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  1. #21
    Member GruffyBear's Avatar
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    Quote Originally Posted by Wolf View Post
    Hey, I saw it three years ago. It was going up too fast to be based on anything real... I've just been waiting to watch it seriously crash and kill off the method the mindless boomers were/are using to try to fund their retirements because they never saved a cent. It'll probably ruin my attempts, too, as the markets are going down, while inflation will wipe out any I make in savings. Basically, they've taken us all down with them.

    The markets of the world are shaking pretty hard as these big mortgage companies, who commanded massive amounts of money, are collapsing like the many houses of cards that they were.
    The funny part of the story is the boomers are on both sides of the deal. Pension funds, under pressure of the impending boomer retirement wave, were seeking safe, high return investments. Treasury bond yields have been abnormally low for several years due to low Fed funds rates and the desire of foreign central banks to keep their currency low vis a vis the US dollar. So the Investment banks, tanned, rested, and ready after the Internet IPO bubble popped found a solution, packaging mortgages into financial instruments that were to be more than the sum of their parts. Pension funds and Hedge Funds starved for yield snapped the securities up. This created a massive demand for mortgages to package. The new flow of money into the mortgage markets made for easier standards, which in turn led to flipping "enterpreneurs" and Boomer Mortgage Equity Wealth extraction as well as House Price Appreciation, which increased the paper wealth of a lot of boomers on the coasts.

  2. #22
    Senior Member darlets's Avatar
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    Quote Originally Posted by Sahara View Post
    As far as I know the house prices are going up in the UK, and I doubt I will ever be able to afford buying one.

    I used to live in an area where a 2 bedroom house went for one million british pounds lol

    Now although the prices are still alot less they are still far far far out of my range or my dreams, and rising.
    The U.K to me is the one likely to be least troubled by the housing meltdown. They'll come down but there's still the underlying issue of lack of land.

    In places like Australia and the U.S it's hard to argue there is a lack of land, in the U.K unfortunately I'm not sure this still holds.
    "The time you enjoy wasting is not wasted time."
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  3. #23
    Senior Member darlets's Avatar
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    "The time you enjoy wasting is not wasted time."
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  4. #24
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    Quote Originally Posted by GruffyBear View Post
    The funny part of the story is the boomers are on both sides of the deal. Pension funds, under pressure of the impending boomer retirement wave, were seeking safe, high return investments. Treasury bond yields have been abnormally low for several years due to low Fed funds rates and the desire of foreign central banks to keep their currency low vis a vis the US dollar. So the Investment banks, tanned, rested, and ready after the Internet IPO bubble popped found a solution, packaging mortgages into financial instruments that were to be more than the sum of their parts. Pension funds and Hedge Funds starved for yield snapped the securities up. This created a massive demand for mortgages to package. The new flow of money into the mortgage markets made for easier standards, which in turn led to flipping "enterpreneurs" and Boomer Mortgage Equity Wealth extraction as well as House Price Appreciation, which increased the paper wealth of a lot of boomers on the coasts.
    It wasn't only on the coasts, and you're forgetting that during the reign of Clinton there were some changes to the laws that supported it, then after Shrub took office even more laws that supported it were passed, then the fed got in on the madness by pushing it ever higher. Basically, not only was there an attempt to generate artificial money with the real estate madness, but the government supported it and helped it happen.

    If Hedge Funds were buying them up, that should have been a red flag to everyone that something was up.


    Someone must be looking out for me - I'm in very nearly the best position I've ever been in since becoming an adult. I work for a company that thrives on turmoil, live in a place where people are leaving in droves (meaning they are buzzed to have me because I'm good and they couldn't replace me even if they wanted to), and the worst that could happen is I lose some money that I'm not worried about that I'm auto-investing in the market (they're just numbers to me at this point, and if I lost them I really wouldn't be out much (I'm getting many times the amount I'm not getting in cash due to not paying taxes)).
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    Disclaimer: The above is my opinion and mine alone, it does not mean I cannot change my mind, nor does it guarantee that my comments are related to any deep-seated convictions. Take everything I say with a whole snowplow worth of salt and call me in the morning, if you can.

  5. #25
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    Quote Originally Posted by darlets View Post
    I find this somewhat funny because my parents have paid their mortgage payments (meaning they switched/refinanced) to at least three of those imploded lenders since buying their house in 1997.
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    Disclaimer: The above is my opinion and mine alone, it does not mean I cannot change my mind, nor does it guarantee that my comments are related to any deep-seated convictions. Take everything I say with a whole snowplow worth of salt and call me in the morning, if you can.

  6. #26
    Senior Member darlets's Avatar
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    Quote Originally Posted by Wolf View Post
    I find this somewhat funny because my parents have paid their mortgage payments (meaning they switched/refinanced) to at least three of those imploded lenders since buying their house in 1997.
    Could be worse, could be a 117

    You'd have to have mortgage insurance over there surely?

