September 20, 2007

Ben Bernanke proves once again he's never read HousingPANIC

"Global financial losses have far exceeded even the most pessimistic estimates of the credit losses on these loans," the Fed chairman said. The situation, he acknowledged, "has created significant market stress."


.

46 comments:

Anonymous said...

GOT GOLD

Anonymous said...

The dollar has reached parity (parody?) with the Canadian dollar. Holy cow!

Trevor Cordes said...

10yr note now at 4.66 in climbing. Foreigners panic selling out of the US$??? 30yr at 4.94: ABOVE THE FED TARGET FOR THE FIRST TIME IN AGES and almost at 5%.

Think mortgage rates will go down. Think again!!! Go bond vigilantes go!

Andrew said...

so who is putting the gun to Ben's head? i mean let's face it, somebody is telling this guy what to do.
and poor Mervyn King...i think he was pretty much told to bail out Northern Quicksand or get fired....

Anonymous said...

.
.
.
.
Ben B doesn't count the predictions of madmen as predictions. Weren't some of you experts saying DOW 7000?

Keep investing in 5% CDs geniuses.

Lisa said...

How many loans have yet to reset, and he's saying losses have ALREADY exceeded their wildest nightmares??

I don't believe for one second that anyone in the financial services industry is genuinely "surprised" about this. It's why the personal bankruptcy laws were changed two years ago. They knew full well that something wicked this way comes.

Anonymous said...

If you watched the senate hearings you would see that they want to raise the government backed loan limits so they can bail out the crap loans and save the banks and Wall Street .

The tax payers will pay for these notes because they will default . Does anybody think that the underwriting by FHA will be any better than sub-prime underwriting . This is a way to pass the tab on to the tax payers.
Tranfer the bagholder is the game
I object to bailing out these loans , especially the Jumbo loans . Do you want to bail out people at the higher income level who bought a luxury home on a gamble .No way .

Anonymous said...

So the losses have exceeded the $10 Trillion meltdown the CEPR projects?

Anonymous said...

QUESTION: Do you think there’s a risk of a recession? How do you rate that?

BUSH: You know, you need to talk to economists. I think I got a B in Econ 101. I got an A, however, in keeping taxes low and being fiscally responsible with the people’s money.

Anonymous said...

Don't miss out on Ron Paul giving Bernanke a lesson about "Moral Hazard" :-}

Ron Paul Questions Bernanke

Sheeple said...

Ben B doesn't count the predictions of madmen as predictions. Weren't some of you experts saying DOW 7000?

Oh I missed it....

Is the game over???

Anonymous said...

"How many loans have yet to reset, and he's saying losses have ALREADY exceeded their wildest nightmares??"

Yeah, we are just six or seven months into the resets. The peak doesn't come for a couple of months. If they are crapping their pants now, just wait until February 2008. I expect to see more (Poole just announced his retirement) resignations and retirements in the months to come.

Check with Neil around November to re-stock your popcorn supplies.

Smug Bastard

russdog777 said...

"Ben B doesn't count the predictions of madmen as predictions. Weren't some of you experts saying DOW 7000?

Keep investing in 5% CDs geniuses."
======
hooray! dopes is back!

Anonymous said...

As a non economist from a Third World country, I am surprised how such a fool (who does not understand basic economics) has been made Fed. Chief.

Good Lord, bring some sanity to this world of Foolish Elites who are make our lives miserable.

Anonymous said...

People, if you are so sure about inflation shouldn't you load up on debt while rates are still historically low??

Anonymous said...

"has created significant market stress."

We are, what, 5% below all time stock market highs? WTF is he smoking?

Anonymous said...

The way the USD is falling, we're going to see the equivalent of DOW 7000 very quickly. The number may still be in five digits, but its actual worth will be well under $7000 in constant dollars.

$1 US = $1 CAD
$1 US = 0.5 UKP

Anonymous said...

i'd imagine most reasonbly bright people, who make a good salary, but are priced out of their local markets by speculators have predicted somewhere between a 50 to 95% default rate on these crazy mortages. shows how disconnected "big money" is from reality

k.w. - southern ca. said...

As someone had pointed out earlier ...

[...This was just a scheme to transfer more wealth to the upper 5% in this country...]

Lost Cause said...

Perhaps there is something to this economy after all. The market did not tank after Bush gave his glowing praises.

Anonymous said...

Yeah, we are just six or seven months into the resets. The peak doesn't come for a couple of months.

====
The peak will come right as the "Bailout The FBs of America" act is signed by the Idiot in Chief, probably with Harry "The Tool" Reid and Nancy "The Jackal" Pelosi by his side.

Whatever has happened is all that will happen. The bailout is here, it's real and it will keep prices up. That is reality.

westwest888 said...

How's this for global housingpanic? They'll kill you in Iraq if you don't sell to the insurgents:

>>"It's bad that I sold our home, but what is worse is that I sold it for only 145 million dinars," Ismael said, naming a price equivalent to about $118,000 -- less than half the house's appraised value in late 2003. "It's an insult to my father to sell it so low. But what choice did I have? They would have killed us."

http://tinyurl.com/2rlwtf

mrmx said...

