Party Like It’s 1945, FHA Drops The Hammer, Weekend Open Discussion

From the Star Ledger:

N.J. home sales may be adversely affected by FHA guidelines

Measures intended to protect government-backed loans from widespread defaults and foreclosures could have an adverse effect on the state’s housing sales, according to industry experts.

Earlier this month, the Federal Housing Authority announced increased minimum down payments for borrowers with low credit scores and higher mortgage insurance premiums for those that take on the loans.

The restrictions will take effect in the spring and early summer.

The latest moves are part of a strategy outlined last year to shore up the FHA’s loan portfolio, which is increasingly under pressure from defaults and delinquencies.

“Now most of our transactions are FHA, so the word on the street is that there are all of these changes,” said Jonathan Kessler, president of the Hunterdon Somerset Association of Realtors. “FHA loans have often been the only means for some buyers to purchase property.”

He said changes made to the government-backed program could hurt deals.

Indeed, last year, the FHA endorsed roughly 59,000 loans in the state — about 55 percent more than in 2008.

These new stricter guidelines, however, are a necessity, said Peggy Yanuzzelli, president of the Middlesex County Association of Realtors.

“Some agents may look at it as a decrease in buyers, with no money and lower credit scores,” she said. “But for the future economy, this has to be done.”

From the NY Times:

Builders Reassess the Market

THE number of new-housing permits issued statewide in 2009 did not even reach 12,000. The last year the tally was that low: 1945, when New Jersey was still mostly cow and corn country.

If the housing crisis was finally over and the overall economy was headed toward recovery, it would still take at least two years for housing starts to recoup, according to market analysts.

“Traditionally, after past recessions, housing starts have doubled within two years,” said Jeffrey G. Otteau, whose Otteau Valuation Group provides advice on state real estate trends. “Because of the severity of this recession, though, there may be lingering wounds.”

Yet even in the face of these sobering numbers, several builders of multifamily projects have forged ahead — some actually building, others planning on it as soon as weather permits.

Their reasons are varied, based on interviews with developers of several large projects. Some asserted that their condominium developments held special appeal despite the general slowdown in sales; others said they had used the “down time” of the economic crisis to reconfigure plans and now felt that they understood the changes in buyers’ requirements.

This entry was posted in Economics, New Development, New Jersey Real Estate. Bookmark the permalink.

190 Responses to Party Like It’s 1945, FHA Drops The Hammer, Weekend Open Discussion

  1. Mocha says:

    First!

  2. Essex says:

    Wake me up when cheerleaders start robbing banks!

  3. Isn’t that a Disney movie?

  4. Sorry, my bad. John informs it is a p0rn flick. “Cheerleaders: Deposit in the Rear”.

  5. freedy says:

    this time it may be just a little different

  6. freedy says:

    a work around with the credit scores is
    being worked on.

  7. Essex says:

    Well think of it this way…..the Moody’s scoring was completely debunked in this last go-round….AAA rated bundled crap for the world….so why should we care?

  8. Essex says:

    Journal reporter Jane J. Kim writes:

    Fair Isaac Corp., maker of the popular FICO credit score, is rolling out its new-and-improved scoring model, dubbed FICO 08, with Equifax Inc.–the second of the three major credit reporting bureaus to start offering the score to lenders.

    Some lenders, generally smaller ones who can switch over their systems more quickly, are already using the FICO 08 score with TransUnion LLC, which began offering the score to lenders in January, says Tom Quinn, vice president of global scoring at FICO. Larger lenders will take longer to switch over. No word yet on when Experian Group Ltd.–which has been in litigation with FICO–will join the other two.

    But with two of the three major credit bureaus starting to make FICO 08 available to lenders, it’s likely that some consumers could start seeing changes in their FICO scores.

    “The model tends to be harsher on consumers carrying a higher debt load compared to previous versions,” says Quinn. But the newer version is also more forgiving of one-time slipups, so those who otherwise pay their bills on time could see their scores improve. “We’re seeing movement on both sides,” he says.

