Where to start??? Fannie/Freddie, Lehman, AIG, Merril…and the guvment response
I know, I know…there is so much going on in the financial markets right now. There are a million people giving a million different opinions on things. Well, I will have my thoughts on things posted here in the next few days.
First off, there is a TON to digest, and I don’t think ANYBODY knows exactly how this is going to play out. That said, I do know one thing though: this blog tried to tell anybody that would read it, what was actually going on in the mortgage market. I think it is safe to say that the mortgage market is the main catalyst for the problems we are seeing in the financial world right now. Where are are the ‘bubble nay-sayers’ at this time? Maybe a few of us ‘bloggers’ did get it right!
I am working on getting my thoughts together, because to discuss this situation requires a books worth of material, not a just a long blog post. There are so many issues that effected things in different ways. Then there is the unprecedented ‘merger’ of guvment and business that we haven’t really seen before.
Anyway, I know it isn’t very much right now, but look for an update to this post in the next several days.
Thank you for your patience and also understanding that this blog has been done for ‘free’ since it started back in 2005. Combine that with the fact that this blog’s main purpose was to educate people so they would NOT be feeling the pain that was going to be coming, and that is now here.
Stay tuned…
SoCalMtgGuy
September 18th, 2008 17:02
I thought I might find a new post this week. Thanks for your post. Always appreciated.
September 18th, 2008 17:05
Here come the govt to the rescue as usual.Get ready to pay higher taxes and give handouts to the rejects of society.this is all election politics.
September 18th, 2008 17:31
Your posts are always worth waiting for.
September 18th, 2008 21:13
SoCalMtgGuy,
I will be looking forward to your post. I’ve also been following the NJ Real Estate Report since 2005 and I’ve obtained a lot of good information and discussion there as well.
I’m impressed, and more than a little alarmed, that blogs such as these are better sources of information than our current mainstream media. This entire mess is playing out exactly the way this blog and njrereport.com has been saying it would. The fact that we can’t get this kind of honest and sober reporting is due to no small part that the MSM is now corporate-owned and therefore corporate-controlled. I believe that the US no longer has a free press.
Thank you for your hard work over these past 3 years.
September 19th, 2008 00:56
Yup. Since 2005, thanks to you I saw it coming and resisted getting sucked in. Thanks again.
September 19th, 2008 08:07
Did you read my post calling out for you yesterday
You have felt like my personal counselor through all this. So when it starts getting frantic, I always look for a post from you, it’s comforting. Looking forward to your take and advice as always!
September 19th, 2008 08:10
SoCalMtgGuy,
How does this bailout situation impact future home prices in the OC?
I’ve been on the fence for so long, with a large down payment burning a hole in my pocket, but I don’t want to get into the market too soon. My lease is up in November, and I don’t really want to renew my lease for another year.
I planned on buying a home in spring of 2009 but want to get as much for my money as possible. Things as they are now are still a teeny bit too high for my tastes. If things dropped by another $50k, I’d be all set.
I’m pretty disgusted at how the savers in our society get screwed over and over again.
Can you give me your thoughts on if I should wait a little longer? Thanks!!!
September 19th, 2008 09:59
Take your time SoCal. You already saved me and mine from getting a POS condo in 2005, and I tried to save others. You should be proud of what you have done.
September 19th, 2008 14:35
Thank you all for the comments.
Gary…for me to better help you, I would need to know what part of the OC, what price range you are looking at, approximate size of your down payment, and how long you plan to stay there. You can send me an e-mail if you would like.
That said, what it is ultimately going to come down to is the numbers. If you like the the house, plan to stay for several years at a minimum, and can truly ‘afford’ the fixed rate mortgage payment without being ‘house poor’, then I would say you will probably be ok.
I wouldn’t let having to renew a lease force me into a decision. See if you can negotiate month-to-month with a higher rent payment. See if you can do 3-month leases at a premium to what you pay now. Negotiate 60 days notice with them as another way to help them lessen the chance of losing money. Most people SHOULD work with you. I understand why they want guaranteed year leases, so they aren’t left without rental income. Your ‘pitch’ is to make it worthwhile so they will work with you.
