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  • On 15 Apr 2014 in I find it interesting...., tatupu70 said:

    indigenous says

    I have hired & fired people who did prison(not jail) time for assault & battery, I worked for a guy connected to the mafia up until he had someone killed, I have been threatened by an individual with a pound of cocaine in one hand and a mac 10 in the other, I started out as a union carpenter and moved to other things.

    You may want to consider doing background checks as part of the interviewing process. Just a thought.

  • On 13 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    You were the idiot who didn't know what "so long as cash flow works" means in real estate investing (and many other lines of business that live off loans); that is a reference to marginal borrowers and ponzi borrowers who have to roll over debt principal on continuous basis.

    I know what it meant, assclown. And your explanation is not correct. Regardless--congrats--you've now managed to completely derail the discussion as is your goal.

  • On 13 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bob2356 says

    No one should have made any of the owners whole. All of them should have went to bankruptcy court and had their carcasses plucked by the responsible banks. If the head of treasury wasn't the former head of GS that's what would have happened.

    I think everyone agrees what should have happened in a perfect world. The reason it didn't happen was very complicated, IMO. Not as simple as you suggest...

  • On 13 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bob2356 says

    Of course the did, they bought them out of bankruptcy court. Onewest got indymac and I think barcley's and some others got lehman. All the rest should have gone the same way.

    OK--fair enough. But nobody made the original owners whole--that was my point.

  • On 13 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    Which part of my second sentence quoted by you above don't you understand? I addressed yield chasing already. "So long as cash flow works" (an expression from your earlier post) has a specific meaning: positive cash flow. That does not apply to cash buyers. Cash buyers are yield chasers

    And yield is determined by cash flow. Didn't think I'd have to explain that to you.

  • On 12 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    justme says

    Don't be daft. You know damn well that the losses of those 3 banks, and many others, got socialized onto the general public and taxpayer via asset inflation generated by the Fed and by screwing ALL bank depositors into paying off the losses of the banks that BOUGHT those 3 banks by getting essentially 0 interest rate on their deposit for now the 6th year in a row.

    Come on now. Nobody bought IndyMac. Nobody bought Lehman. If they made those loans thinking they would be saved later, they were fools. Even the banks that were "saved", lost huge.

    The Fed actions attempted to RAISE short terms rates and lower long term--low bank savings rates were not due to the Fed.

  • On 12 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    tatupu70 says

    bgamall4 says

    Because the Fed forces the house prices up in the midst of wages declining.

    You keep saying that, but can't explain how.

    Lower interest rate translates into higher rent cash flow multiple for the price of the asset. That makes the asset owners richer, exacerbating the wealth disparity.

    That wasn't the question. Read more carefully next time.

  • On 12 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    Cash buyers by definition don't worry about cash flow, as they have no loan to service. Cash buyers are chasing yield, which becomes a necessity also due to FED interest rate policies.

    lol--you're kidding, right? They don't care about ROI? Cash flow and yield are basically the same thing.

  • On 12 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bgamall4 says

    Where do you think they get the cash? It is well known that they are funded with very little cash and mostly credit from the banksters. I am surprised that you didn't know that little conspiracy. But since you are conspiracy blind I suppose I should have expected it from you.

    There is and was no shortage of wealth/cash available. The .01% has enormous amounts of it. Just because there's a distribution problem, don't make the mistake of assuming the US has a wealth problem.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bgamall4 says

    Because the Fed forces the house prices up in the midst of wages declining.

    You keep saying that, but can't explain how.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bgamall4 says

    Low prices were driven by lack of credit. Credit availability drives home prices. If the banksters pull the plug, your house worth 900k in the SF suburbs could drop to 200k. But they won't do that unless they have no other choice since it hurts the banks. But it could happen.

    The last 5 years should have convinced you that that wouldn't happen. All cash investors come in and buy when the cash flow works. They don't let prices fall that far...

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    Retirees lived off savings account returns for much of banking history. The central banks suppressing the savings account yield to such a low rate as to make it impossible is a relatively recent phenomenon.

    People lived off savings in their mattress for a long time too. The changes in investment habits, life expectancies, and retirement lifestyle have nothing to do with the Fed.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    The retirees would not have had to take the risk if they did not have to chase yield due to FED suppression of yield on much more secure instruments that the retirees had been familiar with

    Maybe, maybe not. Most retirees cannot afford to live off a savings account returns.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    AAA rating is an opinion expressed by the rating agency. Read the prospectus yourself, the risk is clearly stated in every damn single rating opinion/statement.

    Yep, and in this case the risk was VASTLY and knowingly understated. Which is why it was fraudulent.