    But regardless of whatever version of FICO that lenders are using, there has been a “noticeable movement into lower scores,” given the economic slowdown and rise in delinquencies, says Quinn. The silver lining is that some consumers’ scores are improving as they pay down their balances, avoid applying for new credit and continue to pay their bills as agreed.

    “If you have a conservative consumer to begin with, they are more likely to become more conservative,” says Quinn.

  9. freedy says:

    credit scores have been so creamed over the past three years , that to keep the scam
    going, credit scores will be modified
    to allow forgiveness of foreclosures,
    late payments, repo’s,etc.

  10. Essex says:

    Cash only for me. Will drive my car til the wheels fall off. Won’t need to return to the well for 10 years.

  11. Cindy says:

    http://www.latimes.com/classified/realestate/news/la-fi-harney31-2010jan31,0,4793464.story

    Starting Monday, FHA revises “anti-flipping” rule.

    Was this posted?

  12. safeashouses says:

    FHA is an abject failure. It was supposed to make housing more affordable, but instead with its low lending requirements, the cost of housing went up for everyone, and the prudent will get stuck with the bill for bailing it out.

  13. gary says:

    “Now most of our transactions are FHA, so the word on the street is that there are all of these changes,” said Jonathan Kessler, president of the Hunterdon Somerset Association of Realtors. “FHA loans have often been the only means for some buyers to purchase property.”

    Bye-bye, Miss American Pie
    Drove my chevy to the levee
    But the levee was dry
    And them good old boys were drinkin’ whiskey and rye
    Singin’ This’ll be the day that I die

  14. gary says:

    “Some agents may look at it as a decrease in buyers, with no money and lower credit scores,” she said. “But for the future economy, this has to be done.”

    Capitulation has commenced and this blog called it perfectly.

  15. gary says:

    But regardless of whatever version of FICO that lenders are using, there has been a “noticeable movement into lower scores,” given the economic slowdown and rise in delinquencies, says Quinn.

    Dear Sue Adler, should I buy now before I’m priced out forever?

  16. Veto That says:

    “credit scores will be modified”

    Your credit score has been permanantly scarred whether they change the scoring system or not. You will never get a reasonable loan again.

    Now go order a burger at the diner and run out to your car without paying the check.

  17. lisoosh says:

    #11 – What a load of hogwash, that article doesn’t make any sense. Exactly how is encouraging flipping going to make housing more attractive for entry-level buyers?

    Look out for a speculative bounce, especially in CA, FL and LV. Course it’ll crash again after that. And another wave of foreclosures will hit the market.

    -Starting to build a bunker….

  18. lisoosh says:

    safe – did see my post regarding job opps?

    If you are up for outside sales I know of a lead. Maybe also for inside sales/development.
    Large decent relatively stable companies. Jobs are tough, but the salaries are decent.

  19. lisoosh says:

    Pat -thanks for the Valley Forge recommendation. Too cold to walk, so I drove around the encampment tour. Definitely worth taking the kids in the summer, maybe with bikes.

    On King of Prussia mall. Quiet. Tall, skinny, blond pony tailed tailed women in the high end stores. Other stores quiet. Apple store heaving.

  20. Cindy says:

    Lisoosh @ 17…Word around CA is that the banks have been slowly releasing the foreclosures so they can manipulate the price.

    Since so many foreclosures have been coming on board lately, I’m wondering if it is a way to dump more on the market at one time – get speculators to buy and take them off of the bank’s hands???? Sort of increase the pool of potential buyers.

  21. gary says:

    I think in the end, when everything is smoldering, there will be two companies left: Goldman Sachs to supply the bananas for the monkeys and Apple Computers so the monkeys can continue to buy iShit into oblivion.

  22. Cindy says:

    21- Gary….iShit – hilarious….

  23. 21
    I’m sorry to say I think I’m addicted to iShit.

  24. Cindy says:

    http://www.bloomberg.com/apps/news?pid=20601039&sid=aWwht2XAEt84

    Gary – Did you see this?

    Michael Lewis: “Goldman Trader Shares Three Big Ideas With Lloyd”

  25. Cindy says:

    “Morts love to laugh”…and apparently – they also love iShit.

  26. nw says:

    #9 Freedy, the new system is harder on repeat defaulters so you are toast either way.

