U.s. Banking Crisis: Capitalism "gone Wild"?

[LaoPo]

How do we regulate mortgages given to seniors? What constitutes a senior? If young people want to live beyond there means, can we forbid the elderly from doing this? Do we give them a sanity exam?

That's the point.....DON'T SELL mortgages to seniors.

And that's also what's sick in the American mortgage industry system.

In most European countries mortgages are NOT GIVEN out anymore to citizens over 65.....even at 60 or lower in age.

It's quite simple, since everybody -including mortgage banks- knows that we die at a certain -average- age and it's irresponsible to sell a mortgage to people who are retired in the wee hours of their lives.

It should be forbidden by law in order to protect those people, who helped, worked and built the Nation.

Instead, they're forced out of their homes

LaoPo

[BEENTHEREDONETHAT]

We all know that there are smooth talking salesmen out there that are very good at convincing people that some not real logical deals are the deal of the century. Stop and think about it, a salesman comes along and shows you that many millionaires have made there money by buying houses and then reselling them a year later for $100,000 more than you paid. And during that year you rent them out in order to cover the payments.

Or even better they will add on your house insurance, job loss insurance and to make it easy for you they will let you pay for it along with the morgage. They might forget to mention that you are paying interest on it and if you sell it you can't cancel the insurance.

If that isn't good enough they will make it a ARM (adjustable rate mortgage) that will start out very low and make the payments easy for you. The payments will go up later but you don't care you are going to sell it at the end of a year and clean up. But you need to hold it for a year for tax purposes.

If you have an existing house you can remortgage it get some cash and use it to buy several houses like the millionaires do.

Get someone who is a good con man and selling those mortgages is a piece of cake. He is getting rich and not at all worried about what will happen to these people in the future. And they don't even have to do it from nigeria.

Now that the cash for trash, oops I meant bailout bill, has passed they can start all over nothing has changed.

[siamamerican]

I understand your point. You are referring to one situation and we don't even have the whole story. How do we regulate mortgages given to seniors? What constitutes a senior? If young people want to live beyond there means, can we forbid the elderly from doing this? Do we give them a sanity exam?

My point is that we can't solve this crisis by analyzing the extremes. The root of the problem is that mortgages were given to people that weren't financially setup to repay them.

There you go I think you mentioned the problem & the answer.

Of course the loan is not a matter of a sanity test for the elderly but then you said...

"The root of the problem is that mortgages were given to people that weren't financially setup to repay them. "

That was & is the problem. If the lender is not smart enough to determine their ability to repay then serves them right for what happens next.

Same as if I did something irresponsible like giving my car keys to a drunk & saying here ya go take a spin I know your good for it.

or something like that

I agree, if you play the game, you own the consquences.

Edited October 4, 2008 by siamamerican

[flying]

I'm not claiming you did this (contractor isn't the builder on record), but builders were definitely pushing the envelope. Builders pushed hard for lenders to loosen up an their lending guidelines. Many builders convinced lenders to do 100% plus loans and if the lender wouldn't comply, they took their business elsewhere.

Your right I am not that type. That is more of a developer here.

I am a contractor. Folks come to me when they already have money & want a home. But mostly I build for myself & then sell later.....again they have money of their own or financed. But I never deal with their banks. I dont get involved.

Many I know do use a thing called agreement of sale here though.

It is where they act as the builder & the bank.

But again not for me so I never tried it. I just never wanted to get into that whole thing.

[LaoPo]

A lot of blame to pass around ( Lenders, government, builders, borrowers...).

...Government>>lenders>>>>>builders>>>>>>borrowers that's the sequence.

The problem NOW is that the Government and lenders can breath because of the bail out....the others can't. They suffocate.

The most responsible ones to be blamed walk away...Joe Mainstreet ALWAYS pay the bill, left on the table.

LaoPo

[siamamerican]

LaoPo

sorry, double post

Edited October 4, 2008 by siamamerican

[Samuian]

Reading criss cross through this avalanche of press articles, editorials and new about the "crisis"...

