Remember when I said housing wasn't affordable and everyone disagreed with me?

vetteman said:

Yeah right. You go ahead and panic rookie, I'll come out of this smelling like a rose because I've been through it all before. I'll just sit back and buy some more stock while you do your Chicken Little act.

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A) Your reading comprehension is fucked. I pointed out that I'm going to make money off of this while putting housing into reach for people who can't afford it now. That means you are a liar when you say I am panicking.

B) You are also lying because you have been presented overwhelming proof that this is not Chicken Little false alarming for investors and home buyers who had to resort to subprime loans to buy houses.

You will not contest A) or B) because you're totally wrong.

Game over, you just lost this fight, just like you've lost every other one you've had with me.

No one will contest what I just said.

Bye. See you in another thread, because you just chickened out after reading this.

Stock markets go up and down. It is what they do.

The first year I invested, the Dow dipped to 600. (Not a typo.)

Every economy (local, national, global) runs in cycles. Will there be a recession in the U.S. in the next 2 or 3 years? Probably.

And it'll be a good chance to buy.

Present market fluctuations notwithstanding, there is a crisis in terms of affordable housing in many part of the country.

For the record, I agreed with your old premise on this one, LT. You were a prick about buying your house in CA though as I recall.

We're raising a generation of renters in many metro areas that can't afford to fund mortgages, or are getting overextended on dubious mortgage terms. The chickens have come home to roost.

Over 50 mortgage brokers have closed in the past 2 months in Southern California. I know. I get an email every morning from our Division Manager about who's gone belly up.

The neg-am's are adjusting & the default rate is climbing. The teaser rates are all teased out.

The real estate speculators are the ones who drove up the prices so that average people couldn't afford homes.

I can't understand for the life of me, why someone would put themselves in such risk with their largest purchase and surest way toward financial security.
At first I thought the problem was largely with the speculators who bought new homes on the hunch the prices would continue to go up, but to see it also is happening to average homeowners is really bad.

Chances are these folks won't be returning to the home market.

But over the longterm, investing sensibly in real estate is a winning thing to do.

There are still really strong real estate markets, the prices just aren't absurdly rising like they were.

LovingTongue said:

Strange. A post of mine simply disappeared.

My plan of action on this trend is to snap up some houses this summer, hire a property manager, and set up a rent to own agreement for tenants.

We could make a pile off the houses and make people into homeowners at the same time.

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This Summer is way too soon. Housing prices are notoriously sticky on the way down.

I don't believe in the "housing drives the economy" theory. I do believe the world economy is a lot shakier than most people realize, driven by excess liquidity and loose lending for a lot of things. We're moving from an economic boom to a slowdown, a normal part of the economic cycle. A recession will follow at some point in the future... then a recovery phase... boom... slowdown... lather, rinse, repeat.

The S&P 500 will end up for the year, although I'm guessing it will be something like 1500, pretty modest gains. I don't expect housing to hit bottom until at least late '08.

JamesSD said:

This Summer is way too soon. Housing prices are notoriously sticky on the way down.

I don't believe in the "housing drives the economy" theory. I do believe the world economy is a lot shakier than most people realize, driven by excess liquidity and loose lending for a lot of things. We're moving from an economic boom to a slowdown, a normal part of the economic cycle. A recession will follow at some point in the future... then a recovery phase... boom... slowdown... lather, rinse, repeat.

The S&P 500 will end up for the year, although I'm guessing it will be something like 1500, pretty modest gains. I don't expect housing to hit bottom until at least late '08.

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Refinancing is what drives a large portion of consumer spending now. Not necessarily housing, but refinancing depends on the value of houses.

BTW I notice Vetteman really did chicken out of this thread once he got his ass royally handed to him...

Okay here you go Lt:


So I read this article in the Washington Post the other day, and my first reaction was: This is interesting. Not only that, it is thoughtful, perceptive, well reasoned.

I would like to discuss it with some friends. I was still, at this point, several minutes away from my second reaction.

The author was Post reporter Natalie Hopkinson, a black woman who, with her husband, has just bought a house in a predominately black neighborhood of Washington, D.C. Said Hopkinson in her piece: "We damn sure are not about to let white folks buy up all the property in D.C."

Said Hopkinson in her piece: "From our perspective, integration is overrated. It's time to reverse an earlier generation's hopeful migration into white communities and attend to some unfinished business in the 'hood."

It continued: "I see every day another benefit of that black migration [back to black neighborhoods]: A second generation of African Americans is growing up in a prosperous, predominantly black suburb."

