2007/08/10

Silver Lining Department - What Sub-prime Crisis?

To the extent that there's anything good about the crisis in the sub-prime lending market, it's the fact that I'm not getting nearly as many of those ridiculous "mortgage refinancing" letters these days.

24 Comments:

I am not getting any of those either... and I don't miss them or the phone calls..
I guess that's true. Those are missing. I just don't get what about this situation was so hard to predict that the stock market is now crashing because of it. What did they think was going to happen?
Suzie-Q... Phone calls I don't get. Thank the fates. But for a while there, the Frogette and I were getting 10 or so missives a week from people who wanted us to refinance.

...what about this situation was so hard to predict...

Ms. Yenta... Nothing, I think. Although, I've been of the opinion that the housing market will be stronger for the shakeout. Yeah sure, appreciation in the overheated markets will slacken. But it should, right? There will be a bit of deflation, but affordability is at an all-time low. So some correction is a good thing.
I found out today on the News that Countrywide was having problems. I have a mortgage with them and jut=st talked with one of their loan officers about money for an apartment unit.
Typo:
I found out today on the News that Countrywide was having problems. I have a mortgage with them and just talked with one of their loan officers about money for an apartment unit.
Sorry to keep reflecting on Australia – I’m stuck here…
Despite headlines like - Australian Stocks Slump Most in 6 Years on U.S. Subprime Rout – scary stories suggest the credit spruikers are still at work here. - Binge on easy credit to meet household needs
“…households increase their exposure to debt to meet day-to-day needs and lenders become more aggressive in touting easy credit.”
Well we are a little behind I guess.
I had to laugh when I saw this post. I'm soooo sick of those things. Particularly the ones that look "official" and I feel obliged to actually open them.
Let's Talk... My understanding is that if they do get into trouble they'll essentially run out of money to make loans. You may get all your paperwork done only to find that they can't close the deal.

Be careful out there.

Cartledge... Easy credit has been a problem in the US for years (decades?). But... what's a "spruiker"?

PT... I used to get them a dozen a week. It was crazy!
But the student loan people are stalking me relentlessly.
"spruiker"?
Like the town crier, or one of those fat thugs who stands outside strip clubs bullying people to see the show.
Somewhere between, close to the second description are the phone and mail cheap loan spruikers.
We paid off our mortgage earlier this year and I'm still getting the freakin' calls. Hey, I'm pre-approved for every sort of loan in the world according to my mail and phone calls. Thank god for paper shredders.
tooo strange,....now if the Viagra adds would just go away....

( Hmm, I wonder why they can't even honestly tell us WHICH lenders are in trouble- very mysterious...)
A dozen a week? Man, now I remember why I left the states. I've had an empty mail box two days in a row, and over the course of the last week I've received exactly one bill and two bank statements. Nothing else.

I did get a telemarketer the night before last. I'd say I average about one or two a year of those.

I don't know about you, but now and then I find an empty mailbox absolutely glorious.
Enigma,

In answer to your question, many (like BNP in France) lie about the extent of their exposure. Others, actually don't know. The debt has been sliced up and re-sold so many times, no one actually knows who is holding it.

Most people figure everyone is holding some, but some more than others. But it really isn't known where most of it is.

That is what really bugs me.
Hi Frog...
I get phone calls all the time from the mortgage department. They don't say who's, however there computer generated calls.

I also get letters from lenders to refinance my mortgage or borrow to remodel.

Then of course there are the emails to take out loans or refinance. You know the ones. We have accepted your loan application. You have been approved for refinance. Yes we will be happy to complete your loan request.

The funny thing about this is that I rent and do not own a home. And this has been going on now for over 4 months.

I hope that my bank don't go under as I would hate too lose the little bit I have managed to save over the past few years.

I remember the S&L collapse as my Grandfather lost most of his savings.

Der Fuhrer{Adolph}Bush has at last done what he started to do and that is totally destroy our country.

I long for the day he stands trial in the Hague for his Crimes Against Humanity and War Crimes.

I want too see him piss and ship his pants. One things for sure though, he will not face his maker like Saddam Hussein who want like a man. No he will go like the coward he is.

Sorry for the rant kvatch.

God Bless.
Sorry...
Should have read "I want to see him piss and shit his pants".
John Doe Pays for Excessive Financial Institution Risk Taking

When the pyramid scheming financial types go on a binge that entails red flag obvious 'excessive risk' taking, then massive losses occur, financial institution' equity hemorrhages and then ( Big Point) interest rates and margins on interest rates must increase until the financial institutions replace the lost capital.
John and Jane Doe then, effectively, have to pay a greed tax and pay more for their car loans, their mortgages, their credit cards until the banks replace the capital.
Meanwhile the financial types have stripped a tenth of a point here and a half a point there from these capital flows, enriching themselves until the speculative 'excessive risk' schemes meet their inevitable cash crunch end.
In 2006, a good year for speculation and mortgages, Wall Street stripped 25 billion dollars from capital flows in bonuses alone.
In a bad year, when capital and equity shrink the little guy has to pony up to replace the capital. It's a mugs game and trust me, if the only way to get the money out the door to consumers in order that the 'bankers' can put a piece of the action in their pocket is to ratchet up the risk, so be it.
I would say "Plus, it should act as a wake-up call to the anyone who thinks an economy can survive for very long with naught but Credit as its primary base" but, of course, the folks in charge will suicide or go into hiding before admitting as much.

Either that or they find a way to work-over whatever is to follow. That's how teh $hrub wrested his own wealth from the flames of his business failures.

{sigh}
Cartledge... Ah, got it!

PoP... I know how you feel. All that information comes from public records, and my guess is that other than the original amount of a loan, the callers have no idea what one's situation is.

E4E... A lot of it has to do with the mix of loans a lender is making, I suppose.
Praguetwin... Yeah 'bout a dozen of the loan offers at the height, and in addition plenty of ads from real estate agents wanting to know if we're interested in selling--a sort of "push advertising".

Hey and thanks for answering Enigma. I suppose that all lenders have some exposure to the sub-prime market, don't they? Just depends on how much.
AnonP... Most of those emails you receive are scams. They're "Phishing" for personal information that they can use to steal your identity.

Cognitorex... Right you are! Though there is not much one can do in the mortgage arena, all other forms of debt are just simply evil and should be avoided. Don't ever pay one penny more than you have to to the financial industry.

Michael... Indeed. The amount of so-called "wealth" generated by simply moving money around is truly astounding.
Yep, everyone is probably exposed, and no one really knows to what extent.

And it is not just lenders, it is anyone who invests. Investing usually includes buying "instruments" which include other peoples debts. So even pension funds who may think they are buying high rated bonds are holding these risky assets. I'd be very suspicious of any fund that has been consistently "beating the market" over the last few years.

I think they will be found holding a lot of these crappy mortgages.
Unfortunately, the credit card offers have taken up the slack.
I think they will be found holding a lot of these crappy mortgages.

Oooowww! Don't say that! The small-cap that I'm invested in has been doing great over the last 4 years. ;-)

TomCat... Ah, but where the credit cards are concerned, I'm on the 'do not solicit' list. So I get very few of those.

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