Tomorrow could be brutal on Wall Street, The London FTSE closed down 3.2% and

The Nikkei down 2.4%. Plus it is Friday, big money usually bails in case there is more bad financial news over the weekend.

How can bad loans, bad credit decisions and such cause people to freak out now? The news is no different on housing, no different on subprime loans, no different on the currency, no different on interest rates.

But NOW people decide to freak out and sell off.

Did I miss a piece of news that would cause a broad sector selloff? Something that is new today, or this week?

Very strange.

maybe it's being manipulated by insiders wanting to buy or sell at the right moment. At our expense, of course.

Cheney moved into Euro stocks a couple of years ago. Nice confidence in the stability of the US economy there.

:party:

and hell-iburton, and all those other war-mongering blood-sucking "leeches?" (BTW, i have nothing against leeches the invertebrates, just the ones that claim to have backbones).

I mean ... this is f*ckin' ridiculous how much money these people have stolen. Really, who needs *that* much money? Are they planning to take it to hell with them?

...depending on how sophisticated/delusional the investor is:

1) For the Big-time, sophisticated investors, I suspect this market is all about "market timing." Those big-time, sophisticated investors know the market is a "Straw House" and so at the first sign of the "Big Bad Wolf," they are heading for the "Brick House" (Bond Market).

And

2) For the less sophisticated investor, they are most likely finding more and more shockingly bad data on internet sites like the one I linked to in this thread from a few weeks ago: <http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=1237649&mesg_id=1237649>

Check out the links in that post, I'm sure the investor in case one (above) already knows that stuff, which is probably why they are so jumpy.

Btw, the 7000 Bankruptcy/Auction listings for Atlanta that I mentioned in that July 3, 2007 post, is now 11064 as of July 27, 2007!

It's going to be a bumpy ride.

Big culprit: the housing market. I think they know SO much more than they're letting on about the real estate market. I think there are some huge lending institutions which are starting to lose blood here.

And they don't want the rest of us to find out. Because SO much of the investment market is based on Faith....pure faith. And if that goes, it becomes a sinking ship where everyone wants to jump off....before the other guy.

housing market will be good for those who can buy...but how is a major sell-off good for the working class if their retirement is in something like 401k's ? Serious question...I understand very little about economics...

:D

since housing has its tentacles weaving thru every aspect of the economy. Spreading like a goddamned plague.

i think Reagan called it trickle-down economics.

...since a lot of the talk I hear about the housing bubble bursting also talks about a major tightening of credit...doesn't that mean higher rates without necessarily corresponding increase in wages?

One thing people can do is become more self-sufficient as a community. Start a vegetable garden. Buy from local businesses, not the large chain stores. I really need to start practising what i preach! sigh!

It's very hard I know, their tentacles are everywhere but we try one purchase, one step at a time to buy local, buy used, or don't buy -- lots of our "needs" aren't...

working people have 401K's. Those who do don't have enough money in them to "retire on" anyway.

401K's are our corporate capitalist masters' device to do away with the Defined Benefit pension plans for their middle and upper middle class workers. They flooded the Ponzi scheme they call a stock market with new cash...knowing that most folks wouldn't be allowed to keep their jobs long enough to get any kind of decent return from them anyway.

The destruction of the Unions was our corporate capitalist masters' method for doing away with Defined Benefit plans for blue collar workers in union contracts -- no union contracts, no fucking pensions... Taft-Hartley was the device that helped do that for them.

The stock market is right up there with faux news and reality TV as a device to pull the wool over our eyes while they pick our pockets. The BOTTOM LINE is that the (very) rich get (very much) richer and the rest of us finance it.

...everything is going exactly to plan.

Sorry to all of you who thought you still had a retirement plan, but the sooner this house of card falls, the sooner we can begin to rebuild.

Btw, I've already spent the tiny little bit of "retirement" savings that they said I had for my "retirement" on paying off Credit Card Debt and eating. :hide:

n/t

that will "WAKE UP THE PEOPLE!" It might not be right now...markets might rebound with Saudi and Drug Money to prop up BFEE...and we might get a bounce...but the FUTURE IS DARK for us..US...because the Cats have been away and the Mice have built a MIGHTY EMPIRE of HEDGE FUND FRAUD based on PLASTIC and DREAMS on the backs of many Americans too clueless to understand, not through fault of their own...but because of generational manipulation by those who knew how to sell them with Dog and Pony Shows and quick gains and riches with no downside, ever. :-(

It was all of my cash savings at the time. I didn't recover anything, nada. The company I invested in went bankrupt. And I couldn't even bail out of the stock while it was crashing, as Charles Schwabb was deluged with phone calls that caused their phone lines to go down and they had and long, long lines at their door.

