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Did Generation X Cause the Housing Crisis?


By Call it Crazy   Follow   Wed, 2 Jan 2013, 4:09am PST   3,798 views   81 comments
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The housing crisis resulted in a great deal of finger pointing. Politicians blamed Wall Street, Wall Street blamed government, and each political party blamed the other political party. What gets lost in the drama of political theater is that real people signed mortgages that could not be afforded. Somewhere in the buck-passing, we are left to wonder what happened and how financial consumers can avoid future foreclosure catastrophes.

Generation X was Most to Blame. The largest percentage of households in foreclosure belonged to those in Generation X—in particular, Gen-Xers who had high average household income ($59,500) and years of education (14.8 years). It seems counter intuitive that a well-educated and affluent group of families would lead the foreclosure charge. Yet this group of households made up more than 1 in 10 foreclosures. How do affluent families end up in foreclosure?

Mortgages with High Loan-to-Value. The size of the down payment at closing can vary greatly. FHA loans can require as little as 2.5 percent of the purchase price. A review of mortgages in foreclosure found that the median mortgage had a loan-to-value of about 65 percent. Mortgages in foreclosure had a median of 96 percent.

http://money.usnews.com/money/blogs/my-money/2013/01/02/did-generation-x-cause-the-housing-crisis

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Dan8267   Thu, 3 Jan 2013, 7:15am PST   Share   Quote   Permalink   Like   Dislike     Comment 42

Kevin says

In reality, the larger the value of x, the bigger the size of your bank account needs to be if you want to keep them in that range.

I actually had another formula for women. It's

f(ageOfWoman) = $20,000 * ageOfWoman

in year 2000 dollars. That's how much the guy has to earn to maintain the relationship.

Of course, for guys it just makes sense to date younger women. More beautiful and less expensive.

Kevin   Thu, 3 Jan 2013, 8:46am PST   Share   Quote   Permalink   Like   Dislike     Comment 43

Dan8267 says

Of course, for guys it just makes sense to date younger women. More beautiful and less expensive.

When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

Your formula is terrible.

Mark D   Thu, 3 Jan 2013, 8:57am PST   Share   Quote   Permalink   Like   Dislike     Comment 44

it was the baby boomers in congress that deregulated the financial industry.
/thread

Dan8267   Thu, 3 Jan 2013, 9:47am PST   Share   Quote   Permalink   Like   Dislike     Comment 45

Kevin says

When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

Your formula is terrible.

Evidently you have never lived in Boca.

APOCALYPSEFUCKisShostikovitch   Thu, 3 Jan 2013, 9:54am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 46

Fucking asshole Gen-X kids - they were supposed to buy that overpriced 3/2, and keep it even when it's real valuation falls to 1/10th their buy price, so I could retire to Asia Minor and live like Caligula by selling the 3 rental gold mines I was going to sell to have my Anatolian empire and vacation castles in Scotland and Estonia! There out to be a law!

ELC   Thu, 3 Jan 2013, 10:34am PST   Share   Quote   Permalink   Like   Dislike     Comment 47

errc says

((X/2) +7)

if X>55 then X/3

ELC   Thu, 3 Jan 2013, 11:03am PST   Share   Quote   Permalink   Like   Dislike     Comment 48

Kevin says

When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

25 year olds are use to dating broke-ass losers.

C Boy   Thu, 3 Jan 2013, 11:42am PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 49

ELC says

Kevin says

When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

25 year olds are use to dating broke-ass losers.

Losers that want them to pay for dinner/drinks and have no manners. Acting like a gentleman goes a long ways.

Moderate Infidel   Thu, 3 Jan 2013, 11:48am PST   Share   Quote   Permalink   Like   Dislike     Comment 50

I'm a boomer cusper/Gen x'r and yes, we caused it.
Whatcha gonna do about it bitxhes?

Dan8267   Thu, 3 Jan 2013, 1:07pm PST   Share   Quote   Permalink   Like (2)   Dislike     Comment 51

Dan8267 says

errc says

((X/2) +7)

Damn, I've used that formula, too, except with 8 instead of 7.

Big announcement. After much research and intense mathematical work, I have perfected the age formula.

A spreadsheet rendering the above graph and showing specific appropriate woman ages for men form 10 to 110 can be download here.

For information about the various physical and mathematical constants, click one of the links below.
Avogadro's Number
Universal Gravity Constant
Speed of Light, c
Soldner's Constant
Base of Natural Logarithms, e
Ratio of Circumference to Diameter, π
Golden Ratio, Φ

It took a lot of effort to deduce this fundamental equation of the universe, but now we can explain why men should date younger women using only the natural physical and mathematical constants of our universe. For such an elegant equation with only natural terms to express the dating age correlations so precisely that no observation has every contradicted the predicted values indicates that a fundamental law of nature must indeed be responsible for these values.

