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In this age of fast moving information, some catchy phrases get very quickly regurgitated by clueless journalists. First it was Goldilocks and now it is the scary monster called "Credit Crunch".
Problem is, I don't see it. I don't doubt that it is happening at the intitutional level where financial institutions are afraid of lending money to each other.
But at the individual borrower level, things seem fine. Now "fine" is a relative word. Things are definitely not fine if you consider recent past as any benchmark. But recent past is simply not a good benchmark.
It should be hard for borrowers to get loans without proving their incomes. It should be hard for borrowers to get loans 10 times their incomes for an asset that is likely to depreciate. It should be hard to to get a negative amortization, 100% loan.
If that is what is happening, then it is simply a return to normal lending standards. This is not credit crunch. This is what it should have always been and I hope this what it will be for a long long time.
When a double income, 800 FICO family finds it impossible to get a loan without 30% down payment - I will call it credit crunch. That may happen very soon, or may take a while.
What do you say ?
StuckInBA
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“Since they make you hold the “asset” 2 years it would be a Long Term Cap. Gain anyway! So it would only be a 15% tax bill!”
Uh, yeah... you'd kinda expect better from the crowd at CR, but then again there are some people who post single word "First!" entries when new threads are created. And don't worry, I'm sure that guy is advising his cousin who did a short sale that his "capital loss" is deductible.
It will still be, research “up and coming” areas, buy, fix, flip! Likely on a smaller scale but the “game” will remain intact.
Quite frankly, I don't begrudge these folks their earnings as they can provide a valuable service by revitalizing housing stock (and this is a risky business, as evidenced by what is currently happening). But to address your concerns, as part of the REIC disassembling, the "owner occupied" check box on the loan application will no longer be "just a suggestion". You can bank on that...
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I’ll be in SF for a weekend. What’s a good area to stay in? Union Square? Marina District? Mission?
I usually prefer the financial district. It is quiet on weekends. Watch out for bums though.
Four Seasons has nice rooms and beds. If you prefer Union Square there is the Grand Hyatt. For Nob Hill, there is Huntington.
You may also want to try some boutique hotels.
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skibum - boomer crap LOL!
The only thing good is the Harleys, good gas mileage, can be built into 3-wheelers like the old Servi-Car, easy to work on, switch and swap parts, at least most of the stuff made here and a lot of people know how to build them up from the bare frame -and that often after they've built the frame.
As we get back to a basic The Waltons type economy, Harleys will go back to being what they were, a people's vehicle.
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The Chinese official inflation number is 6%, but just as our CPI, the number is highly manipulated. Food staples, according to official numbers, are advancing at 15-30% a year, pork price in major cities is already higher than the that of the US. Most people doing business in China already notice that the cost advantage is not that great (rent, materials, utilities etc.), except for dirt cheap labor. China is a developing country so food staples account for a much higher percentage of monthly spending than us, which means, their inflation number should be much more driven by food than transportation, clothing, etc.
Sooner or later, China will have to export their inflationary pressure to us.
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Peter P,
you won't see $60 oil again. It's not just about peak oil, it is about waste paper USD.
USD Depreciation is a preferred path for the WS who are stuck on the wrong side of the bets, that's the easiest way for our great debtor nation to off load our burden.
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StuckinBA,
Well of course sellers/realtwhores don't take MID into account when pricing! Uncle Sam WANTS you to own a house!
One of my favorite scenes is from H.G Wells, The Time Machine where our time traveler can't understand why the Eloy don't even question who lays out their daily feast! It's here. It's always here. You ask too many questions.
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Not to detract from the current line of discussion, but...
In the graphic for this thread, what is the asterisk after "Free Helicopter Inside!" denoting?
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EBGuy,
I never grudge anyone an honest profit. What I should have said is that "Housing as an investment" is here to stay. Or at least it won't just go off and die the quiet death it should?
Sadly, now CGE may be viewed as a conerstone of "the recovery" as the jockeying begins anew.
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In the graphic for this thread, what is the asterisk after “Free Helicopter Inside!” denoting?
* Includes 0% financing offer of a 2-person piston helicopter for the first 10 days, 27.75% APR afterwards.
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In the graphic for this thread, what is the asterisk after “Free Helicopter Inside!” denoting?
Or,
* Possible moral hazard. Use with precaution, only under Fed supervision.
