The Impending Second Great Depression

[FrreeeBird]

Originally Posted by chet if i'm not mistaken...the stock market has hit record levels recently. Peaked at 14121 last week, as of todays close it was down to 13265, a 6.06% loss in a week.

This ad is not displayed to registered or logged-in members. Register your free account today and become a member on Honda-Tech!

[tjbizzo]

Originally Posted by chet

if i'm not mistaken...the stock market has hit record levels recently.

You are correct. On Monday the DJIA went over 14,000 for a while. Today it ended at 13,265. What does that tell you?

[kablamo]

Originally Posted by chet

if i'm not mistaken...the stock market has hit record levels recently.

The stock market is not the only barometer for the economy. It's a surprisingly isolated and psychologically driven metric, hardly precise. Furthermore, many people confuse the stock market as a whole with specific indices like the DOW, Nasdaq or S&P500, to name only the most publicized indicators. These each represent something different, and can't be considered on their own to represent how the economy as a whole is/has/will do(ing).

That said, generally speaking, there's a few reasons the stock market has done really well. While these may be considered signs of how strong the world economy is right now, they also can be seen to reveal how weak the US economy could be:
-More and more firms are plowing money into stock buybacks. (a) this reduces shares available to the public and thus increases share price, (b) reveals the belief of many firms that their excess funds are best used for a purely short-term investment with zero prospect of creating long-term value in the business. Taking excess funds and re-buying stock instead of using the money for R&D, capital expenditures, foreign expansion stunts growth in the long run.
-In part (I believe) due to the federal reserve's unwillingness to raise rates and aknowledge true inflation, especially when compared with other central banks, the US dollar has become weak and is in danger of becoming out of favor in an increasing number of financial transactions. It's far from a tipping point now, but the lower dollar does make foreign investment in the US cheap (relatively speaking), meaning foreigners are more eager and willing to invest in US stocks, which they may not otherwise. This of course depends on how they would truly value the USD, however as a whole it makes speculation that much less risky (to foreigners).
-Leveraging at all levels (individual investors to M&A's) is at very, very high-levels, suggesting the value of investments is not reflective of underlying (true) wealth. Sustaining this is dependent on credit and liquidity, any change in which could affect prices accordingly, and as it is becoming increasingly clear, we've reached the point in the credit cycle where it's becoming too difficult to fund certain positions and they are going to have to either be repaid (cashed) or written-off.

The Dow was at 7,200 in late 2002, and briefly went well over 14,000 last week. Did the US economy really *double* in the last 5 years? No...

Back on topic, GDP growth in the US hasn't exceeded the current accounts deficit in years. That means the economy is (net) sending more money abroad than it is creating (through growth) within its borders. In simpler terms, more money is leaving than coming back in, and we're not making as much as is leaving.

I don't know when all these (along with plenty of other structural problems) will come to pass. There's a lot of people pushing for sustained economic growth, and a lot of people in a position of power with the ability to do something (enough?) about it too. Just because we're in for a rough few months doesn't mean it'll turn into an all-out depression. I think it very well could, but I wouldn't bet on it at this point. I don't think we've seen the worst of this particular downturn yet, but it remains to be seen how resilient the fundamentals are.

[FrreeeBird]

Originally Posted by kablamo

The stock market is not the only barometer for the economy. It's a surprisingly isolated and psychologically driven metric, hardly precise. Furthermore, many people confuse the stock market as a whole with specific indices like the DOW, Nasdaq or S&P500, to name only the most publicized indicators. These each represent something different, and can't be considered on their own to represent how the economy as a whole is/has/will do(ing).

Correct, in so far as that they are not indicators of economic health. However, in terms of how the markets work, the "psychological" impact peoples moods and emotions have is overated. There is nothing emotional about a housing collapse, a huge reduction in consumer spending, inflation, huge losses at banks and hedge funds and mutual funds from the mortgage foreclosures and early pay backs, and upcoming corporate losses.

