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Thread: Hey skipster, I thought the market knew what's best

  1. #1
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    Default Hey skipster, I thought the market knew what's best

    How come so many foreclosures on the mortgages? I thought the market, when left alone, can fix everything and make people happy?

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    Default Re: Hey skipster, I thought the market knew what's best

    (playing Skipster): Big, you can't have an omelet without breaking a few eggs.

  3. #3

    Default Re: Hey skipster, I thought the market knew what's best

    Unless you use Eggos.

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    Default Re: Hey skipster, I thought the market knew what's best

    Yes, a few big eggos will keep it all together for us. Ayn Rand's rational man.

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    Default Re: Hey skipster, I thought the market knew what's best

    Interesting excerpt:

    “All of the old-timers knew that subprime mortgages were what we called neutron loans — they killed the people and left the houses,” said Louis S. Barnes, 58, a partner at Boulder West, a mortgage banking firm in Lafayette, Colo. “The deals made in 2005 and 2006 were going to run into trouble because the credit pendulum at the time was stuck at easy.”

    http://www.nytimes.com/2007/08/19/bu...nted=1&_r=1&hp

  6. #6

    Default Re: Hey skipster, I thought the market knew what's best

    Quote Originally Posted by Big View Post
    How come so many foreclosures on the mortgages? I thought the market, when left alone, can fix everything and make people happy?
    What sort of cartoon character says that the market can fix everything and makes everyone happy?

    The market is working perfectly in the foreclosure situations. People who shouldn't have been taking out ARMs for houses that were too big for them will probably lose their homes. They made a gamble that the housing market would keep going straight up, and that interest rates would never rise. Not too smart.

    People like me who sat on the sidelines watching the idiocy are now in a position to benefit from the situation. As long as the government doesn't step in to bail everyone out, I'll remain happy.

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    Default Re: Hey skipster, I thought the market knew what's best

    Quote Originally Posted by flop the nuts
    What sort of cartoon character says that the market can fix everything and makes everyone happy?
    Quote Originally Posted by flop the nuts
    The market is working perfectly
    Incongruous statements?

    I like how Flop lays the blame squarely on the shoulders of the homeowners who should have known better. Exploding ARMS? Why those stupid people got just what they bargained for. If these upstanding lenders continue to make deals with all the idiots, there'll be even more opportunities ahead. Woo hoo!

  8. #8

    Default Re: Hey skipster, I thought the market knew what's best

    It's not incongruous to say that the market is working perfectly but not everyone is happy. The market doesn't make everyone happy, that's a false premise.

    Here is what is incongruous to me. There is an uproar whenever low-income people have a hard time getting loans for housing or any other large purchases. Critics wail about the fact that people with poor credit histories can't participate in the real estate market, and they are stuck paying high rental rates.

    However, over the past few years, money was easy to get, whether you were high-income or low-income. That's obviously good - equal access for all. Now that some recent homeowners have made some extremely poor choices, betting that interest rates would remain stable and that their home would continue to appreciate steeply. All with no money down.

    So, should lenders make money available to low-income people? Should money be easy or hard to get?

    I'll continue to feel no sympathy for the people who knowingly signed these loan papers, just like I feel no sympathy for people who load all of their money into one stock, or who gamble their milk money away at the craps table. People make choices, and they have to live with them. Is that an extreme position?

  9. #9

    Default Re: Hey skipster, I thought the market knew what's best

    [QUOTE=Flop The Nuts;11478]It's not incongruous to say that the market is working perfectly but not everyone is happy. The market doesn't make everyone happy, that's a false premise.

    Here is what is incongruous to me. There is an uproar whenever low-income people have a hard time getting loans for housing or any other large purchases. Critics wail about the fact that people with poor credit histories can't participate in the real estate market, and they are stuck paying high rental rates.

    However, over the past few years, money was easy to get, whether you were high-income or low-income. That's obviously good - equal access for all. Now that some recent homeowners have made some extremely poor choices, betting that interest rates would remain stable and that their home would continue to appreciate steeply. All with no money down.

    So, should lenders make money available to low-income people? Should money be easy or hard to get?

    I'll continue to feel no sympathy for the people who knowingly signed these loan papers, just like I feel no sympathy for people who load all of their money into one stock, or who gamble their milk money away at the craps table. People make choices, and they have to live with them. Is that an extreme position?[/QUOTE)




    The problem goes way deeper then low income sub prime loans. These are the ones that are being felt today because most of them only had a two year fixed sub prime rate. There are many more out there that went to people with good credit ratings that took ARMs that were fixed for longer periods. These people bet on the real estate market continuing to rise. The California market is a prime example of this. Many ARMs will go into default over the next couple of years with massive ripple effects on the mortage market, the building sector, finacial markets and more. Speculation has altered the markets in a way that is going to cause harm to many investors for years to come.

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