March 26, 2008

Goldman Sachs ups subprime mortgage mess loss estimate to a HP-worthy $1.2 TRILLION. But just wait until they find out about the Alt-A and Prime mess


Still seeing 'subprime this' and 'subprime that', when we all know the REALLY big mess coming up ain't subprime at all.

Why is it so tough for everyone to see what we see? Maybe they know and just don't want to say?

When you see nationwide home values plummeting 10%+, and major cities like Vegas, Miami and Phoenix in total freefall, it's not just subprime that's for dinner. Nope, it's EVERY mortgage written the past few years that may be in trouble.


It's the IndyMac Alt-A garbage, and the First Federal Option Arm timebombs. It's the entire Countrywide portfolio. And it's regular prime loans made by regular lenders all over the country. It's all melting down now - any loan made 2003 - 2007 is suspect, especially when the rates adjust or the job losses mount.

And it infuriates me to no end to keep hearing reporting over here about the "dodgy loans made to poor people" who couldn't afford their loan that caused this mess.

IT WASN'T JUST THE POOR PEOPLE!!! It was the housing gamblers, failed flippers and mortgage fraudsters who brought down the system. A million Casey Serin's, putting no or little money down on lottery ticket STUPIDLY PRICED homes, and when prices went south, the f*cked buyers just walked away.

$1.2 trillion for subprime and we're good to go? I don't think so. Trillions in the plural will be lost by the time this is done. Trillions. And I'm looking for just ONE respected source to say it.

You want the truth America? You can't handle the truth.


Goldman sees $1.2 trillion global credit loss

Goldman Sachs forecasts global credit losses stemming from the current market turmoil will reach $1.2 trillion, with Wall Street accounting for nearly 40 percent of the losses.

U.S. leveraged institutions, which include banks, brokers-dealers, hedge funds and government-sponsored enterprises, will suffer roughly $460 billion in credit losses after loan loss provisions, Goldman Sachs economists wrote in a research note released late on Monday.

Goldman estimated $120 billion in write-offs have been reported by these leveraged institutions since the credit crunch began last summer.

"U.S. leveraged institutions have written off less than half of the losses associated with the bursting of the credit bubble," they said. "There is light at the end of the tunnel, but it is still rather dim."

27 comments:

NEPA debt free & waiting to pounce said...

Tacking the 'subprime' label on this whole mess allows a nice place for the fingers to point. All you poor people trying to buy homes when you should have been renting from ME...NOW LOOK WHAT YOU'VE DONE, you and your lousy credit scores!

It's driving me nuts...EVERYONE who decided to buy in such a fucked up, overpriced market and bought more than they could afford is at fault. EVERYONE who didn't bother to put any money down and got a piggyback to live in a shitbox is to blame. If you got a loan that had a PITI of more than 35% you are a MORON and sadly, part of the MAJORITY.

The MSM will continue calling this subprime in a useless attempt to calm the Americano fear factor.

What are the default stats on 'subprimes' where the buyer PUT MONEY DOWN and got a fixed rate with a payment they could afford? I've had two mortgages so far...and for the first back in 1994 I would have been considered Alt-A and for the second in 2005 I was subprime with a bankruptcy behind me due to a long term family illness. I paid BOTH loans in full...because I bought not what I dreamed of having, but what I could afford at the time and not have to eat cat food and ramen.

Thanks Keith for all you do, man...it makes me feel like I'm not totally insane. Just a little.

james said...

OK. So is this a buying opportunity for skf, or will the bailouts hide the true losses?

Anonymous said...

Can anyone answer...What's up with this?
And - how come US home prices in the NE continue to rise? Explain please- I see no end in sight. Some places may be immune to the bursting bubble.

NEW YORK (Reuters) - U.S. mortgage applications jumped by nearly 50 percent last week as home loan rates fell after the Federal Reserve cut interest rates and took steps to restore bond market confidence, an industry trade group said on Wednesday.