    The banks here make you take out mortgage insurance if you don't front a 20% deposit so the risk is mainly pushed onto the insurance companies.
    "The time you enjoy wasting is not wasted time."
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  7. #27
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    Quote Originally Posted by darlets View Post
    Could be worse, could be a 117

    You'd have to have mortgage insurance over there surely?

    The banks here make you take out mortgage insurance if you don't front a 20% deposit so the risk is mainly pushed onto the insurance companies.
    They had a good down payment on the original house (40% or so), then rolled that plus the price increase in the time they owned it (it went up 35k in the four years they lived there), they put down over 50% on their current place, so no.

    However, they've refinanced all that equity and then some out of the house at this point. They are basically paying nothing but interest on it now and own nothing.
    I 100%, N 88%, T 88%, J 75%

    Disclaimer: The above is my opinion and mine alone, it does not mean I cannot change my mind, nor does it guarantee that my comments are related to any deep-seated convictions. Take everything I say with a whole snowplow worth of salt and call me in the morning, if you can.

  8. #28

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    Quote Originally Posted by Wolf View Post
    Yes, I'm renting a house, and you can rent basically anything (I've seen mansions for rent before).

    I mainly rent because I can't realistically afford to buy one here. The market is crashing, in case you weren't aware. A few zones in the country are still in stupidville, but anywhere along the coasts (or otherwise hyper-inflated, like LV) with overinflated prices is fall like a rock. Las Vegas, San Diego (where I am), Los Angeles, Florida, most of the east coast...

    I hear they're still pushing them up in the South-East (Carolinas, in particular) and some Rocky Mountain states, but that will probably get killed by the effects of the coastal failures and the resultant changes in the lending rules.

    It's difficult for me to believe that you haven't heard about the collapse of so many rather large mortgage lending companies in the US.
    If only this alleged crash would actually COME. I live in Los Angeles, and I can't afford a tool shed. Most of my friends, including married couples, can't afford a house in a neighborhood where you don't need to carry a gun. Everyone keeps threatening that the bubble is going to burst, yet two apartment buildings on my street just went condo with selling prices starting at $400,000. And these aren't luxury multi-story condos. These are run of the mill one and two bedroom apartments with the standard amenities.

  9. #29
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    Quote Originally Posted by FMWarner View Post
    If only this alleged crash would actually COME. I live in Los Angeles, and I can't afford a tool shed. Most of my friends, including married couples, can't afford a house in a neighborhood where you don't need to carry a gun. Everyone keeps threatening that the bubble is going to burst, yet two apartment buildings on my street just went condo with selling prices starting at $400,000. And these aren't luxury multi-story condos. These are run of the mill one and two bedroom apartments with the standard amenities.
    I heard that Los Angeles was faltering a year or two back. It must've picked up again.

    If nobody you know under the age of 40 can afford a house, that's all you need to know, because it must either crash or their incomes must meet the prices, which is unlikely.

    I can't believe anyone in their right mind is still on the condo-conversion kick anywhere. They did that here and many of those have dropped 100+k from their peak point.
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    Disclaimer: The above is my opinion and mine alone, it does not mean I cannot change my mind, nor does it guarantee that my comments are related to any deep-seated convictions. Take everything I say with a whole snowplow worth of salt and call me in the morning, if you can.

  10. #30
    Senior Member ptgatsby's Avatar
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    Quote Originally Posted by darlets View Post
    You'd have to have mortgage insurance over there surely?
    Hmm, can anyone in the US say if you guys have mandatory mortgage insurance? Up here in Canada, we have to pay a premium on the mortgage if we put less than 25% down. But also, mortgages aren't excused the same way in foreclosure - you don't get to walk away as easily as you do in the states. That'll be a significant difference as well.

    Not that insurance will cover the market. It's just a transfer of risk - the end result will still be a dramatic shrinking of the money pool. I'm not sure how bad it will be, but it'll range between "minor recession" to "crash and burn baby". There is a slight chance of hyper inflation and such and a high probability of the US dollar losing another 10-20% of its value (from equity injection, lack of confidence and economic shrinking). In the worst case, these would come together and shatter the dollar further.

    But I'd rank the probability around 40% mild recession, 30% moderate, 15% strong, 10% dollar value drop >20%, and some combination of 5% crash and burn. The dollar bit isn't very likely because the US will impact on other currencies.

    So real estate will drop in the states... I expect it to range from mild (5-20%) in smaller areas and those that didn't rise the same way to extreme (60-80%) in areas with rampant sub-prime speculation (Florida, Las Vegas).

    In Canada - Vancouver, I'm expecting the peak of the probability curve to be around 20%, with the still-possible peak ends around +5% to -45%. The market here is still very tight and clearly in the sellers area.

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