Since its a slow Friday before a 3 day weekend, let’s have some fun.

As the credit market has gone into the crapper over the past few weeks, gallows humor seems to have gotten the best of investors and traders. This hysterical piece of financial wit — in Powerpoint no less — has been circulating round Wall Street trading desks for a few days now.

I embedded it into Google apps and posted it on line so everyone can enjoy the warped sense of humor that accompanies losing $100s of billions of dollars.

Ain’t Wall Street grand?!?
>


click to launch slide show

Ace_mortgage

Category: Credit, Derivatives, Finance, Real Estate, Trading, Video, Web/Tech

Please use the comments to demonstrate your own ignorance, unfamiliarity with empirical data and lack of respect for scientific knowledge. Be sure to create straw men and argue against things I have neither said nor implied. If you could repeat previously discredited memes or steer the conversation into irrelevant, off topic discussions, it would be appreciated. Lastly, kindly forgo all civility in your discourse . . . you are, after all, anonymous.

87 Responses to “How SubPrime Really Works”

  1. cinefoz says:

    Absolutely Brilliant!

  2. Ross says:

    Fire equity withdrawl, FEW. I like the concept since most properties are over insured due to the demand of the lenders.Interseting way to solve the inventory problem.

    The P&C insurers may be the next shoe to drop. Anyone know if Countryslide Mtg. self insures the homes they repo?

  3. Shnaps Parlor says:

    curse you websense!!

    *shakes fist*

  4. Mr. Obvious says:

    Damn, that was funny. I’m not sure if that means I’m a financial geek, or that potty words just make me laugh.

  5. Bob A says:

    If I didn’t know better I’d say that was a script that was written before any of this took place.

  6. tm says:

    I didnt know if I should laugh or cry, until it came to the Czar of accounting “Blow me”
    I both laughed and cried.

  7. Bob A says:

    Oh and they left out the part about “and we know real estate always goes up because POTUS always tells us things are good and the good people are now in control of the government.”

  8. cinefoz says:

    Translated to real life, I would hope that personal consequences of the most heinous type fall on the crap sellers who knew idiots would buy whatever they offered. Unemployment, jail, lawyers and lawsuits, and social degradation all need to be applied against these thieves and accommodating idiots.

    To anyone who has hire and fire capabilities who is reading this …

    Do yourself a favor, make yourself feel good, and come home with something to brag about by firing one or more of the psychopaths who made you look so bad. They’re laughing at you right now. Don’t kid yourself. Throw some out, today.

    If you happen to be a psychopath and are reading this, fire a co-conspirator today and use him or her as a scapegoat. At least one will be gone. That’s better than none.

  9. Sean says:

    This is an ABOLUTE CLASSIC!!

    It will be remembered in the findncial history!

  10. PLing says:

    A classic case of passing the fuck. Made my day.

  11. michael schumacher says:

    Wow that was pretty much the same conversation I had with the assholes at IMB this morning.

    Got a letter yesterday that basically said it’s all my fault they they have no internal risk management controls and that If I wanted my 800 credit score, 200K plus in equity still in my home, spotless payment history $100k HELOC re-activated….all I would need to do is provide an appraisal that shows a higher value…………OMG

    Fuck Me….is that not how we got here in the first place?

    Total assholes…but they are “sorry”

    I knew it was coming so it wasn’t a surprise. I have bullet proof credit and payment history and I get hit……responsible management of ones assets makes no difference now.

    I also realize that this “suspension” has more to do with IMB than me…..however it paints a picture that all of us are suspect no mater what you look like financially.

    Ciao
    MS

  12. johnny m says:

    Bravo, Barry. Perhaps we can anticipate a sequel, along the lines of “I Can Haz Bailout Goverment Cheeze?” Lotsa choppers and wheelbarrows.

  13. Matt from Lincoln says:

    TM is absolutely right.

    The Czar of accounting: “Blow Me.”

  14. Ironman says:

    Closely related – here’s a link to a great post by Jonathan Miller, who has a lot to say about how the change in focus from down payments to monthly payments has led a good number of homebuyers to be comfortable with the idea of walking away from their houses, even if they can work out new financing to stay in them.

