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Thread: Home price drops exceed Great Depression: Zillow

  1. #171
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Aunt Spiker View Post
    It's so multi-faceted you both are right. One large part that gets overlooked is that mortgages were being bundled together - and marketed as investment opportunities. Many invested ignorantly in these golden bundles of joy - internationally - and when the foundation quickly crumbled it took towns, companies, the banks that created them, and wall street - and eveyrone else - down with it.
    The bundling of mortgages would not have mattered had there not been a bubble. The bursting of the bubble made those mortgages worthless. The housing boom, the resulting bubble and it's collapse led to the economic meltdown. They built too many homes after the recession of '01. And too many people refinanced and built more home than they could afford.
    Last edited by Dirty Harry; 01-26-11 at 10:49 AM.

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    Re: Home price drops exceed Great Depression: Zillow

    why do you think there was a bubble? there are many reasons, cheap money, government purchasing of debt, etc. but also bundling mortgages and presenting them as higher quality debt than they actually were was huge for building false value in housing. not to mention the idea that house prices won't fall also causes housing prices to go up.
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Zyroh View Post
    why do you think there was a bubble? there are many reasons, cheap money, government purchasing of debt, etc. but also bundling mortgages and presenting them as higher quality debt than they actually were was huge for building false value in housing. not to mention the idea that house prices won't fall also causes housing prices to go up.
    Artificially stimulating demand caused the housing bubble. Had their been no bubble no one would have lost money on bundled mortgages.
    Last edited by Dirty Harry; 01-26-11 at 01:46 PM.

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    Re: Home price drops exceed Great Depression: Zillow

    The bundled mortgages also increased the avaliablity of credit used to fuel the bubble, combined with lowering of credit standards as the underwriting institutions no longer cared whether or not if the mortgages were good or not (they got paid for originating and selling the mortgage.
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Lord Tammerlain View Post
    The bundled mortgages also increased the avaliablity of credit used to fuel the bubble, combined with lowering of credit standards as the underwriting institutions no longer cared whether or not if the mortgages were good or not (they got paid for originating and selling the mortgage.
    The FED was pumping billions into the financial sector while lowering interest rates during and after the recession of '01.. There was plenty of money to meet the increased demand. However if the demand for new homes had remained constant the bubble would not have happened. The pushing for everyone to own their home, ready or not, stimulated demand to almost double that of before '01. That demand created the boom, the bubble and it's eventual collapse. Fannie, Freddie, bundled mortgages and derivitives would have never made the news without the bubble and it'a collapse.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    The FED was pumping billions into the financial sector while lowering interest rates during and after the recession of '01.. There was plenty of money to meet the increased demand. However if the demand for new homes had remained constant the bubble would not have happened. The pushing for everyone to own their home, ready or not, stimulated demand to almost double that of before '01. That demand created the boom, the bubble and it's eventual collapse. Fannie, Freddie, bundled mortgages and derivitives would have never made the news without the bubble and it'a collapse.
    i'm sorry but your understanding of this situation bothers me. it's so full of half truths and twisted logics that there's no way of fixing it in this post. nothing you said was completely wrong, but your description and conclusions show a real lack of understanding. but hey, let's give it a try.

    curious: what billions did the fed pump into the system during and after the recession of '01. if you're talking about expanding amount of money in the system, they've been doing that through credit since the '70's when we left the gold standard, check shadowstats.com for an explanation of that.

    you seem puzzled on the idea of demand. the government has been administering policies with the goal of expanded home ownership since it created fannie mae in 1938. pretty consistently since then the federal government has been coercing the majority of the population to go into debt and invest in a single market, real estate. the majority of this nation's wealth and leverage is all in a single market, and it's been expanding long before bush, clinton, carter, greenspan, bernanke. but all these men failed to see where it was leading.

    this of course was all put into overdrive when glass-steagall was repealed, further bank deregulation allowed the bundling, fraud the fraud power created mythical amounts of wealth that is still floating around the system today. we've only seen a small amount of this unwound. we still have easy money and the gse's. fraud is as rampant as ever. but the investing public now realizes it's a bad time to be caught owning these mbs's without a seat when the music stops. so guess who owns it all now... all of us, at the gse's, at the fed, in the pension funds.

    this **** is fractal and you're looking really close up, stand back and look at the larger picture and looking at the tiny amount a single piece of this inflated a bit of the bubble is ridiculous. that bubble's been inflating since 1913, and to keep it going your dollar has lost 99% of its value in that time. remember, systems like this work until they don't, and when they don't you realize that the 100 years of supposed prosperity wasn't worth the final cost.
    Democracy is two wolves and sheep voting on what's for dinner. Liberty is a well armed sheep willing to contest the vote.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Zyroh View Post
    i'm sorry but your understanding of this situation bothers me. it's so full of half truths and twisted logics that there's no way of fixing it in this post. nothing you said was completely wrong, but your description and conclusions show a real lack of understanding. but hey, let's give it a try.

