Which bubble-conspirator is MOST deserving of our scorn and shame?
* mortgage brokers
* realtors and the NAR
* homebuilders
* appraisers
* bankers
* flippers/investors
* the MSM
* illegal aliens
* the chinese
* wal-mart
* federal reserve board members
* the bush administration
* ourselves
And who in the end will take the most blame?
September 03, 2006
HousingPanic Stupid Question of the Day
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53 comments:
The FED and the Bush administration
Ourselves. No one held guns to our heads and forced us to buy at heavily inflated prices. No one held a knife to our throat as we signed ARMs. No one twisted our arms as we took out HELOCs to keep up with the Joneses. Since when are we all sheep that take what people tell us at face value? Look squarely in the mirror at who the cause of all this is.
Here is my take on a scale of 1 to 10 where 10 is the most cuplable:
* mortgage brokers 10
* realtors and the NAR 10
* homebuilders 8
* appraisers 8
* bankers 8
* flippers/investors 10
* the MSM 7
* illegal aliens 3
* the chinese 4
* wal-mart 4
* federal reserve board members 10
* the bush administration 2
* ourselves 8
ourselves
In this progressive society of ours, we must remember never to blame the person who committed the act. It is always the fault of THE MAN or THE SYSTEM
Dont worry, Things should pick up right after the superbowl.
I'm a bubble believer and have always believed it's the fault of ourselves.
It's funny how on this blog in particular so many people, and even Keith regrettably, seem to want to blame others for this predicament. None of those outside of ourselves who are being blamed could ever be blamed if so many idiots didn't take the bait. It's just like the John Stossell show on ABC the other night about the reportedly brightest American kids scoring half what kids in Belgium scored on a test. I know someone will bring up the tulip mania they fell for a long time ago, but the kids in Belgium said they thought American kids were really stupid and I agree. The public school system (a bastion of liberalism as shown on Stossell's show) in this country is a joke. I've lived in other countries and it's shocking to see how smarter their children are.
I've done my own personal and very informal survey and found that those who want to blame others tend to be politically left-wing and non-religious. Think about it, it makes sense too because it's so typical of lefties, and because they are also non-religious, they don't feel as compelled to adhere to the strict work ethic strongly advocated in religious teachings. I'm not explaining this as well, but am in a hurry and get this posted.
Bush and associated Cabal
Hey Keith you're famous:
I'm quite pleased that Barron's Electronic Investor has an interesting wrap up on some Housing Blogs. Included in their list are some of our regular haunts:
• The Housing Bubble Blog
(www.thehousingbubbleblog.com)
• Calculated Risk
(calculatedrisk.blogspot.com)
• Econbrowser
(www.econbrowser.com)
• HouseBubble.com
(www.housebubble.com)
• Housing Panic -- The Bubble Blog with Attitude
(housingpanic.blogspot.com)
I'm working on something -- a fun project of sorts -- for after the holiday weekend. If it works as planned, it should generate much more exposure and traffic for quite a few worthy but lesser known blogs. CHeck back in a week or so (you'll know it when you see it).
Congrats to all on the mention!
>
Source:
R.I.P., Housing Market?
By Kathy Yakal
ELECTRONIC INVESTOR
Barron's MONDAY, SEPTEMBER 4, 2006
http://online.barrons.com/article/SB115715106425152251.html
The BUYERS...If nobody would even LOOKED at or BOUGHT these over-priced $500,000 POS, you'd soon see one Hell of a lot of 5..10..15..20% discounts. ooops..that's HAPPENING Now ! Christmas Specials Coming !
* federal reserve board members
* the bush administration
Isn't the whole point of this blog that people need to make good choices financially? Quit crying and blaming others and only buy what you can afford (those of you pointing fingers).
Keith, you have been preaching being responsible financially all along - don't let us down now!!!
Regradless if you are on the bubble camp are not.
The media is now saying that both sides believes that price will fall.
It is just a matter of how much.
Is there a housing bubble?
Is the glass half-empty or half-full?
Those who believe in a real estate bubble anticipate that an impending crash in home prices may destabilize the entire housing market. Those who deny the existence of a bubble concede that the housing market may experience a cooling period over the next few years. According to these investors, housing prices will stabilize or decline slightly, but they will certainly not crash.
http://www.thereporter.com/
search/ci_4283033
readers of the blog know that my #1 answer with a bullet is basic human greed.