[Mark sans]

There are a couple of factors that I don't see in the model. First is the affect of inflation on it. If the Fed lets inflation start to rise a bit, it will reduce the affect of the bubble, at the cost of some other prices. As real estate expenditures are a larger % of income for a family, inflation could offset the drop in value. A rise in inflation would also have the effect of increasing unemployment and locking others out of the housing market, but it could be a reasonable way to deal with the problem.

The other thing is a new approach to mortgages. Some other countries with relatively higher real estate prices have optional 40 or 50 year mortgages. By extending payment times, lenders could salvage some of the default, particularly when combined with some inflation.

I agree that the run up to this point has been reckless at best, but I blame it on the confluence of factors -- greedy lenders, an administration determined to show a "recovery" via stock prices, and people who are way out of touch with reality. But I also think there are enough people with their eye on the ball so to speak to assure that some pressure releases will be introduced to mitigate the fall. And because the bubble is largely confined to the US and relates to a necessary item, I just don't see the collapse that you predict. Not to say that a recession isn't coming -- it is unavoidable and a natural part of the business cycle -- but I just don't see a "depression" on part with the collapse of the 1930s.

[tjbizzo]

Originally Posted by Mark sans

...

The other thing is a new approach to mortgages. Some other countries with relatively higher real estate prices have optional 40 or 50 year mortgages. By extending payment times, lenders could salvage some of the default, particularly when combined with some inflation.

...

Wouldn't the increase in interest rates due to inflation more than offset the benefits of a longer payout term?

[FrreeeBird]

Originally Posted by Mark sans

There are a couple of factors that I don't see in the model. First is the affect of inflation on it. If the Fed lets inflation start to rise a bit, it will reduce the affect of the bubble, at the cost of some other prices. As real estate expenditures are a larger % of income for a family, inflation could offset the drop in value. A rise in inflation would also have the effect of increasing unemployment and locking others out of the housing market, but it could be a reasonable way to deal with the problem.

There is already "baked in" inflation thats in the pipe thats going to show up over the next few months. The Fed Chief is dedicated to fighting inflation, he really can't afford to drop rates if he wants to prevent a collapse of the dollar at this point IMO. Rising inflation doesn't make housing more affordable if prices are still sky high not only in housing, but then are increasing in in other necessities such as food and transportation . . not to mention rising inflation makes your wages less powerful in terms of purchasing power so there is no real effect on housing affordability. If anything, rising inflation is going to push housing prices even lower as real wages fail to grow.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">The other thing is a new approach to mortgages. Some other countries with relatively higher real estate prices have optional 40 or 50 year mortgages. By extending payment times, lenders could salvage some of the default, particularly when combined with some inflation.</TD></TR></TABLE>

But then Banks have to price in IRR or interest rate risk because of a lengthier loan term . . . payments aren't reduced as much as one might think, not to mention who wants a 50 year loan?!?!?!?!?!

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">I agree that the run up to this point has been reckless at best, but I blame it on the confluence of factors -- greedy lenders, an administration determined to show a "recovery" via stock prices, and people who are way out of touch with reality.</TD></TR></TABLE>

Truth.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">But I also think there are enough people with their eye on the ball so to speak to assure that some pressure releases will be introduced to mitigate the fall.</TD></TR></TABLE>

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">And because the bubble is largely confined to the US and relates to a necessary item, I just don't see the collapse that you predict. Not to say that a recession isn't coming -- it is unavoidable and a natural part of the business cycle -- but I just don't see a "depression" on part with the collapse of the 1930s</TD></TR></TABLE>

The bubble is confined to a necessary item, hence why so many people have gotten in over their heads, they had to buy housing, they thought the teaser rates they were getting were going to last, now the resets are coming as are millions of foreclosures. This will spread to other credit areas, affect consumer spending, the housing industry, the banks, etc. etc. etc. And it will affect other countries whose economies are heavily dependent upon exporting to the US, it might not go global, this recession/depression, but odds are it will have an impact around the world.

