He argues the 1st bust in 1998 was rough and they grew out of it. Well, they grew out of it because the housing boom was just around the corner to help them grow. He views this 2nd bust in a similar light and I’m assuming his implication is that they will grow out of this in a similar fashion. Unfortunately there is no housing boom to save them. One of his true statements is the US has $10 trillion mortgage debt. Not once in the talk did he mention the word “bubble” which should receive an honorary award for spin.

He saw the cuts as positive and not cause of the current problems. In fact, he insinuates that the Fed raising rates may have led to the current crunch. Greenspan pushing ARM loans was good in their view. Fannie Mae/Freddie “didn’t keep up with home prices” is another of his arguments and not housing inflation/bubble. These words are never uttered.

He views what occurred in the housing industry as innovation for the lack of growth in Fannie and Freddie. I’ll let you decide if innovation is the right word.
Another change since the talk is LA is now down even in the median price reports.
ML-Implode was at 161 and it now stands at 189.

Oh, and how he said no REOs over $500,000 in California in prime areas:

http://apps.indymacbank.com/individuals/realestate/listings.asp?PType=S&City=&State=CA&Zip=&BedroomMin=0&BedroomMax=NOMAX&BathroomMin=0&BathroomMax=NOMAX&PriceMin=0&PriceMax=NOMAX&submit1=SEARCH+CRITERIA+%3A%3A

Carmel Valley, Irvine, and Brentwood seem prime to you don’t they?

ARM chart is out dated. That chart was issued in January, the newer one (which you’ve seen here) shows 2008 hitting a peak in March of 2008.

His premise of adding more homeownership sounds warm and fuzzy but is financially irresponsible. He may have tempered his words if he knew how brutal his earnings were going to be and also the major hits in the GSEs.

He talks about no articles about him growing his business or positive media press. Are you kidding? What about all the flipping shows, books, etc that pumped the market. These were their 3rd party sellers and pushers. No need for media to help you out. He blames the rating agencies but his business directly benefits from the agencies. There is much hypocrisy in what he says and there is a lot of spin.

His income argument is completely wrong. We’ve talked about the actual raw number of incomes over $100,000 and you can also see that these products came into existence because people couldn’t qualify with old traditional standards. He views the standards as impediments while I view them as necessary brakes. I also respectfully disagree with his assessment. The boom in jobs was in many positions that are going away (read foreclosure story #1 and #2).

$56 trillion net worth. $21 trillion is in housing for all Americans. So nearly half is in housing. So if housing goes down, what happens to the housing net worth? Can’t have the argument both ways.

“US debt is not out of control.” – Wow. Maybe the declining dollar will have something to say about this.

He also argues that if your net worth is growing, you can spend more than your annual income. Bwahaha! This guy believes the bubble will keep on going! Oh that’s right, he didn’t use the word bubble once in the entire talk. If you don’t have a financial background I can understand how someone would be snowed by this type of presentation. In fact, people like this fueled the market. He jokes that the mortgage mess is because of him; I would argue that he is one of the agents that fueled this bubble. And listening to his logic, he would have you believe that there is no housing bubble. I’ll leave it up to you to draw your conclusions. IMB is now trading at $9 a share, down nearly $1 billion in market cap since he spoke; I wonder if his shareholders find this funny? IMB also announced massive losses and possibly talking about cutting its dividend after his talk. What happened to his talk of his companies massive liquidity? By the way, their market cap is currently at $709 million and they have “$30 billion in assets?” Well by looking at their growing REO list which also includes prime areas which he said weren’t on there, their assets look bubbly. But heck, we can see that his company follows his mantra of spend more than you earn.

Wow! This is really interesting! I just wonder how long the “freeze” will last?

http://gov.ca.gov/index.php?/press-release/7481/

They all need to show up to work, day after day, and play “How do we lose less money today than we did yesterday?” After doing that for a few months, losing their Mercedes and “million dollar” homes, they will just walk away.

It may actually help if the government gets involved now and raises limits to $1 million. This would cause Freddie and Fannie to implode faster and bring more financial wizards down to rock bottom. So far we have 2 CEOs, a bunch of realtors, and a few thousands of mortgage brokers that are done for.

The California plan to freeze mortgage rates for people that can’t pay should make it interesting for any Calif. lenders resell any mortgages.

What about all the trophy wives? Will someone please help the trophy wives? How many of you guys only have one wife? Could you find a place in your heart for one or two more?