The answer is "Ourselves". Like everything else in life, you only have yourself to blame for your decisions - good or bad.
However, there were many co-conspirators in this mess. The entire list I presented for starters. They're all to blame as well.
Everyone who goes bankrupt during this debacle though needs to look straight into the mirror and ask themselves:
What was I thinking?
Definately the Mortgage Brokers and the banks.
Dear Mr. Berko:
In May 2005, we bought a condominium in St. Pete Beach, Fla., for $885,000. Five months ago, my wife and I lost our jobs in the travel industry. We immediately put our condo on the market and have lowered the price twice, finally to what we paid for it. Our mortgage is an $878,000 adjustable rate at 4.75 percent. Last week, we got an offer of $795,000, which is the only offer we've had.
Now we are frightened that we may have to keep making mortgage and interest payments until the market gets stronger. Taking an $83,000 loss would wipe out all our savings, our two Individual Retirement Accounts and we'd still be about $18,000 short. We've read that the experts believe housing prices will increase this year between 3 percent and 7 percent. Do you think that when interest rates fall the condominium market will get stronger?
D.S., Delray Beach, Fla.
Dear D.S.:
You folks are in big trouble, and so are tens of thousands of others who bought homes with zero money down using an adjustable-rate mortgage. The banks may be in deep doo-doo, too, because in almost every instance the amount of the mortgage exceeds the market value of the home. In many of those instances, they may be forced to swallow the differences.
http://www.businessrecord.
com/Main.asp?
SectionID=9&SubSectionID=10
&ArticleID=2987
The arm breakers are headed out to collect on all these loan-shark mortgage schemes. People who put the Lexus and face-lift on a home equity loan may find they owe more than what their house is worth.
Is perfect storm brewing on the housing scene?
http://www.orlandosentinel.
com/news/columnists/orl-
miket0306sep03,0,5942090.co
lumn?coll=orl-news-col
I like the picture of the haircut machine, is this list like the waiting list at a restaurant? Do VIPs ( you know who I'm talking about, their initials are NAR ) get to jump "ahead" in line?
All you who are peddling your compassion and justice, take it somewhere else. A social crime on this scale calls for widespread indiscriminant retribution - perhaps a lottery system among the responsible groups? WE could make a reality TV show out of this, perhaps a game show with the aforementioned guests and hungry animals as contestants No? not original enough? Picture this, a building site with basements already excavated. The contestants are in the basements chained chained to the ground by their ankles. They are each given a small hand shovel called "wages" and once an hour the ARM concrete service delivers a truckload of concrete to the basement called "mortgage payment".
So much for the jokes. The serious note is that the government is going to take money off my familys dinner table to pay for these fools(and of course further enrich the predators in the financial community in the process) That's where my compassion stops. Everyone who opts to receive any compensation should be required to do two years of service in Iraq or Afghanistan, the we'll see how important the money really is to them.
Broker indicted in real estate mortgage scheme
A Turlock man whose Modesto mortgage brokerage once vied for naming rights to the San Francisco 49ers' stadium was indicted by a federal grand jury Thursday on 122 counts connected to a scheme to cheat homeowners out of millions.
http://www.insidebayarea.
com/trivalleyherald
/localnews/ci_4271750
Of course Bush - he is a bitter renter. And FOX, they are all bitter renters. And Karl Rove - the bitter renter himself. And I'm absolutely sure that it's "Bush and associated Cabal" fault that Richard is a certified idiot.
State officials launched a major crackdown against alleged scam mortgage lenders yesterday, suing four firms.
‘‘Iwill not stand by and let these unscrupulous individuals profit off the
backs of distressed homeowners,’’’ Attorney General Tom Reilly said in announcing the crackdown.
AG probes charges of mortage scams
http://business.
bostonherald.com/
realestateNews/
view.bg?articleid=
155309&srvc=biz
Hands down, Ourselves.
Sounds like USA Capital just lost their loss mitigation department.