    Via this week’s edition of On the Moneyed Midways – yes, that’s a self-plug (what else are you going to read this weekend before Barry posts his weekend linkfest?)

  15. Larry says:

    I wish more Powerpoint presentations were like this.

  16. dukeb says:

    The only PPT I ever willingly went through more than once…the utter simplicity of it! Hilarious.

  17. Value Man says:

    And if the value is’nt high enough we will beat up the appraiser. If the appraiser give us a hard time we will find another that will hit the number we need. You see we pretend we are bankers but really we are mobsters right out of the 1930′s

  18. lux says:

    Love it. Thanks Barry!

  19. JustinTheSkeptic says:

    Somehow I missed the joke? Perhaps the ending slide should have shown the Golden-Parachute Excutives together out on the golf course fucking each other? But of course they didn’t get fucked; like always!

  20. JustinTheSkeptic says:

    I have to wonder why the market isn’t selling off like crazy….I guess it is because it has been so long since really, really bad things happened in the market, or there really is a PPT… Say it aint so Joe, pleasezzzzzzzzzzz! These ruby shoes aren’t taking me home anymore.

  21. Tad Sketchy says:

    You need a part 2, where the RSG people get in trouble and have various governments bail them out, further fucking over the Norwegian villagers and Kansas school boards.

  22. Don says:

    “Fuck you” says the Norwegian.

    “Fuck you” says the RSG banker.

    And there you have your liquidity trap. No trust, no liquidity.

    Pushing on a string.

  23. JustinTheSkeptic says:

    Tad Sketchy, I’ve got the scene: Golden-Chute Excutives on golden golf green, with rows and rows of people bent over to take it up the ass. The peopel would of course have different signs identifying who they are, and then finally the last one in line would read: “Mom.”

  24. Ben says:

    No matter how bad the situation is, how bad the people think, there is no selling today. Hehe, the bull wins!

  25. Strasser says:

    Barry,

    Homeowners aren’t the only ones walking away according to this FT article from yesterday. Seems the lawyers are now advising “the leading banks that it would be cheaper to walk away from big buyout deals than incur further losses on their funding commitments, increasing the chances that more high-profile private equity transactions will collapse. . .”

    http://www.ft.com/cms/s/0/5becb572-db30-11dc-9fdd-0000779fd2ac.htm

  26. cinefoz says:

    Strasser,

    Homeowners walking away is a myth, possible propagated by a few who are judgment proof, creative writers, and the stupid who don’t think very hard.

    The note / mortgage and state law for a home in most states, in all likelihood, makes it unwise for a debtor to walk away from the home if money is still owed on it. If a note still has an unpaid balance after a foreclosure sale, the borrower is still liable for it.

    Depending on the law and the aggressiveness of the party owed money, asset seizures and sales are a possibility. Wage garnishments are also a possibility. A lesser Hell is making the payments and hoping for the best in a few years. Or bankruptcy chapter 7.

  27. techy says:

    cinefoz…

    i hope you have heard about non-recourse type of mortgage loan?

    http://krugman.blogs.nytimes.com/2007/12/20/jingle-mail-jingle-mail-jingle-mail-eek/

    http://www.adamsmith.org/blog/economics/jingle-mail,-jingle-mail-20071227658/

    i am not sure how accurate this is, but it has become a common knowledge that some states like california have a non-recourse kind of mortgage loan.

  28. Short Man says:

    “Homeowners walking away is a myth, possible propagated by a few who are judgment proof, creative writers, and the stupid who don’t think very hard.”

    - – - -

    This comment makes no sense. The source of the increasing attention to this matter in the MSM is from the comments made by some of the largest lenders in the country themselves…

    From the Wachovia conference call:

    “Part of one of the challenges is, and we’ve mentioned this before, a lot of this current losses have been coming out of California and it’s — they’ve been from people that have otherwise had the capacity to pay, but have basically just decided not to because they feel like they’ve lost equity, value in their properties, and so in a way, we may have — it’s hard to know right now, but we may have seen somewhat of an acceleration problem loans as people have reached that conclusion and we’re just going to have to see how the patterns unfold here.”

