Comments on: The Schism Between Wall Street and Main Street: Green Shoots for the Banking Oligarchy and Crap Shoots for Others. http://www.doctorhousingbubble.com/the-schism-between-wall-street-and-main-street-green-shoots-for-the-banking-oligarchy-and-crap-shoots-for-others/ How I Learned to Love Southern California and Forget the Housing Bubble Sat, 31 Jul 2010 22:55:07 +0000 http://wordpress.org/?v=2.9.2 hourly 1 By: OILWELLDOCTOR http://www.doctorhousingbubble.com/the-schism-between-wall-street-and-main-street-green-shoots-for-the-banking-oligarchy-and-crap-shoots-for-others/comment-page-1/#comment-36044 OILWELLDOCTOR Thu, 07 May 2009 06:23:59 +0000 http://www.doctorhousingbubble.com/?p=1751#comment-36044 Great Post DHB, thanks. Gov't is paying what they deem the dollar is worth; nothing. Why pay interest when the Treasury can print and the Fed buy all they want? Nice to talk about saving in gold or silver. Yeah, like we got extra cash laying around. Let's face it, those of us that were prudent with our money will pay for the gamblers. Fanne and Freddie are already offering little down in an attempt to reinflate the housing bubble. People are biting too! Let the good times roll! Great Post DHB, thanks.

Gov’t is paying what they deem the dollar is worth; nothing. Why pay interest when the Treasury can print and the Fed buy all they want? Nice to talk about saving in gold or silver. Yeah, like we got extra cash laying around. Let’s face it, those of us that were prudent with our money will pay for the gamblers. Fanne and Freddie are already offering little down in an attempt to reinflate the housing bubble. People are biting too! Let the good times roll!

]]> By: Gman http://www.doctorhousingbubble.com/the-schism-between-wall-street-and-main-street-green-shoots-for-the-banking-oligarchy-and-crap-shoots-for-others/comment-page-1/#comment-35970 Gman Mon, 04 May 2009 01:43:19 +0000 http://www.doctorhousingbubble.com/?p=1751#comment-35970 Keep up the great work "Doctor!" Bubble troubles? What housing bubble troubles? No worries folks. Simply "reinflate" the housing bubble as necessary using that "brand new" mortgage product (brought to market by the "fine folks" on Wall Street) available everywhere at any Bank or Savings & Loan of your choice beginning 1 May 2009. Now introducing the "California Twister" -- all inclusive problem-solving* mortgage. * Simply "import" a Japanese-style "three-generation, 100 year" mortgage with an added California twist. Financially "reengineer" it into a "four-generation, 120 year" mortgage product to be hereafter known as the "California Twister." (An advanced financial mortgage product developed for the new century). For truly stubborn existing foreclosure cases (or for those Californians who wish to obtain home price/income ratios mortgages of at least 20:1; as in "don't let a mere $50K annual family income prevent you from living the life you aspire to in the $1M+ home of your dreams in Orange County"). Instead simply "step-up" and utilize the "ultimate" in currently available mortgage products: the "California Twister-II." (A "five-generation, 150 year" "variant" to be shared with your children, grandchildren, great grandchildren, and great-great grandchildren). (Keeping it in the family as a legacy mortgage; "the family that pays together, stays together" -- don't you agree?) All California housing bubble and mortgage-related problems promptly solved. That wasn't so difficult to effect -- now was it? --------------------------------------------------------------------------------------------------------------------- Excerpt from: New Study Shows More Than 2.1 Million California Small Business Jobs Will Be Lost Over the Next 3 to 4 Years 1.5 Million Face Immediate Risk of Job Loss as a Result of Small Business Owners Who Took out Toxic Home Mortgages according to Bornstein & Song, CPAs & Consultants Study with MerchantCircle LOS ALTOS, Calif., April 23, 2009 /PRNewswire via COMTEX News Network/ -- Toxic Mortgage Study will Continue Nationally, Including Florida, Arizona, Michigan, and Nevada New study results show more than one-third of all California small business owners took out risky or toxic mortgages such as Alt-A, Alt-A ARMs, Option ARMs, Interest-Only, and Subprime, etc. to get cash for business expenses during the peak of their home values from 2004 to 2007. As the first wave of mortgage resets hit, small business owners will be at-risk of "payment shock" and default as their monthly mortgage payments skyrocket. The toxic mortgage resets began in the 4th Quarter 2008 and will continue through 2012. "The resulting defaults will be the cause of the 2nd 'Tsunami' Wave of Foreclosures that will dwarf the subprime crisis and will take many homeowners and small business owners by surprise. In California, these inflated mortgage payments will threaten more than 2.1 million small business jobs," said Prof. Samuel D. Bornstein. "I purchased my home in 1999 for 235K," says Keith Capsuto, owner KC Photography & Music in Oxnard, CA. "Within the first 3 yrs. it had a value of $650K. I did the foolish thing of buying the home with an ARM loan to save money for business expenses. Up to the turnaround in the real estate market, I had been doing a fair amount of business, but it dwindled off sharply and by 2008, I was almost bankrupt. Now in 2009, business is about gone! I am 8 months behind on my mortgage with credit cards up to the hilt from business expenses. I am attempting to work with my mortgage company and on the brink of filing for bankruptcy." Keep up the great work “Doctor!” Bubble troubles? What housing bubble troubles? No worries folks.

