Banks 'set to call in a swathe of loans'

Telegraph.co.uk ^ | 6/26/2007 | Ambrose Evans Pritchard

[WoofDog123]

I hadn’t heard about this cancelled auction, but did hear about a fund manager coming in and repricing his cdo’s from 80 to 30 in one day. This was over a month ago, don’t recall date better or if it was before the bear not-auction.

apparently there is an awful lot of this stuff out there in what the public regards as ‘safe’ funds, (even money markets?)

[OpusatFR]

“apparently there is an awful lot of this stuff out there in what the public regards as ‘safe’ funds, (even money markets?)”

CDO’s comprised of garbage loans were nicely repackaged and sold to pension funds and the like.

This is going to be nasty.

[durasell]

They ain’t making any more land. Real estate always goes up. Best investment you can make.

[EarthBound]

been working a very hard job for over 35 yrs.....you gonna tell me NOW that I don't get what is owed me?.....sorry....but I am..... I at least want what I paid in.....after that.....you can bitch all you want....

I fall into the mid-20's age group, and I think about this issue a lot. We know we're going to squat from all this. Most of us are planning on working into our 70's now, or at least my wife and I are. As for chaos "bitch"ing, he's merely mouthing what most of us in our 20s and 30s are thinking. Why on earth should we be forced to pay for y'all to retire when you should have tended to it yourselves?

The problem is that your generation bought into the gov't essentially taking care of you when you're "ready" to retire. This is definately not what I'd consider an option a conservative would take. Unfortunately, when you make your bed with the gov't, all you get is screwed. What you should have done, what we all need to do, is save more of our money and invest it wisely.

[ovrtaxt]

“We need more of a saving culture and less borrowing.”

http://www.fairtax.org

[djf]

Limey spelling, I guess!

[ken5050]

semantic query..

Isn't an "aggravated hard landing" a C-R-A-S-H?

[ovrtaxt]

You’ll get no flaming from me, bud. I’m 38, and I can’t tell you how much I agree.

The sixties generation has screwed up this nation, and it’s still coming to light how badly they’ve done it. You know, it’s forty years since the ‘summer of love’. Forty year periods are significant in the Bible. We’re about to see some crap come down, bigtime- and some very destructive cycles broken.

[listenhillary]

45 years old (Tail end boomer)

I’ll give up my SS if the tax ended now.

[BuffaloJack]

Am I reading this right?
You get a mortgage on your house, then the bank sells it to another bank for 85% of its face value. Some bidders only offering 30%. Damn, if my mortgage company offered me the opportunity to pay off my mortgage at these discounts, I’d use my savings and jump on it.

[Puddleglum]

makes me think of the 1929 margin calls

The rhetoric makes me think of the Penn Square Bank fiaso. I'll have to wait and see if the reality matches it.

[durasell]

Yeah, but it’s your house and a couple thousand oher houses bundled together.

[AppyPappy]

A lot of people are about to discover the problem of having too much debt. We paid off everything but the mortgage a few months back.

[Puddleglum]

Debt is loss of liberty; we are trying to prune ours.

[EverOnward]

Re you post #33 — I honestly do feel sorry for your generation for the reasons you stated and more...

[palmer]

I’ll give up my SS if the tax ended now.

Same here. I am the "last" boomer (44).

[capitalist229]

There is no crisis. Simply lower the prices until you sell more homes.

Debt and deflation are an explosive mix as demonstrated in the 30s.

We don't know what will happen because debt level is unprecedented.

Bernanky will save us, he said that the Fed can prevent any deflation, just print more dollars. To make it fair he will first confiscate all the gold.

BUMP

[AppyPappy]

Our strategy was to use savings to undo debt. Then we pay back the savings. People use savings like they should use debt. Debt is for emergencies, not savings.

[Cloverfarm]

I must be a boomer too (b. 1963) — I have a better chance of seeing a UFO land than seeing any of “my” social security money come back to me. Just figuring it’s going to go bust sometime in future. We’re making other plans.

My folks didn’t bank on SS either. Dad has another pension, Mom invested in teh company she retired from and it’s doing OK, and they do their arts/crafts stuff on the side.

Glad I had good role models ;-)

[starbase]

Lombard Street’s warning comes as fresh data from the US National Association of Realtors shows that the glut of unsold homes reached a record of 8.9 months supply in May. Sales of existing homes slid to an annual rate of 5.99m.

The median price fell for the 10th month in a row to $223,700, down almost 14pc from its peak in April 2006. This is the steepest drop since the 1930s.

Here on FR, the housing pessimists have long posted negative threads, which I have enjoyed reading, and always the housing optimists would respond sarcastically with "oh the sky is falling" and "oh, 5% decline, what a tragedy".

Well these measurements here are quite drastic, and drastically consistent, and in verifiable decline.

I think all the last 15 years have been an absolute fantasy land. It should have ended with the absurd tech bubble, but the real estate/debt bubble came to the "rescue" and kept the false readings going.

There's never any free lunch, and this claim that "all the risk has been packaged and sold off" was always mathematically impossible at the end of the day.

Looks like we know where the end of the road is. It's a place were math comes back into being.