Since then, I have no desire whatsoever to ever approach either a gambling casino or a stock market again. I wish everyone in the market good luck, but it's not for me.

I have a Schwab account and I do all my transactions online. The internet would have to crash before someone would experience what you did in 1987.

That said, the current wave of irrational sell-offs in the markets has little or nothing to do with the real estate market. It's pure fearful irrationality at work, a common characteristic of the stock markets. The real estate problems are solely caused by those lending institutions who suckered people out of their hard-earned savings and got them into houses they couldn't afford with short-term low-to-no-interest "sub-prime" loans which turned into high interest loans after a year or more. As a result, many of those ignorant suckers suddenly discovered after a year or two or three, however long it took for the high interest rates to kick in, that they couldn't pay their mortgage bills, and lost their homes to foreclosures. Since the "sub-prime" loan practice artificially inflated the number of buyers out there, it's mind-boggling to watch these nutcase analysts act as if they're shocked that now that the suckers are gone, and the worst "sub-prime" lenders are going out of business, that there are, necessarily, fewer new buyers out there.

The worst part is that these same knucklehead "experts" on TV keep babbling gobbledygook about how this narrow problem is supposedly going to affect everything, and like a self-fulfilling prophecy, everyone who listens to them and actually takes them seriously, starts panicking and selling off, despite the fact that other stocks have absolutely nothing to do with the "subprime" market scandal. The irrationality of the market spreads one problem like a cancer across the board, sweeping all other totally unrelated submarkets along in its wake.

Fuckin' jerks. They cost me over $70K since last week at this time.

I've been investing long enough to know that this hysteria too shall pass and I'll recoup that loss and then some before long.

And, I predict, that in less than a month, the DOW will be back above 14,000, setting new closing records.

"The internet would have to crash before someone would experience what you did in 1987"

Wrong. Only the schwab servers -- easily done when the market really crashes.


I don't know about where you live but in the S.F. Bay Area since 1977 housing became a commodity and the price "raises" are a result of "speculators" (I'll call them by their right name) Sharks have been flipping housing between themselves every few years to make a pile of money. It's very similar to the Ponzi scheme called the stock market.

They sucker mom and pop into selling their "home" at a "good price". They sit on the house for a few months and sell it to their fellow shark for a 25% increase...who sits on it for a few months and sells it to another shark for another 25% increase...etc., etc. then they sucker in a bunch of folks with weird loans and bail. The sharks just bailed and now we're left with a bloated housing "market" with "prices" that bear no relation to their value as housing.

Just like the stock market.

When the Chinese or the Brits or the Japanese start calling in their loans so that they can buy oil with Yen or Euros or Yuan since the oil countries won't sell them oil for dollars -- the Ponzi Scheme called a stock market will collapse along with the entire house of cards called a U.S. "economy"...

Define in detail for me what you mean by the phrase "since 1977 housing became a commodity". I haven't the foggiest idea what you're talking about there. Real estate is not a commodity any more than a cell phone, which is a commodity, is land. What's the point of calling land a commodity?

Calling the real estate market and the stock market nothing more than a "ponzi scheme" is probably a reflection of some kind of idealism, but betrays a lack of understanding of all three.

And all that stuff about the evil "speculators"/"sharks" - whenever anyone offers to sell or offers to buy a house they are engaging in speculation. It's not as if there is some evil band of conspirator "sharks" out there destroying everything in its path as they engage in "speculation".

The subprime market is something else entirely - it has nothing to do with real estate speculation. It has to do with predatory practices in the mortgage lending industry.

a house was a house. The "value" of the house inched up at about the same rate as inflation...

In '77, my brother-in-law and his family and their fellow sharks discovered "home flipping" as a way to artificially inflate the price of housing and began selling properties among themselves to drive up the "prices".

