August 14, 2007

Greater Expectations: Quotes and Psychology of a Modern Day Housing Bull.


John is a hard working middle-class man in a mixed blue collar and upcoming white collar neighborhood. A vestige of old times when working class groups of families purchased homes before the mention of any housing bubble or subprime mortgage ever hit the CNBC newswires. Now this neighborhood is experiencing a Renaissance that doesn’t include blue collar working class families. “I wouldn’t be able to purchase my own home if I were to buy it right now,” echoes John as many families in this neighborhood feel the same sentiment. The idea of using interest only mortgages or refinancing to tap into mortgage equity seem like a foreign language to his frugal and debt free way of life. The only debt that he has, he proudly tells me, is the mortgage debt which he only has a few years left to pay off. Welcome to a bygone era and the rhetoric of a past decade. We are living in a time where the definition of “home” is radically shifting. Take a look at some quotes from the ex-head honcho of the National Association of Realtors had to say over the past few years:

March 2005: " I believe that in years to come historians will see the beginning of the twenty-first century as the "golden age" of real estate. And I want to persuade you to take advantage of this historic opportunity. "

Source: Are You Missing the Real Estate Boom? Why Home Values and Other Real Estate Investments will Climb Through the End of the Decade-And How To Profit From Them" March 2005, p4. Author David Lereah

What made real estate so special in March of 2005? Did it all of sudden become supernatural and have uncanny healing powers? Nothing really changed except the fuel of a massive credit bubble and rhetoric like this was swallowed by buyers and sellers believing that they somehow found El Dorado and an endless money pit in their home. This language started many years ago but you can see even as of March of 2005, the psychology of many in the housing syndicate was such that housing was entering some kind of new era. Remember the book DOW 30,000? Maybe someone should write 500 Square Foot Box, $500,000. Even the last sentence about “I want to persuade you…” echoes of a sales pitch for a speculative product. There was no frame of economic reference aside from a tiny window of 2001 to 2005 that of course, made it seem that real estate was the hottest investment on the planet. And it was. But not anymore. Like any speculative bubble, those that get in early and are able to time the peak make out like bandits. Yet those that come late to the party have a hard time figuring out what happened. Even as the market was clearly showing signs of bubblicious behavior, we get more absurd housing teeth gnashing.

August 2005: "If you paid your mortgage off, it means you probably did not manage your funds efficiently over the years. It's as if you had 500,000 dollar bills stuffed in your mattress."

Source: David Lereah quote, August 2005 LA Times quote

Say what? So let me get this straight, if you paid off your mortgage you somehow have a problem managing your funds? Of course, the assumption here is that you should use the money to buy more homes and flip them like the Ukrainian gymnastic team. Maybe you should slap the virtual ATM of home equity lines and loans to the side of your house and turn on the shiny chrome spigot and let the equity ooze out. And guess what? People believed this and actually followed the lead of the housing syndicate. Mortgage equity withdrawals became a new industry unto itself. The problem with the statement above is that it isn’t completely financially prudent. In fact, the better advice would be to sell a home in an overpriced area, rent, and ride the bubble down. But no one in the housing industry would say this because if you would sell and wait for a few years that would mean that the following isn’t going on during your sabbatical from housing: Sales go down, refinances drop, construction falls, home upgrades no longer happen, and anything else that lives on the butter churning housing industry. Sell, upgrade, refinance, rinse and repeat seems to have stopped and as you may have currently noticed, the way housing goes so goes the world economy.

April 2006: David Lereah, the Realtors' chief economist, said he was still looking for a gradual slowdown in housing that would result in a drop of around 6 percent in home sales this year and a slowing in price gains to around 6 percent, compared with the double-digit gains in prices in recent years.

Source: St. Petersburg Times, April 26, 2006

This statement above highlights another fallacy in the housing syndicate logic. Yes, real estate can appreciate by double-digit returns with no economic fundamentally sound reason however, the downside has a safety net of only single digit drops. Think about the implication here for the consumer. “Well, if I buy I have the potential of 20 percent returns but if the market goes down, I will only lose 5 percent for one year and then we’ll be back at double-digit returns.” Hedge funds live off these analysis. Risk assessment and running market assumptions on potential future scenarios. Most consumers didn’t do either but bought with the unconscious belief that housing will go up drastically but the downside was very minimal. Clearly, we are now seeing with some Real Homes of Genius that homes can drop $100,000 in one year. So if they are wrong about the downside what else were they wrong about?

September 2006: "With a general background of growing population and favorable affordability conditions, home sales are staying at very healthy levels," said Lereah. "As a result, we'll continue to see above-normal home price appreciation for the foreseeable future."