[Mark sans]

Originally Posted by FrreeeBird

...
Rising inflation doesn't make housing more affordable if prices are still sky high not only in housing, but then are increasing in in other necessities such as food and transportation . . not to mention rising inflation makes your wages less powerful in terms of purchasing power so there is no real effect on housing affordability. If anything, rising inflation is going to push housing prices even lower as real wages fail to grow.

But then Banks have to price in IRR or interest rate risk because of a lengthier loan term . . . payments aren't reduced as much as one might think, not to mention who wants a 50 year loan?!?!?!?!?!

I don't mean to suggest that there is a way to eliminate the problem, but rather to mitigate it and/or to spread its affects over a larger period of time. Every year that a mass of foreclosures is staved off is another in which natural inflation and debt service help balance the problem.

Originally Posted by FrreeeBird

The bubble is confined to a necessary item, hence why so many people have gotten in over their heads, they had to buy housing, they thought the teaser rates they were getting were going to last, now the resets are coming as are millions of foreclosures. This will spread to other credit areas, affect consumer spending, the housing industry, the banks, etc. etc. etc. And it will affect other countries whose economies are heavily dependent upon exporting to the US, it might not go global, this recession/depression, but odds are it will have an impact around the world.

It is a necessary item, and it is also an item that is held by too many. Record high levels of home ownership are great, except that it is not consistent with economic reality. That is a huge part of the bubble. There are, however, those that can afford what they have, particularly those that owned a home at the start of the bubble and traded up. Moreover, to the extent that certain areas were "bargains" -- such as the DC-area market -- five years ago, the massive increases are partially offset by the fact that people are making NY salaries and still paying 25% less for housing.

I agree that other financial sectors will be affected and possibly our import/export market as well, but I just don't see it as hastening a global collapse, any more than the Japanese bubble did in the 1990s. The economic factors in play there were, afaik, as bad or worse than what we've seen here, but the fallout wasn't on par with the Great Depression.

[turboteener]

Our grandparents knew so much didn't they? "Don't buy what you can't afford". "Save some money for a rainy day". Damn looks like rain outside.

Guess I will have my pick of what houses and properties I want to buy shortly. Since my debt level is so low and I am a tight sum bitch I can save enough to come in a offer bank 20-50% down payment. Hence securing great terms if not going right to the home owner and paying cash.

We won't be suffering from any great depression style catastrophes but it will hurt when people have to pay for their stupidity. Kinda nice to be watching this one from the outside.

[FrreeeBird]

Hedge Funds are starting to go under en masse, not good.

[Whats Up DOHC]

Not to attack you personally, FreeeeBird, but your somewhat climactic, almost ejaculatory anticipation of this supposedly impending worldwide economic collapse makes it hard for me to take you seriously, even though you provide a lot of good info and valid arguments...

In any case... I'm also with the camp that thinks 'it's not gonna be that bad'. The bubble isn't in something abstract like internet stocks... it's in a necessary commodity... housing. One way or another people need somewhere to live... where are all these people getting foreclosed moving to?

Here's how I see things playing out...I'm no expert so just let me know if I'm off base...

In markets where they built way too many houses and tried to sell them for too much... eventually developers will sell them at like a little above cost just to move them... the prices will be 'corrected'.

In places where people bought waaaaaaaaaaaay too much house for their household income people will get foreclosed and kicked out. Cool. But then who moves in? Obviously the values on the homes are way higher than they should be so again there will be a 'correction'... I think either landlords or developers will move in and buy the properties and probably rent them out to the people who got kicked out of them.

Or, in a weird twist of events, if house values really drop 50% as someone said in GDD, the people who got screwed by ARMs will get foreclosed... and take a shitty straight rate mortgage (at like 10-12%) on the same level of home at half price!!! The banks will definitely get screwed (and are as you can see by all the small lenders closing up shop) because really, they'll have to eat the difference in cost of the home from what they could have got for it a year ago and what people are willing to pay now... but one way or another, some group will have to eat the cost of the inflated prices.