I cm across this:

“When I give food to the poor, they call me a saint. When I ask why the poor have no food, they call me a communist." — -Dom Helda Camara-

And this is how "our world" is divided, the "leftists" are bend by the bad influences for power and the liberal are bend by the bad influence of the power of money and the fear of sharing, or even worst, losing!

As long as mankind hasn't "jumped across this fence" the question "if a 65 year should get a mortgage or not" will certainly remain an issue for some - as inhumane that ever might be, bible in hand and "in god we trust on the banner"! - people perceive the world only in values as "in terms of ROI - these "ghosts" will continue to haunt them and "their markets"!

Because it's the same system causing this in an unavoidable way!

Food for thought?

"

[siamamerican]

How do we regulate mortgages given to seniors? What constitutes a senior? If young people want to live beyond there means, can we forbid the elderly from doing this? Do we give them a sanity exam?

That's the point.....DON'T SELL mortgages to seniors.

And that's also what's sick in the American mortgage industry system.

In most European countries mortgages are NOT GIVEN out anymore to citizens over 65.....even at 60 or lower in age.

It's quite simple, since everybody -including mortgage banks- knows that we die at a certain -average- age and it's irresponsible to sell a mortgage to people who are retired in the wee hours of their lives.

It should be forbidden by law in order to protect those people, who helped, worked and built the Nation.

Instead, they're forced out of their homes

LaoPo

I'm 25 years away from 65, but if someone told me I couldn't get mortgage because of my age, I would be furious. If I allowed this to happen where I work, we would get sued in a week. What countries in Europe restrict mortgages to 60+ year olds.

Age discrimination is not allowed, end of story. It is a slippery slope. Do we forbid a 55-60 year old from buying an annuity, taking out a loan for an expensive car, using credit cards...? Age wasn't the main contributor to bad and irresponsible loans. Money was the driving force for lenders and borrowers and all the other parties involved in the transaction.

I understand your frustrations, IF an 86 year old was taken advantage of, but excessive regulations won't rid the world of evil people. Not to say regulation is bad. I just don't want the pendulum to swing too far in either direction.

[OriginalPoster]

How do we regulate mortgages given to seniors? What constitutes a senior? If young people want to live beyond there means, can we forbid the elderly from doing this? Do we give them a sanity exam?

That's the point.....DON'T SELL mortgages to seniors.

And that's also what's sick in the American mortgage industry system.

In most European countries mortgages are NOT GIVEN out anymore to citizens over 65.....even at 60 or lower in age.

It's quite simple, since everybody -including mortgage banks- knows that we die at a certain -average- age and it's irresponsible to sell a mortgage to people who are retired in the wee hours of their lives.

It should be forbidden by law in order to protect those people, who helped, worked and built the Nation.

Instead, they're forced out of their homes

LaoPo

Granted there are a good number of senior citizens who are easy to manipulate and are ripe targets for con men, but there can be legitimate reasons that a person over the age of 65 would want to borrow money using his house as collateral. All depends (or it should depend) upon how much equity he has in the house and what he's going to do with the money he borrows. Where even reasonably alert seniors often run into trouble though is when they are "house rich and cash poor", make the decision to tap into the house's equity by borrowing a lump sum against thier house to cover their living expenses, and then ultimately run out of money either due to undestimating thier living expense or thier longieviety. However those people are going to tend to run out of money even if they don't borrow against the house and end up needing to sell the house and move somewhere cheaper anyway.

[Jingthing]

The age thing is sticky. Mortgages have been given with the expectation that values will go up at least 10 percent per annum. That thinking was faulty and the last thing a bank wants is to own the house, especially in a falling market. It seems to me if banks just gave sane mortgages with enough money down and yes mortgage insurance, age wouldn't be much of a factor. Elder people will die before 30 years but pass the houses on, and the heirs can sell them if there is any equity in them. In normal markets, with sane mortgages, not a big issue. I also doubt a very large percentage of these wacky mortgages were given to really old people anyway. I have heard there is a huge scandal which we haven't heard about much yet: overselling of HUGE cash advances on credit cards to all kinds of people, without regard to ability to repay, without regard to age either, even targeting old people.