The equation so gracefully combines elements of geometry, physics, and chemistry that the only question remains is in which field shall I receive the Noble Prize for this equation. Perhaps all three?

Kevin   Thu, 3 Jan 2013, 1:23pm PST   Share   Quote   Permalink   Like   Dislike     Comment 52

ELC says

Kevin says

When you're 60, try telling me that it's less expensive to date a 25 year old than a 60 year old.

25 year olds are use to dating broke-ass losers.

Yeah, but not ones wearing diapers who can't get it up.

bgamall4   Thu, 3 Jan 2013, 4:37pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 53

varmint says

Gen X are 15% of the population and had 10% of the foreclosures. Get em!

That still doesn't mean they were the cause. The cause was lack of underwriting, you know, the job of the banks. They knew they could get awayMark D says

it was the baby boomers in congress that deregulated the financial industry.

/thread

That is BS. The idea that we divide boomers from others is foolish. The central bankers deregulated the financial system because big finance figured out how to fleece regular people. It started at Basel 2 in 1998 and then with the repeal of Glass-Steagall and the deregulating of the derivative swaps. Phil Gramm led the repeal of Glass-Steagall and was born in 1942, and Wendy Gramm led the deregulation of the derivatives and insurance against the crap CDO's. She was born in 1945.

The boomers were born from 1946-1964.

ELC   Thu, 3 Jan 2013, 9:35pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 54

bgamall4 says

The boomers were born from 1946-1964

I don't know where the Census Bureau gets 1964. There's no way the post war boom or it's influence lasted till 1964. Pure nonsense.

C Boy   Thu, 3 Jan 2013, 10:22pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 55

ELC says

bgamall4 says

The boomers were born from 1946-1964

I don't know where the Census Bureau gets 1964. There's no way the post war boom or it's influence lasted till 1964. Pure nonsense.

18 years after the end of WWII is when the birthdate declined and the baby boom was over. Also when the Pill became available.

C Boy   Thu, 3 Jan 2013, 10:23pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 56

Wasnt Greenspan part of the "Greatest Generation"?

zzyzzx   Thu, 3 Jan 2013, 10:51pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 57

ELC says

25 year olds are use to dating broke-ass losers.

That really depends upon how hot they are.

Dan8267   Thu, 3 Jan 2013, 11:49pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 58

bgamall4 says

varmint says

Gen X are 15% of the population and had 10% of the foreclosures. Get em!

That still doesn't mean they were the cause

varmint was being sarcastic. His point was that clearly Gen X participated less in the bubble and foreclosure mess than their fair share based on the percentage of potential home-owners who belong to Gen X.

errc   Thu, 3 Jan 2013, 11:58pm PST   Share   Quote   Permalink   Like   Dislike     Comment 59

Next you're going to tell me that the popping of the bubble was a black swan event lmao

Let me put on my ohshitimsosurprised face. You mean to tell me that house prices don't always go up? That there has to be some connection to reality of wages and prices? Bloody fucking hell,,,that's just bullocks. My realtor says otherwise

bgamall4   Fri, 4 Jan 2013, 12:56am PST   Share   Quote   Permalink   Like   Dislike     Comment 60

ELC says

I don't know where the Census Bureau gets 1964. There's no way the post war boom or it's influence lasted till 1964. Pure nonsense.

I don't know. And isn't that a long generation? I am not into that stuff.

ELC   Fri, 4 Jan 2013, 3:08am PST   Share   Quote   Permalink   Like   Dislike     Comment 61

Kevin says

Yeah, but not ones wearing diapers who can't get it up.

If Hugh Hefner can get it up ANYONE can!

ELC   Fri, 4 Jan 2013, 3:19am PST   Share   Quote   Permalink   Like   Dislike     Comment 62

C Boy says

Losers that want them to pay for dinner/drinks and have no manners. Acting like a gentleman goes a long ways.

The young ones are more impressed by things like cars too. And I'm not talking real expensive cars either. A Viper or a Vette is all you need. Older ones try to pretend it doesn't matter.

Peter P   Sat, 5 Jan 2013, 7:34am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 63

C Boy says

Losers that want them to pay for dinner/drinks and have no manners. Acting like a gentleman goes a long ways.

The art of being a gentleman is now gone with the wind.

Peter P   Sat, 5 Jan 2013, 7:34am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 64

ELC says

The young ones are more impressed by things like cars too. And I'm not talking real expensive cars either. A Viper or a Vette is all you need. Older ones try to pretend it doesn't matter.