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Ah, there it is. If you turn your head sideways and squint…
* The term “FREE” is used here anecdotally and shall not be construed to mean "No financial obligation on the part of the consumer.” You are strongly encouraged to make all scheduled payments as per the terms of the purchase agreement. We offer our “Help” to you, the distressed serial consumer in good faith that you will use it to meet your legal obligations concerning your mortgage.
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HARM's website
Ok, who the hell is running Ron Paul's campaign?
Paul keeps donation from white supremacist
Is the $500 USD and "principle" of keeping the money really worth all the damage this will inflict on his campaign, thanks to an already-hostile MSM repeating every "racist" accusation as fact?
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Is the $500 USD and “principle” of keeping the money really worth all the damage this will inflict on his campaign, thanks to an already-hostile MSM repeating every “racist” accusation as fact?
Yes. There should be no damage.
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"Dr. Paul stands for freedom, peace, prosperity and inalienable rights. If someone with small ideologies happens to contribute money to Ron, thinking he can influence Ron in any way, he's wasted his money," Paul spokesman Jesse Benton said. "Ron is going to take the money and try to spread the message of freedom."
This is brilliant!
I will take donations from animal rights activists and feast on veal and foie gras!
NOT SOLICITATION OF DONATIONS
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Forget the guilt trip –you either put your family’s well being first or let Prodigal parents drag you down with them.
I say, let da market sort it out! Ha-cha-cha-cha! Me likely sushi and hanging out with my pals from my MBA program.
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HARM's website
There "should" be no damage, just like the media "should" do more research before parroting NAR talking points verbatim. And people "should" run the numbers before borrowing a million bucks.
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Huh? Who is Peter P Nis?
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HARM's website
Looks like someone has a (mildly evil) blog impersonator.
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Interesting quote (copied from Ben's blog)
“Damato said that it would be impossible to find a lender for almost anyone who wanted a loan without income documentation, so many of the laws are already out of step with the current market. And, that market changes weekly and sometimes daily.”
“‘I could do stated (undocumented) income loans on conforming loans until last week. … Now I can’t,’ he said. ‘It’s changing every day.’”
He could do no-doc loans till last week ?? This is freaking amazing. No wonder I cannot see the boxes of credit crunch in Safeway yet. But I guess it's coming soon. The "market" is changing daily. I like that part.
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An awful lot of these white "supremacists" are in actuality separatists, who just want to live among their own, not be told who to hire, who to promote, etc and are tired of race-based affirmative action (what needed to be set up was wealth-based affirmative action).
Take away the forced busing, the race-based handouts, etc., and you've taken the wind right out of their sails.
Thus, since this Stormfront fellow is donating to help elect Paul, he's actually hoping to in essence, put himself out of business.
It's just not anything to worry about. But we can count on the press to make a big hairy deal out of it.
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Carlsbad, CA
Malcolm's website
Peter P Says:
December 19th, 2007 at 5:44 pm
"Huh? Who is Peter P Nis?"
You do get that it is a bit of a play on words right? Get it? P-Nis. Funny, but it will get old pretty quickly.
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@DinOR
Been otherwise occupied and away. Details omitted because it's pretty much a sob story and I'm a "Don't cry for me Argentina" kind of guy.
Great day today. ACA downgraded from A to CCC. MBIA and Ambac get a negative outlook. FGIC on review for downgrade. Munis on pins and needles.
MS sells a chunk to the Chinese.
Ahhh. Napalm in the morning. And evening too.
For the first time in 20 years, I'm seriously considering stacking dry 50s in the corner.
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Harm & DinOR
Thanks for the support. I'm trying not to let the guilt get to me but it's tough. My husband is playing the part of the bad guy to get me off the hook a bit (nice of him, don't you think?). But I think I'm going to have to really keep them at a distance. I mean, they "borrowed" $100k from my brother without paying it back. I don't have "stupid" stamped on my forehead.
(Yeah, they really did blow $100k of my brother's money. Everyone thinks their family is insane until they meet mine)
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Lets take another crack at affordability.
Dual income tech = $250k? Does that sound about right? If so, then with 20% down and 6.5% 30 year fixed the tech couple can afford 1 million and still meet the guidline of 30% of gross.
What percentage of the fortress is (or could be as boomers retire) dual income tech?
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Everyone should read this
http://patrick.net/housing/contrib/collapse.html
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>> Dual income tech = $250k?
IMHO, Dual income tech = $200k.