"he has no idea! he has no idea how bad it is out there, he hasn't met my friends who read housingpanic.blogspot.com and patrick.net. he simply has no idea what people are going to loose...'

Anonymous said...

Sheeple said...
Ben B doesn't count the predictions of madmen as predictions. Weren't some of you experts saying DOW 7000?

Oh I missed it....

Is the game over???

September 21, 2007 1:44 AM


=============

HA HA HA. SO you loons thing not only will housing drop 70% but the DOW will fall 50% too. You guys are too much.

It's a free country, everyone is entitled to their opinion. You keep believing that if it makes yous sleep soundly.

Ooops what's this now? Dow up another 70 in the first 20 minutes of trading.

westwest888 said...

Even worse, Bernanke's boost to bank profits is going to be the nail in the coffin for mortgages as they price in inflation. Lower 1/2, watch it go up 1 point. He personally will kick the housing market off a cliff, lowering the fed funds rate until the inflation premium makes fixed rate mortgages hit 8%. Maybe everyone will just get ARMs...

>>Watch the 10-year swap yield. Nothing correlates better with the prime 30-year mortgage rate. It’s up 13 basis points since the FOMC move.

>>Looking at slope of the yield curves 10-years to 2-years, the Treasury curve has widened 20 bp and the swap curve 23 bp. If all Bernanke is trying to do is calm the short-term lending markets, that’s fine, but the long-term markets are getting hit.

gimme shelter said...

"The tax payers will pay for these notes because they will default . Does anybody think that the underwriting by FHA will be any better than sub-prime underwriting . This is a way to pass the tab on to the tax payers."

Yes, and the "tax" used to pay for it all will be inflation. The central banks are going to whack gold prices to try and stem the bad PR surrounding the drop in the USD. This will be a "golden" buying opportunity, so load up when it drops below $700. The next leg up will see gold at $1K+, and the USD index at .72.

Blissex said...

«If they are crapping their pants now, just wait until February 2008.»

They are not panicking now -- the smart money just wants to be given time to unwind their positions, cash in their gains and disappear, and then it is somebody else's problem.

What is scaring people now is a liquidity crisis, but the smart money know that there is a much worse solvency crisis behind it. All they want is for the Republicans and those Dems who are "business friendly" to keep things looking good for a while, and provide the liquidity for the insiders to get out.

airhead said...

Although I have been reading for a long time, today I officially stopped being "annon" since today I officially housing panicked. As of close of market today I am out of stocks/bonds and into TIPS. My whole nut which is about $300k. Looks like I'm having a pretty good last day in stocks, good. I plan to stay this way until at least after the election next year. I consider myself lucky to get out only 1% below my peak net worth. I'm expecting to be able to buy back in in a year or two at a 50% discount or you guys are going to hear about it!

Anonymous said...

Anonymous said...
The dollar has reached parity (parody?) with the Canadian dollar. Holy cow!
September 20, 2007 7:30 PM
--------------------------------
I wonder if it will ever get back to the ratio of $1.75 US to one Cannuck buck.

Anonymous said...

BUSH: You know, you need to talk to economists. I think I got a B in Econ 101. I got an A, however, in keeping taxes low and being fiscally responsible with the people’s money.

September 21, 2007 12:40 AM
--------------------------------
Delusional chimps......

Wallflower said...

Check out a snippet of Ron Paul's grilling of Bernanke:

http://tinyurl.com/yvgfkb

Says Paul:
"I want to follow up on the discussion about moral hazard. I think we have a very narrow understanding about what moral hazard really is. Because I think moral hazard begins at the very moment that we create artificially low interest rates which we constantly do. And this is the reason people make mistakes. It isn’t because human nature causes us to make all these mistakes, but there is a normal reaction when interest rates are low that there will be overinvestment and malinvestment, excessive debt, and then there are consequences from this. My question is going to be around the subject of how can it ever be morally justifiable to deliberately depreciate the value of our currency?"

Adds the commentator:

"His statements continued (about how much oil, gold, wheat, corn, etc. has gone up since the rate decrease) but the heart of his question was the following moral question: ...consciously depreciating the value of the USD has winners and losers (Wall Street/banks/the rich and everyone else), Mr. Bernanke. How do you constantly choose Wall Street over the rest of America?"

There ARE people in this country who really "get it". Let's stop the insanity and give thoughtful logical leaders a chance to lead our country.

Anonymous said...

Ooops what's this now? Dow up another 70 in the first 20 minutes of trading.

DOPES, I have news for you... It ain't yours until you sell it.

p.s. We've missed you.

Anonymous said...

Whatever has happened is all that will happen. The bailout is here, it's real and it will keep prices up. That is reality.

Rubbish.

This "bailout" is nothing of the sort. It is merely a mechanism to allow those in the lower credit class to refi their loans. They are not writing these people checks for their houses. That would be a bailout.

And sorry to burst your "bubble", but any bailout or perceived government intervention will be moot. Because the two major reasons for this housing bubble were 1) euphoria and 2) a lax derivatives market which allowed for loans to be resold.

