Hmm.
Sure, house prices are down .. in selected areas. A lot of people bought homes and knowingly speculated using high LTV mortgages. So, ARMs reset and the speculators default.
Boo hoo. Too bad. When you go to Vegas, you can lose too.
Subprime ABS and CDOs are way down in price. Boo hoo. INVESTORS KNEW SUBPRIME WAS RISKY!
The market will clear. It always does.
Some of you are buying into the Democrats “The Financial Sky is Falling! Elect us, we will fix it!”
How about this - if you can’t afford a home, DON’T BUY ONE!!!!!!!!!!!!!!
You very obviously didn’t bother to read the article. Read it, then come back and make an informed comment.
You deserve an explanation for my conclusion that you didn’t bother to read the article.
You believe investors knew subprime loans were risky. Yet when a conservative pension fund buys a AAA-rated investment vehicle, they are shunning risk. If you had read the article, you would have learned the way very conservative investors seeking safe investments ended up eating massive risk.
You would understand the completely lack of transparency in the financials and understand how this is creating a liquidity crisis.
Please go back and read the entire article. You will learn a great deal about the cause of the financial pain we are all going to share for the next couple of years. Or more.
It’s still an abstraction for you. Wait until it becomes real.
My response is an anecdote: I joined a small credit union around 1993. In 2003, my credit union was bought by a CUINO (Credit Union In Name Only). I voted against the buyout of course even with the little I knew about the buyer. The offered CD rates immediately dropped about a point and the loans rates went up a little. Where before I got almost 5% on a CD, and could get a car loan for 7%, I was offered 4% CD's and 7.5% car loans (although home loan rates went down). The new CUINO steered funds to their stock investment "partner" which was for-profit unlike the CUINO. Likewise, loans were sold on the secondary market as opposed to being self-funded.
In short the credit union was smashed and replaced with an ABS and stock market scheme. I gladly invest in stocks, but anyone in general funds especially index funds right now is not paying attention. And as the ABS market seizes up, so does the source of funds for the CUINO loans. Do you really think the small mutual credit market that they destroyed can be put back together again?
He is definitely right, folks. From 1930 to 1940, the Market did indeed right itself!
“Hmm.
Sure, house prices are down .. in selected areas. “
No point in reading your comment past this. You did’nt read the article, and/or don’t understand what it says.
If you believe the “the bubble burst is selective”, then there’s no point discussing it with you.
>>How about this - if you can’t afford a home, DON’T BUY ONE!!!!!!!!!!!!!!<<
Ahhh. But apparently they COULD! ;)