In the hearing Thursday, USA Capital attorney Annette Jarvis reported that the interim managers are hiring attorneys to start foreclosure against loans in default in several state. Allison declined to estimate the number of loans that will be foreclosed or the total amount of those loans.
http://www.reviewjournal.
com/lvrj_home/2006/
Sep-01-Fri-2006/
business/9388133.html
Keith, I don’t know if you have any control over the choice of Google ads on your site, but the one from www.loan-time.com which states on their site “125% LTV Cash Out. These home loan products allow a borrower to take a loan that goes 125% over equity of your home.” appears to disagree with what your blog stands for, not to mention Mr. Trump, who is teaming up with Anthony Robbins for the Real Estate Wealth Expo
>>>because they are also non-religious, they don't feel as compelled to adhere to the strict work ethic strongly advocated in religious teachings.
And just imagine if the wealthy and powerful in this country adhered to religious teachings about honesty and not treating other human beings as means to one's own ends.
How typical of conservabots to absolve the guys at the top in favor of piling all the blame on people who simply want a decent place to live.
Mortgage fraud scheme gets Greenville lawyer a prison sentence
September 1, 2006 - Last March, a Greenville lawyer admitted he sent false loan documents to residential mortgage lenders in the Upstate. Now Alex J. Newton has been sentenced to 41 months in federal prison.
Between May 2002 and March 2004, the 35-year-old closed a series of residential loans designed for the purchase of single family, owner-occupied homes. Newton admitted misleading the mortgage lenders by conducting undisclosed flip transactions, in which co-conspirators bought and immediately re-sold the houses at inflated prices based on fraudulent appraisals.
Newton admitted he knew that the borrowers were not buying the properties as primary residences, and therefore did not qualify for the loans. Instead of notifying the lenders of the fraud, Newton advanced the scheme by falsely certifying to the lenders that the properties would be owner-occupied as primary residences.
Newton also allowed loan proceeds designated for certain closings to be used to fund other transactions, disguising the dual-use of the loan proceeds from the lenders.
As a result of the fraud, the lenders unwittingly advanced more than $1 million in loans to unqualified borrowers for the purchase of over-valued properties.
There may be charges against others as the investigation continues.
http://www.wistv.com/
Global/story.asp
S=5356051&nav=0RaP
I blame the human nature of complacency. It amazes me how it’s deeply rooted in human nature to be so unconcerned and content to a fault. We are all influenced by companies and people who wish to shape our perceptions but, the lack of people who try to read the writing on the wall shows our tendency to be complacent.
Oh, and anon @ 5:31
The public school system (a bastion of liberalism
Ok, I’m not blaming you, but there is an attempt to change the definition of Liberalism due to religious or political ideology or whatever. Here are the direct links to Merriam-Websters Dictionary and also The American Heritage® Dictionary of the English Language That should put us all on the same page. Yes, I am a Libertarian.
It's definitely Bush's fault that I refied with a neg-am option ARM will will lose my home.
Ourselves. Ourselves? Of course, "caveat emptor", but:
1. Some of "ourselves" just wanted to buy a home, some of "us" were speculating. Some were priced out. Some saw a bubble and waited. Flippers, yes, "ourselves" as in everyone? - bottom of the list. How that factors into politics boggles my mind, especially considering:
2. Outright fraud is simply not the fault of the buyer. I'd move appraisers way up the list for pumping up fake valuations.
3. Market conditions are also not "our" fault, unless that has something to do with for whom "we" voted. But Greenspan was Fed chair during both Clinton and Bush terms. Without the low interest rate, no bubble. Political leanings seem irrelevant.
4. There has to be shared responsibility for toxic loans, too. On the one hand, the lenders set a trap. On the other hand, even if you can't decipher all the fine print or are not too bright, the general rule "you don't get something for nothing", if followed, would have been applicable. Surely this isn't 100% "ourselves" though?
5. Realtors will take the brunt of the blame. They are lower on my list because if someone insists on buying an over-inflated property, that's on the buyer (so that's solidly in the "ourselves" camp, except for dishonest realtors, which this blog seems to hold as the norm!)
I'm sure there are many other aspects discussed to death here that
obviously are not "ourselves". And these knee-jerk blame the liberals/conservatives comments are boorish and warped. Blaming people who are genuinely less intelligent (rather than "stupid" owing to lapse of judgement) seems mean-hearted, too.