    And now that you’ve been outed as a troll, please take some advice frequently offered on this blog, kill yourself(cyber self).

  27. Cindy says:

    http://www.housingwire.com/2010/01/29/tougher-times-coming-for-commercial-real-estate/

    Sas – What’s up with the Georgia banks?

    I have wondered that before as well – CRE???

    “Warren said these declines severely threaten bank balance sheets and contributed to failures of 30 Georgia banks since August of 2008…”

  28. Anon E. Moose says:

    Bloomy: One in four home-loaners underwater

    http://www.bloomberg.com/apps/news?pid=20603037&sid=a6RsJycboEUE

  29. grim says:

    Sorry folks, but I side with Pesche.

    More vitriol spilled over Pesche walking away then over the banksters paying out billions in bonuses. That wasn’t egregious?

    How about Tischman Speyer walking away from 11,000 mortgages in one shot?

    Hell, they went as far as admitting it was a gamble.

    How about mortgage lenders pushing tens of thousands into loans they knew the borrwers never had any chance of paying back?

    If one side can’t respect a deal responsibly, and manage debt with some overtones of morality, why should the other?

    These loans are secured by collateral, and “walking away” is factored into the deal from the lenders side. So he took the option and bailed, so what?

    Is it the pride you take offense with? Hell, as far as I’m concerned, Pesche deserves more respect for taking the option then the president deserves for anything he’s done housing related. He should be proud.

    This is a business decision, pure and simple. He opted for an alternative that worked out in his favor.

    We live in a new world, a mortgage has nothing to do with morality any more.

    Business deal, from both sides. And I think more folks should walk away.

    Recourse judgements? Never, if you see them start to gear up, expect legislation to eliminate any chance of collecting. You don’t think so? IRS doesn’t go after taxes associated with debt forgiveness anymore, this would just be the next step.

    Your financial position, and the security of your family comes first, period.

    When the banksters realize that they don’t hold all the cards in mortgage lending; only then will we’ll see some sort of return to responsible lending.

    If you need to, if you want to, walk away. There isn’t shame in it anymore. Hell, be proud you stuck it to them.

  30. willwork4beer says:

    So I spot a house on the market that hits most of my criteria. Wanting a little more info, I google the address. Find out that this address is where you send your registration for some Wiccan/Pagan organization’s clothing optional retreats. So now I’m thinking no way am I going to buy that place, I’ll probably have naked Wiccans showing up all the time.

    Oh, wait a minute…

  31. grim says:

    Oh, wait a minute…

    Did I ever tell you guys about a friend of mine who was trying to evict a tenant for non-payment, only to find they were running an S&M website out of the attic (they had access from their apartment) complete with photo studio and props?

  32. Mr Hyde says:

    Barb
    from yesterday: I agree with clot, one of the best comment days ever.

    Secondly yesterdays debates convinces me that we are seeing a philosophical debate amongst our society with the two possible outcomes being society decides to be debt slaves, or society says F the money lenders and burn it to the ground.

    I am slightly hopeful that we may still rise to the occasion even if the odds are against it.

    F the banks, they got paid already with our tax money. Why exactly should they now tecieve a dime for the same tax layers.

    F them. Burn it to the ground.

    By the way NICE bags (us sadists love quality leather)

  33. scribe, The Princess of Paramus says:

    grim,

    did you post yet on BFF?

    from the WSJ:

    By MICHAEL R. CRITTENDEN

    U.S. regulators closed at least six more banks on Friday, including two in Georgia, as the fallout from the financial crisis continued to be felt by smaller financial institutions across the country.

    The failures included Cornelia, Ga.-based Community Bank & Trust, with$1.21 billion in assets at Sept. 30, and First National Bank of Georgia of Carrollton, Ga.

    The latter, with about $833 million in assets, was found by the Office of the Comptroller of the Currency to be “critically undercapitalized” and to have engaged in “unsafe and unsound practices.”

    The other four banks closed by regulators were Florida Community Bank of Immokalee, Fla.; Hallock, Minn.-based Marshall Bank; American Marine Bank of Bainbridge Island, Wash., and First Regional Bank, of Los Angeles. First Regional had roughly $2.2 billion in assets at Sept. 30, along with $1.87 billion in deposits.

