House of cards
02-17-2009, 03:47 PM
#21
Registered User
There were two things stated in the show that set me to thinking.
One former sub-prime mortgage broker pointed out that you cannot sell real estate without a license, you can't even cut someone's hair without a license but "loan originator", "loan officer" or whatever they want to call themselves does not require any qualifications except salesmanship. Now I realize that there are many knowledgeable, ethical people in the loan origination business, but there are no laws to protect us from the others.
The other thought provoking statement is from the hedge fund manager who foresaw the bursting of the bubble and made a billion dollars for his clients off of it. He flat out stated that housing won't right itself without a "Darwinian flush." But our government is working frantically to prevent the very thing that is needed.
One former sub-prime mortgage broker pointed out that you cannot sell real estate without a license, you can't even cut someone's hair without a license but "loan originator", "loan officer" or whatever they want to call themselves does not require any qualifications except salesmanship. Now I realize that there are many knowledgeable, ethical people in the loan origination business, but there are no laws to protect us from the others.
The other thought provoking statement is from the hedge fund manager who foresaw the bursting of the bubble and made a billion dollars for his clients off of it. He flat out stated that housing won't right itself without a "Darwinian flush." But our government is working frantically to prevent the very thing that is needed.
02-17-2009, 05:28 PM
#22
Thread Starter
I don't think that they are trying to prevent it but they are trying for the "soft landing" without overshoot.
If they get to a point where banks have to call notes it could get really ugly.
it will probably not finish crashing for 3-5 years.
as jobs fall off more and more will fall into the abyss.
we're fortunate that we have owned our house long enough that equity isn't an issue.
but had we bought in the few years and had stretched to buy, we'd be in a world of hurt without my income.
If they get to a point where banks have to call notes it could get really ugly.
it will probably not finish crashing for 3-5 years.
as jobs fall off more and more will fall into the abyss.
we're fortunate that we have owned our house long enough that equity isn't an issue.
but had we bought in the few years and had stretched to buy, we'd be in a world of hurt without my income.
02-17-2009, 05:30 PM
#23
Thread Starter
and what's wrong with training as a pizza delivery guy as qualification for loan originator? 
a good smile and a trusting personality was all it took.
hell most of these kids didn't even know enough to know that they were lying.
a good smile and a trusting personality was all it took.
hell most of these kids didn't even know enough to know that they were lying.
02-17-2009, 07:19 PM
#24
Registered User
In my opinion, pizza delivery guy should be adequate preparation for many jobs: loan originator, Realtor, securities dealer, etc. Then we'd educate ourselves to "caveat emptor" and we'd be better off than today's sham where there's an illusion of fair play and fiduciary responsibility to the client. But that's just one man's opinion...
02-18-2009, 03:32 PM
#25
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Originally Posted by boltonblue,Feb 17 2009, 10:28 PM
If they get to a point where banks have to call notes it could get really ugly.
it will probably not finish crashing for 3-5 years.
as jobs fall off more and more will fall into the abyss.
it will probably not finish crashing for 3-5 years.
as jobs fall off more and more will fall into the abyss.
02-18-2009, 05:59 PM
#26
Thread Starter
as an engineer geek I tend to be very rational.
I also studied economics and financial accounting as well as some fairly advanced mathematics.
suffer "a little" is not the issue.
there is substantial systemic risk is in the system.
you don't want to see where this could go.
if the bank gave you two weeks notice, could you come up with your mortgage balance.
Did you know your bank could do that?
It happened in the 30's, when valuations in the surrounding area got too depressed banks would call mortgages.
Of course few could pay, so they would also become another victim in a downward cycle.
BTW I'm not disagreeing that a correction needs to occur.
but we don't want a radical overshoot in the correction.
I also studied economics and financial accounting as well as some fairly advanced mathematics.
suffer "a little" is not the issue.
there is substantial systemic risk is in the system.
you don't want to see where this could go.
if the bank gave you two weeks notice, could you come up with your mortgage balance.
Did you know your bank could do that?
It happened in the 30's, when valuations in the surrounding area got too depressed banks would call mortgages.
Of course few could pay, so they would also become another victim in a downward cycle.
BTW I'm not disagreeing that a correction needs to occur.
but we don't want a radical overshoot in the correction.
02-18-2009, 08:43 PM
#27
Registered User
Are today's residential mortgages callable if one is current on payments? I don't remember anything like that, and I tend to read all the papers I'm signing. But it's been about 16 years since I closed the last mortgage.
FYI, I did the low-level math classes through differential equations, and a couple of graduate-level statistics classes just because it seemed like a good idea at the time. But that was years ago, and us IT geeks never use that stuff...and it is definitely a "use it or lose it" skillset.
I am of the opinion that the gene pool needs a major shot of chlorine...Let the chips fall where they may...
FYI, I did the low-level math classes through differential equations, and a couple of graduate-level statistics classes just because it seemed like a good idea at the time. But that was years ago, and us IT geeks never use that stuff...and it is definitely a "use it or lose it" skillset.
I am of the opinion that the gene pool needs a major shot of chlorine...Let the chips fall where they may...
02-19-2009, 05:40 AM
#28
Thread Starter
ok so if you took diffies, you know what can happen to an underdamped system.
Investors are the equivalent of the second derivative forward feedback term.
The undershoot can be severe. it would result in a lot more job losses.
In one respect hopefully that has already happened and we'll see a rebound.
I understand your frustration with the gene pool. There are very few real stressors to give darwin a chance to work on US society in general.
Investors are the equivalent of the second derivative forward feedback term.
The undershoot can be severe. it would result in a lot more job losses.
In one respect hopefully that has already happened and we'll see a rebound.
I understand your frustration with the gene pool. There are very few real stressors to give darwin a chance to work on US society in general.
02-19-2009, 05:48 AM
#29
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02-19-2009, 06:40 AM
#30
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Scott, I do hope that a bunch of bond traders are not your moral compass.