I'm a white guy. I talk like one, act like one, think like one. But I do not feel threatened by the pride and solidarity of other racial or ethnic groups. In this particular case, I admired Hopkinson not only for her convictions but for the clear and forceful way she expressed them.


Then I had my second reaction. What if one of my fellow white guys had written the exact same article? Well, not exactly the same.

What if he had said in his piece: "We damn sure are not about to let black folks buy up all the property in Scarsdale."

What if whitey had said: "From our perspective, immigration is overrated. It's time to reverse an earlier generation's hopeful migration into black communities and attend to some unfinished business in the 'burbs."

What if whitey had said: "I see every day another benefit of that white migration [back to white neighborhoods]: A second generation of white Americans is growing up in a prosperous, predominantly white community."

What if this had happened? The answer is obvious. The white reporter's piece would not have run in the Washington Post, or in a majority of other newspapers in our country, and he would have been fired or shipped off to a sensitivity training gulag for an extended stay.

I was not kidding about my regard for Hopkinson's article. One of the reasons she feels as she does is that, having moved into white neighborhoods as a child, she and her family were brutally taunted. "The KKK's gonna get you, nigger!" said some white kids to her cousin, as they chased her through the streets. Her husband, then a child in another part of the country, heard: "My grandfather used to own your grandfather!"

I am moved by these stories of Ms. Hopkinson not just because of our shared humanity, but because of my family's shared experiences. As a grade school girl near Pittsburgh, Pa., early this century, my Italian grandmother stopped wearing clean dresses to school because the Irish kids kept throwing mud at her. She started wearing bandages because they threw stones at her.

They called her a guinea, a dago, a wop. She did not know what the words meant, but did not need to: Their real definition was in her accusers' tone of voice.

This, then, is not a column about Ms. Hopkinson. I would be comfortable in her presence. It is a column about her editors. I would not be comfortable in theirs. It is about the terrible hypocrisy in journalism which, in the name of righting past wrongs by allowing minorities an unfair license in the press, perpetrates present wrongs, and makes racial healing seem a dream that will never come true.

As long as there is a double standard, there cannot be a single nation.

http://www.foxnews.com/story/0,2933,27750,00.html

LovingTongue said:

Well, those subprime mortgages that people were using to buy houses they really could not afford, are now coming back to haunt the entire economy.

I won't even bother with all the articles about this. You'd have to live in a cave not to know what's happening to subprime lenders now, and it's entirely due to people trying to buy homes, which by nature are out of their financial reach due to overspeculation.

You can blame all of what's going on now, on housing speculators.

I warned you about them bastards, but no one believed me.





Tick tock. $1.3 trillion in subprime mortgages are still sitting around out there. Tick tock. That's almost as high as California's whole economic output. Tick tock. $265 billion in subprime mortgages are set to be reset this year. BOOM.

Now even those of you who weren't involved in this shit, will be taking more hits when stocks all around start taking another ding this summer when collective purchasing power (read: refinance-driven purchasing power) takes a dive. PLUS, your home values will drop because the coming foreclosures will put a shitload more houses on the market.

Good luck trying to sell in the summer. Mutual fund managers, get out your high waters, and check your scuba gear just in case.

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How is this supposed to prove that housing is unaffordable?

Poor choices were made over financing, but you blame the price tag.

phrodeau said:

How is this supposed to prove that housing is unaffordable?

Poor choices were made over financing, but you blame the price tag.

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The rise in subprime mortgages is due to the fact that without them, people couldn't afford to get a house at all. But that flew over your head the first time, it no doubt will again.


Bump since Vetteman is such a coward.

JackAssJim said:

The market will weather this and roar again, as it ALWAYS does.

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And we weathered the Great Depression, too. What does that have to do with the fact that I warned that housing was unaffordable for the average income, and that people with average incomes had to go with ultra risky subprime mortgages that are now causing several lenders to go under?

phrodeau said:

How is this supposed to prove that housing is unaffordable?

Poor choices were made over financing, but you blame the price tag.

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To show housing is inflated, you look at the price per square foot paid, and compare that ratio to median income. You can also compare the cost of buying to renting on a market by market basis.

Here in San Diego, housing prices have skyrocketed relative to incomes, while the price to rent has increased more or less in lock-step with income. I don't claim to be an expert in other markets, but I'm fairly sure we do have a worse bubble here than most of the country. Our price to income ratio is far above historical values, even relative to usual peaks in cycles.

There's a lot of speculation how far prices will fall. We're sure to see a Spring bounce, but the fall should usher in new lows.