Something like:
Husband = Senior Software Engineer = 120-130K
Wife = Quality Assurance = 70-80K
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Can someone remind me about Paulson at Sachs? By joining the government he was able to realize at peak prices his portfolio or some such? Normally I don't believe in media-driven corruption theries, but we have an impressive array of doom-say articles at Patrick today and it really does look like Paulson just took the job 'to get his.'
I really would appreciate any details people can recall about Paulson.
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I really would appreciate any details people can recall about Paulson.
Well, the truly respectable politician is one that cannot get elected. :(
Ron Paul, Banzai!
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I mean, they “borrowed” $100k from my brother without paying it back. I don’t have “stupid” stamped on my forehead.
SQT, I don't know what to say.
One thing though, if you lend to friends or relatives and they do not repay you, the IRS expects you to collect. You do not want to lose money AND the 50% gift tax.
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SQT15's website
One thing though, if you lend to friends or relatives and they do not repay you, the IRS expects you to collect. You do not want to lose money AND the 50% gift tax.
Considering my dad hasn't paid taxes for the last four years or so and moved to Thailand, I'm thinking taxes never entered into his mind. My family is a mess.
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Found it
http://www.slate.com/id/2143018/
Seeing as how Mozilla is being sued, I am curious to see if anyone comes knocking for some of Paulson's $700+ million.
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I am gonna take my GOLD, MAN, and put it in a SACK.
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You know, someone really did a lot of work on that cereal box. I just can't see that hairy ol' face looking at me while I eat my Credit Crunch, can I offer my services to try to come up with a sort of cartoony Ben? Or is it just not worth fooling with?
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Considering my dad hasn’t paid taxes for the last four years or so and moved to Thailand, I’m thinking taxes never entered into his mind. My family is a mess.
*gasp* :eek:
Fyi: new thread: Counterparty risk and bubble hedging
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Damn. My Dad tried to run off to Phuket, he'd have been smart to, actually. An Ivy League educated pedicab driver, I can see it now. He'd probably still be alive today if he had. He also tried to move in with my older brother, kind of came to visit and wouldn't leave. Like any good American son though my bro kicked his ass out into the street.
My Dad was in huge IRS trouble, any IRS trouble is resolvable though, and my older sis, married to a hotshot lawyer, couldn't even arrange a date for my Dad with a tax lawyer to get it unsnarled. They were too busy buying flashy cars and $300 purses to pay a few legal fees for old Dad. And she's the one who felt really close to him.
Some fucked up parents out there. Producing some seriously fucked up kids (US).
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SQT15's website
He also tried to move in with my older brother, kind of came to visit and wouldn’t leave
I'm totally afraid of this. I'm not going to let them stay with me. I don't trust them to leave.
Some fucked up parents out there. Producing some seriously fucked up kids (US).
Ain't that the truth....
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San Jose, CA
by credit crunch, they mean credit crunch. when asset backed securities have an increasingly hard time to put value on and, at the same time, the value of them is falling, then investors don't want them. if investors don't want them banks can't sell them. if banks can't sell them, buyers can't borrow from banks. if buyers and businesses can't borrow from banks, this puts brakes on the velocity of money in the economy. this slows consumption, employment,...etc. thats why a credit crunch may not be seen by someone with a 9-5 job who doesn't work in the credit or banking industry. but it's powerful enough to throw this economy out of balance.
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john said:
but it’s powerful enough to throw this economy out of balance.
Some would argue that the economy has been thrown off balance a long time ago. The credit crunch is actually going to get things back into balance.
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SQT,
Sorry to hear about your parents. I remember a time when it sounded like things were going to work out sort of OK for them.
Not knowing the situation, I don't know what to say. It sounds like you definitely need to keep a strong boundary with them in order to avoid giving more than you have available to give. Difficult, that. But, yeah, you probably don't want to have them living in your house. Or borrowing your money. It sounds like advising them in any way is really difficult, too.
It is always possible that they will change enough that you will be able to help them in some way in the future--advice if they are able to accept it, maybe helping them to find their way into a budget and reasonable housing (not yours). Or maybe just giving them love and no additional rope.
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@Steveoh
Straight answer to your question can be found in the Wikipedia article that describes why Bernanke is derisively called "Helicopter Ben" by his critics. Note that his actual remarks were more nuanced than what critics have attributed to him. Furthermore, an argument could be made that stealth inflationary injections of the sort he described in his remarks are exactly what has been transpiring this month.