Real Estate bubble?

[rodinz]

wow about the city's budget.

 

[Slinky Bender]

This is the most bizarrely ironic post* I've ever seen you make here.

*or would it be 'indication of reading material I avail myself of'?

edit:On a whole lotta levels.

OK, what did I miss?

 

[curious]

World Socialist Web Site? Not the sort of thing I'd have thought you'd be reading.

I envisioned you as the sort of ferocious capitalist who's truly in his element in NYC, as evidenced by this post http://utopiaguide.com/forums/showthread.php?p=257750&highlight=blackest#post257750

Did something change?

 

[Slinky Bender]

That's not how I fond out about the issue. It was simply the first site that showed up on a Google search having an article about this story (but perhaps that's what you meant by finiding it ironic).

 

[EddyBearNY]

Interesting

Yes (and I know that they are suposedly "private", but operate under Federal Charters and when the shit hits the fan, they aren't going to take down Wall Street, it will be a huge Gov't bailout. It's like the Port ). Intersting factoid from Freddie's site:"More than $500 billion: is the amount of home equity cashed out by millions of homeowners who have refinanced since 2002").

The Russian government has given two sovereign wealth funds worth $157 billion the green light to begin buying bonds of foreign government agencies. The Russian Finance Ministry told its SWFs yesterday that 15% of their funds can now be used to buy the debt of 15 different international government-backed companies.

Most interesting to us, the Russian funds will now be allowed to buy debt of two U.S. companies -- Freddie Mac and Fannie Mae. Oy… we hope they know what they’re getting into.

The other 85% will be used to purchase sovereign debt.

 

[Slinky Bender]

Right! I remember having a conversation a few years ago with a colleague about fixed income markets and he was adamant that the biggest risks lay in prepayment. Of course, he's in his mid twenties and so that kind of ignorance is somewhat excusable.

I think we can both agree that lowered rates do nothing if there isn't any capital to lend. My biggest fear these days is that they'll grown desperate enough to fuck with the capital ratios for lending institutions.

Back to Fannie & Freddie, do you really think it's 100% certain that the government will honor commitments that are only implied? I mean, there's no written guarantee that I know of. I can see them coming through enough cash to stave disaster, but they just don't have the capital to save things if it all goes to shit.

Do you think they'd actually print the money necessary for a large scale bale out? I don't see any other way because the credit market for dollars just won't be that strong.

Anything happen recently to alter your feelings?

 

[Slinky Bender]

http://online.wsj.com/article/SB120614027637056019.html?mod=myyahoo_module

 

[justme]

Anything happen recently to alter your feelings?

I'm not entirely familiar with the terms of the deal, but it seems like the gov is only guaranteeing 29 billion in potential losses. With Fanie, I'm talking about covering actual losses, and not limited by a cieling other than the 400 billion + in total assets that it holds.

It is clear that the government believes in "too big to fail," though. I just wonder what they'd do if they needed to come up with 100 billion in actual cash.

 

[genius]

......It is clear that the government believes in "too big to fail," though. I just wonder what they'd do if they needed to come up with 100 billion in actual cash.

There is actually no such thing as actual cash (besides the outstanding specie which is really just a convenience nowadays allowing you to buy a hot dog or some crack). What they will do is what they always do – a number will appear on a gov’t balance sheet, some additional treasury bonds will be sold top cover it, the deficit will increase by that number and the dollar will drop accordingly allowing everyone else to pay for it.

 

[justme]

There's a certain political cost in issuing $100Bn of debt to cover mismanagement. That was my point.

 

[larry1718]

maybe the Wall Street ****nal is overly pessimistic

http://online.wsj.com/article/SB120614027637056019.html?mod=myyahoo_module

I just purchased a condo listed by a Fort Lauderdale broker. The selling price was $295,000 compared to its offering price of $389,000 a year ago. After the closing the broker told me that he has done twice as many closings this first quarter as compared to last year. He's had an increased number of Europeans purchasing. I suspect this is due to the weak dollar and the overall discounting of home prices. Just thought I pass this along. Maybe the market has bottomed out here, at least for on the water properties.

 

[Axe]

I dont think the general fall in housing prices is finished.


http://mysite.verizon.net/vodkajim/housingbubble/

Be sure to look at the 115 year chart done by a prof at Yale.

 

[elmo16]

According to John Beck you can buy a home valued at $190,000 for $120 free and clear. How cool is that?

 

[Slinky Bender]

That's ho we got into this problem to start out with.

 

[elmo16]

That's ho we got into this problem to start out with.

We got into this problem because banks were greedy and gave home loans to anyone who walked through their door, not because of scam artists like John Beck.

 

[Lou Grant]

Saw this on another board and thought it hit the topic of this thread well:

[youtube]bNmcf4Y3lGM[/youtube]

 

[Slinky Bender]

A Downturn Begins NYTimes