Meltdown day for world economy? - Page 2

Sourceworx · 10-08-2008, 11:02 AM

[QUOTE=PlumberKhan;2794724]You're a good man, 'Fish.

Plenty of "folks" who could qualify for traditional mortgages opted for sub-primes to keep their monthly payments low...banking on the belief that their home would increase in value undeterred and they could resell.[/QUOTE]

I know a ton of people (morons?) who bought their homes on impulse, buying a home that was priced way beyond their means without putting two and two together and realizing there was no way they'd be able to make the payments.

The cause of this crisis goes beyond government and the banks.

CTM · 10-08-2008, 11:08 AM

[QUOTE=PlumberKhan;2794724]You're a good man, 'Fish.

Plenty of "folks" who could qualify for traditional mortgages opted for sub-primes to keep their monthly payments low...banking on the belief that their home would increase in value undeterred and they could resell.[/QUOTE]
There's a difference between "sub-prime" loans and ARMS. You seem to be convoluting the two.

Warfish · 10-08-2008, 11:11 AM

[QUOTE=PlumberKhan;2794724]You're a good man, 'Fish.

Plenty of "folks" who could qualify for traditional mortgages opted for sub-primes to keep their monthly payments low...banking on the belief that their home would increase in value undeterred and they could resell.[/QUOTE]

I can't honestly tell if you're being sarcastic or not.......:(

But I absolutely agree that many many people bought beyond their means in the belief that their interest-only, sub-prime or other "low-cost" loans would be fine due to increases in the value of their property, i.e. the Speculators, House Flippers and Plenty of Regular Folks looking to get more than they could afford.

The Housing Bubble collpases, the loans invert, property gets harder to sell and the credit market dries up, and alot of people are left holding the fiscal bag.

The conservative side of me says these folks took a risk, because they saw a potential big profit coming, or they lived beyond their means, or were ignorant and didn't inform themselves, or were led to beleive they'd be fine by mortgage companies. In any case, they still made a personal choice, and they alone should bear the burdens of that choice......

Of course, when your entire economy starts looking fragile because of the depth and width of this (and other) problems, the concept of personal responsabillity runs up againsty the concept of "best for the Nation as a whole". So I can see a bit of both sides of the bail/don't bail concept.

long island leprechaun · 10-08-2008, 11:24 AM

[QUOTE=sourceworx;2794733]I know a ton of people (morons?) who bought their homes on impulse, buying a home that was priced way beyond their means without putting two and two together and realizing there was no way they'd be able to make the payments.

The cause of this crisis goes beyond government and the banks.[/QUOTE]

The crisis also goes beyond sub-primes. Prime mortgage purchasers are now hitting record high default rates as well due to lost house equity, inability to convert loans, and massive unemployment.

What I'm struck by in all of this is the herd mentality reflecting in the patterns. People bought houses they couldn't afford or took loans they couldn't sustain over time for fear that housing would just continue to climb and be forever out of reach. They had to get in or believe they would be left out. The idea of cycles seemed lost in the thunder of hooves.

In the stock market... same thing. The panic is escalating due to no one wanting to be left holding the bag on when the great depression hits. But this too is cyclical. For those who rely immediately on their investments, it's one thing, but for those in thrifts who can hold out, now is not the time to be unloading (at the low point in the market) when all one is doing is locking in loss. The psychology is interesting.

jetstream23 · 10-08-2008, 11:40 AM

[QUOTE=bitonti;2794635]dow up about 70 points this morning

it's never as bad as the media thinks it is[/QUOTE]

Don't listen to the media, bit. Listen to the markets.

CTM · 10-08-2008, 11:45 AM

[QUOTE=long island leprechaun;2794764]The crisis also goes beyond sub-primes. Prime mortgage purchasers are now hitting record high default rates as well due to lost house equity, inability to convert loans, and massive unemployment.

What I'm struck by in all of this is the herd mentality reflecting in the patterns. People bought houses they couldn't afford or took loans they couldn't sustain over time for fear that housing would just continue to climb and be forever out of reach. They had to get in or believe they would be left out. The idea of cycles seemed lost in the thunder of hooves.