Edited October 4, 2008 by Jingthing

[siamamerican]

A lot of blame to pass around ( Lenders, government, builders, borrowers...).

...Government>>lenders>>>>>builders>>>>>>borrowers that's the sequence.

The problem NOW is that the Government and lenders can breath because of the bail out....the others can't. They suffocate.

The most responsible ones to be blamed walk away...Joe Mainstreet ALWAYS pay the bill, left on the table.

LaoPo

Did you forget the borrowers or are they void of responsibility. The common Joe has the capacity to make decisions and also own the consequences.

Also, many financial companies didn't walk away. You have been tirelessly posting the demise of many financial institutions.

[siamamerican]

How do we regulate mortgages given to seniors? What constitutes a senior? If young people want to live beyond there means, can we forbid the elderly from doing this? Do we give them a sanity exam?

That's the point.....DON'T SELL mortgages to seniors.

And that's also what's sick in the American mortgage industry system.

In most European countries mortgages are NOT GIVEN out anymore to citizens over 65.....even at 60 or lower in age.

It's quite simple, since everybody -including mortgage banks- knows that we die at a certain -average- age and it's irresponsible to sell a mortgage to people who are retired in the wee hours of their lives.

It should be forbidden by law in order to protect those people, who helped, worked and built the Nation.

Instead, they're forced out of their homes

LaoPo

Granted there are a good number of senior citizens who are easy to manipulate and are ripe targets for con men, but there can be legitimate reasons that a person over the age of 65 would want to borrow money using his house as collateral. All depends (or it should depend) upon how much equity he has in the house and what he's going to do with the money he borrows. Where even reasonably alert seniors often run into trouble though is when they are "house rich and cash poor", make the decision to tap into the house's equity by borrowing a lump sum against thier house to cover their living expenses, and then ultimately run out of money either due to undestimating thier living expense or thier longieviety. However those people are going to tend to run out of money even if they don't borrow against the house and end up needing to sell the house and move somewhere cheaper anyway.

I agree. Some seniors own their home outright and it would be a crime, IMO, if we restricted them from using some of their equity to live a better life. As you stated, equity is the main factor.

[siamamerican]

The age thing is sticky. Mortgages have been given with the expectation that values will go up at least 10 percent per annum. That thinking was faulty and the last thing a bank wants is to own the house, especially in a falling market. It seems to me if banks just gave sane mortgages with enough money down and yes mortgage insurance, age wouldn't be much of a factor. Elder people will die before 30 years but pass the houses on, and the heirs can sell them if there is any equity in them. In normal markets, with sane mortgages, not a big issue. I also doubt a very large percentage of these wacky mortgages were given to really old people anyway. I have heard there is a huge scandal which we haven't heard about much yet: overselling of HUGE cash advances on credit cards to all kinds of people, without regard to ability to repay, without regard to age either, even targeting old people.

Agreed, we just have to get back to doing sane mortgages. American mortgage regulations that forbid age discrimination aren't going away. LaoPo mentioned that European countries don't allow senior citizens to obtain mortgages and this seems a little unjustified. I'm sure he will get back to me with a list of countries, but I've never heard of this main stream European regulation.

[LaoPo]

I'm 25 years away from 65, but if someone told me I couldn't get mortgage because of my age, I would be furious.

That's exactly why the American crisis is where it is now; -in bed, in hospital with a Bail Out Pill of $700 Billion- but there is NO subprime crisis in Europe; we just suffer from the lousy products sold to us of which the buyers have to take their responsibility as well.

But, the basic mortgage industry situation in Europe is by far not so bad as in the US although it varies from country to country but still not so sick.

The difference between America and Europe is the behavior in spending. America is by far...champion in spending; we still know how to save, a little.

That's one of the big differences, the other is the behavior in paying.

Americans pay mostly with credit cards. Europeans with debit cards or cash.