The question is, how would that cost be passed to the people? I think lenders are really gonna be the ones to pay the price. But again I'm no expert. In any case I don't see massive waves of homelessness or vacant homes on the horizon. As a country we've made it through worse.

[FrreeeBird]

Originally Posted by Whats Up DOHC

Not to attack you personally, FreeeeBird, but your somewhat climactic, almost ejaculatory anticipation of this supposedly impending worldwide economic collapse makes it hard for me to take you seriously, even though you provide a lot of good info and valid arguments...

No why'd you have to go and make things personal? I like how you left this gem <TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">Here's how I see things playing out...I'm no expert so just let me know if I'm off base...</TD></TR></TABLE> where its easily readover instead of as a preface.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">In any case... I'm also with the camp that thinks 'it's not gonna be that bad'. The bubble isn't in something abstract like internet stocks... it's in a necessary commodity... housing. </TD></TR></TABLE>

Correct, necessary, but if people can't afford the loan payments on a 30 year fixed for a house, even a small 900 sq ft shack, then theres an issue. Cheap money from the fed = easy loans = everyone can take out lots of money = HUGE rise in prices (completely delinked from real wages btw, which when combined with inflation, is what drives rises and falls in housing prices during normal times).

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">One way or another people need somewhere to live... where are all these people getting foreclosed moving to?</TD></TR></TABLE>

I don't know where they are going, but it is VERY clear people can't afford to live almost anywhere given current housing prices.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">In markets where they built way too many houses and tried to sell them for too much... eventually developers will sell them at like a little above cost just to move them... the prices will be 'corrected'.</TD></TR></TABLE>

Yeah, but where wasn't there tons of housing construction over the last 5 years? And what happens if they can't move the houses at a little above cost? Then prices start to plummet, hell, theres almost a YEARS supply of housing out there right now, not counting vacancies, new construction being completed, etc.

Prices are going to come down 20% or more.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">In places where people bought waaaaaaaaaaaay too much house for their household income people will get foreclosed and kicked out. Cool. But then who moves in? Obviously the values on the homes are way higher than they should be so again there will be a 'correction'... I think either landlords or developers will move in and buy the properties and probably rent them out to the people who got kicked out of them. </TD></TR></TABLE>

Ok so you can admit this is a big problem then, and that lots of people are in trouble with their housing situation, subprime and otherwise?

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">Or, in a weird twist of events, if house values really drop 50% as someone said in GDD, the people who got screwed by ARMs will get foreclosed... and take a shitty straight rate mortgage (at like 10-12%) on the same level of home at half price!!!</TD></TR></TABLE>

Ummm, I don't think someone who gets foreclosed upon is likely to get a new loan anytime soon.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">The banks will definitely get screwed (and are as you can see by all the small lenders closing up shop) because really, they'll have to eat the difference in cost of the home from what they could have got for it a year ago and what people are willing to pay now... but one way or another, some group will have to eat the cost of the inflated prices.</TD></TR></TABLE>

The banks, and anyone who bought some sort of MBS (CDOs, CLOs, regular MBS, etc) . . . which tons of hedge and pension funds bought coincidentally . . .

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">The question is, how would that cost be passed to the people? I think lenders are really gonna be the ones to pay the price. But again I'm no expert. In any case I don't see massive waves of homelessness or vacant homes on the horizon. As a country we've made it through worse.</TD></TR></TABLE>

See my original post please, and really try to understand it, seems like you glossed over it without reading how it will impact consumer spending, peoples abilities to get new loans, how people have used CCs to get by while paying huge mortgage payments, etc.

[FrreeeBird]

10th largest U.S. retail mortgage lender goes out of business

[Mark sans]

FWIW: I came pretty close to getting my mortgage through them. But I'm guessing Chase, who holds my paper, will probably be there at the end of the day.