    The failures bring to 15 the number of U.S. banks taken over by regulators in 2010. There were 140 bank failures in 2009.

    The FDIC estimated the six failures would cost its deposit insurance fund roughly $1.86 billion.

    The deposits of all six banks were sold off to other institutions. The FDIC said Orangeburg, S.C.-based SCBT agreed to acquire the deposits of Community Bank, which totaled $1.1 billion at Sept. 30. The agency also entered into a loss-sharing agreement on roughly $828 million of Community Bank’s assets.

  34. scribe, The Princess of Paramus says:

    I didn’t know freedy was formerly known as pesche

  35. blindjust says:

    31 – Does the same business decision argument apply to tenants as well?

  36. Pat says:

    ‘stuck it to them’ implies final win/loss scenario.

    Assuming default percentage is correctly baked into the numbers, even considering banks were using zero cost of capital, then there is no sticking going on. Profits during the bubble have adequately covered projected losses. Bank is still ahead. Arb opportunity still exists.

  37. Pat says:

    freedy is correct in seeking additional opportunities.

  38. scribe, The Princess of Paramus says:

    From today’s WSJ:

    * JANUARY 30, 2010

    Fannie, Freddie Chase Bad Mortgages
    Lenders Like BofA, J.P. Morgan Repurchase Billions in Faulty Loans; Just a Drop in the Default Pool

    By NICK TIMIRAOS

    It is payback time for Fannie Mae and Freddie Mac on some mortgages sold to the finance companies by lenders.

    Stuck with about $300 billion in loans to borrowers at least 90 days behind on payments, Fannie and Freddie have unleashed armies of auditors and other employees to sift through mortgage files for proof of underwriting flaws. The two mortgage-finance companies are flexing their muscles to force banks to repurchase loans found to contain improper documentation about a borrower’s income or outright lies.

    The result: Freddie Mac required lenders to buy back $2.7 billion of loans in the first nine months of 2009, a 125% jump from $1.2 billion a year earlier. Fannie Mae won’t disclose its figure, but trade publication Inside Mortgage Finance said Fannie made $4.3 billion in loan-repurchase requests in the first nine months of 2009.

    “Because taxpayers are involved, we’re being very vigilant,” said Maria Brewster, who oversees Fannie’s repurchase team. “No taxpayer should have to pay for a business decision that caused a bad loan to be sold to Fannie Mae.”

    The get-tough stance comes amid pressure on Fannie and Freddie to make the most out of more than $100 billion in taxpayer funds they got to stay afloat. The U.S. government took them over in September 2008.

    The biggest losers are likely to be Bank of America Corp., J.P. Morgan Chase & Co. and other mortgage lenders when the housing bubble burst. Such lenders also are being deluged with loans kicked back to them by holders of mortgage-backed securities who uncover deficiencies with loans bundled into the pools. One common example: a borrower who said the loan was for an owner-occupied home but used it for a second house.

    Overall, banks repurchased about $14.2 billion in loans from holders of mortgage-backed securities in the first nine months of last year, up from $3.6 billion a year earlier, according to Barclays Capital. The figures are based on data reported to regulators by federally insured banks and savings institutions.

    Forced loan buybacks threaten to “wipe out a significant portion of the [loan] origination profits…made in the last year,” said Nicholas Strand, a Barclays analyst.

    Strong-arming lenders to swallow loans that were guaranteed by Fannie Mae and Freddie Mac helps cushion the mortgage-finance companies from defaults, though repurchases represent a sliver of all defaulted loans.

    Fannie reported Thursday that borrowers of 5.29% of the loans it guarantees were at least 90 days behind as of November, up from 2.13% a year earlier. Fannie guarantees $2.9 trillion in loans.

    At Freddie, such delinquencies reached 3.87% at the end of December, up from 1.72% a year earlier.

    More here:

    http://online.wsj.com/article/SB10001424052748704343104575033543886200942.html?mod=loomia&loomia_si=t0:a16:g2:r1:c0.100881:b30143756

  39. Pat says:

    And I need to research reasons more ‘morts’ aren’t going for the tax liens subordinating 2nds and forcing foreclosure.