Over time, those bastards have made sure that it would become impossible for anyone of lesser or medium means to become a homeowner without mortgaging their lives -- or without those "predatory lending practices" that are now more the norm than the exception.

As a result, the "price" of a house in California does not reflect its value as housing but its value as a "commodity" like pork bellies or gold or copper in the jungle you'd call "the free market"...


I have a vision of an economic system that takes care of its members; that makes sure that no one goes homeless, hungry or without health care.

You appear to be among that cult that has absolute faith in the mythical "market" and hate the idea of the most good for the most people -- that would get in the way of profits...

I don't think your brother-in-law "and their fellow sharks", whoever they may be, had any real effect on the housing market as a whole. Such "home flipping" as you call it has always been part of the housing market. It didn't start in 1977 - you just became aware of it then. There is nothing wrong with buying a house, paying for upgrades, and putting it back on the market for a higher price. Those who do that have been branded "speculators" but their impact on overall price is extremely minimal because they control a miniscule portion of the housing market. By far and away, most purchasers are not "home flippers", and buy their homes to live in.

Perhaps your animosity towards your brother-in-law all these years has caused you to have a very exaggerated notion of his effect on other people.

If this is what caused you to label housing as a "commodity" well, that's understandable and rather novel of you, but it's hardly an accurate description.

I have no such "absolute faith in the mythical 'market'". I'm just realistic about it, in a way which does not prevent me from sharing your ideals about those who go homeless, hungry, or without health care. In my experience, problems are best solved when they are most accurately and realistically perceived, which of necessity eliminates exaggeration or distortion of the nature of the problems.

One reality which you obviously dislike, is that corporations are driven by profit, and because of the nature of corporations, they are required by law to maximize profits due to their fiduciary duty to their shareholders. The problems you're concerned about arise because the vast majority of corporations do not appear to possess a social conscience. That's where government must enter the picture and require certain kinds of corporate behaviors, while preventing others. Repukes want no government regulation. Dems like us are in favor of it because otherwise there's no check on destructive corporate rapaciousness. I think we probably agree that governments have been remiss over the years in not imposing and enforcing much tighter curbs. I also think we can agree that one form of rapaciousness which should have been eliminated by government long ago is the predatory lending practice known as "sub-prime" lending. Market forces alone won't cure the problem.

But I still maintain that has absolutely nothing to do with your brother-in-law's "home-flipping" practices. The "sub-prime" problem affects a much vaster portion of the housing market.

the groups that should be labeled "speculators" and the ones most responsible for the insane price increases in the housing market over the past several decades are the developers and real estate agencies. Together they have conspired for decades to offer new housing at outrageously inflated prices every year, attracting only wealthy buyers who don't mind paying too much. Then the realtors go off and represent sellers of pre-existing homes at ludicrously high prices that most people can't afford, justifying this practice by pointing to the new home market they helped to inflate. Down the road, when both new and pre-existing housing became too rich for most buyers' blood, along come the mortgage companies offering scam loans to those whose credit doesn't qualify them for traditional loans, and so for the past 10 years or so there's been an explosion "sub-prime" lending which by now has led to record foreclosures, since the poor saps who sign up for these loans are never properly warned that within a few years (typically 1-5 years) their low-to-no-interest loans will suddenly become over-10% loans multiplying monthly mortgage payments to levels they simply can't afford.

A very small subgroup of that group of "speculators" are individual realtors who on their own go around buying properties, sitting on them for a few months to a year, then selling them at inflated prices. An even smaller subgroup of that subgroup goes around buying and selling to each other at inflated prices (as your brother-in-law does), then ultimately selling to the public at a vastly inflated price to god knows what kind of sucker.

That's exactly what I was talking about.

Once housing became too expensive for the vast majority of the People, it no longer could be considered housing and, in my words, became a "scarce" commodity to be bought and sold to the highest bidder.

That's a crime...

Because you put it very differently. The only ones you identified as "speculators" were the "house-flippers", a small subgroup of another small subgroup of the main groups responsible for rising housing prices.

I still wouldn't call housing a "commodity", though. I don't think it helps to solve the problem at all.