[FrreeeBird]

Originally Posted by Mark sans

FWIW: I came pretty close to getting my mortgage through them. But I'm guessing Chase, who holds my paper, will probably be there at the end of the day.

All the really big banks like jp morgan, boa, etc should be ok . . . . and its mostly been mortgage houses that have been wiped out so far, but if some bigger banks start to go under then shit will really hit the fan.

[Mark sans]

Originally Posted by FrreeeBird

All the really big banks like jp morgan, boa, etc should be ok . . . . and its mostly been mortgage houses that have been wiped out so far, but if some bigger banks start to go under then shit will really hit the fan.

Backstory b/c it is tangentally relevant: My realtor recommended a guy at AHM b/c she sucked at life and wanted more commission. They guy offered Alt-A and ARM products and then questioned me on why I didn't want more house (mind you my mtg is north of 500k). I got the impression he was pitching those products b/c he had to b/c he dropped them quickly and commented that he didn't see many people do what I did (i.e., the smart thing). In the end, a local shop that resold paper was able to give me a better rate b/c AHM was trying to eek out an extra 1/8th from qualified borrowers getting a 30 yr. fixed (likely recognizing where they were in danger).

I would guess that my experience is not atypical, other than resisting the temptation to go ahead and drop another 25% b/c you "could." I'd wager at the end of this thing, a lot of the smaller, more recent shops like AHM will be gone (even if a global meltdown never materializes).

[FrreeeBird]

Originally Posted by Mark sans

Backstory b/c it is tangentally relevant: My realtor recommended a guy at AHM b/c she sucked at life and wanted more commission. They guy offered Alt-A and ARM products and then questioned me on why I didn't want more house (mind you my mtg is north of 500k). I got the impression he was pitching those products b/c he had to b/c he dropped them quickly and commented that he didn't see many people do what I did (i.e., the smart thing). In the end, a local shop that resold paper was able to give me a better rate b/c AHM was trying to eek out an extra 1/8th from qualified borrowers getting a 30 yr. fixed (likely recognizing where they were in danger).

I would guess that my experience is not atypical, other than resisting the temptation to go ahead and drop another 25% b/c you "could." I'd wager at the end of this thing, a lot of the smaller, more recent shops like AHM will be gone (even if a global meltdown never materializes).

You're story is pretty typical from 2005 until mid 2007 . . . . they indeed did try to push larger loan amounts to generate more comissions.

Also, rumors are floating around that Washington Mutual, aka WaMu . . . is in some pretty deep trouble right now, but they're trying to keep a lid on it to prevent a run on their bank.

[Whats Up DOHC]

Ahhhh commissions.

I've been reading a bit more on the whole thing and have a better understanding of it since I made my first post here... but I'm still at a loss as to how this will affect anyone besides the immediately involved parties. I get that

- with banks and lenders shutting down and mortgage money being harder to get, getting a mortgage will become much harder and much more expensive, somewhat wiping out the whole 'yess now houses will be cheap and easy to get' theory

- whoever the banks and lenders got their actual money from, be it through their own measures to generate liquidity or through outside sources (investors, etc), will either be walking away or giving them a much harder time for mortgages

- Shit's gonna hit the hot side of the turbo when all these people literally get thrown out of their homes and all these bankers go out of business... but really nobody involved is without blame. I don't know who's gonna do what but I really doubt the gov't would allow for 7 million homeowners to suddenly wind up on the streets, as dumb as they may have been to take those funny money loans...

Beyond that though while there are definitely far reaching effects that can come from this I don't see the huge catastrophic collapse you seem to be splooging over in anticipation. There is too much at stake for the involved parties to let things go w/o some kind of cushion or check.

I definitely see tighter regulations on mortgage lending being a hot topic for politicians over the next few years (as it should be), as well as the federal interest rates. We'll see though.

Why did the feds drop the interest rate down to 1% in '03???

[FrreeeBird]

Originally Posted by Whats Up DOHC

Ahhhh commissions.