    BofA CEO Kenneth Lewis:

    “We’re seeing people who are current on their credit cards but are defaulting on their mortgages….I’m astonished that people would walk away from their homes.”

  29. Barry,

    If the blog thing doesn’t work out, you can become a financial cartoonist.

  30. cathompson says:

    BR – Thanks for sharing!

  31. JustinTheSkeptic says:

    Cinefoz, your kidding, right?

  32. Ross says:

    Cinefoz,
    There are many non recourse states. Even in recourse states, the real estate dockets are clogged.

    One of the reasons for all the gov. help and potential modification agreements by the lenders is their fear of jingle mail. Better to have an inmate pay something a month rather than absorb property tax bills, utility bills and deferred maintainence issues.

    I still want to know if the P&C insurance on repos is farmed out and to whom.

    Unwinding this bubble should be known as the attornies and accountants relief act.

  33. JustinTheSkeptic says:

    Happy Friday: Anyone interested in getting a look ahead at the economy turn on “Spike” TV…

  34. cinefoz says:

    I am unfamiliar with non recourse states. I will google the concept. Wikipedia says it is common with commercial loans, but a quick look over google makes it look like some states leave lenders on the hook.

    However, if the house foreclosure sale does not satisfy the amount due, the IRS will treat the forgiven amount as income and tax the former debtor on that amount. Of this I am sure, at least according to the tax publications as they relate to forgiven debt.

    At least there is a little payback.

  35. michael schumacher says:

    How are those buys going earlier this week??

    Cinefiz??

    funny how you forget about those when the market turns on you.

    Ciao
    MS

  36. Ross says:

    Cinefoz,
    You need to catch up on current events. The current law vetoes the IRS ability to claim relief of debt as a taxable event……

  37. Short Man says:

    Ross – “I still want to know if the P&C insurance on repos is farmed out and to whom.”

    - – - – -

    I know Assurant (AIZ) is one of the bigger players in the field.

    Disclaimer: short AIZ

  38. cinefoz says:

    Ross,

    Please document your source for this. Debt forgiveness has always been considered income to the IRS. Please cite a reference.

  39. Alan says:

    Cinefoz, you’re wrong about the tax liability. The Mortgage Cancellation Tax Relief Act of 2007 (HR 1876) which was passed in December amends the tax code to exclude debt forgiveness on principal home mortgages from treatment as income.

    “Debt forgiveness” is now non-taxable.

  40. bartkid says:

    The only improvements I could suggest is adding a slide of President Bush propounding the “Pwnership Society”.

  41. Mr. Obvious says:

    Damn, cinefoz…and here I thought you were a big-time real estate investor. In reality, you are a nitwit.

    Under the Mortgage Forgiveness Debt Relief Act of 2007, which was enacted Dec. 20, taxpayers can exclude debt forgiven on their principal residence if the balance of their loan was less than $2 million. The limit is $1 million for a married person filing a separate return. The form is available at http://www.irs.gov.

  42. cinefoz says:

    Ross, Alan

    I just found it at irs.gov, updated 2-4-08. In non-recourse states, the forgiven amount is non taxable.

    Since non recourse states such as California have the option of judicial foreclosure, I don’t know the full effects of this new provision.

  43. Alan says:

    Cinefoz, judicial foreclosure is precisely when non-recourse laws come into play. There’s no such thing as recourse in non-judicial foreclosure, unless it’s written into the contract, and it never is (because the concept doesn’t make sense… you’d be agreeing to have the bank potentially take all your assets beyond the collateral without going through a judgment enforcement proceeding).

  44. Mr. Obvious says:

    cinefoz, for awhile now you’ve been yapping that housing is going to “normalize” in a couple of months. But it is clear that you have no idea what the current state of the housing market is.

    I cruise a number of home buying forums. It is utterly amazing the number of people who start threads regarding foreclosures/inability to pay the mortgage, and concluding that walking away is the best bet.

