January 20, 2007

When the debt bubble begins to unravel, it'll seem a bit like this...

Posted by blogger at 1/20/2007

11 comments:

Anonymous said...

Bam! Smash! Crash! Watch out!

January 20, 2007 11:53 PM
Anonymous said...

Here is just one example of how this will unfold. This bank gave out 482 loans (construction loans probably) to one builder. $110 million. Now he is going broke leaving the buyers and the bank holding the bag. The banks made no doc loans with only the buyers signature. And then made payouts to the builder without verifying the work had been done. It hadn't. Subs weren't paid. One person had 3 houses under construction, the other was told the realtor would have hers sold again before it was completed. The word greed comes to mind.
The bank, the buyers, the builder, and the workers are going to suffer. http://tinyurl.com/2b72h9

January 21, 2007 1:15 AM
Anonymous said...

What kills me is how over the past few years all the agents loved telling the prices on houses so they could use the inflated prices for the next yahoo's comparables. There is a house i've had my eye on that finally sold and the agent won't tell me the price( I guess he's not so proud of it) He told me i'd have to check with the courthouse. Does he really think I'm that stupid?

January 21, 2007 1:59 AM
Anonymous said...

Very cute but ominous remake, "Capital Keeps Falling on my Head".

http://www.yieldsz.com/

January 21, 2007 8:55 AM
Anonymous said...

Woo Hoo! Oh, this is sweet. Here is the stock chart for CFHI, Coast Financial Holdings, a building loan lender. They had a big customer default:

http://finance.yahoo.com/q/bc?s=CFHI&t=3m

or

http://tinyurl.com/2utqh8

Pay close attention to the right hand side of the graph. No, it's not a typo. This is what is in store for lenders in the upcoming months.

Game Over.

I'm glad my puts are in place.

January 21, 2007 9:03 AM
Anonymous said...

The really funny thing about all this is, the bankers, the realtors, Wall Street, the Government all realize now what is going on. None of them can really acknowledge the downside. Some would lose their jobs, some would be accused of collapsing the American economy and some would lose vast amounts of money and income. Hedge funds, mutual funds, pension plans and investors under the gun to grow assets have to continue playing the game, each one knowing any minute the whole thing could come tumbling down, each hoping they will "get out" right before armageddon. So everyone just smiles and pretends they don't see the turd in the punchbowl.

In the end it was Alan Greenspan, asleep at the wheel, who held interest rates too low for too long.

The value of money should not be determined by humans because as you see, they inevitably screw it up. Only gold or some other easily transported, not printable commodity should be used for money. Something the government can't print at will. Only that will bring fiscal responsibility and stability.

January 21, 2007 10:07 AM
Anonymous said...

Oh dear god that was funny!

January 21, 2007 12:31 PM
Anonymous said...

Oh Shit! Rising margin debt sounds familiar. I guess that's why they invented the saying:

"those who don't learn from history are destine to repeat it",

or something like that.

http://bigpicture.typepad.com/comments/2007/01/margin_debt_up_.html

January 21, 2007 2:21 PM
Anonymous said...

Bozonian, that is some graph!

I guess everything was just dandy, not a cloud in the sky, until the moment of impact.

January 21, 2007 3:02 PM
Anonymous said...

bumper cars .. awsome !!

January 21, 2007 4:44 PM
Anonymous said...

"Very cute but ominous remake, "Capital Keeps Falling on my Head".

http://www.yieldsz.com/"


Funny and dead on - thanks. Beyond the narrowing of spreads, this excess, forced liquidity has another effect that no one dares mention. The rate of money supply growth (the change in the change) has to increase just to keep the system solvent. We have to create more money every day just to service interest payments on our newly created "wealth".

There is a limit to this exponential foolishness, but I don't know if we'll see it in six months or twenty years. It's sad that many of the institutions are in a don't care mode. They collect transaction fees and for them, the more the merrier. The problem is now so large and widespread, they know a bailout of some kind will occur should the balloon burst while they're playing this game. Meanwhile these financial institutions will continue to generate record profits and their executives will earn huge bonuses.

But all you good and pure HPers will be screwed along with Joe Average in the end. Joe Average can't, and you won't participate in their cynical money game. Like the song says, earning 4.75% on your cash hoarde "won't fuel no party".

January 21, 2007 4:52 PM

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