patrick.net

You folks are discussing Al Queda. Well Al Greenspan can do more damage:

AP
NABE: Bad Credit Biggest Risk to Economy
Monday August 27, 7:54 am ET
By Dan Seymour, AP Business Writer
Bad Credit Tops Terrorism As Biggest Immediate Risk to Economy, Group Reports

http://biz.yahoo.com/ap/070827/nabe_bad_credit.html?.v=3

NEW YORK (AP) -- Bad credit has supplanted terrorism as the gravest immediate risk threatening the economy, a key national research group reported Monday.
Borrowers' withering ability to pay their bills and the subsequent fallout in the credit markets this summer topped the list of short-term risks on peoples' minds, according to a survey of 258 members conducted by the National Association of Business Economics.

NABE, a Washington-based association, said 32 percent of its surveyed members cited loan defaults and excessive debt as their biggest near-term concern.

Only 20 percent of members cited defense and terrorism as their biggest immediate worry, down from 35 percent when the survey was last conducted in March. Credit risk also topped gas prices, inflation and government spending.

"Financial market turmoil has shifted the focus away from terrorism and toward subprime and other credit problems as the most important near-term threats to the U.S. economy," said Carl Tannenbaum, president of NABE and the chief economist at LaSalle Bank/ABN Amro.

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Please remember that Al Greenspan advised consumers to take ARM ...

http://www.usatoday.com/money/economy/fed/2004-02-23-greenspan-debt_x.htm

Posted 2/23/2004 11:39 AM Updated 2/24/2004 2:13 AM

Greenspan says ARMs might be better deal

By Sue Kirchhoff and Barbara Hagenbaugh, USA TODAY

WASHINGTON — Federal Reserve Chairman Alan Greenspan said Monday that Americans' preference for long-term, fixed-rate mortgages means many are paying more than necessary for their homes and suggested consumers would benefit if lenders offered more alternatives.
In a standing-room-only speech to the Credit Union National Association meeting here, Greenspan also said U.S. household finances appeared generally sound, despite rising debt levels and bankruptcy filings. Low interest rates and surging home prices have given consumers flexibility to manage debt, he said.

I received this email notification from New York FED today morning:

Temporary OMO: Fed adds $9.50 billion with 10 day RP

Can sombody take my comment out of moderation, please?

Euro Bulls Bloodied, Unbowed as Subprime Lifts Dollar (Update5)

http://www.bloomberg.com/apps/news?pid=20601087&sid=ap7HwAh2wUxY&refer=home

By Aaron Pan and Kim-Mai Cutler

Aug. 27 (Bloomberg) -- The euro, battered by the dollar since reaching a record a month ago, may climb to new highs this year as U.S. central bankers lower the cost of credit and European policy makers signal that interest rates will rise.

Goldman Sachs Group Inc., the world's most profitable investment bank, and Merrill Lynch & Co., the biggest brokerage firm, increased their year-end forecasts for the currency as much as 6 percent last week as concerns about the rout in subprime mortgages abated. Citigroup Inc., the largest U.S. financial services company, says the euro may rise to $1.42 by the end of the year from $1.3675 on Aug. 24.

While the euro tumbled as much as 3.5 percent since rising to $1.3852 on July 24, currency strategists now say faster economic growth in the region will prompt a recovery. The European Central Bank suggested last week that it's preparing to boost borrowing costs, five days after the Federal Reserve reduced the rate it charges banks for loans to keep money markets from seizing up.

The sheep on Long Island have discovered patrick.net

Denial, denial, denial!!!!

Allah, thanks!

Of course it won't affect LI. Do you suppose DH is "dear hubby"?

Allah, thanks!

Of course it won’t affect LI. Do you suppose DH is “dear hubby”?

Yes.

DH = "Dear Husband" or "Dear Hubby"
BIL = "Brother in law"
SIL = ""
FIL = "Father in law"
MIL = ""

Hasnt seemed to affect long island, houses are still selling and people are still buying.

No, just that inventories have almost tripled on Long Island since 1999.
...and there are over 12000 pre-foreclosures on Long Island
...and asking prices are dropping daily on Long Island
...and Jumbo loans over $417k are now requiring 8% interest
but it hasn't affected LI in any way; LI is immune!