Simply “reinflate” the housing bubble as necessary using that “brand new” mortgage product (brought to market by the “fine folks” on Wall Street) available everywhere at any Bank or Savings & Loan of your choice beginning 1 May 2009.

Now introducing the “California Twister” — all inclusive problem-solving* mortgage.

* Simply “import” a Japanese-style “three-generation, 100 year” mortgage with an added California twist. Financially “reengineer” it into a “four-generation, 120 year” mortgage product to be hereafter known as the “California Twister.” (An advanced financial mortgage product developed for the new century). For truly stubborn existing foreclosure cases (or for those Californians who wish to obtain home price/income ratios mortgages of at least 20:1; as in “don’t let a mere $50K annual family income prevent you from living the life you aspire to in the $1M+ home of your dreams in Orange County”). Instead simply “step-up” and utilize the “ultimate” in currently available mortgage products: the “California Twister-II.” (A “five-generation, 150 year” “variant” to be shared with your children, grandchildren, great grandchildren, and great-great grandchildren). (Keeping it in the family as a legacy mortgage; “the family that pays together, stays together” — don’t you agree?)

All California housing bubble and mortgage-related problems promptly solved. That wasn’t so difficult to effect — now was it?

———————————————————————————————————————
Excerpt from:

New Study Shows More Than 2.1 Million California Small Business Jobs Will Be Lost Over the Next 3 to 4 Years

1.5 Million Face Immediate Risk of Job Loss as a Result of Small Business Owners Who Took out Toxic Home Mortgages according to Bornstein & Song, CPAs & Consultants Study with MerchantCircle

LOS ALTOS, Calif., April 23, 2009 /PRNewswire via COMTEX News Network/ —

Toxic Mortgage Study will Continue Nationally, Including Florida, Arizona, Michigan, and Nevada

New study results show more than one-third of all California small business owners took out risky or toxic mortgages such as Alt-A, Alt-A ARMs, Option ARMs, Interest-Only, and Subprime, etc. to get cash for business expenses during the peak of their home values from 2004 to 2007. As the first wave of mortgage resets hit, small business owners will be at-risk of “payment shock” and default as their monthly mortgage payments skyrocket. The toxic mortgage resets began in the 4th Quarter 2008 and will continue through 2012. “The resulting defaults will be the cause of the 2nd ‘Tsunami’ Wave of Foreclosures that will dwarf the subprime crisis and will take many homeowners and small business owners by surprise. In California, these inflated mortgage payments will threaten more than 2.1 million small business jobs,” said Prof. Samuel D. Bornstein.

“I purchased my home in 1999 for 235K,” says Keith Capsuto, owner KC Photography & Music in Oxnard, CA. “Within the first 3 yrs. it had a value of $650K. I did the foolish thing of buying the home with an ARM loan to save money for business expenses. Up to the turnaround in the real estate market, I had been doing a fair amount of business, but it dwindled off sharply and by 2008, I was almost bankrupt. Now in 2009, business is about gone! I am 8 months behind on my mortgage with credit cards up to the hilt from business expenses. I am attempting to work with my mortgage company and on the brink of filing for bankruptcy.”