In the stock market... same thing. The panic is escalating due to no one wanting to be left holding the bag on when the great depression hits. But this too is cyclical. For those who rely immediately on their investments, it's one thing, but for those in thrifts who can hold out, now is not the time to be unloading (at the low point in the market) when all one is doing is locking in loss.[B] The psychology is interesting.[/B][/QUOTE]
Yup. Good post. It's why I stopped day trading. Had a nasty, uncontrollable habit of doing the same in quick moving markets. Bought on the way up, near the top thinking I was missing the next million dollar run, sold on the way down, near the bottom, thinking I was getting out before the stock was worthless.

The amazing thing was that I knew better, but just couldn't control the visceral response to market speed. It's a very strange feeling, I guess you would call it panic.

I've been tempted to dip my toe in again, but I don't know if this kind of tendency is one you can out think..

jetstream23 · 10-08-2008, 11:46 AM

[IMG]http://img517.imageshack.us/img517/7824/dow5yrlf4.jpg[/IMG]

bitonti · 10-08-2008, 11:52 AM

[QUOTE=jetstream23;2794797][IMG]http://img517.imageshack.us/img517/7824/dow5yrlf4.jpg[/IMG][/QUOTE]

honestly 23 this is not evidence of a meltdown

it's evidence of a correction

the market was overvalued for years, now it is correcting

it might even over-correct

all that is actualy good news

what would be bad news is a collapse.

jetstream23 · 10-08-2008, 12:00 PM

[QUOTE=bitonti;2794810]honestly 23 this is not evidence of a meltdown

it's evidence of a correction

the market was overvalued for years, now it is correcting

it might even over-correct

all that is actualy good news

what would be bad news is a collapse.[/QUOTE]

I agree. I'm not saying it's evidence of meltdown (and there was a ? in my thread title) but there are clearly things being done on a global basis that have never been done before in efforts to combat a very bad situation. This isn't the dotcom crumble of 2000 or the Asian financial crisis of 1988, or even the S&L problem. This seems to be worse.

I like corrections as well, but pointing to Dow up 70, as you did earlier when the Dow is down 5000 from it's recent high is like admiring the silverware on the Titanic as it is sinking. The problem isn't that we may likely see Dow 7500. It's that we may not return to anything like 10,000 in the next decade.

$2 Trillion in retirement assets have evaporated for Americans in the past 2 weeks. It may not "be as bad as the media says it is" but they are on to something.

bitonti · 10-08-2008, 12:39 PM

[QUOTE=jetstream23;2794826The problem isn't that we may likely see Dow 7500. It's that we may not return to anything like 10,000 in the next decade.
[/QUOTE]

we didn't know the tech bubble was coming

we didn't know the real estate bubble was coming

there will be another bubble, maybe alt energy, maybe space exploration

we don't know when it will arrive but something always comes up

Piper · 10-08-2008, 12:43 PM

[QUOTE=bitonti;2794912]we didn't know the tech bubble was coming

we didn't know the real estate bubble was coming

there will be another bubble, maybe alt energy, maybe space exploration

we don't know when it will arrive but something always comes up[/QUOTE]

Usually at the hands of private industry, not government programs.

jetstream23 · 10-08-2008, 05:03 PM

[QUOTE=bitonti;2794912]we didn't know the tech bubble was coming

we didn't know the real estate bubble was coming

there will be another bubble, maybe alt energy, maybe space exploration

we don't know when it will arrive but something always comes up[/QUOTE]

Tulips ;)

10-08-2008, 11:02 AM	#21
Sourceworx Hall Of Fame Join Date: Mar 2005 Location: Long Island Posts: 13,411	[QUOTE=PlumberKhan;2794724]You're a good man, 'Fish. Plenty of "folks" who could qualify for traditional mortgages opted for sub-primes to keep their monthly payments low...banking on the belief that their home would increase in value undeterred and they could resell.[/QUOTE] I know a ton of people (morons?) who bought their homes on impulse, buying a home that was priced way beyond their means without putting two and two together and realizing there was no way they'd be able to make the payments. The cause of this crisis goes beyond government and the banks.