    For you to not know that Cali, the biggest of the foreclosure problems, is a non-recourse state demonstrates your niavity as to the housing debacle. For you to not know that “mortgage reform” in the form of taxable debt relief was just passed is utterly amazing.

    But it sure puts your housing call of “normalization” into perspective….

  45. JustinTheSkeptic says:

    Wow! Beazer Homes bonds just got downgraded… And this is the best system in the world? Yo! to capitalism…I can see why Marx and Ingles felt like they did. People of the U.S. we’ve been brain-washed. That doesn’t mean that a control-economy would work, but perhaps there is room for something else completely? Please young minds think!!!

  46. cinefoz says:

    Alan,

    From what I read, California lenders have the option of a judicial foreclosure, as opposed to the non-judicial non-recourse action. The judicial foreclosure, however, allows the borrower 1 year to recover the property, making the foreclosure sale an unattractive possibility. The reference said judicial foreclosures were used only when the lender would be likely to take a big bath.

    From what I see in the papers, the non-recourse non-judicial route is the most popular in California.

    References also say that 2nd mortgages are almost never non-recourse.

  47. cinefoz says:

    Mr Obvious,

    I said that housing would turn upward this spring or summer. This would be the time of the inflection point towards normalization. I also said that nobody is coming to bail out the California tulip speculators. In a year, housing will look more normal in most locations. Normal does not mean gangbusters. Normal means normal.

    I assume you are an idiot who can’t read or retain information for long. Otherwise I wouldn’t have to repeat myself.

  48. Will T says:

    Did anyone notice this story?…..Bernanke utilizes speech consultants, on the fly, to improve his communication skills.

    Three months earlier — on Oct. 2 — Bernanke had a two-hour meeting with communications expert Andrew Gilman, president of CommCore Consulting Group.

    Gilman worked with Bernanke on speech delivery, according to both Gilman and Fed spokeswoman Michelle Smith. Gilman’s bio says he has worked as a communications strategist and a crisis counselor. Gilman’s session with Bernanke, however, did not involve crisis management, Smith and Gilman said.

    Gee, this really creates an aura about his abilities.

  49. Don says:

    W/out piling on cinefoz too much…you, sir, are a bit mis-informed.

    California and several other states have one remedy available to the lender–foreclosure.

    Like Alan said, if you want to collect on the note in other states, you have to sue on the balance outstanding after the foreclosure–which can still be done non-judicially–it only requires the court if an action on the note is desired after the fact.

    But, debt forgiveness is no longer taxable, as was pointed out.

    And even if all that doesn’t work, there’s always Chapter 7.

    You are correct that if a borrower in a state that allows the lenders to collect on the note are sued, and then a judgment rendered, their wages can be garnished–up to 25% of their paycheck in my state, which allows this type of remedy. But it didn’t stop a couple of folks I personally know of calling the bank and offering the keys. The problem is finding and suing and collecting when so many folks don’t collect wages anymore, and they just left their last known address.

    Ross,

    I know Countrywide has a subsidiary insurance company that does homeowner’s insurance. If they force-place insurance (buy a policy in lieu of the homeowner’s buying one, if there isn’t an escrow account), it is done w/ this company, and I assume the same would be done if there was a foreclosure, but, I’m quite sure that their captive company is essentially nothing more than a broker, pawning off its policies to whomever will underwrite them, so I don’t know what that says for the fire equity withdrawal.

    In any case, “jingle mail” is real, and makes good economic sense in some cases, and will continue to do so as long as real estate prices keep falling. As Ross says, why remain enslaved to a house you can’t afford, when freedom is not that expensive?

  50. cinefoz says:

    I just looked at the market close. It rallied late in the day just before a 3 day weekend.

    Would this be a bullish indicator? Possibly marking a turning point where the number of buyers finally exceed the number of sellers at a bottom.

    Me, I would say yes. I would guess this is the last day of a bottom and up will be the predominant direction for the next few weeks.

    I love being right.

    BTW, thanks for the drill on loans. I learned something new today.