    Is it fear of failure?

  40. Cindy says:

    http://www.npr.org/blogs/money/2010/01/podcast_to_walk_away_or_stay.html

    NPR via Calculated Risk – 22 minute podcast on strategic default.

    A lawyer from Phoenix, Karen – I didn’t get the last name – discusses the difference between the calls she received in 2007: Folks begging to find out how to hold on to their homes…crying, distraught – then…

    Fast forward to 2010: How can I force the bank to foreclose? I no longer want to pay association dues or taxes….calm, matter-of-fact – the bank can have the place, I don’t want it.

    She explains the lack of stigma as being similar to divorce once being unthinkable or bankruptcy once being a badge of shame. Times change.

    She explained that there is no hard and fast rule regarding the credit score hit you will take for strategic default but that you should expect to lose 200 points or so from your credit score.

    She also reminds folks that Arizona has an anti-deficiency statute so the laws may be different in other states.

    Outofstater – I was so with you a few years ago and stated so on these boards. I still believe we are in unchartered waters and have no idea where our moral hazard problems will lead us.

    The way I understand it is that with this sort of business contract – the expectation of default is supposed to be written into the interest rate and the closing costs of every loan. Everyone is paying toward that risk so to speak.

    Also – I try to remember – How am I to know what it is like to walk in someone else’s shoes? – I cannot.

  41. blindjust says:

    40 – The credit market siezed up last year because the market was unable to assess a proper risk premium. I fully agree that we are in unchartered waters and we all will eventually pay for this “strategic” thinking on the part of institutional and retail/homeowner “investors”.

    “I still believe we are in unchartered waters and have no idea where our moral hazard problems will lead us.
    .”

  42. 30 year Realtor says:

    Walking in someone else’s shoes…

    When your family’s survival is on the line any action that buys time or gets you out is in play!

    Those who stand in judgement have not been there.

  43. blindjust says:

    42 – The problem is that these “arbitrage” opportunities are being exploited by those with the means.

  44. blindjust says:

    and why not … it is, afterall, a “business” decision.

  45. Jeff K says:

    I’ve been reading this blog for 2 years now, about the same amount of time I’ve been house hunting. I’ve been saving my money for a number of years now while living at home with the parents, and I’ve been waiting for some big price drop that really never came. Does anyone think that this spring there might finally be some halfway decent prices on homes coming onto the market? I want to move out, but if I’m going to rent, I’d rather just stay home with the parents longer… lol

  46. Kim says:

    Buy now or be priced out forever!

    Apologies if this has been posted already.

    “The higher-end market is definitely on an upswing,” says Coldwell Banker’s Michele Kolsky-Assatly, broker for the Bellaire development in Demarest. “I’m talking about $1.5 million and up.”

    The Bellaire has 34 townhomes ranging in size from 5,800 to 7,800 square feet. The Bergen County development sold one $2 million residence at the end of 2009 and currently has three more in contract at more than $1.5 million each.

    The return of finance industry buyers like Bernstein and Thakker has been key to the Jersey luxury market’s revival, Kolsky-Assatly says. “When Wall Street is happy, the people who can afford the better properties step up to the plate.”

    And as buyers begin snapping up homes once again, others may feel increased pressure to act, says Roseland Property’s Debra Tantleff. This is particularly the case in the high-end market, she suggests, where inventory tends to be sparser (in absolute terms) and more unique.

    “There aren’t as many choices out there,” she says, “and if you wait too long, it might not be there when you come back.”

    Read more: http://www.nypost.com/p/news/business/realestate/residential/jersey_soars_d24EgLCryDjZuxjkfV1CzI/1#ixzz0e7YdZrVy

    http://www.nypost.com/p/news/business/realestate/residential/jersey_soars_d24EgLCryDjZuxjkfV1CzI/1

  47. Kim says:

    Comment #46 in moderation!

  48. Al "The Thermostat" Gore says:

    Jim Cramer states the Bavarian Illuminati are not all bad.
    http://www.youtube.com/watch?v=6TzSqWWOBaY

    This guy will probably be found floating down the East River soon.

