December 21, 2008
– Comments (14)
Some here have already warned of this.
Watch CBS Videos Online
(Something is preventing me from embedding this, but it is WELL worth watching!)
Argh! I think TMF is preventing the embedding. Here's the proper link:
Great video, thanks for posting.
BTW- I love the lady who pretty much admits she was an idiot, but wants a do over anyway. I guess it's our fault she was a greedy fool.
I watched this when it aired last week, it actually was a pretty well done piece. I don't think people realize how much pain is still out there to come. DWOT has been talking about this for some time, this is potentially much worse than what we are currently experiencing...
Thanks for the link.
It's nice hearing from investors who actually have skin in the game rather than people who only play CAPS. My money's with the big boys. I think I'm about done with CAPS.
I think I got it to embed...
As much as people are shocked about the information they are presenting... I'm not. For years people in the DC metro area have been suffering from some type of mass hysteria.
Almost all my friends/acquantences own houses that I would not feel comfortable paying for (and not to brag I make >2x they do without and debt/car payments.) A few other folks I know started a Real Estate Holding Company, (to buy/flip/rent out houses) 2 friends took Real Estate classes to be an agents or buyers brokers, another became a mortgage broker. (everyone wanted in on the game)
The same folks who threw their hat in the ring for the real estate game simply refuse to believe that housing is doomed. (in the next few years).This whole real estate frenzy is a sickness... I'm afraid the medicine is going to be tough to swallow.
Nice post, thanks. You know that a market is going to experience a crash when you have an acupuncturist flipping houses.... Well I guess that is the society that we live in. Once again nice post.
It's interesting to hear Tilson exclaim at the end that the stock market has already figured in the next burst, that this is a reasonable place to call bottom. hmm
The more I thought about that line, the more it doesn't make sense to me. I don't think Wall Street has things priced into the market regarding real estate until 2012.
Plus, the beginning of the piece starts with him saying how no one knows how bad things are going to get, and ends with him saying he's bullish on stocks because Wall Street has the bad news priced in already.
Option1307 - dwot was main the one I had in mind when mentioning that others have been warning of this already, but definitely not the only one.
Excellent post. I don't normally catch 60 minutes, so thanks for posting this. I agree, very well done and informative. And it echos what Dwot, TMFBent, and so many others have been saying for months.
I'm not sure why people think they can jump from something like acupuncturist to real estate mogul. I know a window washer who just turned day-trader.
If I were that lady in the video I would be terrified looking at million-dollar loan balances when I am less skilled than my competitors in the market.
Stick with what you know!
If I hadn't run my own side business for a while, I'd have stuck to index ETFs. In fact, when my portfolio grows a little larger, I plan to buy some SPY to balance things out.
Easy to forget is that the government contributed to the mess, indrectly, primarily with actual or implied loan guarantees of the mortgages made. Throw in the greed of brokers (fees), the political connections of the bankers, the "anti-discrimination" laws (e.g. CRA of 1978 can penalize a lender if he doesn't loan to risky folks), stir well, and you've got a hell of a mess. And now people look to the same government to bail them out. God help us. Counter-point: of course the government was a lot less involved in the lead-up to the Depression, so I'll concede other factors (greed, little control over the lending process.)
During subprime, the job losses were only just getting started. During the next wave there will be a lot of people defaulting before their loan even resets or who had a good loan in the first place. I know a few people that lost their home or who are about to because one or the other of the couple lost their job.
You'd like the Fred Thompson video I posted on my KDakotaFund account.
I agree that gov't is largely responsible for the entire mess, and it could've been prevented had they done one important thing: force mortgage brokers and banks to return all their fees and commissions on mortgages that went sour. Then they'd have had been more concerned about people's abilities to repay those loans.