Source: Chicken Little's revenge, Salon

Strike three amigo. We are now facing housing depreciation on a national level, the first time since the Great Depression. He gave this opinion in the same month that Bloomberg mentioned this fact! And it doesn’t seem like we are on track for a bounce back this summer with the mortgage market debacle. So we’ve given them long enough with one year. Clearly the Chief Economist is the figurehead for his industry, and as such he speaks for many in the industry. I was listening to a local housing show on the weekends that discusses the real estate market and the host did an absolute 180. All of sudden, he turned into a Democrat and started blaming mortgage brokers directly for the housing debacle. “I can’t believe these brokers with subprime lending…” as he went off on his opportunistic CYA moment. Keep in mind, a year ago this same person was echoing the benefits of adjustable rate mortgages and pumping housing like the next great invention. Unbelievable. But that is the psychology of a good sales person; once one market is dry make sure you are prepared to jump into the next market. And this host was since he touted his incredible ability of refinancing and saving folks from foreclosure. Still trying to churn the butter. And he had a broker call in and gave him a piece of his leveraged mind, "what you are doing is wrong. What we need is the Fed to drop rates. We didn't force people to sign."


No one forced anyone to sign but only a few years ago, anyone calling a housing bubble was labeled as a Chicken Little. Take a look at this PowerPoint from a big housing presentation calling any bubble believers Chicken Little back in October 2005:

Chicken Little Slide from Presentation

Many other quotes, information, and articles can be found at the once great site, David Lereah Watch that is no longer positing since the NAR has replaced Lereah with a new housing bull, Lawrence Yun. These people are important because they are the Chief Economist to one of the, if not, most powerful housing associations in the nation. The NAR has membership of over 1.2 million folks and the majority believe the party line. They have large advertising and marketing campaigns that fund their industry. In addition, these industries are some of largest contributors to both political parties. Do you think they are looking out for you or Mr. John worrying about the risky new buyers coming into his neighborhood?


There is a great article in the Orange County Register that came out August 12 called One street’s subprime struggle. It talks about a block in Santa Ana that is the epitome of the subprime risky mortgage collapse. There is one fantastic quote from one of the older owners who is almost done paying off his mortgage:

“"I never sell. I never refinance," Zambrano said. "I don't take money out of my house to buy a car or take a vacation. I'm not stupid."

Don’t tell that to some folks in the housing syndicate. They may think you have bad money management skills and will try to get you to slap a virtual American Express to the side of your home. Maybe John has a point about being frugal and trying to manage his debt wisely. Should we try to convince Mr. Zambrano about his poor money management ability and tell him about a wonderful HELOC that’ll fund a nice trip to Europe?



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35 Comments:

Chris said...

I love the man's attitude about locking his money up in his home.

When did people start looking at their primary homes as anything other than a liability if they still had a mortgage?

This has always bothered me even though I've been investing in RE since 01. I have never touched my home equity and only refinanced when rates on 15 year notes got insanely low in 2003.

And, when I hear people talking proudly about their equity I just want to shake them. I just don't know how to tell people that it's just play money unless they choose to use it.

Dr Housing Bubble said...

@chris,

You are absolutely right. The equity is only a true gain until you close escrow and have a cashier's check in your hand. If you are using a HELOC or Home Loan, you are only creating a lower rate credit line secured by your home. You still need to pay it back.

That is good that you are careful with your equity. Interesting that him stating the obvious comes off sounding like a foreign language especially in the post-housing bubble hang over.

Peppermint Hippo said...

Most people will believe what they want to believe. They will seek out the "experts" that support their hopes and ignore the ones who offer the counter view. In this case, people wanted to believe home prices would go up indefinitely, leading to riches without any real work. I recall the president saying that home ownership was the path the wealth for most Americans. Why think for yourself when there are experts and the president to think for you?

I know I'm preaching to the choir, but I hope one result of this bubble bursting is that people will place a higher value on financial/economic education and thinking for themselves.

Numpty McHoon said...

That OCR article is definitely worth a read. Check out this particluar little nugget:

During the boom years, finding another loan with another low-interest teaser rate was easy.

I wonder how many people thought they could just keep refinancing their homes- just like they might do their credit cards, migrating to a new one with a lower interest after their "0 APR" honeymoon ends?

Without realizing the well might eventually become dry, or there would be pre-payment penalties (this shouldn't be allowed by law, IMHO).

Perhaps before anyone applies for a mortgage or any kind of debt, there should be a test administered (maybe a web app as a public service) before the prospective borrower would be allowed to sign any loan doc.