If I were a girl I would only be impressed by cars with contrast-stitchings in the seats.

thomaswong.1986   Sat, 5 Jan 2013, 10:46am PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 65

Call it Crazy says

Generation X was Most to Blame. The largest percentage of households in foreclosure belonged to those in Generation X—in particular, Gen-Xers who had high average household income ($59,500) and years of education (14.8 years). It seems counter intuitive that a well-educated and affluent group of families would lead the foreclosure charge. Yet this group of households made up more than 1 in 10 foreclosures. How do affluent families end up in foreclosure?

well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

regardless history even in SFBA.... they ignored it thinking they were immune from any downturns. I certainly dont know what the GX were ignorant on how homes like in SoCal went down by 40-50% by 1991-95. It was a deep deep correction. Many others were hell bent on RE as a path to wealth, Its all odd how many ignored recent history.

bgamall4   Sat, 5 Jan 2013, 11:32am PST   Share   Quote   Permalink   Like   Dislike     Comment 66

thomaswong.1986 says

well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

It only went down in a few places. It went down a little bit. The S and L crisis did drop some. But for the most part, housing has not gone down in value in most places since the 1930's Wong.

And remember, Wong, the drop in So Cal was a generation removed from the drop in the 1990's.

bgamall4   Sat, 5 Jan 2013, 11:48am PST   Share   Quote   Permalink   Like   Dislike     Comment 67

thomaswong.1986 says

well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

Also, the housing market was not destablized in the 1990's. People could still get loans and there was not a credit crisis. You are mixing apples and oranges Wong. We did not have wages stagnating and easy money loans en masse. We had that in 2000-2010.

thomaswong.1986   Sat, 5 Jan 2013, 12:03pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 68

bgamall4 says

You are mixing apples and oranges Wong. We did not have wages stagnating and easy money loans en masse.

In SV we had for the better part of the 90s wage stagnation.

what happens when the market price of goods and services get slashed by 20,30,40%

you dont exactly hand out salary increases during these years.

bgamall4   Sat, 5 Jan 2013, 12:33pm PST   Share   Quote   Permalink   Like   Dislike     Comment 69

thomaswong.1986 says

In SV we had for the better part of the 90s wage stagnation.

In SV house prices didn't decline much in the 90's. And that is local. Wages increased in the 90's compared to the next decade.

C Boy   Sat, 5 Jan 2013, 12:47pm PST   Share   Quote   Permalink   Like   Dislike     Comment 70

bgamall4 says

thomaswong.1986 says

well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

It only went down in a few places. It went down a little bit. The S and L crisis did drop some. But for the most part, housing has not gone down in value in most places since the 1930's Wong.

And remember, Wong, the drop in So Cal was a generation removed from the drop in the 1990's.

bgamall4 says

thomaswong.1986 says

well for one.. many ignored history that home prices do actually go down. certainly heard many times over "RE never goes down".. which it actual did back in early 80s and 90s.

Also, the housing market was not destablized in the 1990's. People could still get loans and there was not a credit crisis. You are mixing apples and oranges Wong. We did not have wages stagnating and easy money loans en masse. We had that in 2000-2010.

In Texas in 1985, my father's house was worth $75k. By 1990 it was worth $50k. It was not until 1998 that the house was again worth $75k.

By 1990, almost every bank and savings and loan in Texas failed.

As much as I disliked GHW Bush, he at least called up his attorney general Dick Thornburgh and told him to find the worst crooks in the S&L scandal and put them in jail. He put almost 1,000 bankers in jail.

How many banker has Holder put in jail? ZERO. Obama has him raiding marijuana clinics and providing guns to Mexican drug gangs instead.

thomaswong.1986   Sat, 5 Jan 2013, 12:54pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 71

bgamall4 says

In SV house prices didn't decline much in the 90's.

another Bubble Head jackass.. 30-40-50% was common. Are you now in denial we had over inflated prices (bubble) in the late 80s ?

bgamall4 says

And that is local. Wages increased in the 90's compared to the next decade.

HA! yes.. 1998-2000 from the infusion of $100B
coming from VCs who rec'd it from the top 1%.

PWC Money Tree
Historical Trend Data

https://www.pwcmoneytree.com/MTPublic/ns/nav.jsp?page=historical

thomaswong.1986   Sat, 5 Jan 2013, 12:55pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 72

C Boy says

In Texas in 1985, my father's house was worth $75k. By 1990 it was worth $50k. It was not until 1998 that the house was again worth $75k.

BG suffers from Amnesia!

bgamall4   Sat, 5 Jan 2013, 12:57pm PST   Share   Quote   Permalink   Like   Dislike     Comment 73

C Boy says

In Texas in 1985, my father's house was worth $75k. By 1990 it was worth $50k. It was not until 1998 that the house was again worth $75k.

By 1990, almost every bank and savings and loan in Texas failed.

Even with the S and L crisis, your house bounced back to the 1985 value. There was never a credit crisis and banks kept lending, except of course, the S and L's.