I agree that the entire housing industry should be regulated more strictly and that "house-flipping" of the kind your brother-in-law should at least be outlawed if not criminalized. The overall problem of the real estate agencies and developers conspiring to inflate prices, however, may not be so easily addressed, as there seems to be an endless stream of uncaring rich buyers who don't mind paying too much for their homes, and who aren't complaining about it, and don't give a hoot that their purchases as a whole have the effect of overinflating prices in the rest of the market.

"valued" at $29,000

"Sells" in 1978 at $85,000 as-is

"Sells" later that same year for $165,000 as-is...

That's hardly "buying a house, paying for upgrades, and putting it back on the market for a higher price"!

I'm afraid you obviously don't know what really happened during the California Feeding Frenzies that drove up the prices of housing to the point where, in the Bay Area, less than 10% of the population can reasonably qualify to buy...

The one that just finished from about 2001 through last year more than tripled the average home "price" in the S.F. bay area...that's why the lenders had to get "creative"...

I had nothing against my brother-in-law or his entire family of "real estate magnates". Personally, I liked them, I rented from them. Of course, I couldn't ever afford to buy the house I lived in because my income in the late 70s was only going up 25% a year -- not NEARLY enough to catch up with housing "prices"...

After the fact, I learned what they were doing and consider it a crime. They were selling to each other to drive up the prices!!! That's a FACT! It's total bullshit to think that mom and pop were selling to new little mom and pops coming up and THAT caused the housing bubble. Mom and pop were FEEDING the sharks but it was the sharks that made out like the bandits they are...not mom and pop. Mom and pop got stuck with the fucked up loans they had to take out to continue their "mini-flipping" crap...

If housing were housing and taxed accordingly instead of being regarded as commodities for short term gain, wouldn't have happened...

You are right about the sociopath nature of corporations. They need to be HEAVILY regulated and their charters REVOKED and their executives jailed if they fucking get out of line!!!! I would like to see their major stockholders and board members jailed too if they commit crimes...

If there had been a prohibitive tax on housing held less than 2 or 3 years, we would NEVER have seen this shit and housing prices in California wouldn't have driven me out of the state to "retire"...I could have afforded to stay there.

There was NO "sub-prime" nonsense back then. This is a new development to make up for the fact that NO ONE CAN FUCKING AFFORD TO BUY IN CALIFORNIA!!!

Nope, that shit that started with housing in '77 was NOT "business as usual" or any reasonable facsimile of "business as usual"...

about my not being aware that there were people like your brother-in-law selling houses to each other to inflate prices before somehow magically finding some sucker who is willing to pay many times its value of just a couple of years earlier. I can't imagine what kind of moron would buy a house without investigating its price history (doing a search of public records at the Recorder's Office, something any half-decent RE buyer's agent should do as a matter of course) but apparently such morons exist in sufficient numbers to allow that scheme to work and pay off. And frankly, though I am not living in the Bay Area, I can't imagine that your brother-in-law's games could have that much of an effect on even that market as a whole. There have always been other major factors at play in even that market, and certainly other markets around the country.

I agree that what your brother-in-law and his pals are doing should be deemed criminal.

Here in San Diego, nothing like your brother-in-law's practice ever happened, or if it did, it was so minimal as to go completely unnoticed, or have no effect on more than a relative handful of properties.

One of the differences between the Bay Area (I lived there from 1973-1980) and San Diego is that the quantity of housing in the Bay Area is very limited compared to San Diego due to geography. So I can understand that if your brother-in-law's evil practice became widespread there, it could have a major effect on the overall market there. In San Diego, there's so much more land available, and by now so many more houses than the Bay Area that the "big fish in a small pond" effect your brother-in-law's practices may have had in the Bay Area isn't possible here - the pond's just to big.

The problem here is that record numbers of wealthy people keep moving here year after year, bringing their life savings with them, and buying, buying, buying. As a result, San Diego has a booming housing market that seems unaffected by negative forces that affect the rest of the country. More new housing continues to be built, and prices for both new and existing homes just keep rising at 5%-15% per year reliably, primarily due to collusion between real estate agencies and greedy developers who know that they can always find someone with the money to pay their obscene list prices. Last year saw a slow-down to almost a flat rate of growth in prices, but it's picked up again. For decades, the average price of housing has doubled here about every 10 years.