Sins of commission, on the richter sale:
whoever invented "liar loans" 11
deceptive, sleazy mortgage brokers 10
flippers 10
Bob Toll 10
realtors 9
subprime mortgage packagers 9
homebuilders, other than bob toll 8
appraisers 7 (only because they were pressured into lying by people above)
fawning media 7
Fannie & Freddie 7 {only because they are limited to conforming mortgages; otherwise by their own desires they'd be up at 10}
boomers who made their children "invest" in "can't lose real estate" 9
Sins of omission:
6 Federal reserve and banking regulators
Sins from unexpected consequences:
5 Asian bond buyers and currency manipulators
Lenders allowing under-qualified buyers to get in too deep!
The Fed
Ourselves as well, no one stuck a gun to my head
The Irish and the Methodists!
Buyers who borrowed beyond their means are the real culprits.Accepting a toxic loan worth 7-10 times income hoping to join the 20% yoy increase bandwagon created the problem and will become human snackrifices to the bubble Kraken
FNMA and Freddie Mac by extending their approvals. 5 years ago someone with good credit score could not buy a home unless they substantial savings, enough down payment, 3 month reserves, 2 year job history and even then they could only be approved 3 times their annual income.
One day I woke up and all of a sudden rates were record low, FNMA guidelines were losened, everybody was a candidate to buy. Government sure did interfere as much as they could to create this monster to keep rich richer and the rest poorer.
Realtors and NAR - they lie so friggin much. One of my own family members is a realtor and actually tried to sell me a house in this market! What an ass!
GREED - by all parties.
I agree that the Fed has alot of responsibility. If they had allowed a severe recession in 2000 that tanked home prices, the bubble would have never gotten off the ground.
Perhaps Bush would not have been elected (at least not for a second time).
I'm not sure whether a sharper recession after the NASDQ collapse would have been better or worse than what we are facing now.
Bill
Um, that would be the realtor.
I would say EVERYONE in the RE industry since they became greedy pigs. Last year, I looked into buying a house and after checking with 3 separate realtors told them to go p!$$ up a wet rope (not using those words, mind you). As youngexc2b said, nobody forced people to sign those ARMs and HELOCs.
"I'm not sure whether a sharper recession after the NASDAQ collapse would have been better or worse than what we are facing now."
Hard to tell since there's no real engine of growth in this country anymore. I mean really, if the NASDAQ crash resulted in a full blown recession/mini-depression, outside of telcoms, then what would pull the IT/telco sectors up today?
I think the use of RE asset inflation, believe it or not, gave the economy a jolt in the arm but unfortunately, it didn't give it a new industry from which a sustainable recovery could be based upon.
The problem is that the US needs to invest in basic R&D and stop expecting industries to fall from the sky as if we're the sole proprietor of all the world's R&D like much of the duration of the cold war.
as an appraiser....i was gonna take the blame...but, whenever a loan/purchase comes up, and i am too low on value...most realty whores get real mad, when i say NO, and call another sheep/appraiser...same thing for refis/helocs with mortgage brokers...i get cursed at and called names, and they try another appraiser as soon as i hang up on them...
my stuff gets reviewed by one or two people at least, then its approved...so, somebody wanted the loan whenever i actually get to do an appraisal...
so, it can't be me...
it must be Richard's fault...
or suz my fav realtor...
Keith,
You forgot Suzanne.
Keith,
You forgot Brian!
"The problem is that the U.S. needs to invest in basic R&D..."
I agree and in addition, we have produce locally and not depend on foreign imports. The problem is the cost of labor, since it's cheaper to outsource production than to do it here. We have to devalue the dollar, in order to make foreign imports less affordable and instead but locall produced products.
I agree it is human nature that is the biggest culprit. Believing you could get something for nothing is absurd.
But if we want culpible parties, shouldn't we discuss the local governments that granted all the permits to high-rise condos in hopes of ever-increasing tax base (maximising taxable land = revenue) to fund schools etc.? Here in NoVa outside DC, Arlington county govt was able to capitalize on a buying public by increasing the housing (and tax base) primarily in condos and by the rising tax assesment based on all the new sales. Double the windfall. What potentially will be a ghost town of condo owners in 5-10 years in Arlington as owners flee their condos - as they usually have in the past - will radically change the local community from owners to renters. That is usually not a positive development for the local community. also buried in the condo boom is whether there is a subsidy to the existing SF homeowners for schools, etc. as condo owners are primarily single and childless and have no need for public schools. Was this a Machhiavellian ploy by the local govts. to fund their pet projects knowing the local community will become a desolate wasteland of future renters they will not have to answer to come election time? Throw them all out.
