tag:blogger.com,1999:blog-6616959642391988608.post1432725971557437256..comments2024-03-28T00:18:25.641-07:00Comments on Calafia Beach Pundit: No relief from Obama's speechScott Grannishttp://www.blogger.com/profile/14028519647946868684noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6616959642391988608.post-7134808481192687502009-01-21T12:48:00.000-08:002009-01-21T12:48:00.000-08:00I am aware of the many reason the market have come...I am aware of the many reason the market have come up with to attribute the disaster to specific factors much like a performance attribution model, but it is usually more art than science and it always boils down to the embedded assumption within the model.<BR/><BR/>At the end of the day, the one factor that probably most correlates with the "underestimation" is the profit maximization of every Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-43809333943234133192009-01-21T10:30:00.000-08:002009-01-21T10:30:00.000-08:00Bernard: I've got some older posts that lay out wh...Bernard: I've got some older posts that lay out why so many institutions got burned by subprime-related debt. I don't think it was greed. Freddie and Fannie played a major role, as did the rating agencies. Nearly everyone underestimated the degree and speed of the housing price downturn.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-4500504870498625612009-01-21T10:28:00.000-08:002009-01-21T10:28:00.000-08:00thudbear: my understanding is that judges will be ...thudbear: my understanding is that judges will be able to determine "cramdowns" and thus reduce the principal value of mortgages whose homeowners are in default. Unilaterally rewriting private contracts like this is a fiasco that only worsens the problem of moral hazard. Meanwhile the Fed is trying to reflate the housing market, in order to reduce the incidence and severity of defaults. That's Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-6857365756135493422009-01-21T10:24:00.000-08:002009-01-21T10:24:00.000-08:00Speak: What you're describing may already be price...Speak: What you're describing may already be priced into the market. As I've pointed out many times, this market is priced to a severe depression and a multi-year deflation.Scott Grannishttps://www.blogger.com/profile/14028519647946868684noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-35416606677572769602009-01-21T09:21:00.000-08:002009-01-21T09:21:00.000-08:00This may be a good case of spurious correlation. T...This may be a good case of spurious correlation. <BR/><BR/>The banks have literally headed straight up stream without any paddles. For example, look at BAC. Two ridiculous acquisitions later and the company is basically insolvent. If anyone has dealt with the insides of Citi, you need not feel sorry here either. Their mergers over the past 15 years have produced zero synergies while creating Public Libraryhttps://www.blogger.com/profile/00017383928897945054noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-9396974868794639982009-01-21T08:55:00.000-08:002009-01-21T08:55:00.000-08:00At the risk of exposing my acute ignorance on the ...At the risk of exposing my acute ignorance on the subject, I have some questions. Exactly how will this "relief for homeowners" manifest itself. Will there be outright grants of thousands of dollars to underwater homeowners? Will the banks be compensated for revising the terms of the original mortgages? For 750 billion, you can outright buy 2.5 million homes in the $300,000 price range. I would Unknownhttps://www.blogger.com/profile/06816556258682440933noreply@blogger.comtag:blogger.com,1999:blog-6616959642391988608.post-11078377214231506072009-01-21T07:45:00.000-08:002009-01-21T07:45:00.000-08:00The right thing to do (for the US economy) is to l...The right thing to do (for the US economy) is to let the housing market finish its correction, then throw another $700 billion in equity at the banking system. This is not what's going to happen, though. The Obama administration has promised relief for homeowners and sterner treatment of the banks. We'll end up with a nationalized banking system and an extended downturn. You need to plan for SpeakToMehttps://www.blogger.com/profile/04512373918759007718noreply@blogger.com