  51. cinefoz says:

    Don,

    Only non-recourse loans are non taxable if forgiven, not all mortgage loans.

    http://www.irs.gov/newsroom/article/0,,id=174034,00.html

  52. B.B. says:

    Barry,

    I was in a daytrading room once, where every Friday the members would vote. The vote was to kick out any idiots. 3 ‘no’ votes would do it. That kept most idiots from piping up, and the few that couldn’t resist, adios. How about it Barry? I beleive I know of 1 poster that would be removed as of today… :)

  53. cinefoz says:

    B.B.,

    That would leave this a cloistered mutual admiration society for people who don’t know what they don’t know … and like it that way.

  54. Ross says:

    Cinefoz,
    I’m kinda with you on todays action. Short term we could have a pretty good rally but we ain’t seen the bottom yet in my opinion.

    I also like to read positive blogs to counter my basic cynical nature. Markets go both ways. I hate trending markets. No fun.

    Someone who has been pretty good on the intermediate trends is Henry To at marketthoughts. His site is modestly priced ( $120 ) a year and he shares many of your views.

  55. The Subprime Shuffle

    Courtesy of Barry Ritholtz, we get a look at some black humor being passed around on the trading desks of Wall Street:
    Go here to see the whole slideshow.

    I would have more humor about this if I didnt just get some bad news.
    My new house has a …

  56. cinefoz says:

    Ross,

    Absent some new major market catastrophe (I mean gigantic), I think we will zig zag past S&P 1450 and maybe to 1500. Once we get to 1450 I will be watching like a hawk. 1500 is unsustainable for sure, but a buying frenzy might happen.

    I think the market will fall again from the high to maybe 1380. Then it will climb back.

    All of this is only guesswork. But I think this will be a profitable year and one that follows a predictable trend based on history.

    I think we have normal variation to look forward to once we recover from the bubble sell off … which I think is happening now.

  57. techy says:

    i think we need cinefoz….just to keep us balanced…

    the only problem is like FRED, he will say wolf too many times and we will ignore him after a while….or he may just go away like FRED.

    i hope i remember that poster correctly as FRED, who used to be bullish six months back….and we are atleast 20% down since then and i dont see any posts from him anymore..

  58. JustinTheSkeptic says:

    Ben Bernanke doesn’t need speech professionals…he’s fine. Things are such that anyone in the “real” know would have a shimmer in his voice…WHAT EVER HAPPEN TO TRUTH AMERICA…I THOUGHT THAT IS WAS WHAT MADE US GREAT IN THE FIRST PLACE???????????????????????

  59. rexl says:

    i am amazed that the village head, or other victim does not pull a gun and blow the fucker’s head off.
    particularly in the case of enron or similar scam, where people sixty-five had their entire savings stolen and were looking at starting over, fuck it, lock and load.

  60. ken h says:

    Barry,

    I love the presentation but I think it went a little different.

    They are leaving the part out about how the CZAR didn’t tell the investors to fuck off but to “be patient, for the US Taxpayor Bailout.”

    CineFoz, Real Estate Mogul my ass, More like a high school student. Boat loads of bullshit. In Sacramento, Foreclosures almost eclipsed sales. You can call that whatever you want but I guarantee you that city council is sucking wind.

    A point CineFoz could have made and is a question that I have: What about speculators, the Freedom act does not protect them as they will not be able to prove “primary” residence. Talk about the Government working around the 13th ammendment. Ouch!

    I still say Cheese fuz is Barry after kicking a few back. Laughing his ass off while we get our panties in a wad.

    Don’t kick cheese fuz out, he just needs to argue his point better and come prepared. Same shit I have to tell my 15 year old.

  61. JustinTheSkeptic says:

    Aint bull-shit grand! Until it meets truth.

  62. ronyregan says:

    Agreed…

    You want to know the simple solution:

    Foreclose on all the Idiot buyers who can’t make payment

    Let all the greedy lenders and peddlers and insurers and financiers go bankrupt!

    The ones who deserve the pain will suffer the pain!