All in all I think Europeans are more conservative in their spending and paying behavior.

LaoPo

[LaoPo]

A lot of blame to pass around ( Lenders, government, builders, borrowers...).

...Government>>lenders>>>>>builders>>>>>>borrowers that's the sequence.

The problem NOW is that the Government and lenders can breath because of the bail out....the others can't. They suffocate.

The most responsible ones to be blamed walk away...Joe Mainstreet ALWAYS pay the bill, left on the table.

LaoPo

1. Did you forget the borrowers or are they void of responsibility.

2.The common Joe has the capacity to make decisions and also own the consequences.

3. Also, many financial companies didn't walk away.

4. You have been tirelessly posting the demise of many financial institutions.

1. No, I didn't, but the average Joe has, by far, not the knowledge and know how about complicated finance products as the trained employee from a (mortgage) bank.

And, IF this employee would just tell him and inform him ALSO about the risks he's about to face in the future...the average Joe, wouldn't be so stupid to sign that contract ! But Sir, you know very well that your Boss told you NOT to inform Joe....

And, don't tell me that your average Joe-mortgage-client is as WELL INFORMED and trained as you are...

2. see # 1

3. Really ? I hope so: I'm curious to hear from you which financial companies did NOT walk away; any important names, preferably stock listed ?

4. If they wouldn't have gone under because of their greedy and scandalous behavior nobody would have posted about them.

LaoPo

[siamamerican]

I'm 25 years away from 65, but if someone told me I couldn't get mortgage because of my age, I would be furious.

That's exactly why the American crisis is where it is now; -in bed, in hospital with a Bail Out Pill of $700 Billion- but there is NO subprime crisis in Europe; we just suffer from the lousy products sold to us of which the buyers have to take their responsibility as well.

But, the basic mortgage industry situation in Europe is by far not so bad as in the US although it varies from country to country but still not so sick.

The difference between America and Europe is the behavior in spending. America is by far...champion in spending; we still know how to save, a little.

That's one of the big differences, the other is the behavior in paying.

Americans pay mostly with credit cards. Europeans with debit cards or cash.

All in all I think Europeans are more conservative in their spending and paying behavior.

LaoPo

No argument from me. Americans as a whole spend a lot and save little. Now we are paying for our excesses.

I just don't see this crisis as our final swan song.

Also, I tried to find European regulations that forbid mortgages to seniors. I'm sure they exist and would appreciate some examples.

Thanks, and I need to hit the sack before the wife looses it.

[Jingthing]

I just don't see this crisis as our final swan song.

Final? No. Beginning? Yes. Unless there is a major turnaround in priorities and fast towards

energy independence

producing much more rather than shopping

health care

investment rather than spending

saving rather than spending

stopping to view the American way of life as meaning massive, irresponsible planet-killing waste

and with the huge debt, foreign wars, low savings rate, an infantile cultural environment where people are in mass denial of the current global realities, massive entitlement programs coming due (baby boomers) it all just does not add up. Yes, I do think America is over. Sorry. Britain went from the British empire to royalty running tourist tours of their castles in just a few decades. No empire lasts.

Edited October 4, 2008 by Jingthing

[LaoPo]

The age thing is sticky. Mortgages have been given with the expectation that values will go up at least 10 percent per annum. That thinking was faulty and the last thing a bank wants is to own the house, especially in a falling market. It seems to me if banks just gave sane mortgages with enough money down and yes mortgage insurance, age wouldn't be much of a factor. Elder people will die before 30 years but pass the houses on, and the heirs can sell them if there is any equity in them. In normal markets, with sane mortgages, not a big issue. I also doubt a very large percentage of these wacky mortgages were given to really old people anyway. I have heard there is a huge scandal which we haven't heard about much yet: overselling of HUGE cash advances on credit cards to all kinds of people, without regard to ability to repay, without regard to age either, even targeting old people.

