Re: the mother effin market yesterday and today...
you want the corect answer?in the simplest of terms, it is exactly that. the overgrown market during the 90's and early 2000's went unchecked. money became extremely cheap to obtain. uncollateralized loans, unregulated lending. allan greenspan is a fucking criminal when you look at it now.
basically, the in the US's recent history, lets go back 100 years. the average increase in the value of a property increases 20% over an average of an 8 year period. the values of some homes doubled and tripled from 1993-2007. much like the tech sector, the money was pumped into areas where there was no income to back it up for re-payment. best example is one i had first hand. i am the comptroller for a finicial asset management company, and deal heavily in conforming loans. i was reviewing a -refinance for the FHA branch of our company. there was/is a couple in queens who, with 64K in combined income, recieved a loan in 1999 for a 700K 3 family home in queens. it was an ARM, and they were trying to re-fi out of it. my bank said the only way we can approve the loan is if all the tenents would go on the loan. for a 700K loan, at the debt to income ratio of 34/52 (1st number is the max % of income the mortgage can be, 2nd is the max % of income all bills can be) you would need roughly 200K in income a year. and thats before factoring in bills that dont appear on credit reports, like school, utilities, clothing, food, gas, auto insurance, homeowners, etc.
it is a correction, but a terrible one at that. the over extension of credit lines are coming full circle, and the market fears are accelerating the losses at a pace no one could imagine. there is a great story of how an FBI agent, who dealt with mortgage fruad warned his superiors after he subpenoed records from credit suisse, that a ton of loans were about to adjust up, and none of these people had the income to back it. the FBI ignored this simple because it had nothing to do with law enforcement and more to do with financial regualtion.
all the collateralized assests (homes) were over valued (appraisal fraud), and the loans were given out at higher rates and monetary values than they had in hard backing (the home tied to lein). mortgage brokers knew what they were doing, and the appraisers were on board, and the SEC/banking deptarments of the states were too happy with the growth of income to querstion it.
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Re: the mother effin market yesterday and today...
Major nightmare ... I work for a uk bank, fortunately my part is snowed under with work so we'd be the last to go. On the other hand all those with fluffy jobs in there should be shittin themselves !Leave a comment:
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Re: the mother effin market yesterday and today...
The makets got killed, I lost over 20% this year in my 401k, and todays news made thing worse. It's going to get very ugly out there, I want my goverment bailout...Leave a comment:
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Re: the mother effin market yesterday and today...
and Bush is calling this just an 'adjustment'.Leave a comment:
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Re: the mother effin market yesterday and today...
Yeah good thing I didn't decide to invest a little bit a couple of weeks back.
Also, don't forget that Houston is pretty much out of commission for the next week at least (including 16 refineries), and got fucking hosed damage-wise. It's the 4th largest city in the country and the energy capital to boot. Having it fucked up like it is doesn't really help matters.Leave a comment:
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the mother effin market yesterday and today...
wow. speculation destroyed lehman.
merrill bought out.
these were essentially two of teh most important financial institutions on the planet. lehman filed chap 11 this afternoon.
this is the biggest sign of impending DOOM for the worlds markets. i mean, a lot of it b4 was essentially trouble created by the stock devaluation of the previous companies, and this to a degree. but holy shit did the NYSE collapse today and wait and see....
its about to get a lot worse. if you work for a big company in the financial sector.. duck.
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