George HW Bush put bankers in jail. However, the banking community is much more powerful now. They are immune from prosecution now. The reason is, the international financial cabal sanctioned the last housing bubble. It was created at Basel 2 in 1998.

But HW Bush did not put Greenspan in jail, and he was responsible for the S and L crisis because he refused to stop the easy money loans. But those loans were small in comparison to the bubble in the 2000's.

bgamall4   Sat, 5 Jan 2013, 1:01pm PST   Share   Quote   Permalink   Like   Dislike     Comment 74

Also, the Texas savings and loan debacle was an oil patch depression. And it happened in my home town of Coalinga California. But it was nothing like what we had in the housing bubble. It was small potatoes.

thomaswong.1986   Sat, 5 Jan 2013, 1:13pm PST   Share   Quote   Permalink   Like   Dislike (1)     Comment 75

http://www.rntl.net/history_of_a_housing_bubble.htm

1993: It's definitely a buyer's market. Some people are saddened by the fact that current prices are 50% of what they were in the 1980's. The housing bust in Southern California is clearly negatively impacting the California economy and the national economy at large. Sellers are desperate to sell (and some people taking extreme measures like putting huge "for sale" signs on their lawns for passing planes to see). Folks who waited out the boom to buy at the bottom are being handsomely rewarded for their patience. Proof-positive of the contrarian investing style -- be greedy when everyone is fearful and fearful when everyone is greedy. The "slump" may be ending.

Long Southland Housing Slump Finally Ending?
DAVID W. MYERS; Los Angeles Times (pre-1997 Fulltext); Feb 10, 1993; pg. 1

Housing Market Warming Up After 3-Year Slump Real estate: Optimism returns to Southland with rising sales. Number of homes on market is down.
DAVID W. MYERS; Los Angeles Times (pre-1997 Fulltext); Feb 10, 1993; pg. 1

A sad Westside story: Home prices have declined up to 50% since late 1980s
Myers, David W; Los Angeles Times; May 28, 1993; D; pg. 1

C Boy   Sat, 5 Jan 2013, 2:18pm PST   Share   Quote   Permalink   Like (1)   Dislike     Comment 76

bgamall4 says

Also, the Texas savings and loan debacle was an oil patch depression. And it happened in my home town of Coalinga California. But it was nothing like what we had in the housing bubble. It was small potatoes.

The S&L collapse was due to fraud and theft.

Texas based Sunbelt Savings & Loan was known as Gunbelt Savings & Loan as it was revealed how execs spent the institutions money on yatchs, hookers, and cocaine.

Don't forget that John McCain himself successfully put his career on the line to keep Charels Keating out of prison and Bush's son Neil was threatened with jail for his part in the collapse of Silverado Savings & Loan.

Don't forget that the Resolution Trust Corporation was created to track down and confiscate stolen property and monies.

Today the crooks get to keep thier ill gotten gains.

C Boy   Sat, 5 Jan 2013, 2:18pm PST   Share   Quote   Permalink   Like   Dislike     Comment 77

ELC   Sat, 5 Jan 2013, 9:21pm PST   Share   Quote   Permalink   Like   Dislike     Comment 78

Peter P says

If I were a girl I would only be impressed by cars with contrast-stitchings in the seats.

Me too. Parents do a terrible job at teaching their children. That's the first thing they should be taught to look for.

ELC   Sat, 5 Jan 2013, 9:23pm PST   Share   Quote   Permalink   Like   Dislike     Comment 79

Peter P says

The art of being a gentleman is now gone with the wind.

Not for all of us. http://artofmanliness.com/

bgamall4   Sun, 6 Jan 2013, 12:53am PST   Share   Quote   Permalink   Like   Dislike     Comment 80

thomaswong.1986 says

Housing Market Warming Up After 3-Year Slump Real estate:

Again, the 3 year slump was not a function of a credit crisis Wong. How long did the slump last this time? Is it over? Not sure. No one is sure. Shiller doesn't think the slump is over.

bgamall4   Sun, 6 Jan 2013, 2:24am PST   Share   Quote   Permalink   Like   Dislike     Comment 81

C Boy says

Don't forget that John McCain himself successfully put his career on the line to keep Charels Keating out of prison and Bush's son Neil was threatened with jail for his part in the collapse of Silverado Savings & Loan.

Don't forget that the Resolution Trust Corporation was created to track down and confiscate stolen property and monies.

Today the crooks get to keep thier ill gotten gains.

Yes, Bill Seidman, before he passed away, said the TBTF banks should be put into a resolution trust. It never happened.

You may be interested in this article I wrote about Gramm and McCain. http://www.businessinsider.com/phil-gramm-legacy-mccains-evil-twin-2010-12

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