Agreed, we just have to get back to doing sane mortgages. American mortgage regulations that forbid age discrimination aren't going away. LaoPo mentioned that European countries don't allow senior citizens to obtain mortgages and this seems a little unjustified. I'm sure he will get back to me with a list of countries, but I've never heard of this main stream European regulation.

You are twisting my words. You cast your words as if I said that European countries do not allow senior citizens to buy new mortgages above 60 or older. As if it was by law...You know very well that I didn't say that.

I said it will be impossible for them to get mortgages but a bank will never say that it is because of age.

Apart from that, I said it was a scandal that greedy mortgage salespeople, banks, institutions and the like, sold mortgages to elderly people who could NOT afford it AND didn't ask for it.

Sir: that is UNHEARD of in Europe and you will find NOT A SINGLE BANK giving a mortgage to elderly people with a low income or a lousy pension ! And that Sir is why I said it is a scandal because exactly that happened on a large scale in your country.

I said it a few times before: "Banks are legalized Mafia" and the government allowed them to continue.

The results ? Have a look in the newspapers or television.

LaoPo

[siamamerican]

A lot of blame to pass around ( Lenders, government, builders, borrowers...).

...Government>>lenders>>>>>builders>>>>>>borrowers that's the sequence.

The problem NOW is that the Government and lenders can breath because of the bail out....the others can't. They suffocate.

The most responsible ones to be blamed walk away...Joe Mainstreet ALWAYS pay the bill, left on the table.

LaoPo

1. Did you forget the borrowers or are they void of responsibility.

2.The common Joe has the capacity to make decisions and also own the consequences.

3. Also, many financial companies didn't walk away.

4. You have been tirelessly posting the demise of many financial institutions.

1. No, I didn't, but the average Joe has, by far, not the knowledge and know how about complicated finance products as the trained employee from a (mortgage) bank.

And, IF this employee would just tell him and inform him ALSO about the risks he's about to face in the future...the average Joe, wouldn't be so stupid to sign that contract ! But Sir, you know very well that your Boss told you NOT to inform Joe....

And, don't tell me that your average Joe-mortgage-client is as WELL INFORMED and trained as you are...

2. see # 1

3. Really ? I hope so: I'm curious to hear from you which financial companies did NOT walk away; any important names, preferably stock listed ?

4. If they wouldn't have gone under because of their greedy and scandalous behavior nobody would have posted about them.

LaoPo

1. I am the boss and I would fire an employee that misslead a borrower. For that matter, I have. We didn't clean up during the boom years because we stuck with conforming 30 year fixed mortgages.

2. The average Joe knew exactly what he was getting into. The exception were the ones that didn't. It's odd how people always want to blame others for their faults.

3. Do you really want of list of financial institutions that went under. That would take up too much space and effort. I don't have their ticker symbols, because they are no longer around. How did you miss all financial company closings?

Here is a start:

- - almost every true subprime mortgage lender ( Fremont Home Loans, First Franklin, Ameritrade, the list goes on)

- - Banks - Country Wide ( largest lender), Washington Mutual (Largest Thrift), Wachovia ( one of Americas largest and oldest banks),....

- - Non- deposit institution - Bear, Lehman...

4. No idea what you point is

Sht - now I'm in trouble with the wife and it all your fault for keeping hammering away at the keyboard.

Edited October 4, 2008 by siamamerican

[Pakboong]

A lot of blame to pass around ( Lenders, government, builders, borrowers...).

...Government>>lenders>>>>>builders>>>>>>borrowers that's the sequence.

The problem NOW is that the Government and lenders can breath because of the bail out....the others can't. They suffocate.

The most responsible ones to be blamed walk away...Joe Mainstreet ALWAYS pay the bill, left on the table.

LaoPo

1. Did you forget the borrowers or are they void of responsibility.

2.The common Joe has the capacity to make decisions and also own the consequences.

3. Also, many financial companies didn't walk away.

4. You have been tirelessly posting the demise of many financial institutions.

1. No, I didn't, but the average Joe has, by far, not the knowledge and know how about complicated finance products as the trained employee from a (mortgage) bank.