By now it's difficult to find a nondescript new house over 3K square feet for under $1 million. $1 MILLION! For a relatively small-to-moderate sized unremarkable house on generally less than a quarter acre of land. I personally consider that both obscene and insane. And the average price of a single family home county-wide (which includes most of the county where incomes are pretty low overall) is now well over $500K. As a result, a lot of middle-class people are fleeing the county to places like Temecula and Murietta to pursue their dreams of becoming homeowners, and commuting long hours to their jobs in San Diego.

That started around 10 years ago - by now, prices in Temecula and Murietta (and Riverside County in general) have gone up so much, a lot of middle class people are just leaving California altogether.

I had to leave California to be able to afford to buy anything.

Soon, we'll be putting solar electric on our roof and our electric bill will dwindle to nothing per year.

We're able to do this because the local Electric company will pay us $1 a watt!

That's the difference between a Muni Power Company and a group of corporate capitalists like PG&E!!

Ah, but the government can't do anything right, can they??? :sarcasm:


Now, if I can just get me a used Electric Car.... :shrug:

Good news about your local electric company and the solar panels.

PG&E doesn't provide that incentive here - but I'm installing solar panels anyway because I believe in Al Gore. :)

Sorry you had to leave - coastal real estate here has been going through the roof for decades and no end seems to be in sight.

I got lucky - got in at a price I could afford, and have watched the value of my home double in the past 6 years (because it's near Del Mar), which is of little use to me because I'm also semi-retired and not planning on ever moving again.

Started buying back 2 days after crashed. I guess timing is everything.

Our financial advisor called us last week and moved most of our 401K out of US funds. It's going to get really ugly.

into this category because they have a fixed time to their existence. While the market as whole goes on forever. Bonds to me are not a wager, because they guarantee a payment of face value after a certain time period. The real question about bond are, Can you get a better return today for the same amount you have invested. That is why they vary in price from day to day.

This is not a republican issue.

This hits home for me.

That's the whole fucking corporate capitalist "system" in a nutshell...including their Ponzi schemes called "stock markets"...

it's not going to bother you "right now." But...eventually the Bush Flying Monkeys will come home to roost...about the time we Change Administrations...so collect your cash and stash it...like a squirrel.

and things will be filtered out.

future in the hands of those wonderful Wall Street guys.



Now, once we let them have the Social Security trust, we will have no more worries about "retirement".

as far as house flipping, all one has to do is google baltimore+flipping to see what a disaster that turned out to be for them. And, for years, I have followed stories about BancBoston and Fleet as they ravaged communities and entire states. The most amazing part has been watching the heads of companies like BancBoston placed in government positions tied to the mortgage industry. Talking about the fox watching the hen house.

it took 7 months to get there and only 3 days to drop.

"CHEVRON REPORTS $4.35 BILLION IN PROFITS! It's Like They Were Printing Money
by John Ehrenfeld about 21 hours ago - 3 comments

Chevron's record profit's amazingly couldn’t satisfy Wall Street’s expectation’s as their just reported $4.35 billion second quarter earnings sent shares tumbling. I suppose profits 18% higher than last quarter which capped off the most profitable three-month period in Chevron’s 127 year history just doesn’t cut it in this hyper-active greed cycle energy investors are in. Revenues for this period were $53.5 billion.

"It was still like they were printing money. They just weren’t printing as much as everybody thought,” said industry analyst Fadel Gheit of Oppenheimer and Company".

I doubt Chevron CEO David J. O'Reilly care’s very much about the temporary drop in Chevron’s shares, since he made $8.8 million last year bringing his six-year compensation total to $37.39 <Million>. I’m sure he thinks the future is bright indeed as he oversees Chevron’s insatiable thirst for massive amounts of profits no matter what the cost, including their involvement in the exploitation of oil in Iraq."

--------------------
and let's not forget the environmentally friendly oil company:
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"EXXON MOBIL'S INCOME FALLS TO $10.26 BILLION! Tears Flow At Headquarters
by John Ehrenfeld 4 days ago - 19 comments

Please join all compassionate people in conveying our sincerest best wishes to Exxon Mobil during this very trying and difficult time. The repercussions of their second quarter net income falling to $10.26 billion dollars are unimaginable. A large bouquet of flowers said to be from Dick Cheney was seen being delivered to company headquarters and rumors are circulating that all employee yacht payments and country club memberships have been suspended. A fund is being established for their executives; please stay tuned for further details."