    curious: what billions did the fed pump into the system during and after the recession of '01. if you're talking about expanding amount of money in the system, they've been doing that through credit since the '70's when we left the gold standard, check shadowstats.com for an explanation of that.

    you seem puzzled on the idea of demand. the government has been administering policies with the goal of expanded home ownership since it created fannie mae in 1938. pretty consistently since then the federal government has been coercing the majority of the population to go into debt and invest in a single market, real estate. the majority of this nation's wealth and leverage is all in a single market, and it's been expanding long before bush, clinton, carter, greenspan, bernanke. but all these men failed to see where it was leading.

    this of course was all put into overdrive when glass-steagall was repealed, further bank deregulation allowed the bundling, fraud the fraud power created mythical amounts of wealth that is still floating around the system today. we've only seen a small amount of this unwound. we still have easy money and the gse's. fraud is as rampant as ever. but the investing public now realizes it's a bad time to be caught owning these mbs's without a seat when the music stops. so guess who owns it all now... all of us, at the gse's, at the fed, in the pension funds.

    this **** is fractal and you're looking really close up, stand back and look at the larger picture and looking at the tiny amount a single piece of this inflated a bit of the bubble is ridiculous. that bubble's been inflating since 1913, and to keep it going your dollar has lost 99% of its value in that time. remember, systems like this work until they don't, and when they don't you realize that the 100 years of supposed prosperity wasn't worth the final cost.
    In '01 The country was in a recession. New home contruction was falling. To pull us out of recession Greenspan pumped billions into the financial sector and lowered interest rates to levels never seen before. Bush started a homeowner initiative that reduced borrower requirements, red tape and even down payments. He toured the country spreading his plan to make this an ownership society and how everyone should own their own home. New home construction doubled due to the newly created demand. Home values started to skyrocket and more and more people were afraid they would be priced out of the market so they bought homes even when they weren't ready. They sold ten years worth of homes in 5 years. They created a bubble and eventually it all came crashing down.
    This was not normal home value increases from inflation. This was a bubble. Do you know the difference?

    Half truths? Everything I have said is fact.
    Last edited by Dirty Harry; 01-26-11 at 08:06 PM.

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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by Dirty Harry View Post
    In '01 The country was in a recession. New home contruction was falling. To pull us out of recession Greenspan pumped billions into the financial sector and lowered interest rates to levels never seen before. Bush started a homeowner initiative that reduced borrower requirements, red tape and even down payments. He toured the country spreading his plan to make this an ownership society and how everyone should own their own home. New home construction doubled due to the newly created demand. Home values started to skyrocket and more and more people were afraid they would be priced out of the market so they bought homes even when they weren't ready. They sold ten years worth of homes in 5 years. They created a bubble and eventually it all came crashing down.
    This was not normal home value increases from inflation. This was a bubble. Do you know the difference?

    Half truths? Everything I have said is fact.
    the half part is where you think it suddenly started in '01. or maybe it's just willful ignorance. if you apply a bit of logic i'm sure you'll come around.
    Democracy is two wolves and sheep voting on what's for dinner. Liberty is a well armed sheep willing to contest the vote.

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    Re: Home price drops exceed Great Depression: Zillow

    even tho houses are almost worthless, they're not moving at all

    today: New-home sales in 2010 fall to lowest in 47 years - Yahoo! Finance

    what happened to hamp, mr president?

    feb, 2009: http://www.reuters.com/article/idUSTRE51G5X7200902180

  10. #180
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    Re: Home price drops exceed Great Depression: Zillow

    Quote Originally Posted by The Prof View Post
    even tho houses are almost worthless, they're not moving at all

    today: New-home sales in 2010 fall to lowest in 47 years - Yahoo! Finance

    what happened to hamp, mr president?

    feb, 2009: http://www.reuters.com/article/idUSTRE51G5X7200902180
    When my parents bought their house their main support for doing so was "it's easy to get out of the mortgage if things start to fall apart" - or "and it'll be worth something in the future when we sell it, absolutely" - as well as "house-values NEVER drop"

    Well - it's not, it wasn't, and they do.

    Homes were SEEN as being solid - steadily increasing - always present - an actual dependable investment with a guaranteed return. Now people see them as a chance - a HUGE chance - and one that many aren't wanting to take. I most certain have no interest in furthering the hole I'm already in.
    A screaming comes across the sky.
    It has happened before, but there is nothing to compare it to now.
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