]]> By: compass rose http://www.doctorhousingbubble.com/the-schism-between-wall-street-and-main-street-green-shoots-for-the-banking-oligarchy-and-crap-shoots-for-others/comment-page-1/#comment-35968 compass rose Sun, 03 May 2009 16:53:24 +0000 http://www.doctorhousingbubble.com/?p=1751#comment-35968 Kudzu puts out green shoots. Covers thousands of square miles and touches none of it. Smothers/strangles all other life. ~ I was thinking about that 6.1% contraction. Ten more years of that (a Lost Decade, that is to say, another one) and the economy would be halved. That's the magnitude of such a downturn. Not judging it, just observing. This also means that growth of 10 percent in any year would be required to get to positive growth of 4%. Which would mean a growth rate that would double the economy in seven years. Nutso way to run an economy, dood. No wonder they keep coming up with new things to count. You can run a Ponzi scheme on any one thing for only so long. ~ DHB, I agree that many people are saving more because debt is harder to get. But something else is going on as well, a cultural shift. Now it's considered gauche to talk about house flipping, renovations, etc. Those who've been prudent, as well as those who cleaned up in the boom, don't talk much about their 401(k)s anymore. Reminds me of 2001 in San Francisco. Also am observing a whole lot of silence where people used to brag about, oh, say, their house's market value, or their CA pensions. ~ I'm seeing more and more listings locally that say "priced at $XX under assessment!" Great, so I get to buy a house that's STILL overpriced, AND pay an inflated real estate tax on it? What a deal! ~ We've always used wholesale and deep discount stores as our primary ones...now those stores are packed. Good to see, except most people are shopping to big-ticket standards. E.g., a 5-ounce serving of ready-to-eat brand-name organic oatmeal for $3 (translates $9.60/lb. w/o tax--16 times what I pay for organic rolled oats). But that is CHEAP, because at the Shopping Experience stores, that same packaged product would be closer to $5-6. Thus I see far more room for contraction on the money-wasteage front. ~ I'm seeing posters and flyers all around town--workshops for "hard times skills." Not "prudence" or "frugality" skills. The implication: if we just weather this, soon things will be back to normal. I.e., fall of 2006. This is a gale, not a sea change. ~ 'Twill be interesting to see what our overlords fund with all their public-debt bling. I predict a bunch of ill-advised, top-down, poorly thought out, but very lucrative sustainability and climate change boondoggles out of the military-industrial-university complex. For an example, see corn ethanol. ~ rose Kudzu puts out green shoots. Covers thousands of square miles and touches none of it. Smothers/strangles all other life.
~
I was thinking about that 6.1% contraction. Ten more years of that (a Lost Decade, that is to say, another one) and the economy would be halved. That’s the magnitude of such a downturn. Not judging it, just observing. This also means that growth of 10 percent in any year would be required to get to positive growth of 4%. Which would mean a growth rate that would double the economy in seven years. Nutso way to run an economy, dood. No wonder they keep coming up with new things to count. You can run a Ponzi scheme on any one thing for only so long.
~
DHB, I agree that many people are saving more because debt is harder to get. But something else is going on as well, a cultural shift. Now it’s considered gauche to talk about house flipping, renovations, etc. Those who’ve been prudent, as well as those who cleaned up in the boom, don’t talk much about their 401(k)s anymore. Reminds me of 2001 in San Francisco. Also am observing a whole lot of silence where people used to brag about, oh, say, their house’s market value, or their CA pensions.
~
I’m seeing more and more listings locally that say “priced at $XX under assessment!” Great, so I get to buy a house that’s STILL overpriced, AND pay an inflated real estate tax on it? What a deal!
~
We’ve always used wholesale and deep discount stores as our primary ones…now those stores are packed. Good to see, except most people are shopping to big-ticket standards. E.g., a 5-ounce serving of ready-to-eat brand-name organic oatmeal for $3 (translates $9.60/lb. w/o tax–16 times what I pay for organic rolled oats). But that is CHEAP, because at the Shopping Experience stores, that same packaged product would be closer to $5-6. Thus I see far more room for contraction on the money-wasteage front.
~
I’m seeing posters and flyers all around town–workshops for “hard times skills.” Not “prudence” or “frugality” skills. The implication: if we just weather this, soon things will be back to normal. I.e., fall of 2006. This is a gale, not a sea change.
~
‘Twill be interesting to see what our overlords fund with all their public-debt bling. I predict a bunch of ill-advised, top-down, poorly thought out, but very lucrative sustainability and climate change boondoggles out of the military-industrial-university complex. For an example, see corn ethanol.
~
rose