If real estate crashed here, it would turn us sheep into lambchops; therefore it cannot happen here! Next topic please!

Allah,

Funny comments! It was a mixture of denial and total disbelief? Your "Right Now" video said it all! Still I can see how people on LI could get the impression that there is only a finite amount of land? In their world, that's to a certain degree true. However, prices need to be connected to what people can actually afford at some point.

Funny comments! It was a mixture of denial and total disbelief? Your “Right Now” video said it all!

Thanks!

Still I can see how people on LI could get the impression that there is only a finite amount of land? In their world, that’s to a certain degree true.

Well; there is more land available, but NIMBY's don't want it to be developed. The politicians want to build "affordable housing" to keep the younger generation on the Island; but the fact is we already have it [affordable housing], yet the sellers haven't accepted it yet.

Land was more limited in Japan, but that didn't prevent a crash there, did it?

However, prices need to be connected to what people can actually afford at some point.

Exactly. We have so many properties just sitting; many people can't even afford the houses they are living in right now. It's pretty much common sense what is going to happen now! I have been tracking inventory here and just about every day it is going higher. Housing bubble has popped; now we have an inventory bubble!

However, prices need to be connected to what people can actually afford at some point.

Not exactly. Prices only need to be connected to what people think the assets are worth in the future, although such expectations can and do change.

Anything in the universe has a price. Consequently, anything in the universe can become overpriced.

All the terrorists have to do to wreck us is to take out thousands of 100% NINJA home loans and not pay them back. I hope I didnt give them any ideas.

Anything in the universe has a price. Consequently, anything in the universe can become overpriced.

Which it already has.

These sheeple are like a cult; I have seen many people better than me try to go on there and make a post; only to be banned and their posts removed within 24 hours (usually less).

I got a real kick out of someone going on there last april; I knew they would get kicked off and their posts removed, so I saved their posts in a pdf just hours before it was removed.

Notice the "THIS IS A FAKIE ALERT" in the comments! LOL

These people will not allow anyone say anything negative about the market; this is their own isolated world and "we just can't have that!"

All the terrorists have to do to wreck us is to take out thousands of 100% NINJA home loans and not pay them back. I hope I didnt give them any ideas.

They don't have to; we already did it to ourselves!

Peter P,

That is true. However, as you've pointed out, all we ever needed for the bubble to pop was for prices to stop rising! (Or words to that effect?) Now that clearly... prices have ceased their ever upward spiral people are taking a step back and saying "WTF did I just DO!"

Sure, I was more than willing to overpay, as long as the next GF was NTB!

NTB=Nut to Butt (as in very, VERY close behind me!)

Sure, I was more than willing to overpay, as long as the next GF was NTB!

DinOR, I also think it is fine to overpay occasionally. After all, it is life that we live, not some economic process. ;)

Now that clearly… prices have ceased their ever upward spiral people are taking a step back and saying “WTF did I just DO!”

Yup. The shift in expectations has already begun.

Peter P,

I agree, it's just fine to overpay from time to time. Look at all the people you know for a fact, (a) never buy a round (b) never pick up the tab (c) etc. etc? I know "I" try to avoid them! If you have a rep. as a bottom feeding, nut cutting SOB who's going to actually want to do business with you! :)

The article by Mish in today's list of news stories is most interesting. The summary prospectus for my 401(k)'s PIMCO fund bragged about being in "government bonds" for security. Mish pointed out that that really means Ginny Mae's and the ilk. I exchanged out all my funds (not that much really) from the PIMCO "Total Return" fund into something better this morning.

New reality show; I'm writing the script...."Desperate Seller's"
Here's a sample...

Wife: "Damn, the Swansons lowered their price again!"

Husband: "Yeah, I heard the Stevenson's are putting their house up too!"

Wife: "How much equity do we have left?"

Husband: "Well, if the Thompson's get their price, we will have..........well, we will be underwater by $10k."

Wife: "That's all? Gina said she is underwater by at least $60k!"

Husband: "Well, if the Miller's sell their house, we will be down another $30k....Oh, and then there are those 3 foreclosures on the block; that's a wildcard!"