LovingTongue said:

A) Your reading comprehension is fucked. I pointed out that I'm going to make money off of this while putting housing into reach for people who can't afford it now. That means you are a liar when you say I am panicking.

B) You are also lying because you have been presented overwhelming proof that this is not Chicken Little false alarming for investors and home buyers who had to resort to subprime loans to buy houses.

You will not contest A) or B) because you're totally wrong.

Game over, you just lost this fight, just like you've lost every other one you've had with me.

No one will contest what I just said.

Bye. See you in another thread, because you just chickened out after reading this.

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Ayup, Vetteman has been on the run from me ever since I posted this.

vetteman said:

Don't flatter yourself LT, I don't run from anyone. Look I have better things to do with my time than a day long screaming contest with you, you don't like to discuss anything.

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You're definitely not one to talk about discussing anything. You like to launch personal attacks just as much as me, but you whine like a baby when it happens to you.

Now listen. Is there a possibility of a recession next year. Yes. Will there be one next year? I don't know and neither do you. Are there ten or twelve subprime lenders on the verge? Yes. Will they go over the precipice into bankruptcy? Maybe, we don't know and you don't either. Are there actions that can mitigate such a misfortune? Yes. Do I have confidence in the economy nonetheless? Yes. Here is one way to mitigate the possibility of a recession.

http://www.ibdeditorials.com/IBDArticles.aspx?id=258765687157333&kw=subprime,lenders

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What you just posted does not even come within a mile of refuting the fact that there are plenty of people out there for whom this situation is cause for alarm - a fact that contradicts what you said.

This tick has been tocking for the last year, oh and will someone please turn off the false alarm?

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It's no false alarm for the loan officers losing their jobs. Or the loan companies going out of business. Or a shitload of other people who are being affected by this (not limited to home sellers facing a more crowded market this summer). Why can't you either deny that this is true, or admit you're wrong?

And you also can't admit you're wrong about this:

Yeah right. You go ahead and panic rookie, I'll come out of this smelling like a rose because I've been through it all before. I'll just sit back and buy some more stock while you do your Chicken Little act.

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You are in fact completely wrong on both counts.

A) Your reading comprehension is fucked. I pointed out that I'm going to make money off of this while putting housing into reach for people who can't afford it now. That means you are a liar when you say I am panicking.

B) You are also lying because you have been presented overwhelming proof that this is not Chicken Little false alarming for investors and home buyers who had to resort to subprime loans to buy houses.

Now I'm calling you out - show me the error in A) or B). Come on, Peter Pan, grow up and grow a pair for once.



I already said there won't be a recession - I said there is going to be a correction. Forbes doesn't refute what I said, and neither does Cramer.

LovingTongue said:

The rise in subprime mortgages is due to the fact that without them, people couldn't afford to get a house at all. But that flew over your head the first time, it no doubt will again.


Bump since Vetteman is such a coward.

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No shit. Well, it's a good thing they invented subprime mortgages after you said that housing was unaffordable.

You may not believe this, but it is still possible to take a subprime mortgage, make the payments properly, be allowed a better rate, and eventually own a house.

phrodeau said:

No shit. Well, it's a good thing they invented subprime mortgages after you said that housing was unaffordable.

You may not believe this, but it is still possible to take a subprime mortgage, make the payments properly, be allowed a better rate, and eventually own a house.

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But it is still not a traditional mortgage that is used as a standard of housing affordability.

To use subprime mortgages as a way of saying housing is affordable is like saying Phrodeau can compete in the olympics. Phrodeau can't. He has to compete in the Special Olympics.

JackAssJim said:

Pull up that two or three year old thread LT. Jesus, this is not even going to be a bump in the road.

I've bagged 40k in commissions already this year. I hope it does slow down, my wife will want to quit work.

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The train wreck that's happening in the subprime market right now isn't a bump in the road?

Let me spell this out for you. Fewer subprime lenders will be out there after this. Credit score requirements are now 640 at least, up from 600. Fewer people will be able to afford homes under any circumstances.

And just because, in your fantasy world, you can afford a house, it's not a bump in the road?


Ok now, before you reply, point out which part of the stuff in bold, is wrong. I dare you.

JackAssJim said:

Pull up that two or three year old thread LT. Jesus, this is not even going to be a bump in the road.

I've bagged 40k in commissions already this year. I hope it does slow down, my wife will want to quit work.

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Hey JAJ, how is the beachfront market where you are? Down here on the Gulf, you can't swing a dead cat without hitting a for sale sign, but prices aren't moving. Bunch of people decided to get into the pre-construction buying and are now hanging over a barrel unable to move their property.