Best of luck whatever you decide.
SoCalMtgGuy
September 20th, 2008 12:21
So the gov’t just hit the reset button and Wall St starts over. I never would have guessed that correcting the problems of a global finance system would be so easy.
Now that we have a new starting point, How long before the first issue of new toxic paper is created?
September 22nd, 2008 18:48
RTB -
I read NJRER too - and while some predictions were spot on, did even HEHEHEH or Boyah bob predict THIS kind of meltdown in a serious tone? Or maybe I just dismissed the more extreme predictions up or down.
Seriously, the jam we’re in is seriously f-ed up. We (kinda) predicted this so it’s nice to feel finally vindicated. Now that it’s here I’m getting nervous.
September 29th, 2008 10:10
I heard that after passing the bail out plan mortgage interest rates will be going down.
Mohammad Yamin
North Andover
October 2nd, 2008 05:07
People are shocked, but what is shocking is what happened up until 2005, not what happened after.
October 2nd, 2008 14:54
SoCal,
Now that we are up to our eyeballs in this shit, are you still against the bailout or do you view it as a neccessary evil? I keep wavering myself. On one hand I am against it, let Americans suffer for thier lax financial ways, it needs to happen and we will be better for it in the long term. On the other hand I don’t want to be punished for being financially responsible and see all my investments go to zero. Something in my gut tells me not to let the government have 700 billion of our money.
October 3rd, 2008 22:14
Brownie,
I have been following this situation intently. Every time I start to write about it, they keep changing things. Plus the fact that I am out of town for work, hasn’t left me a ton of time to let my fingers dance on the keyboard.
That said, it takes quite a bit of time to READ 400 pages, much less WRITE 400 pages. The fact that a bunch of politicians wrote 400 pages about business and finance, when by and large, they don’t know anything about either, makes me worry. Have you seen the ‘pork’ that has been attached to that proposal????
I am a big fan of Larry Kudlow, and he is ‘for’ the bailout. To me, there are 2 ways to look at the bailout. There is the ideological side, and the real world side. Obviously, I am ideologically against any homeowner getting ONE CENT for a house they signed a contract on, but can no longer afford. But at the same time, I am aware that these MBS and bonds were spread throughout the entire worldwide financial system. I am still not 100% convinced that it is the Armageddon some are predicting, but I do see how it impacts everybody, even those not directly involved.
The one thing I think people miss about the ‘bailout’ is that they are just ‘throwing away’ 700 billion dollars. That isn’t the case. I don’t believe it will be as profitable as some say, but I think when it is all said and done, it won’t cost that much.
I know this is very short, but I don’t have much time at the moment. I will be back next week from this last minute trip.
Stay tuned….
SoCalMtgGuy
October 3rd, 2008 22:21
WT Economist…
I completely agree. None of these problems were created overnight. In most cases, they are the result of some ‘well intentioned’ guvment legislation or decision, that doesn’t work in the ‘real’ world.
Sorry, but I don’t think financial decisions should be made on race or sex, they should be made on numbers. Either the numbers work, or they don’t. Guvment prefers ‘feel good’ vote buying legislation over fiscally responsible legislation. Show me a guvment; local, federal, or otherwise that is running in the black. Not for a month or a year, but in the black….right now.
I won’t hold my breath…
Stay tuned….
SoCalMtgGuy
October 7th, 2008 07:39
Hello, a couple years back, you took a long moment to walk through what the lenders would not do, and say the complicated and heartbreaking… that I had no business even thinking about buying a home, much less buying a home at that point in the market. And for this: THANK YOU
.
October 7th, 2008 10:11
Hapto,
You are completely welcome. THAT is the reason I started this blog. To try and educate people as to what was REALLY going on. From your post, and the hundreds of e-mails I have received, it seems that I was able to help quite a few people avoid some type of financial trouble due to the housing bubble.
Thank you for the feedback and for reading my blog.
Best,
SoCalMtgGuy
March 1st, 2009 15:05
None of these fixes have worked as the government promised. Fannie Mae, AIG, the rebate checks, nothing!