I've been reading a bit more on the whole thing and have a better understanding of it since I made my first post here... but I'm still at a loss as to how this will affect anyone besides the immediately involved parties.

Homeowners = consumers = the driving force behind the economy. Go into foreclosure = no money to spend because you're bankrupt = less spending x 6 million + households that are going to be foreclosed upon = downturn in the economy

Lenders, Banks, People who invested in MBSs, CDOs and CMOs = get screwed on their investment as the value of the assets backing the now defaulted loans is not worth anywhere near as much as when the securities were first packaged together. So now you have layoffs at lenders and banks, and investment houses, so instead of foreclosure you now have job loss = no money to spend because you're bankrupt = less spending, etc etc etc

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">I get that

- with banks and lenders shutting down and mortgage money being harder to get, getting a mortgage will become much harder and much more expensive, somewhat wiping out the whole 'yess now houses will be cheap and easy to get' theory

- whoever the banks and lenders got their actual money from, be it through their own measures to generate liquidity or through outside sources (investors, etc), will either be walking away or giving them a much harder time for mortgages

- Shit's gonna hit the hot side of the turbo when all these people literally get thrown out of their homes and all these bankers go out of business... but really nobody involved is without blame. I don't know who's gonna do what but I really doubt the gov't would allow for 7 million homeowners to suddenly wind up on the streets, as dumb as they may have been to take those funny money loans...</TD></TR></TABLE>

You get so much more than most, which is great, but where is the government going to come up with a few trillion dollars to bail people out? Print it? LOL, goodbye value of the dollar, lower interest rates to save people from ARMaggedon? Same thing, break the dollar. The gov't is between a rock and a hard place.

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">Beyond that though while there are definitely far reaching effects that can come from this I don't see the huge catastrophic collapse you seem to be splooging over in anticipation. There is too much at stake for the involved parties to let things go w/o some kind of cushion or check.</TD></TR></TABLE>

Yeah but if the parties can't prevent the collapse then what? I understand how you can not agree with me, but what makes you think the government can pay for trillions of dollars of bad debt and derivatives and other obligations that people won't be able to pay for?

<TABLE WIDTH="90%" CELLSPACING=0 CELLPADDING=0 ALIGN=CENTER><TR><TD>Quote &raquo;</TD></TR><TR><TD CLASS="quote">I definitely see tighter regulations on mortgage lending being a hot topic for politicians over the next few years (as it should be), as well as the federal interest rates. We'll see though.

Why did the feds drop the interest rate down to 1% in '03???</TD></TR></TABLE>

They dropped the rate to spur economic growth to power the economy through the mini recession we went into after the tech bubble popped in late 99 and the subsequent terrorist attack on 9/11. However, most of this growth was accomplished through asset valuation increases (housing and stocks), take away what created the growth in asset values (cheap money) and the bubble bursts and brings down everything around it (the rest of the economy).

[FrreeeBird]

Bump.

More people in here need to read all of this and understand the severity of the implications on the horizion.

[Whats Up DOHC]

If the gov't won't directly bail them out, I think they will create some kind of leeway for them maybe? I heard they were gonna create some kind of special loan or something to keep these people off the street. Kind of unfair, but better than a wave of foreclosures and homelessness.

[FrreeeBird]

Originally Posted by Whats Up DOHC

If the gov't won't directly bail them out, I think they will create some kind of leeway for them maybe? I heard they were gonna create some kind of special loan or something to keep these people off the street. Kind of unfair, but better than a wave of foreclosures and homelessness.

They can't do it, people can't afford the loans, the banks won't change the terms (creates BAD precedence for them), something has to give . . . .

[FrreeeBird]

http://money.cnn.com/2007/08/2...n=yes

[Danziver]

http://money.cnn.com/2007/08/2...x.htm

[FrreeeBird]

Originally Posted by Danziver

http://money.cnn.com/2007/08/2...x.htm

As called in my original post, lol.