And, IF this employee would just tell him and inform him ALSO about the risks he's about to face in the future...the average Joe, wouldn't be so stupid to sign that contract ! But Sir, you know very well that your Boss told you NOT to inform Joe....

And, don't tell me that your average Joe-mortgage-client is as WELL INFORMED and trained as you are...

2. see # 1

3. Really ? I hope so: I'm curious to hear from you which financial companies did NOT walk away; any important names, preferably stock listed ?

4. If they wouldn't have gone under because of their greedy and scandalous behavior nobody would have posted about them.

LaoPo

1. I am the boss and I would fire an employee that misslead a borrower. For that matter, I have. We didn't clean up during the boom years because we stuck with conforming 30 year fixed mortgages.

2. The average Joe knew exactly what he was getting into. The exception were the ones that didn't. It's odd how people always want to blame others for their faults.

3. Do you really want of list of financial institutions that went under. That would take up too much space and effort. I don't have their ticker symbols, because they are no longer around. How did you miss all financial company closings?

Here is a start:

- - almost every true subprime mortgage lender ( Fremont Home Loans, First Franklin, Ameritrade, the list goes on)

- - Banks - Country Wide ( largest lender), Washington Mutual (Largest Thrift), Wachovia ( one of Americas largest and oldest banks),....

- - Non- deposit institution - Bear, Lehman...

4. No idea what you point is

Sht - now I'm in trouble with the wife and it all your fault for keeping hammering away at the keyboard.

The failure of these banking institution suggests that the failure was well outside what could be corrected by loan officers at street level. Something much more serious infected the banking systems and I doubt it was the borrowers themselves. A couple of centuries of fractional reserve banking and about a third of that time with fiat currency are IMHO what caused this mess. There is no way a house could have appreciated at those rates without the inflation caused by fiat money. I won't even go into the idea of fractional reserve banking.

If a dollar is only worth 5% of what it was worth in 1913, the answer is obvious to me. The end is near. How much lower can it actually go before everything fails? There are only 5 cents left and no gold backing that 5 cents.

I can imagine an average house costing a million dollars and the dollar being only worth 2 cents.

[midas]

The failure of these banking institution suggests that the failure was well outside what could be corrected by loan officers at street level. Something much more serious infected the banking systems and I doubt it was the borrowers themselves. A couple of centuries of fractional reserve banking and about a third of that time with fiat currency are IMHO what caused this mess. There is no way a house could have appreciated at those rates without the inflation caused by fiat money. I won't even go into the idea of fractional reserve banking.

If a dollar is only worth 5% of what it was worth in 1913, the answer is obvious to me. The end is near. How much lower can it actually go before everything fails? There are only 5 cents left and no gold backing that 5 cents.

I can imagine an average house costing a million dollars and the dollar being only worth 2 cents.

Pakboong you were watching Professor Nouriel Roubini also the other night ? This is exactly

what he was saying........... he described it as the ending of the American Empire no

different to the collapse of other empires in history,.

[Naam]

If a dollar is only worth 5% of what it was worth in 1913, the answer is obvious to me. The end is near. How much lower can it actually go before everything fails? There are only 5 cents left and no gold backing that 5 cents.

there... there...! here is a list of all currencies which have the same value they had in 1913

[lannarebirth]

How much lower can it actually go before everything fails?

If you're speaking of something like the S&P 500, here is the Fibonacci Spiral:

1070ish

974

788

602

It will fetch up there somewhere.

[lannarebirth]

LIBOR is EIGHT standard deviations from its norm. If you are a statistician, you will know that is mind boggling. At this CDS auctuion coming up I expected some are going to get the shaft, some are going to commit near theft, and some who thought they had got away with a theft are going to get shafted instead.

Edited October 4, 2008 by lannarebirth

[LaoPo]

1. I am the boss and I would fire an employee that misslead a borrower. For that matter, I have. We didn't clean up during the boom years because we stuck with conforming 30 year fixed mortgages.

2. The average Joe knew exactly what he was getting into. The exception were the ones that didn't. It's odd how people always want to blame others for their faults.

