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Mortgage Problem Being Drawn Out

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October 31, 2008 – Comments (9)

Yves has a post which explains how the mortgage problem is being drawn out.  It looks like people are getting 3 years of relief payments in restructuring, but then in 3 years they have the same problem, a mortgage reset to what they can't afford.

How much more of this crap is out there?

Yves has another post showing the excessive liability the bailed out banks owe to these morons that got us into this mess.

 

9 Comments – Post Your Own

#1) On October 31, 2008 at 10:01 AM, dwot (67.78) wrote:

Yves is full of good stuff today...

This one is on "junk" bonds and that defaults could go to 20%. Here's a little tid bit from it:

"According to Moody's, the largest default rate in history was 15% in 1933. In the post Depression era, there have been three years which produced double-digit default rates: 1990 (10.1%), 1991 (10.4%) and 2001 (10.6%). The average recovery rate (i.e., the amount the bond is worth immediately after default) is 32% for the three peak default years. So if a portfolio suffers 10% in defaults with 30% in recovery, it has actually suffered 7% in total credit losses."

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#2) On October 31, 2008 at 10:51 AM, lquadland10 (< 20) wrote:

You go girl. You need to become a finical adviser to some of these yahoo's out there. Keep up the good fight.

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#3) On October 31, 2008 at 10:55 AM, abitare (39.45) wrote:

dwot,

we should start a company, could you work with me?

Also how many Fools can you house up there in Canada, if things get bad here in the US?

I can paint, chop wood, start a fire, hunt and fish. What else is needed to live in Canada? I also can fly, so I can look for one of those boat planes.

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#4) On October 31, 2008 at 3:21 PM, EScroogeJr (< 20) wrote:

dwot, one short question.

The lowest point in DJIA - your prediction?  

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#5) On October 31, 2008 at 4:35 PM, TheGarcipian (65.72) wrote:

Here's mine: 7500-7800 for the DJIA. That's about 750-800 for the S&P500. Hopefully, it won't go that low, but that's what I'm thinking.

Given that the DJIA popped its mole head today out of the "9000 and under" hole, I think we've got a pretty good shot at whacking this mole a bit more. There is more pain to come. What you're seeing now is classic bear market rally. What's even more of a determinant is the short time that we've been down. It will take several months (perhaps a year) for this to simply level off, not a few weeks. Heck, we might even see the same 9000 DJIA in 1-2 years from now. The fact that you're seeing another bump up today (and spottedly throughout the last 2 weeks) is more evidence that these are short blips of a bear market rally. Use them to sell off anything you don't want to hold for more than a year or two (or five, really, for you shouldn't have anything in the stock market unless you're willing to wait that long).

Good luck,
--Gar

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#6) On October 31, 2008 at 11:13 PM, Option1307 (29.70) wrote:

How much more of this crap is out there?

I'm assuming you've already read iguadland10's newest post regarding the shady business call at JP Morgan. I mean you are a CAPS uber allstar...I think his article sums it all up with respect to your question. The BS is endless, there are going to be countless other frauds etc exposed in the coming year similar to this article. I am not going to predict the market, but even if it goes up slightly, the US economy is going to be in horrid shape for years as this crap continues to show its face and present trouble.

 I spent the majority of my life in Washington state and am very familiar with the ol' Canada. Maybe I should look into moving to BC...Well, that was before you described the serious troubles vancover/whistler are quickly approaching. Thanks for the links, I don't have the time to find them all, so I always turn to you etc for relevant reads/post/blogs

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#7) On November 01, 2008 at 11:15 AM, biotechmgr (35.20) wrote:

If you really want to know how low the DJIA will go, first determine time horizon. We may be looking at forced liquidations and mutual fund redemptions through Nov. 15. I expect SPX 768 possibly down to 707 both of which equate with some major trendlines.

Ultimately, you probably don't want to hear how bearish the potential is. Most people will not believe it until it is too late. If you believe we will have the Greater Depression then you could probably swallow the prediction.

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#8) On November 01, 2008 at 11:18 PM, dwot (67.78) wrote:

EscroogeJr,

I was thinking that I would start looking for stocks at around Dow 7000, and I thought it could go lower.  But I really don't know what to make of all the non-existent money they are throwing on the markets...

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#9) On November 14, 2008 at 10:53 AM, NEWSMONKEY (84.10) wrote:

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