Comments on: 10 Reasons why there will be no Second Half Recovery in 2008: Federal Reserve, Housing, and Jobs.

By: lary h

lary h — Wed, 03 Sep 2008 18:39:37 +0000

Btw, WBuffet is a.k.a. the Oracle of Omaha, not the “…sage of Omaha…”.

By: Timeline Guy™

Timeline Guy™ — Mon, 25 Aug 2008 22:43:14 +0000

Interesting tidbit about Berkshire Hathaway, but be careful that the table you cite is the book value of the company and teh stock chart is the market value. Not necessarily th esame thing.

– Timeline Guy™

By: Wall Street Seminars

Wall Street Seminars — Mon, 25 Aug 2008 21:51:29 +0000

Very well said, we’ve been saying that all year and now we finally will have a monthly sell signal on the S&P 500 which will intensify the selling pressure.

By: Tom

Tom — Mon, 25 Aug 2008 18:36:47 +0000

@OC Bear: Looking at that article, it pretty much answers some of the questions:

” I think the main reason is when they started making loans the Depression had bottomed out. Also, interest rates declined, so they benefited from lower and lower funding costs on the debt they issued.”

Given HOLC didn’t get started until around the market bottom anyway, it’s actually surprising to me that they couldn’t do better than break even (which may or may not include the $200MM taxpayer startup costs).

By: js

js — Mon, 25 Aug 2008 18:28:43 +0000

“The 40yr loan sets a bad precedent, as it will go from unusual to mainstream.”

I think you’ve hit the nail on the head Kim. In my more tin fail hat moods, I’d say this is a plan, to make people mortgage slaves for longer and longer periods of time. Mortgage slaves have social uses: they make good loyal employees, they don’t tend to be boat rockers, political agitators, or even entrepreneurial risk takers, they don’t become financially independent early and just quit the system. And besides far more to the point they are profitable to banks!

As we know ultimately housing prices need to be related to income, but with longer mortgage periods you can have higher housing costs without needing a bigger income. And the bank gets even more years of mortgage payments out of you. What a steal.

Oh I’m styling it with my trendy (comes in a multitude of styles and colors) tin foil hat, I know. But think, once upon a time 15 year mortgages were common. Now it is true that only 40% of the population could afford houses then, but there is no way even 40% of the people could afford *15 year* mortgages now much less with a single income as they usually did in those days! So are we getting richer yet?

And yes the 40 year thing might fail (one can only hope), but then it will have only succeeded in pushing the crisis out 5 years as mentioned. That seems to be what we as a society love to do, defer problems which ultimately multiplies them rather than solves them.