But that might restrain the "sucker trade," and we couldn't have that in America, oh no siree.

John said...

peppermint hippo,

I just want to say amen to your post. I went through a financial crisis about 10 years when I too "followed what the experts said". I came out of that crisis with a new found skepticism. I don't trust ANY "authority" figure or "expert".

Dr Housing Bubble said...

All,

The Los Angeles County Median went up again:

LA County Median Up

Guess we're on our way to a rebound!

thamnosma said...

and another one gone and another one gone and another one bites the dust...

http://quote.morningstar.com/Quote/Quote.aspx?Ticker=TMA

Liberal said...

I was sitting in LAX 4 years ago waiting for my flight and this 20 something bimbo was talking on the cell besides me about the wonderful condo she just bought for zero down and that she finally could "afford" a new car and her "long deserved" vacation to Hawaii, courtesy, yes you guessed it right, her home ATM.
From that day on I knew something was wrong and saw the writing on the wall!
Haaa, I hope she has a good night sleeping in her car. Absolutely disgusting!

Dr Housing Bubble said...

@thamnosma,

And Mr. Jim was pumping this stock earlier this month because supposedly Jumbo mortgages were immune to this mess. They fell nearly 50% today and put their dividend on hold by the way.

Jim said "Shorts have bet against this company before, and they've been taken to the one-hour Martinizing cleaners. It will happen again." Sorry Jimbo, shorts made out like one armed drunken bandits today.

@liberal,

I totally understand. I would need to count my toes and fingers to tell you how many times folks have taken an exotic trip financed by the Bank of Home Equity. Or what about the folks driving around in $75,000 leased cars of the year?

Does anyone have any stats on car loans? I'd be curious to see the average loan/debt incurred over the past 7 years. Hardly anyone seems concerned about the balance so long as they can carry the monthly nut.

covered said...

Lots of good comments above. David L. is just another Ken Lay in my book. The problem is a societal one. The bimbo liberal refers to is a perfect example of the "new gilded age," entitlement society we've become. Dumbed-down and over extended to the max. Nothing is free. Cramer is a perfect example of the east coast, Wall st. type, safe in their little Manhattan bubble that didn't "get it" as this was happening all around us. I mean his teevee show or book is called something like "Watch TV and Get Rich." So that's what we've become? How lazy and stupid do you have to get!? Booyah all the way to the poor house. Just so long as they show Americam Idol and we get the dish on Paris and Lindsay, it's all good...right? Ugh.

Liberal said...

Covered.. Great comment about Cramer. Sometimes I feel I'm the only one who thinks this guy is a complete fraud and should be investigated for trying to manipulating stocks\market!
He is in the same league like all the other shysters and "celebrities" turning this country into a mindless dump.
Below is an email I received and for me it clearly sums it up.

The following was written by Ben Stein and recited by him on
CBS Sunday Morning Commentary

Herewith at this happy time of year, a few confessions from my
beating heart: I have no freaking clue who Nick and Jessica are. I
see them on the cover of People and Us constantly when I am buying
my dog biscuits and kitty litter. I often ask the checkers at the
grocery stores. They never know who Nick and Jessica are either. Who are they? Will i t change my life if I know who they are and why they have broken up? Why are they so important?

I don't know who Lindsay Lohan is either, and I do not care at all
about Tom Cruise's wife.

Am I going to be called before a Senate committee and asked if
I am a subversive? Maybe, but I just have no clue who Nick and
Jessica are.

If this is what it means to be no longer young. It's not so bad.

Next confession:
am a Jew, and every single one of my ancestors was Jewish.
And it does not bother me even a little bit when people call those beautiful lit up, bejeweled trees Christmas trees. I don't feel
threatened. I don' t feel discriminated against. That's what they are: Christmas trees.

It doesn't bother me a bit when people say, "Merry Christmas" to
me. I don't think they are slighting me or getting ready to put me in a ghetto. In fact, I kind of like it. It shows that we are all brothers and sisters celebrating this happy time of year. It doesn't bother me at all that there is a manger scene on display at a key intersection near my beach house in Malibu . If people want a creche, it's just as fine with me as is the Menorah a few hundred yards away.

I don't like getting pushed around for being a Jew, and I don't
think Christians like getting pushed around for being Christians. I think people who believe in God are sick and tired of getting pushed around, period. I have no idea where the concept came from that America is an explicitly atheist country. I can't find it in the Constitution, and I don't like it being shoved down my throat.