    ….and they will all be less likely to do it again.

    …and those of us who are still liquid…will pick up the pieces….at bargin rates….that’s fair!

  63. Reinko says:

    Well well, finally found a collection of Barry stuff. That is better than looking at seekingalpha.com for nice stuff to read.

    Here is some good good stuff for you Barry:

    Find out about IFRS wel (prime beneficiary beginsel)and Basel 1 and Basel 2 (ways of measuring commercial bank reserves).

    After that you go to the Federal Reserve h3 release and proof the next theorem:

    Combined reserves of the US commercial banks is at least 78009 million in the negative and declining at a 2 billion a working day speed.

    _________

    I hope that in the future we will see some comics around that one…;)

  64. CJS1943 says:

    What is ‘jingle mail”? Thanks.

  65. B.B. says:

    “Jingle Mail”

    When a homeowner mails the keys to the bank. and walks away…

  66. Ross says:

    Let’s get serious here about jingle mail.

    Who in their right mind is going to pay to mail keys to their lender? You just put them in the mailbox and drive away!

    Love the line ‘last known address’. The Sheriff in my county isn’t going to go out of his way to deliver papers on the ‘former owners’. Ketch me if u can!!!! Bye

  67. ken says:

    If you think housing will be more “normal” in the spring you are in for a surprise. This mess is not over by a long shot. Wake up and smell the coffee. Every day the news is filled with more problems in the general economy. The value of the dollar keeps going down. Price of oil keeps going up. Prices of every day goods such as food keep going up. Get in the game. Being optimistic is one thing but being delusional is another.

  68. Winston Munn says:

    I clicked on this and my system froze – somewhere there is a moral in that.

  69. lurker says:

    But stocks have stopped dropping??? Is the news sooo bad that it is known by all and in stock prices already? Will the announcement of a full recession be met by a giant rally up the mountainous wall of worry? I am NOT cinefuzz, but isn’t a market that refuses to sell off on clearly bad news a BULLISH thing? I honestly do not know the answer…see told you I wasn’t cinefuzzy. ciao for now.

  70. Dan says:

    Hmm. I wonder what the Norwegian villagers are going to do with all that real estate they now own in the new world? Maybe they can move over and teach the stupid Americans about Financial Transparency, Responsibility and Nordic Socialism!

  71. Ghost of Cinefoz says:

    Volume this week sucked. Not about to call a bottom on such low volume.

    And lets face it…market fundamentals are puking all over. I mean, seriously puking all over. Munis can’t even sell their friggin bonds, and here cinefoz is calling the all clear signal…

  72. Kuds says:

    Today was an options expirations day. Anything can happen, and it did.

  73. Estragon says:

    MS – “I have bullet proof credit and payment history and I get hit……responsible management of ones assets makes no difference now.”

    I can relate. Having been self-employed for over 20 years now, I simply don’t bother with personal credit any more. A few years ago, I employed 100 or so people who could get mortgages, car loans, etc. on the basis of what I paid them. If I applied for the same loan, I’d have to (try to) explain that I paid myself whatever made sense from a business and tax standpoint. That doesn’t fit in a checkbox though, so applying for consumer credit just became an exercise in futility.

    Maybe just as well. In a way, it’s very liberating. If I want something, and have the money to buy it, I’ll consider it. If I don’t, I don’t even think about it.

    Money (cash) talks, BS walks.

  74. Stuart says:

    US Comptroller General has had enough. He quits.

    http://www.washingtonpost.com/wp-dyn/content/article/2008/02/15/AR2008021503189.html?hpid=moreheadlines

    A shitstorm is headed our way.