10-08-2008, 11:08 AM	#22
CTM Hall Of Fame Join Date: Jan 2006 Location: Not bababooey and I resent the implication Posts: 21,029	[QUOTE=PlumberKhan;2794724]You're a good man, 'Fish. Plenty of "folks" who could qualify for traditional mortgages opted for sub-primes to keep their monthly payments low...banking on the belief that their home would increase in value undeterred and they could resell.[/QUOTE] There's a difference between "sub-prime" loans and ARMS. You seem to be convoluting the two.

10-08-2008, 11:11 AM	#23
Warfish JetsInsider.com Legend Join Date: Jan 2004 Posts: 35,000	[QUOTE=PlumberKhan;2794724]You're a good man, 'Fish. Plenty of "folks" who could qualify for traditional mortgages opted for sub-primes to keep their monthly payments low...banking on the belief that their home would increase in value undeterred and they could resell.[/QUOTE] I can't honestly tell if you're being sarcastic or not.......:( But I absolutely agree that many many people bought beyond their means in the belief that their interest-only, sub-prime or other "low-cost" loans would be fine due to increases in the value of their property, i.e. the Speculators, House Flippers and Plenty of Regular Folks looking to get more than they could afford. The Housing Bubble collpases, the loans invert, property gets harder to sell and the credit market dries up, and alot of people are left holding the fiscal bag. The conservative side of me says these folks took a risk, because they saw a potential big profit coming, or they lived beyond their means, or were ignorant and didn't inform themselves, or were led to beleive they'd be fine by mortgage companies. In any case, they still made a personal choice, and they alone should bear the burdens of that choice...... Of course, when your entire economy starts looking fragile because of the depth and width of this (and other) problems, the concept of personal responsabillity runs up againsty the concept of "best for the Nation as a whole". So I can see a bit of both sides of the bail/don't bail concept.

10-08-2008, 11:24 AM	#24
long island leprechaun Don't mess with Angel Eyes. All Pro Join Date: Jan 2006 Location: greenwich village, NYC Posts: 7,226	[QUOTE=sourceworx;2794733]I know a ton of people (morons?) who bought their homes on impulse, buying a home that was priced way beyond their means without putting two and two together and realizing there was no way they'd be able to make the payments. The cause of this crisis goes beyond government and the banks.[/QUOTE] The crisis also goes beyond sub-primes. Prime mortgage purchasers are now hitting record high default rates as well due to lost house equity, inability to convert loans, and massive unemployment. What I'm struck by in all of this is the herd mentality reflecting in the patterns. People bought houses they couldn't afford or took loans they couldn't sustain over time for fear that housing would just continue to climb and be forever out of reach. They had to get in or believe they would be left out. The idea of cycles seemed lost in the thunder of hooves. In the stock market... same thing. The panic is escalating due to no one wanting to be left holding the bag on when the great depression hits. But this too is cyclical. For those who rely immediately on their investments, it's one thing, but for those in thrifts who can hold out, now is not the time to be unloading (at the low point in the market) when all one is doing is locking in loss. The psychology is interesting.

10-08-2008, 11:40 AM	#25
jetstream23 recovering from turf toe Jets Insider VIP Join Date: Dec 2005 Location: Phoenix, AZ (New Jets Stadium Section 246) Posts: 31,588	[QUOTE=bitonti;2794635]dow up about 70 points this morning it's never as bad as the media thinks it is[/QUOTE] Don't listen to the media, bit. Listen to the markets.