Or maybe I can put it another way: where did the idea come from
that we should worship Nick and Jessica and we aren't allowed to
worship God as we understand Him?

I guess that's a sign that I'm getting old, too.

But there are a lot of us who are wondering where Nick and Jessica came from and where the America we knew went to.

In light of the many jokes we send to one another for a laugh, this is a little different: This is not intended to be a joke; it's not funny, it's intended to get you thinking.

Billy Graham's daughter was interviewed on the Early Show and
Jane Clayson asked her "How could God let something like this
Happen?" (regarding Katrina)

Anne Graham gave an extremely profound and insightful response.
She said, "I believe God is deeply saddened by this, just as we are,
but for years we've been telling God to get out of our schools, to
get out of our government and to get out of our lives.

And being the gentleman He is, I believe He has calmly backed
out. How can we expect God to give us His blessing and His protection if we demand He leave us alone?"

In light of recent
events...terrorists attack, school shootings, etc. I think it started when Madeleine Murray O'Hare (she was murdered,) complained she didn't want prayer in our schools, and we said OK.

Then someone said you better not read the Bible in school. The
Bible says thou shalt not kill, thou shalt not steal, and love your neighbor as yourself. And we said OK.

Then Dr. Benjamin Spock said we shouldn't spank our children
when they misbehave because their little personalities would be
warped and we might damage their self-esteem (Dr. Spock's son
committed suicide). We said an expert should know what he's talking about and we said OK.

Now we're asking ourselves why our children have no conscience,
why they don't know right from wrong, and why it doesn't bother them to kill strangers, their classmates, and themselves.

Probably, if we think about it long and hard enough, we can
figure it out. I think it has a great deal to do with "WE REAP WHAT WE SOW."

Funny how simple it is for people to trash God and then wonder
why the world's going to hell.

Funny how we believe what the newspapers say, but question what
the Bible says.

Funny how you can send 'jokes' through e-mail and they spread
like wildfire but when you start sending messages regarding the
Lord, people think twice about sharing.

Funny how lewd, crude, vulgar and obscene articles pass freely
through cyberspace, but public discussion of God is suppressed in
the school and workplace.

Are you laughing?

Funny how when you forward this message, you will not send it
to many on your address list because you're not sure what they
believe, or what they will think of you for sending it.

Funny how we can be more worried about what other people think
of us than what God thinks of us.

Pass it on if you think it has merit. If not then just discard
it... no one will know you did. But, if you discard this thought
process, don't sit back and complain about what bad shape the world
is in.

Liberal said...

DR. HB,
the story below is being suppressed by the major news organization (Reuters\AP. I know it has nothing to do with housing but shows in what sad state our country is in. I like to post it here so more people know about it!
Thanks

Illegal Aliens with Prior Charges Murder 15 year old Texas Girl
(Story Quarantined by news wires to prevent national exposure)

August 13, 2007

CONTACT: ALIPAC, press@alipac.us, (866) 329-3999, www.alipac.us

Court documents are shedding more light on the rape and murder of Dani Countryman, a 15 year old American girl from Texas, who was murdered in an apartment in Milwaukee, Oregon on July 28. Authorities have charged two illegal alien cousins with aggravated murder.

Alejandro Emeterio "Alex" Rivera Gamboa, 24, and Gilberto Javier Arellano-Gamboa, 23 have admitted to being in the US illegally, according to Immigration and Customs Enforcement. Rivera Gamboa was issued an Oregon ID card and avoided deportation even though he has been arrested for drunk driving four times since 2000!

Rivera has admitted to placing his foot with force down on Countryman's neck, while his cousin Gilberto struggled with her during the rape. Authorities have matched a bloody shoe print on the body to Rivera's shoe.

"Dani Countryman is dead because our government failed to secure our borders and enforce our existing immigration laws," says William Gheen of ALIPAC. "The suspects in this case were shown, by our state and federal governments, that they could break many American laws without any serious penalties. Hell, the state of Oregon even aided them by giving them an ID! It is no wonder that many illegal aliens escalate their crimes into the realms of rape and murder. How many more Americans must suffer or die before our nation takes action"?


On the date of this release, this story has been confined to the New Media of talk radio and the Internet, with only newspapers in the states of Oregon and Texas reporting. We believe that the Associated Press has confined the story to those two states. This information can be verified by doing Google News searches, which reveal the quarantine of the story. No mention of the story exists at all on Reuters. No major networks have picked up this case yet.

ALIPAC volunteers across America are being asked to forward this story to break through the Associated Press quarantine on this story, as it is clearly of national interest, considering the high profile case of the execution style murders by illegal aliens in Newark, NJ. All help getting this preventable and horrific story of national interest out to the public is appreciated.