The euphoria has now vanished and people are more edgy. And more importantly, the market to purchase loan instruments in the form of derivatives if vanishing. Which means the institutions that are doing the lending will have to carry these loans. For those of us who know enough about history, how "lax" do you think banks and institutions are with their own money when it comes to borrowing?
Read the news. People are now filing multiple mortgage applications to try and get approval. And this is not just sub prime.

Ultimately, the true calamity of this housing debacle won't begin to truly unfold until the Alt-A paper begins to reset. Once they realize even those in the Alt-A and even prime categories are at risk, the true nature of this problem will finally come to the forefront. By then, the smart money will have already moved to other asset classes and currencies. In the end, the little guy will once again get stiffed, through higher inflation.

Enjoy the ride folks. We are still just at the beginning of this roller coaster.

Lost Cause said...

The dollar has reached parity (parody?) with the Canadian dollar. Holy cow!

I wonder how much of this is due to all the oil that we import from above?

Anonymous said...

Hey renters, did you catch this one? Bush is going to allow people with ARMS to refinance into 1% 30 year fixed loans. That's right suckers. While you scrimp and save, the so-called FBs are getting a 1% loan for 30 years.

FB? Yeah right. Try more like FR. Oh and thanks a bunch, I have an ARM resetting in about a year.

http://articles.moneycentral.msn.co
m/Investing/SuperModels/BushMortgag
eBailoutJustMightWork.aspx?page=1

Lost Cause said...

People, if you are so sure about inflation shouldn't you load up on debt while rates are still historically low??

Good question. Did Ben drop his rates because he thinks a recession is likely, or to placate his Wall Street peers who reported this week? Am I cynical enough to think that he is rolling over for the banks, or doing what has been the historical reflex to counter a slow down?

For one thing, dropping rates does not always work to counter a recession. For another, there is more evidence of screaming bankers than there is of an upcoming recession, though there are some indications of that.

I would bet with the fed, since they have more resources to make predictions than I do. They are betting on recession.

Anonymous said...

Anonymous said...

The way the USD is falling, we're going to see the equivalent of DOW 7000 very quickly. The number may still be in five digits, but its actual worth will be well under $7000 in constant dollars.

$1 US = $1 CAD
$1 US = 0.5 UKP

September 21, 2007 5:47 AM


================

Another ignorant HPer speaks. When the dow is 7000 it doesn't mean $7000 you dolt. It is an index not a dollar value.

Anonymous said...

Is it reasonable to make an offer on a property based on CPI inflation that has occurred during the previous owner's ownership term? I'm thinking of applying a 2.2% inflation rate to a property that was purchased 20 years ago by its owner. Please let me know what you think, as opposed to applying a 160X - 180X rental rate. I think this is a severe low-ball, and I like it :)

Anonymous said...

Escalating mortgages = escalating rents.
Check out this video on youtube:
http://www.youtube.com/watch?v=3CLOFm6uFbE

Anonymous said...

Hey Dopey,

If the housing market is so good riddle me this.

1 Why are we talking bailouts?

2 Why would someone go into forclosure instead of sell for an amazing profit?

3 Why is the HB index so low?

4 Why did Hovnanian have the deal of the century.

Well let me know

Anonymous said...

Could not watch the vid. Disgusting. Hopefully this only applies to bubblicious California.

Anonymous said...

These guys had to have known what was going on. I am J6P and even I could see it 2 years ago.

So the question becomes.... why did they do it and why did they do it for so long.

They pushed the economy to the very edge of the abyss.

If we loose the dollars position as the worlds currency, then who has won the war on terrorism.

Have we been brought to our knees .... facing east.

Anonymous said...

Hey renters, did you catch this one? Bush is going to allow people with ARMS to refinance into 1% 30 year fixed loans. That's right suckers. While you scrimp and save, the so-called FBs are getting a 1% loan for 30 years.

FB? Yeah right. Try more like FR. Oh and thanks a bunch, I have an ARM resetting in about a year.


And will they be offering new loans to home buyers that are 1%? And if not, who will buy houses?

Your grasping at straws, my friend. And we can see through your vain attempt at the tough guy routine. You are clearly in over your head on your mortgage and are hoping and praying for a bailout. Well, enjoy the ride. You'll be paying for a depreciating asset for 30 years. Congrats.

LauraV said...

"Hey renters, did you catch this one? Bush is going to allow people with ARMS to refinance into 1% 30 year fixed loans. That's right suckers. While you scrimp and save, the so-called FBs are getting a 1% loan for 30 years."


This wont keep FB in their overpriced mcmansions..as the credit crunch gets worse - cost of living is going through the roof, will financially wipe out the FB. Re-fiing yet again will only allow them to hang onto their houses alittle bit longer.

Banks will probably make money though...re-fi these FB into yet another loan by charge points and fees. Instant higher bank reserves without selling loans!

See, the FED will always help the banks, not the borrower!

Thanks Anon, but I'm happy to wait until next month when the stock market crashes, thats when I'm buying gold.

Anonymous said...

HP can change to DP - Dollar panic....
cause that is what looks to be the actual outcome of this mess!

Anonymous said...

Why would he read housing panic when its the FED that creates the boom and bust cycle to begin with.