Anonymous said...

Jerry : So were going to make the Post Office pay for my new stereo ?

Kramer : It's just a write off for them .

Jerry : How is it a write off ?

Kramer : They just write it off .

Jerry : Write it off what ?

Kramer : Jerry all these big companies they write off everything

Jerry : You don't even know what a write off is .

Kramer : Do you ?

Jerry : No . I don't .

Kramer : But they do and they are the ones writing it off .

David in So Cal said...

For the first time in my 38 years, I can now say I am very worried for the future of America. We are sitting on a bomb that will make any nuke look like a childs toy.
We are in for some big big trouble and I am going to blow a fricking gasket if/when all of these "mortgage fraud" perps get bailed out!!!

Prosecute these bastards for commiting MORTGAGE FRAUD!!!!

Anonymous said...

Keithm This reminds me of a qupte from Pulp Fiction.

"If my answers frighten you then you should cease asking scary questions."

Those in the know are frightened... ...They have ceased asking the scary questions.

G-LYTE

Anonymous said...

Housing is down 10% since last year.

That's a $2 Trillion paper loss right there (based on the value of housing stock which peaked at just over $20 trillion)

And we're just getting started.

Jymkata

P.S. How did you get a copy of that Trillion dollar bill from Mr. Burns (my very favorite Simpson's episode, ever!)

Garth Farkley said...

Roubini says trillions. Plural.

Anonymous said...

It's actually pretty chilling to see the HERD and the MSM constantly blame the poor, illiterate, slack-jawed and unwashed for the housing debacle. It's a depressing mass psychology of denial, but once that soon evaporates, the real "Housing Panic" will set in. Does our society take responsibility for anything? Did it ever?

sandman said...

IT WASN"T JUST THE POOR PEOPLE!!!

Priceless. And True.

Thanks Keith

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

It's just another housing catastrophy waiting to happen.

~~~~~~~~~~

Anonymous said...
Can anyone answer...What's up with this?
And - how come US home prices in the NE continue to rise? Explain please- I see no end in sight. Some places may be immune to the bursting bubble.

NEW YORK (Reuters) - U.S. mortgage applications jumped by nearly 50 percent last week as home loan rates fell after the Federal Reserve cut interest rates and took steps to restore bond market confidence, an industry trade group said on Wednesday.

Anonymous said...

We will all be sleeping in our cars soon.... the madness....make it stop.

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

The infusion of endless money being pumped in by the Fed is for one thing only ... to keep supporting the lavish life-styles of their wall-street and banker cronies.

I really hope that people start waking up fast - stop watching American Idol or any other mindless distraction - and realize what is now happening in this country.

~~~~~

David in So Cal said...
For the first time in my 38 years, I can now say I am very worried for the future of America. We are sitting on a bomb that will make any nuke look like a childs toy.
We are in for some big big trouble and I am going to blow a fricking gasket if/when all of these "mortgage fraud" perps get bailed out!!!

Prosecute these bastards for commiting MORTGAGE FRAUD!!!!

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

The bigger bulk of the problem will be with Alt-A and Prime.

These (typically) higher earning borrowers were also niave, greedy, impulsive or just plain clueless as to what they have now found themselves in with an ever depreciating asset.

Housing values - on paper - were shifted upwards through these borrowers, but the fall of prices will be that much more severe overall because of it.

We're just getting started with this mess.

Anonymous said...
It's actually pretty chilling to see the HERD and the MSM constantly blame the poor, illiterate, slack-jawed and unwashed for the housing debacle. It's a depressing mass psychology of denial, but once that soon evaporates, the real "Housing Panic" will set in. Does our society take responsibility for anything? Did it ever?

Anonymous said...

I just keep thinking of the Running Man and the scene where Dustin Hoffman is in the chair and Laurence Olivier keeps asking:
"Is it safe?"
So, who's in the chair and who's drilling...