Dani Countryman is dead due to the immigration policy failures in the US.

For more information, please visit www.alipac.us

###

Paid for by Americans for Legal Immigration
Post Office Box 30966, Raleigh, NC 27622-0966
Tel: (919) 787-6009 Toll Free: (866) 329-3999

Mr. Bean said...

Dear HB - Love your blog and hate to see it used as a place to disseminate Bible pushing agenda. So inappropriate. I'm referring to "Liberal's" post about what Ben Stein allegedly said. According to Snopes.com, the hoax busting website, Ben Stein only wrote part of that speech. The rest of it was tacked on by the religious right(eous). from SNOPES "Update: In mid-2006, someone added the following coda (not written by Ben Stein) to this piece. It combines older items about a TV appearance that Anne Graham Lotz (the daughter of evangelist Billy Graham) made just after the September 11 terrorist attacks and the false claim that the son of child care expert Dr. Benjamin Spock committed suicide:" (end update).

Below is the tacked on part that I'm sure Ben Stein would have nothing to do with.

"Liberal" please check your facts before posting them as the gospel truth. Pun intended.


In light of the many jokes we send to one another for a laugh, this is a little different: This is not intended to be a joke; it's not funny, it's intended to get you thinking. Billy Graham's daughter was interviewed on the Early Show and Jane Clayson asked her "How could God let something like this Happen?" (regarding Katrina) Anne Graham gave an extremely profound and insightful response. She said, "I believe God is deeply saddened by this, just as we are, but for years we've been telling God to get out of our schools, to get out of our government and to get out of our lives. And being the gentleman He is, I believe He has calmly backed out. How can we expect God to give us His blessing and His protection if we demand He leave us alone?"

In light of recent events...terrorists attack, school shootings, etc. I think it started when Madeleine Murray O'Hare (she was murdered, her body found recently) complained she didn't want prayer in body our schools, and we said OK. Then someone said you better not read the Bible in school . the Bible says thou shalt not kill, thou shalt not steal, and love your neighbor as yourself. And we said OK. Then Dr. Benjamin Spock said we shouldn't spank our children when they misbehave because their little personalities would be warped and we might damage their self-esteem (Dr. Spock's son committed suicide). We said an expert should know what he's talking about. And we said OK. Now we're asking ourselves why our children have no conscience, why they don't know right from wrong, and why it doesn't bother them to kill strangers, their classmates, and themselves. Probably, if we think about it long and hard enough, we can figure it out. I think it has a great deal to do with "WE REAP WHAT WE SOW." Funny how simple it is for people to trash God and then wonder why the world's going to hell. Funny how we believe what the newspapers say, but question what the Bible says. Funny how you can send 'jokes' through e-mail and they spread like wildfire but when you start sending messages regarding the Lord, people think twice about sharing. Funny how lewd, crude, vulgar and obscene articles pass freely through cyberspace, but public discussion of God is through suppressed in the school and workplace. Are you laughing? Funny how when you forward this message, you will not send it to many on your address list because you're not sure what they on believe, or what they will think of you for sending it. Funny how we can be more worried about what other people think of us than what God thinks of us. Pass it on if you think it has merit. If not then just discard it... no one will know you did. But, if you discard this thought process, don't sit back and complain about what bad shape the world is in

Mr. Bean said...

Dear HB,

Ewww. Now your blog is being used to push some racist, illegal immigrant agenda. Hey, "Liberal". Why don't you get your own blog so the rest of us can read and contribute on topic.

HONESTLY said...

Hey Liberal!

"Dani Countryman is dead due to the immigration policy failures in the US."

This must be the most idiotic statement ever posted. Why don't take your stuff and post it to a group that accepts your racist pig nazi personality.

Liberal said...

Mr. Bean and HONESTLY..
Keep on putting your head in the sand and as great liberal enablers call anyone with a different view a "Nazi".. like any of you fat and self serving morons know what Nazis are.
DR. HB has the power to delete this and thats what I put into my posting:
I like to post it here so more people know about it!
Thanks
I'm just glad that freedom of speech is well and alive in this country......for deranged liberals.
and "honestly" for your statement about the racist pig nazi personality in connection with a strangled 15 year old.. You have no shame, do you??

thirdloaf said...

"Liberal", you knew your posts would elicit these kinds of responses.
I'm a big fan of this blog, besides Dr. HB's posts, it has a good community that contributes constructively to the issues at hand. Can we PLEASE keep it about the housing bubble.
thanks.