]]> By: blutown http://www.doctorhousingbubble.com/the-schism-between-wall-street-and-main-street-green-shoots-for-the-banking-oligarchy-and-crap-shoots-for-others/comment-page-1/#comment-35962 blutown Sun, 03 May 2009 02:14:01 +0000 http://www.doctorhousingbubble.com/?p=1751#comment-35962 Comrades, Wild gyrations in the market are to be expected since there is a total lack of confidence in what anyone says or does on Wall Street or in Washington. How do you know what fair market value is for anything? There are so many accounting tricks going on that even David Copperfield must be impressed. Here's what Peter Schiff's newsletter had to say: "the level of stress in the tests was set unrealistically low. Their absolute worst case assumption was for a GDP contraction of only 3.3 percent in 2009. This comes as first quarter 2009 GDP shrank at 6.1 percent. And the economy is still slowing. To post a contraction of just 3.3 percent for the year would likely involve an immediate reversal in the rate of contraction and outright expansion by the fourth quarter. The stress test also assumes a worst case scenario unemployment rate of 8.9 percent in 2009. This is also wildly optimistic when unemployment is already at 8.7 percent and rising at some 20,000 each day. Worse still, if calculated on a pre-Clinton basis, to include all those unable to find anything but part-time employment, the current unemployment rate is a staggering 19.2 percent, or just 0.8 percent from official depression levels! It appears that the U.S. is fast slipping from recession into depression, rendering the stress tests almost meaningless other than as a public morale boosting exercise." Yes, we live in the United States of Delusion. The stock market trades on expectations and momentum, not on fundamentals. The current rally is meaningless. Soon the federal bailout morphine will wear off and the patient will be sicker, not better at that point. The wild gyrations will snap back to the down side and everyone will look on in amazement (and disgust). Remember that during the Great Depression, the stock market didn't hit its lows until 4 years in and didn't return to break even for 25 years. Enjoy the market bounce for what it is but be ready for the downside move. Be brave Comrades! Comrades,
Wild gyrations in the market are to be expected since there is a total lack of confidence in what anyone says or does on Wall Street or in Washington. How do you know what fair market value is for anything? There are so many accounting tricks going on that even David Copperfield must be impressed. Here’s what Peter Schiff’s newsletter had to say:
“the level of stress in the tests was set unrealistically low. Their absolute worst case assumption was for a GDP contraction of only 3.3 percent in 2009. This comes as first quarter 2009 GDP shrank at 6.1 percent. And the economy is still slowing. To post a contraction of just 3.3 percent for the year would likely involve an immediate reversal in the rate of contraction and outright expansion by the fourth quarter.

The stress test also assumes a worst case scenario unemployment rate of 8.9 percent in 2009. This is also wildly optimistic when unemployment is already at 8.7 percent and rising at some 20,000 each day. Worse still, if calculated on a pre-Clinton basis, to include all those unable to find anything but part-time employment, the current unemployment rate is a staggering 19.2 percent, or just 0.8 percent from official depression levels! It appears that the U.S. is fast slipping from recession into depression, rendering the stress tests almost meaningless other than as a public morale boosting exercise.”

Yes, we live in the United States of Delusion. The stock market trades on expectations and momentum, not on fundamentals. The current rally is meaningless. Soon the federal bailout morphine will wear off and the patient will be sicker, not better at that point. The wild gyrations will snap back to the down side and everyone will look on in amazement (and disgust). Remember that during the Great Depression, the stock market didn’t hit its lows until 4 years in and didn’t return to break even for 25 years. Enjoy the market bounce for what it is but be ready for the downside move. Be brave Comrades!

]]> By: Realist http://www.doctorhousingbubble.com/the-schism-between-wall-street-and-main-street-green-shoots-for-the-banking-oligarchy-and-crap-shoots-for-others/comment-page-1/#comment-35961 Realist Sun, 03 May 2009 01:45:51 +0000 http://www.doctorhousingbubble.com/?p=1751#comment-35961 I currently work for a subsidiary of one of the biggest banks. I say currently because we specialize in commercial re. It is truly astonishing how little is happening in terms of deals getting done in this market. I cant believe that they are keeping so many of their people much to their credit. I suppose they believe that foreclosures are going to start hitting the market in a couple of months, which my coworkers have been talking about for a year at least. Do you think that there will be great deals in commercial re very soon?? I currently work for a subsidiary of one of the biggest banks. I say currently because we specialize in commercial re. It is truly astonishing how little is happening in terms of deals getting done in this market. I cant believe that they are keeping so many of their people much to their credit. I suppose they believe that foreclosures are going to start hitting the market in a couple of months, which my coworkers have been talking about for a year at least. Do you think that there will be great deals in commercial re very soon??

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