Are we safe HPers...huh, huh, huh?

Anonymous said...

I opened an account at Indymac in March 2007. They were actually bragging they didn't write much subprime only Alt-a. Unreal...

Jonathan said...

Oh your God.

Anonymous said...

As first-time home buyers in the Seattle area we put somewhere between 5-10% down and a 30yr fixed. Got a 20yr fixed piggy-back and bought a small 2br 1.5 bath house in early 2005 we could reasonably afford (~30% PITI) in a great location and plan to be in for 10 years or more... barring a depression and rampant inflation. We've never used the house as an ATM with a HELOC.

How the frick were we supposed to know the economy was going to end up teetering on the brink of destruction? We're certainly not idiots, but we're not economists either and HP isn't exactly advertised....

Being temporarily (years) upside down, if that occurs, would be tolerable given our long-term outlook if our income doesn't radically go down for an extended period of time simultaneously.

I'll be utterly pissed if those actually responsible for this mess are bailed out. Especially if the screws are put to us as responsible buyers.

mairca izda debol said...

Why don't we have the Fed print out $1 Trillion bills and repay out debts? It will only take 9 of them.

Anonymous said...

well i live in bergen county nj, just 10 mins outside NY city and the housing markets sux here most houses stay on the market for over 11 months, average % loss now is about 20% below last year, aint nothing really selling, at sheriff sales have usually about 12 people when theres about 200 homes up for auction...so dont believe 'em.....taxes are about 10 grand on a 400k home...

Anonymous said...

Anon said:"I opened an account at Indymac in March 2007. They were actually bragging they didn't write much subprime only Alt-a. Unreal"...



ALL the banks are saying they dont have much exposure in Alt-A ...

things are going to get interesting.

Anonymous said...

why is it goldman sachs doesn't seem to be bothered by or touched by all of this? or are they? soon we will know for sure. sooner or later, the garbage they have on their off balance sheet asset book will have the light of day shined on it for all to see. frankly, i think goldman sachs used insider info to profit from this sub prime mess and they perhaps dumped their holdings and went short a lot. however, they are in serious trouble just all of them. they just try to posture and pretend that they are not.

Anonymous said...

If things are already heating up now like this:

www.msnbc.msn.com/id/23814034/

Imagine when those trillions hit the fan and Bernanke tries to bailout his Israeli masters by dumping the bill on AMERICAN taxpayers who actually work for a living.

Anonymous said...

You can go back more than a year to see my postings alerting that the biggest shoe to drop was Alt-A. Everybody here was talking about subprime while I was screaming Alt-A.

Yoski said...

Let's run a few numbers here.
Total worth of single family homes in the US about $20 trillion.
A 10% drop in values from peak is $2 trillion that will show up on somebody's balance sheet. I guess that homeowners will eat about 75% of that while Lender are on the hook for the remaining 25% or $500 billion. If we drop another 10%, which it looks like we will, then there're in for another $500 billion of losses. So $1.2 trillion before it's all over is a reasonable estimate in my opinion. That also means that to date we're only 15% into this game. 2nd inning, 7 more to go. Enjoy the popcorn

Anonymous said...

Goldman Sachs is the 'master of disaster' for this corrupt administration.

If this country still had a Justice Department that prosecuted corporate fraud, they'd all be in orange jumpsuits.

But instead, they're allowed to continue with their 'legalized' looting of our financial futures.

With such a high degree of evil accomplishment, they surely deserve a ceremonial White House presentation of Medals of Freedom from the PTB...

Insidious crooked bastards!

Disgusting.

WINGS said...

Maybe Andrew Hac is totally right afterall, and we're all just a bunch of Americano Snapper Turtles, myself included.

Perhaps our goose really is cooked!

Perhaps the fate of the Americano is signed, sealed and delivered on a hot BBQ grill ass sizzling, etc.

I can't believe the friggen' financial Thermonuclear Bomb about to go off and roast our collective asses!