Kaz said...

liberal,

Please keep post at least close to the topic. I don't read this blog for religious topics or the issues about protecting our border - unless it affects the housing bubble. I think its rather rude to introduce subject matter that will incite arguments with an audience that is clearly NOT here for those topics. Please post them on blogs that cater to the subjects you are interested in and don't sully this blog's great content and discussion.

Mr. Bean said...

Dear HB, I too am a big fan of your blog, but I won't continue to read it if racist, self-serving invective is posted. There's other sites for that. I hope it's not true, that as Liberal claims, you condone his postings.
I for one, hope your blog sticks with the subject at hand.

On another note, how about that CountryWide bankruptcy?

Dr Housing Bubble said...

All,

I appreciate all the comments regarding this post. How it deviated from the housing market, I’m not sure. This is the freedom of the internet. If anything, an open discourse is important and freedom of speech if anything is a corner stone of most blog communities. I do not condone anyone’s posts. It is impossible to police every post and censor comments – the only comments I have ever deleted are blatant spam. We have over 100,000 unique visitors a month.

That is the primary reason for people logging on to post comments. From the data I have gathered, only .001 percent of the readers here actually post comments. We have a great community here and let us stay on topic.

Thanks,

Dr. Housing Bubble

Liberal said...

...I hope it's not true, that as Liberal claims, you condone his postings...
This is exactly the lying,spinning liberal BS I am so sick about!!
Where MR. BEAN did I state that DR. HB "condones" my posting, tell me where??
You are small people, one posting in thousands you which doesn't agree with you or is off topic you become belligerent and insulting.
Like I said, you have no shame!
If DR. HB deleted my post it would have been completely alright with me, because I respect his blog and whatever he does with it. But for you it's all threat and " but I won't continue to read" if it doesn't cater to your flavor!!!

People like you disgust me, you cannot rise above your idiotic partisan venom, you cannot just read the stuff, disagree and keep on going. No people like you have to call me racist, a Nazi, insensitive (reading your posting I can tell how sensitive you are)just because you disagree with me.
You liberals love to censor everyone else but always cry that you get censored.
You make me sick.
Do you really think this is all a insulated "financial bubble" what is going on in this country with the real estate market? If you belief this then it is time to pull your head out of the sand and smell the roses.

thamnosma said...

I generally agree that it's more worthwhile to stay on topic here. Comments on other social issues are of general interest, but no reason to dilute housing discussions for topics well covered on other blogs.

That being said, Liberal posted about issues affecting many of us. Mr. Bean pointing out that the Stein article may have been altered was just as worthy.

However, Mr. Bean's and Honestly's personal invective against Liberal are far more disturbing than anything Liberal posted. It certainly exposes them as the sort of leftist bloggers found on Daily Kos, who happily toss out language like "racist, pig, etc" when they oppose a point of view. Challenging the system for permitting criminal behavior by illegal immigrants is a social issues one can have various takes on without resorting to hateful, vicious name calling. There was nothing nazi-like or pig-like in Liberal's comments.

Sad you guys can't present an opposing viewpoint without resorting to such tactics. It only shows a lack of integrity and intellectual capability

Liberal said...

I cant belief I even post this here, but after these attacks I am breathless and disheartened about the vile
attitude from these people. These are the open minded, multicultural sophisticated people wanting to make our world BETTER??
OK, let me tell you what you know about the NAZIS, you know nothing, all you know is rhetoric, slander and division. I immigrated 17 years ago to this country from Europe, I am a citizen since 8 years and I am applaud by what is going on in this country! Being called racist and a NAZI by some left wing idiots trumps everything.
My uncle's father was kidnapped by the NAZIS in Poland for slave labor in Germany, my then 15 year old uncle crawled into the truck to not being left alone because his mother died a couple years earlier.
My family lost everything because of the NAZIS (you know horrible people like me)...
I am crying now...sorry that I don't live up yo your expectation of an IDEAL socially conforming citizen... 1984..

Mr. Bean said...

Hey Liberal - have you checked your lithium levels lately?

I happen to be Jewish and from a survivor family. And I didn't call you a Nazi or racist. Please re-read my post and slander me accurately.

Now. Can we get back to housing?

Mr.Mortgage said...

Disturbing news from large prime wholesaler. Signed loan docs and they may not fund because of the loan being unsaleable.
http://thegreatloanblog.blogspot.com/

Liberal said...