    Institutions and retirees were duped.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    Not true at all.

    It wasn't fraud??

    Reality says

    AAA corporate papers are not nearly as secured and guaranteed as bank deposits. Even without FDIC insurance, bank deposits at AAA rated banks would have precedence over the AAA bond papers issued by the same bank. When interest rates decline, it is quite common for depositor to switch their maturing fixed deposits to the non-insured AAA corporate bonds as a way of chasing yield. AAA rating is an opinion by the rating agency. The rating carries no guarantee, and can be changed at any time.

    Yes, AAA is not as secure as an FDIC backed bank account. But, you can't really be arguing that the problem was risk taking in the form of investing in AAA rated securities.

    The problem was fraud.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    That's why those junk papers were rated AAA, so the savers of the world would buy them. Like I said, Wall Street sharks were waiting for the hapless savers when the sharks' friends at the FED forced down rates.

    If they were rated AAA, then it wasn't really Grandma having to take on more risk. It was fraud. Right?

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    justme says

    Because you knew that Uncle Sam and Uncle Ben would socialize your bank's losses. You KNOW this, why are you even asking?

    Really? How did that work out for IndyBank, or Lehman? Or Countrywide?

    And even the ones that got bailed out, lost huge. So, the owners like losing money???

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    You are quite wrong that those two recessions did not involve government policies. They were direct consequences of government policies.

    When did I say they weren't caused by government policies? I don't think I spoken on the cause of the recessions because I don't care about the cause. We're talking about your claim that the free market reduces the duration of recessions.

    Reality says

    Sounds like what a believer in the Divine Right of the King/Government would have said in the late 18th century.

    lol. Great analogy.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    Reality says

    At 5% bank interest rate, a retired grandma with $1M in savings and whatnot left to her from her deceased husband could live a reasonably comfortable life with interest from savings. When that interest rate was forced down to 1%, the same grandma would be facing starvation if she does not put her money towards much more risky investment vehicles to chase higher returns. The Wall Street sharks were waiting for her with just the right rip-off schemes when their FED friends forced down the interest rate that she had been getting.

    Nominal interest rates are not really what you should be quoting. Grandma cares about real interest rates.

    In any event--I don't think Grandma caused the abandoning of underwriting standards.

    And I'm pretty sure Grandma wouldn't loan money to someone that won't pay her back no matter what the interest rate was at the time.

  • On 11 Apr 2014 in America in rapid decline, tatupu70 said:

    Strategist says

    The whole world is lining up to immigrate to this country. They will do anything to get in here, including risking their lives.

    Why do you think that is?

    I don't see too many folks from Western Europe or Canada lining up.

    I think it's more accurate to say people from 3rd world countries are lining up to get into 1st world countries.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bgamall4 says

    Yeah, if they just want to rent.

    If they want to buy, they had a great opportunity--what the hell were they waiting for? I don't buy a theory that prices only dropping 20% below rental parity is robbing anyone of the opportunity to buy.

    bgamall4 says

    Globalization.

    Exactly--so why blame the Fed??

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bgamall4 says

    Wages go down and house prices go up. People with cash, mostly backed by Wall Street buy the houses. It is a massive squeeze on the middle class.

    Why do wages go down? What is the mechanism that causes that?

    Wall St. only buys houses when they are cash flow positive. The rents didn't change--so the middle class isn't really seeing any difference.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    bgamall4 says

    It puts a floor under the securitization market. Risk is offsset from the banks, who can trade MBS's for treasuries. I think that is how it work. Then the treasuries are used as collateral in swaps deals. It is a massive scam. The banks then bet on rates being low, and the Fed obliges.

    OK--how does that raise house prices?

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    mell says

    It increases rents and house prices artificially and benefits those who own housing

    How? How does the Fed buying MBS raise rents and house prices? Banks still took losses on their portfolios--so how does realizing a loss increase house prices?

    mell says

    The middle-class will either overpay in rent or try to slave off a lifetime to pay for an overpriced shack only to be foreclosed upon the next crisis by which the rich can unload whereas the middle-class has to live in their shack.

    OK--what does that have to do with the topic at hand?

    mell says

    Also buying MBS increases the likelyhood of bad loans to be made and money skimmed off immediately on forward promises of future labor.

    You're arguing moral hazard then. That's a weak argument given that some banks were allowed to fail and all others lost HUGE. I don't see the hazard.

  • On 11 Apr 2014 in Middle Class was "Fed" to the Sharks, tatupu70 said:

    justme says

    And what about the real-estate agents? The ones who would starve the appraisers that would not get on board with inflated appraisals?

    Them too.

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