>>Let's just blame Bush for everything. The bigger the moron the more blame to go around. <<
Sorry, that's like the other side trying to blame Bill and Hillary for all the ills of the world...
It is your fault Keith.
"The problem is the cost of labor, since it's cheaper to outsource production than to do it here."
I think in this situation, it goes beyond the costs of manufacturing.
The problem is the lack of proprietary intellectual property. In a sense, globalization has decimated the American industrial R&D machine. Just look at Intel, DuPont, Dow, etc... The core R&D is beginning to be done in Russia, E. Europe, and Asia. 15 years ago, the NSA/Feds would only have allowed the Fortune 1000 to move production facilities abroad. Execs could be jailed if key sensor, chip design, and materials research were found outside the country and in the *potential hands* of Soviet operatives in S Korea or Singapore.
Today, with no restrictions on where research can be done, our executives have enabled all of the world to catch up with America within a single generation. You see, it's both capital and the reverse brain drain that's pulling the rug from under America's cold war lead as the world's tech giant (ala age of DEC, Xerox, MITRE, GTE, HP, DuPont, etc, etc). Once international engineers have a decade's worth of experience in US funded labs, in their own countries, they'll leave and start their own companies which will have all the know how of let's say 50 years of DuPont's corporate experience. How's that for disempowering America's global competitivity?
So, it's not about more American kids studying engineering but it's about our corporations providing real R&D careers (not just sales jobs) to the next generation of Americans.
So, it's not about more American kids studying engineering but it's about our corporations providing real R&D careers (not just sales jobs) to the next generation of Americans.
yes yes yes yes yes
I'm 38 with excellent education (PhD physics, ivy undergrad), experience, dozens of publications, and this year unemployed. I haven't even gotten a single phone call re any job application in 6 months.
At least I don't have a suicide loan.
Frankly, if you are studying engineering (i.e. before a real job) there is much more opportunity to get a fellowship or a postdoc. It's after that where the crap hits the ventilation apparatus. Everybody who is able in my local group is attempting to get jobs back in Europe---the reverse of the last 50 years. US citizens aren't eligible for them.
The last guillotine execution was in France in public in 1974.
"Frankly, if you are studying engineering (i.e. before a real job) there is much more opportunity to get a fellowship or a postdoc."
Postdoc-ing is the best route to a lifetime of underemployment and white collar slavery. Many postdocs will never be hired for a non-R&D type of business track in a company. It's clearly a 'Scarlet Letter' for an educated person as an academic who's not capable of a real world career.
Your best hope is to do well on your MCAT and apply for medical school. Otherwise, you're off onto a business track upon graduation because sales and consulting is the only avenue for top American graduates nowadays. Those days of a being an entry level investigator at a Bell Labs or Dow Chemical is history.
NO BLAME. Typical of the stock market---the real estate market is always right.
BUYERS MAKE VALUE !!! NO BUYERS-WHAT'S THE VALUE ??? Many predict demand for housing will flounder, especially if recession takes hold. If you get out fast enough you may get to keep most of your gains. If this is your traditional family homestead then value should'nt matter, till you find you owe hundreds of thousands more than you can sell it for.
Now get a grip because our latest upward 25 year spiral was caused by the birth of the age of information. MANY of those techy jobs that created high value BUYERS are now being outsourced to B.R.I.C. (brazil.russia.india.china.) anybody checking realtor.com/moscow.?
Can you imagine a real estate agent telling you, now is not a good time to buy because prices are expected to decline. He would go hungry.
Well atleast your stock broker advised you at the prick of the dot com bubble !!! Notice I did not use L.O.L.
"Now get a grip because our latest upward 25 year spiral was caused by the birth of the age of information. MANY of those techy jobs that created high value BUYERS are now being outsourced to B.R.I.C. (brazil.russia.india.china.)"
Thus, a long term bear market is in the cards.
Wow this debate is getting healthy and interesting. Having some of you with engineering background makes, gives a different perspective. From time to time, you'll encounter hate mongers who does nothing but cuss, but can't offer an intelligent opinion.
Let's keep it up and if there's anyone who starts to talk trash, we'll nip it.
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