Wow MR. Bean, that makes us all a wonderful, loving family, doesn't it??
You cannot even find one kind word! What a surprise that is. To refresh your memory:
...but I won't continue to read it if racist, self-serving invective is posted.
And by the way, you must have been through a hell of a lot of suffering YOURSELF to become such a vile person, haven't you? Or is it all talk again?

v said...

Dr Housing Bubble the site still rules..even though it's a little off topic.

More "Americans" die by the hands of other Americans than by illegal aliens..hell more people die by heart attacks than attacks by illegal aliens.

I know that the real outrage was that Dani Countryman was white and therefore should not have been killed by a Brown man...Would you have the same outrage if he was white?..a legal immigrant?


Religion is simple..If you're healthy and wealthy God loves you, if your poor and in bad health God hates you.

God loves you if you made money flipping your house but he doesn't love you when you can't sell it.

Mr. Bean said...

Right, on V. I can't tell you how many times I've opened the paper and see White girls raped and murdered by White men who ARE legal citizens. Oh, and let's not forget Hispanic girls who are victims of men of all colors, or doesn't that count?

Brown is the new Black, I guess. All the vitriol aimed at Hispanics used to be reserved for blacks.

Oh, and whie we're worrying about all the illegals stealing our chicken-plucking jobs, let's not forget that our gov't has made it legal for corporations to ship of white collar jobs to other countries. Anyone called AMEX and talked to someone in Bangalore lately. Losing these well paying jobs to cheap foreign labor is only going to contribute to the demise of the housing market. On the bright side, maybe those from India, China and other countries will be able to afford our overpriced housing. Blaming illegal aliens for everything is just a smoke screen.

covered said...

Wow...did this thread ever derail in a hurry. My original post was directed toward the masses that rely upon the media (Television in particular) to influence their socio-economic views of our present society and all it entails, including making their own informed financial decisions, which I think, but can't be certain, Dr. HB would agree with me that this blog is all about.

Ben Stein's name came up. I saw Mr. Stein on television recently saying everything's great, no problem, la la la. I don't happen to agree with him. The following is an excerpt from Doug Kass of Seabreeze Partners who is a frequent guest on Laurence Kudlow's CNBC financial show (and a frequent contributor to James Cramer's website.)

Kass: Ben Stein Whistles Past Mortgage Mess

By Doug Kass
RealMoney Silver Contributor
8/15/2007 12:29 PM EDT
Click here for more stories by Doug Kass

This blog post originally appeared on RealMoney Silver on Aug. 15 at 8:20 a.m. EDT.From my perch, one of the most astonishing features of the recent decline in stocks and rise in credit spreads is the smug rejection of the notion that "things have changed" -- particularly of a credit nature.

No better view of the ostrich-in-the-sand mentality was delivered than by warm and cuddly

actor/lawyer/columnist/comedian/economist/
Clear Eyes shill Ben Stein in this weekend's business section of the New York Times, and then again on CNBC Monday evening.

In the past, I have admired the common sense and logic of argument in Stein's writings. Maybe Stein was acting this week, as he did in the role of the economics teacher in the classic movie Ferris Bueller's Day Off. After all, on Sir Larry Kudlow's show, Stein suggested that the mortgage lenders will "end up fine," and he concluded that the subprime mess is a media hoax in an attempt to "talk America into a panic." Excuse me?

Tell that to Thornburg Mortgage (TMA - commentary - Cramer's Take - Rating), which is temporarily ceasing loan production, Countrywide Financial (CFC - commentary - Cramer's Take - Rating), American Home Mortgage, Accredited Home Lenders (LEND - commentary - Cramer's Take - Rating) or the millions of individuals who are about to lose their homes and those that can no longer get a mortgage. Or tell it to the investors in the Bear Stearns (BSC - commentary - Cramer's Take - Rating) hedge funds and the Sentinel Cash Management Fund.

Tell it to the homeowners who live next to foreclosed homes who are about to rein in their own spending for fear that they might be the next foreclosure. Or tell it to the Wal-Mart (WMT - commentary - Cramer's Take - Rating) customers and mall customers who are no longer buying. Or tell it to the U.S. banks that are caught with hundreds of billions of dollars of illiquid bridge loans. Or tell it to the foreign banks that are taking multibillion-dollar writedowns and are reining in their credit activity. Or tell it to the employees at brokerage firms, banks and retailers who will soon be laid off.
The subprime market is not an isolated problem as suggested by Stein; it is only the beginning of the chain.

The global credit bubble of leveraged financial engineering (and ownership of risky assets) has been pierced. Wall Street sold arcane and illiquid products with promises of limited risk and fat profits. I have fully covered the causality and chain reaction of deteriorating subprime on the broader world credit markets on The Edge. Throughout my chronicles, bulls scoffed.

