Amazing Foreclosure Facts
#11
Posted 12 April 2008 - 12:55 PM
#12
Posted 12 April 2008 - 01:51 PM
(Otherwise, I hope Rogerdodger is right and this crisis is overstated by the Carlton Sheets factor. Maybe this crisis is more like the mess you make on the stove when the pot boils over, and the smoke detector goes off, and there's a big spill to clean on top of the stove but, once the heat is off and the boiling subsides, you notice that very little soup actually boiled over. You clean up the mess, and then have your dinner.)
Great analogy!
Mark S Young
Wall Street Sentiment
Get a free trial here:
http://wallstreetsen...t.com/trial.htm
You can now follow me on twitter
#13
Posted 12 April 2008 - 02:24 PM
(Otherwise, I hope Rogerdodger is right and this crisis is overstated by the Carlton Sheets factor. Maybe this crisis is more like the mess you make on the stove when the pot boils over, and the smoke detector goes off, and there's a big spill to clean on top of the stove but, once the heat is off and the boiling subsides, you notice that very little soup actually boiled over. You clean up the mess, and then have your dinner.)
Great analogy!
Not to "pour ice water" (pun intended) on the analogy but, the amount of people foreclosing isn't the issue. It's the amount of foreclosures and what affect those foreclosures have on home prices. The amount of foreclosed homes on the market in such a short span will lower prices for many years and put many responsible homeowners "under water" (no pun intended) for many years.
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe
#14
Posted 12 April 2008 - 02:39 PM
Not to "pour ice water" (pun intended) on the analogy but, the amount of people foreclosing isn't the issue. It's the amount of foreclosures and what affect those foreclosures have on home prices. The amount of foreclosed homes on the market in such a short span will lower prices for many years and put many responsible homeowners "under water" (no pun intended) for many years.
This is somewhat true. The money that was lent to these speculators came from somewhere, and everyone will feel its effects. But I tend to believe it was spread around quite a bit to china, middle east, and other emerging wealth countries, so the effect isn't concentrated.
So it goes that money flows from one pocket to another pocket and back to the same pocket in an ever lasting circle jerk.
#15
Posted 12 April 2008 - 03:29 PM
Not to "pour ice water" (pun intended) on the analogy but, the amount of people foreclosing isn't the issue. It's the amount of foreclosures and what affect those foreclosures have on home prices. The amount of foreclosed homes on the market in such a short span will lower prices for many years and put many responsible homeowners "under water" (no pun intended) for many years.
This is somewhat true. The money that was lent to these speculators came from somewhere, and everyone will feel its effects. But I tend to believe it was spread around quite a bit to china, middle east, and other emerging wealth countries, so the effect isn't concentrated.
So it goes that money flows from one pocket to another pocket and back to the same pocket in an ever lasting circle jerk.
I speaking more of the concentration of foreclosures timewise having a very bad affect on prices that will affect those who bought responsibly.
Unfortunately, the situation at hand is not a "circle jerk" game which can go on eternally. That would have been OK and all would be well and balanced.
This situation is the result of having entered the inevitable "The Minsky Moment" in a "greater fool" game which is doomed to always end badly.
Edited by milbank, 12 April 2008 - 03:34 PM.
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe
#16
Posted 12 April 2008 - 03:42 PM
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe
#17
Posted 12 April 2008 - 03:49 PM
I should have added our country doesn't play "circle jerk" capitalism. We only do "greater fool" capitalism because the game players never lose that game. It's played because it's rigged so that the ultimate "greater fool" is always the taxpayer.
That has never stopped the US from moving forward, and still being on top of all the other nations.
#18
Posted 12 April 2008 - 04:16 PM
Edited by milbank, 12 April 2008 - 04:18 PM.
"The power of accurate observation is commonly called cynicism by those who have not got it."
--George Bernard Shaw
"None are so hopelessly enslaved as those who falsely believe they are free."
--Johann Wolfgang von Goethe
#19
Posted 12 April 2008 - 04:16 PM
If this is widespread, and I believe it most likely is, then the number of homeowners facing foreclosure is much smaller than the number of foreclosures.
You are correct....no. of foreclosures most likely exceeds no. of individuals by some number.
HOWEVER.......whenever a home gets foreclosed, the lender certainly loses capital. For example,
if bank loaned out $300k to the buyer, that money went to the previous owner/builder. Then the home
gets foreclosed and the bank can not sell it at $300k, but instead has to auction it off for $250k, then
the bank lost $50k minus whatever principal the owner paid off in intervening time, most likely a small
amount.
So your premise seems correct that fewer individuals are affected by foreclosures therefore will have less
impact on consumer spending, but do not overlook the negative impact on banks.
#20
Posted 12 April 2008 - 04:20 PM
~Benjamin Franklin~