliens and now they are all abandoning their homes. My latest tax assessment was 307k so not only am I now upside-down on my house, but I also have to pay $1000 more a year in taxes than the actual value of the house. These places were going for 370k 2 years ago and 2 years from now it will not surprise me if these places could be had for 130k or less. Needless to say it will be a bitter pill when my ARM resets and I am paying a very high mortgage payment on a house that is worth half what I paid for. I'm still deciding if I will walk away next year if things don't get better. No use throwing money down a pit in a neighborhood that has went to pot since with section 8 lowlifes moving in.



posted on May, 1 2008 @ 06:44 AM
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Originally posted by whaaa
S&F as usual DD

Great, the property that I have paid so dear for, that I was hoping to be my old age retirement, ain't worth squat.

Who's responsible for the deregulation that allowed the thieves to prosper while the middle class gets screwed?

Lou Dobbs is correct, there really is a war by the neocons against the middle class!!

Go ask the Fed Reserve to explain to you how they have bent you all over.



posted on May, 1 2008 @ 08:47 AM
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A Nation gets the government it deserves.

George Bush's history in Texas was there for all to review, but people would rather vote for the village idiot, so be it. In 2004 America surrendered to ameteurish marketing of fears, another 4 years of insane fiscal policies.

How safe do you feel now? do the terms bait and switch mean anything?


how can people blame government agencies, its your govt. You can kick out policy makers any time you wish, it is called impeachment and if your senators and congressman cannot follow the will of the people, then you recall your congressman or senator.
It is quite simple and was used in the past, when people took responsibility.
All it requires is people to stop whining and act.


As far as Wealth disappearing, it was never there to begin with. It was a Bubble. The market cannot sustain the nonsense banks and mortgage companies were offering, and the Market is adjusting.



posted on May, 1 2008 @ 09:07 AM
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reply to post by Hallberg Rassy
 


Very well put I cant disagree at all because I am the first to say I put myself in the position I am in by not being prepared completely for the crap that has gone down...I will never make that mistake again...and yes the same people who are bitter a lot of them voted Bush....Dont Blame Me Im Voting Paul



posted on May, 6 2008 @ 08:38 AM
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reply to post by Hallberg Rassy
 


A very good explanation in short form as to what should be done.Star for you from me.



Perhaps we should all stop and read his post again because in my opinion this is exactly what we should start to pursue.



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