Wife: "Ah! The miller's had their house on the market for almost 2 years....they're no going anywhere....Do you think maybe we should put the Hummer up for sale?"

Husband: "Who is going to buy it? Everyone on the block already has one. The Henson's had two of them before they were repossessed."

Wife: "Well; there's always ebay."

Husband: "Yeah, well, I checked there too; apparently everyone is selling one or two of them."

This is no lie either check it out!

well; that is all I have right now. Could be a hit! Would make a nice replacement for "flip this house."

HelloKitty Says:
All the terrorists have to do to wreck us is to take out thousands of 100% NINJA home loans and not pay them back. I hope I didnt give them any ideas.

Funny you should mention that - they already are on it.

"A man arrested in December at the Kansas City airport with $70,000 in his bulging pockets while trying to board a Southwest Airlines flight claiming the money was actually Muslim prayer books, a San Francisco mortgage company executive who went on the run from the FBI in November, seven people arrested in September in Salt Lake City with ties to al-Qaeda, and a co-defendant in the Sami al-Arian/Palestinian Islamic Jihad trial all have one thing in common -- the growing trend of terrorist associations with mortgage fraud rings in the US. Financial experts say that mortgage fraud has become the fastest growing type of white-collar crime, and terrorist organizations have been quick to jump on the trend. But what concerns federal authorities is how regularly mortgage fraud is showing up in terrorism investigations."

"Tarik Hamdi was charged last year for immigration and mortgage-loan fraud as part of an investigation into the role of an Islamic charity, the International Institute for Islamic Thought of Herndon, Virginia, that Hamdi worked for and was being investigated for ties to terrorist financing."

"Last year a Dearborn, MI man pled guilty to mortgage fraud in a plea deal with federal authorities to prevent being charged additionally with terrorist activities. At the time of his arrest, federal authorities found books, posters and recruitment videos for the Hezbollah terrorist organization inside the home of Nemr Ali Rahal."

"Mohammed Krayem and Mahmoud Youssef Kourani were accused in 2004 of transferring more than $200,000 obtained through real estate fraud and cigarette smuggling to Kourani's brother, Haider Kourani, the Hezbollah chief of military security for southern Lebanon."

And it goes on and on.

SP

SP,

And why... NOT!

Over the last several years what crime has been easier to commit than mortgage fraud!? It's so easy a caveman could do it!

It’s so easy a caveman could do it!

That is politically incorrect! :)

IMO, we should play up the "terror funding" angle of subprime - that will kill any appetite that politicians have for a bailout. "Did you know that by bailing out FB's, you're actually supporting the terrorists?" :-)

The irony is that money from fraudulent RE deals is being generated from the same neighborhoods from which kids are being sent to Afghanistan. How does it feel to know that while you are celebrating the rising comps in your 'hood, some of that money went to buy mortars for the guys who are shooting at your son?

It would make an even more sensationalist story for the MSM than the tear-jerking "HELOC-lovin' grandma is losing her hizzouse" crap.

SP

DinOR Says: It’s so easy a caveman could do it!
Peter P Says: That is politically incorrect! :)

Okay, ya PC-weenie. "It's so easy a cave-person could do it."

Are you happy now?

SP

I think he meant that Osama was living in a cave.

"HELOC lovin' grandma"

Yep. Not a pretty visual now is it?

I spoke with a MB this morning and I was really surprised by the level of candor. She really began to question whether or not she had been helping people? She meant even BEFORE the boom! It's got to be hard to put some poor person/couple into a 40 yr. mort. and feel good about it? In her mind, all most of this added up to was... more debt?

She said she began to get really alarmed at just how comfortable people were becoming about ever increasing levels (and lengths) of debt. Certainly no revelation here but refreshing to hear it from someone in the industry.

Do you think maybe we should put the Hummer up for sale?”
Husband: “Who is going to buy it? Everyone on the block already has one. The Henson’s had two of them before they were repossessed.”
Wife: “Well; there’s always ebay.”
Husband: “Yeah, well, I checked there too; apparently everyone is selling one or two of them.”
This is no lie either check it out!

Those are some really lovely-looking vehicles. 6 litre V8s? wow... we'll be needin' oil from somewhere... how many cup holders does it have?