  75. Bikerken says:

    You guys have missed what really started all of this. When Bush came into office in 2001, he wanted to help his illegal alien sweeties buy homes. So he pushed, along with the congress, for the financial sector to loosen the paperwork and financial requirements to get a home loan to make the ‘American Dream’ easier to obtain for everybody. (Do you remember this?) The financial sector, smelling a quick profit, figured that they’d be perfectly willing to hand out cheap easy money as long as they could boost the prices to kingdom come because their commisions were based on prices. Everybody saw dollar signs in their eyes. Hence the birth of the “NO DOC” loans for “NO DOC” people. Here in San Diego county, in the five years starting in 2002, home prices went up and average 135% over the next five years. I have many friends who work real estate here, they saw as many as fifteen to twenty names on one mortgage as illegals banded together to make home purchases. What did they have to lose? They were buying houses that were going up forty percent in a year, taking out a huge equity loan, getting that new hummer, all on piss poor credit, probable fake id and no employment confirmation. When the payments went up, what did they have to loose by walking away? Nothing! This story was repeated over and over and over again down here in SoCal.

    A similar situation is BofA advertising that they want to give credit cards to illegals. Now what do you think is going to happen when you give a credit card to someone with a fake ID? They run it up and dissappear, DUH! Could this be why BofA is boosting the interest rates on all of their customers through the roof for no reason at all. Even some of their best payers are getting DOUBLED! As usual, the US taxpayer is paying for someone elses folly.

    The problem here is that when you start deviating from the law, skirting the rules to make it easier for people to be irresponsible, you are asking for it. The laws of economics are like the laws of physics, you think you can mess with them, if you try, you’ll get hurt.

  76. ef says:

    Now imagine that is your retirement fund, and you are getting ready to retire in a few years, and WS just said FU to you and your family. I thought we were suppose to be the good guys, with the quality, transparent accounting rules.
    Argh.

  77. How SubPrime Really Works

    Fluctuations, My Good Man…a guide to the sub-prime mortgage crisis in slide show form. Don’t balk at the fact there are 45 slides. It’s worth it. Via Jim Henley.

  78. goatchowder says:

    No, the Norwegians do NOT own any “land in the new world”. They bought a securitized “basket” of loans– collateralized by nothing, at least not directly. It’s the magic of the free market! Consequence-free lending!

    How the hell are those bad loans going to get worked out? Who will actually end up with the property?

  79. bz says:

    @ Bikerken:
    Had nothing to do with wanting “to help his illegal alien sweeties buy homes”, bro. It had everything to do with attempting to make the “ownership society” fetish a reality while simultaneously providing a very nice gift to his corporate sponsors. (One wonders whether the former was merely cover for the latter.)

    It also became a matter of his political survival to keep the music playing. He could (and did) then claim the naysayers were wrong, the economy was doing swell — and he had the housing bubble data to point to. He woulda been out on his a** in 2004 if the music had stopped in 2002. It’s possible a tanking economy could have put a pretty big ding, too, in the support he was trying to manufacture for his little excursion into Iraq.

    Americans seem to not care much about the legality of pre-emptive war or torture or being spied upon, or even loss of habeas corpus, but they sure as heck will get pissed and turn contrary if the economy goes into the crapper. Junior didn’t forget what happened to his daddy, who won his war and got no 2nd term. Remember “it’s the economy, stupid”?. Junior remembered.

  80. Jeff says:

    Any chance I could get a “clean” copy of your How Subprime Really Works slide show? It’s hilarious and 100% accurate, but would probably offend a few people I’d like to show it to in it’s current form, unfortunately.

    ~~~

    BR: As of now, a few 100 billion dollars have been lost, heading towards a trillion, with the economy getting weaker, student loans inaccessible, the mortgage market seized up, some major assets lost, entire industries ground to a halt — And you are worried about someone being offended by the word fuck?

    THATS seriously fucked.

    If they are offended by the word, and not what’s going on, then I cant help them

  81. Steve Pett says:

    Brilliant – I will be telling 9,000 UK IFAs about it in next weeks http://www.IFAbonus.co.uk Newsletter!

    Steve

  82. It’s not just a subprime issue. It was really more about a lack of income and asset verification that allowed anyone to qualify for a home loan, though most had no history of supporting that level of debt.

    I think we need to start verifying income, assets, and employment. And speaking with potential homeowners to ensure they understand what they’re getting into.

    The mortgage industry is constantly looking for ways to circumvent whatever is thrown at them, and that needs to stop.

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