10-08-2008, 11:45 AM	#26
CTM Hall Of Fame Join Date: Jan 2006 Location: Not bababooey and I resent the implication Posts: 21,029	[QUOTE=long island leprechaun;2794764]The crisis also goes beyond sub-primes. Prime mortgage purchasers are now hitting record high default rates as well due to lost house equity, inability to convert loans, and massive unemployment. What I'm struck by in all of this is the herd mentality reflecting in the patterns. People bought houses they couldn't afford or took loans they couldn't sustain over time for fear that housing would just continue to climb and be forever out of reach. They had to get in or believe they would be left out. The idea of cycles seemed lost in the thunder of hooves. In the stock market... same thing. The panic is escalating due to no one wanting to be left holding the bag on when the great depression hits. But this too is cyclical. For those who rely immediately on their investments, it's one thing, but for those in thrifts who can hold out, now is not the time to be unloading (at the low point in the market) when all one is doing is locking in loss.[B] The psychology is interesting.[/B][/QUOTE] Yup. Good post. It's why I stopped day trading. Had a nasty, uncontrollable habit of doing the same in quick moving markets. Bought on the way up, near the top thinking I was missing the next million dollar run, sold on the way down, near the bottom, thinking I was getting out before the stock was worthless. The amazing thing was that I knew better, but just couldn't control the visceral response to market speed. It's a very strange feeling, I guess you would call it panic. I've been tempted to dip my toe in again, but I don't know if this kind of tendency is one you can out think..

10-08-2008, 11:46 AM	#27
jetstream23 recovering from turf toe Jets Insider VIP Join Date: Dec 2005 Location: Phoenix, AZ (New Jets Stadium Section 246) Posts: 31,588	[IMG]http://img517.imageshack.us/img517/7824/dow5yrlf4.jpg[/IMG]

10-08-2008, 11:52 AM	#28
bitonti searching Hall Of Fame Join Date: Apr 2003 Location: Philly Posts: 38,786	[QUOTE=jetstream23;2794797][IMG]http://img517.imageshack.us/img517/7824/dow5yrlf4.jpg[/IMG][/QUOTE] honestly 23 this is not evidence of a meltdown it's evidence of a correction the market was overvalued for years, now it is correcting it might even over-correct all that is actualy good news what would be bad news is a collapse.

10-08-2008, 12:00 PM	#29
jetstream23 recovering from turf toe Jets Insider VIP Join Date: Dec 2005 Location: Phoenix, AZ (New Jets Stadium Section 246) Posts: 31,588	[QUOTE=bitonti;2794810]honestly 23 this is not evidence of a meltdown it's evidence of a correction the market was overvalued for years, now it is correcting it might even over-correct all that is actualy good news what would be bad news is a collapse.[/QUOTE] I agree. I'm not saying it's evidence of meltdown (and there was a ? in my thread title) but there are clearly things being done on a global basis that have never been done before in efforts to combat a very bad situation. This isn't the dotcom crumble of 2000 or the Asian financial crisis of 1988, or even the S&L problem. This seems to be worse. I like corrections as well, but pointing to Dow up 70, as you did earlier when the Dow is down 5000 from it's recent high is like admiring the silverware on the Titanic as it is sinking. The problem isn't that we may likely see Dow 7500. It's that we may not return to anything like 10,000 in the next decade. $2 Trillion in retirement assets have evaporated for Americans in the past 2 weeks. It may not "be as bad as the media says it is" but they are on to something.

10-08-2008, 12:39 PM	#30
bitonti searching Hall Of Fame Join Date: Apr 2003 Location: Philly Posts: 38,786	[QUOTE=jetstream23;2794826The problem isn't that we may likely see Dow 7500. It's that we may not return to anything like 10,000 in the next decade. [/QUOTE] we didn't know the tech bubble was coming we didn't know the real estate bubble was coming there will be another bubble, maybe alt energy, maybe space exploration we don't know when it will arrive but something always comes up

10-08-2008, 12:43 PM	#31
Piper Hall Of Fame Charter JI Member Join Date: May 1999 Location: L.I. NY (where the Jets used to be from) Posts: 13,197	[QUOTE=bitonti;2794912]we didn't know the tech bubble was coming we didn't know the real estate bubble was coming there will be another bubble, maybe alt energy, maybe space exploration we don't know when it will arrive but something always comes up[/QUOTE] Usually at the hands of private industry, not government programs.

10-08-2008, 05:03 PM	#32
jetstream23 recovering from turf toe Jets Insider VIP Join Date: Dec 2005 Location: Phoenix, AZ (New Jets Stadium Section 246) Posts: 31,588	[QUOTE=bitonti;2794912]we didn't know the tech bubble was coming we didn't know the real estate bubble was coming there will be another bubble, maybe alt energy, maybe space exploration we don't know when it will arrive but something always comes up[/QUOTE] Tulips ;)