It is now clear, however, that our financial and investment world is so tightly wound and levered that the likely fallout is going to be far broader than almost anyone, except an outspoken minority, expects. What had been a liquidity problem is now morphing into a solvency problem in a wide and surprising array of assets and companies, including money market funds, Canadian trusts, cash management funds, mortgage companies, investment bankers, etc.

The price discovery in the credit markets will inevitably result in further wealth destruction, bankruptcies and an ever-increasing risk-aversion, regardless of central-bank behavior. The excessive use of cheap, mispriced credit is the source of the problem, and providing more liquidity (as central bankers do) can hardly be considered a healthy solution. Our financial system is like an alcoholic who has had too much to drink -- the solution is not to serve up another round of drinks but rather to close the bar.
Stein, like others, seems to endorse the ludicrous notion that there remains a negativity bubble. Many were wrong three months ago, and Stein is wrong today, as stocks and credit don't fall in the manner that they have in the past month if there is broad-based pessimism. Rather, with the benefit of hindsight, it is now clear that there was a bubble in optimism, as disbelief had been suspended on the part of buyers of credit, buyers of homes and buyers of stocks.

In his now-famous interview with Erin Burnett, Jim Cramer went on a rant in which he expressed his idea that certain members of the Fed didn't understand the severity of the current credit problem.

Jim Cramer knows how bad the situation is.

Ben, pardon my French (and my reference to Ferris Bueller's Cameron Frye), but on the subject of credit, you are clueless.

The credit event that you dismiss is already morphing into an economic event.

Liberal said...

It never ceases to amaze me how morally corrupted the so called "liberals" who try monopolize these kind of blogs are.
Statements like this:I know that the real outrage was that Dani Countryman was white...and..Brown is the new Black, I guess. All the vitriol aimed at Hispanics used to be reserved for blacks...


Is that what the "understanding, open minded and
progressive left" are all about?
Like I said before, people like you have no shame and hide behind the mantle of humanity. You will excuse or minimize anything as long it fits into your deranged worldview.. do I hear Stalin knocking?
All over the place blogs like this are hijacked by commies and suddenly nothing beside your views are permitted anymore, else you are threatening to "never read it again" or spew your morally twisted garbage that strangling of a 15 year old by two "brown" (your words)illegals is less of a crime then when a "white" man does it.

This kind of rhetoric is so repulsive it takes my breath away. But I bet you also have a smug comment for that too.

v said...

Smug..nope just using facts. I mean I can't help being right or cool for that matter, or attractive.

Would you be as outraged if Dani was an illegal alien?..Would you be as outraged if an "American" killed an illegal alien?

Would Jesus kick out illegal aliens?..or I mean would God kick out illegal aliens(in the case that that messiah is still coming)

You can attack by calling others commies or liberals or anything you like as that's the only way you can win an argument is by attacking the person instead of providing clear cut arguments.

I have no problem with you be against illegal immigration, but don't bring God or god in to it as according to the Bible all beings were created by Him.

It's not rhetoric when the statics show that you're more likely to be killed by an "American" than by an illegal...when was the last time you were attacked by an illegal? Did the kids that beat you up in high school illegal? Was Stalin illegal? Were the commies illegal?

The answer is no to all of the above...except for the part of you being beat up in high school.

Hieu said...

Please do not bring God into the discussion. People who bring God into the discussion are the ones who has nothing else to say so they have to resort to the unprovable.

I didn't verify the Dani Countryman story, but if it did happened, it is horrible. I don't care if it was committed by blacks, whites, asians, mexicans, legals, or illegals... it is still horrible. To me, it is more news worthy than Paris Hilton going to jail or getting out of jail. Beside the viciousness of the crime, the other troubling aspect of the story is that the offender was arrested for drunk driving 4 times. That is 4 more times than any body should be arrested for. If the immigration policy was followed or working properly, he should have been deported when he committed the first offense. Illegals should not be treated differently because they're illegals.

Liberal said...

http://www.nwcn.com/statenews/oregon/stories/NW_081507ORN_countryman_murder_rape_charge_LJ.382d22d3.html

Jennifer said...

All the doom & gloom hyped in the market and news media; I personally believe the market is starting to make a turn around.

v said...

Yes it can't go down forever, but even Investors Business Daily suggests extreme caution in buying equities at the present time. The market is definitly in a correction but there are some really great sectors out there...Housing on the other hand and mortgage based securities are getting rocked...I wish I could figure out which ones will go even lower so they can be shorted.