3. Do you really want of list of financial institutions that went under. That would take up too much space and effort. I don't have their ticker symbols, because they are no longer around. How did you miss all financial company closings?

Here is a start:

- - almost every true subprime mortgage lender ( Fremont Home Loans, First Franklin, Ameritrade, the list goes on)

- - Banks - Country Wide ( largest lender), Washington Mutual (Largest Thrift), Wachovia ( one of Americas largest and oldest banks),....

- - Non- deposit institution - Bear, Lehman...

4. No idea what you point is

Sht - now I'm in trouble with the wife and it all your fault for keeping hammering away at the keyboard.

2. If Joe knew what he was getting....he wasn't a Joe....he would have been a Boss, like you.

3. It wasn't about the ones who closed......you forgot what you wrote

...it's MY fault that you have troubles with your wife....? you are a hilarious chap

LaoPo

[LaoPo]

LIBOR is EIGHT standard deviations from its norm. If you are a statistician, you will know that is mind boggling. At this CDS auctuion coming up I expected some are going to get the shaft, some are going to commit near theft, and some who thought they had got away with a theft are going to get shafted instead.

Sorry LR...this might be a nice cookie language for most, but not for me... Can you please explain what you mean because I have difficulties with your language sometimes. It's a kind of slang I'm not familiar with.

Please ?

LaoPo

[lannarebirth]

LIBOR is EIGHT standard deviations from its norm. If you are a statistician, you will know that is mind boggling. At this CDS auctuion coming up I expected some are going to get the shaft, some are going to commit near theft, and some who thought they had got away with a theft are going to get shafted instead.

Sorry LR...this might be a nice cookie language for most, but not for me... Can you please explain what you mean because I have difficulties with your language sometimes. It's a kind of slang I'm not familiar with.

Please ?

LaoPo

I mean to say that there is probably a lot of mispricing going on. Both to the benefit of the buyer and to their detriment. Also with things so "out of whack", what may appear golden could turn to lead quickly, and vice versa. Not too confusing I hope.

http://jessescrossroadscafe.blogspot.com/2...nk-time-to.html

Edited October 4, 2008 by lannarebirth

[midas]

LIBOR is EIGHT standard deviations from its norm. If you are a statistician, you will know that is mind boggling. At this CDS auctuion coming up I expected some are going to get the shaft, some are going to commit near theft, and some who thought they had got away with a theft are going to get shafted instead.

Sorry LR...this might be a nice cookie language for most, but not for me... Can you please explain what you mean because I have difficulties with your language sometimes. It's a kind of slang I'm not familiar with.

Please ?

LaoPo

I mean to say that there is probably a lot of mispricing going on. Both to the benefit of the buyer and to their detriment. Also with things so "out of whack", what may appear golden could turn to lead quickly, and vice versa. Not too confusing I hope.

http://jessescrossroadscafe.blogspot.com/2...nk-time-to.html

An interesting article - But it's feeling a bit scary-

" However, exposure remains unclear, which is one concern that regulators now have about the credit derivatives market."

It seems like there is nothing we can do and when I read that i had the feeling like everything that happened last week

was only at the " fasten your seat belts " stage because we havent actually hit the turbulence yet?

[lannarebirth]

Clearly midas, evrything that has been done thusfar is in preparation for some event or series of events that are likely to take place. Are we aware of all the likely events? Probably not, and certainly not their outcomes. Additionally, I can't remember a time when "the system" was more vulnerable to damage from exogenous events like sudden warfare or large scale terrorist attack.

Edited October 4, 2008 by lannarebirth

[ace]

OK - I have a quesition, apologies if it has been covered already.

The banking system is being part-nationalised. Nearly every government is pushing for tighter regulation and therefore de-leveraging. So, banks have leveraged up a couple of trillion to 50 (estimate). If government calls for say max 2.5x leverage then what will happen to the the remaining 45tn ? Will it disapear? Does it even exist? Who will pay ($7500 for every man woman & child in existence)?