  49. danzud says:

    Jeff K,

    If I look, I’m waiting until after the spring since that’s when the most competition is in play (think families with kids trying to upgrade). By July or August, this should thin out.

    Let me change the above. I’m always looking but still think there’s more room to go down. People here have been saying 1% a month for a while now.

  50. BC Bob says:

    IMO, whether Pesche is/was boasting is of zero signifiance. His actions and the corresponding ramifications, along with the 25% who are currently underwater, are more critical.

    From the day I found this site, sometime in late 2005, I stated that there was a sh#itstorm brewing which would lead us deep into the abyss. One possible outcome was a worldwide revoultion. Now many associate a revoultion with blood on the streets. That was never my contention. However, I don’t rule it out. My revolution scenario was focused on a 360 reversal by the sheeple. A retraining of Pavlov’s Dog. 99% said it was not possible. They will be fed unlimited liquidity in an era of infinite RE increases.

    Today, is Pesche simply a tiny piece of this revolution, a worldwide readjustment? Is he part of a colony of ants on the warpath? The masters may be able to stamp out 1-2 colonies at a time. Subsequently, do 5-6 more surface?

    The saviour of the universe, AG, touted the use of adjustables in 2004. He stated they afforded more options. They will allow the buyer the opportunity to allocate resources to alternative areas, in conjunction with their house purchase. In addition to this, the use of derivatives has dispersed risk, granting more flexibility. Now, if I didn’t know better, I imagine I may have followed the advice of the maestro. After all, he was the most respected financial guru in the world. It’s not radical to suggest that Pesche may have been influenced, then trapped in a bad loan?

    In 2006, CP stated that he’ll continue to dance until the music stopped. Well if it’s OK for the C CEO, it may have struck a cord with Pesche? It’s quite possible that Pesche is a dervivative of AG or CP.

    As we move forward, AG moves to Switzerland and buys foreign currencies. After the fat lady sings, CP gets booted, with a package worth zillions. C gets tarped, bankers pockets are filled with bonuses, funded by the same sheeple who are underwater. Sadly, Pesche is trapped. The only option afforded Pesche is to make a rational business decision. What’s right for Pesche/his family? He may have exhausted all possibilities, came to a fork in the road and decided to take it. [Thanks, Yogi]

    On a daily basis we are subjected to a bunch of lies, corruption, securities fraud, robber baron’s and a private banking syndicate which is robbing us blind. All from the same carnival barkers that created the mess. Why isn’t there an uprise against them? Root on the colony of ants. It’s our only hope.

  51. danzud says:

    This is why we still have a while to go……

    http://www.trulia.com/property/43784827-Apt-Condo-Twnhm-Millburn-NJ-07041

    Why yes, I’d love to pay a half-million for this aging POS……I want to live in the ambience of multi-rental home dwellers and town employees and feel like my sh** don’t stink because it’s Millburn which of course is next to Short Hills.

  52. Al "The Thermostat" Gore says:

    – No shortage of food but prices will rise astronomically.
    – Dollar devaluation of 30%-50% within 12 months.
    – Oil price will rise correspondingly.
    – Dubai World/City update
    – Hard asset like gold and silver are what the élite believe in, not paper currencies.
    – Derivatives collapse can cause a global banking crisis at any moment.
    – There will be no war with Iran for next 1 – 1.5 years. But war is planned with Iran. Israel will start it.
    – Health bill is a total government take over. It is about RFID microchipping, asset take over……

  53. blindjust says:

    48 – As Clot had correctly pointed out previously, though, the bid/ask spreads need to come in before any deals can get done. Props in the areas I’m looking have just been sitting and the prices holding firm. I’ll move the master br to my basement before I pay these prices.

  54. relo says:

    31: I may have told this before, but…we looked at an open house in BC where the seller was very explicit about the time to be there, etc. While showing (shadowing) us around, we noticed that there were PCs in each bedroom. No biggie. Then we go to the basement where the are more “rooms” w/ mattress’ on the ground and, you guessed it, PCs. This time we made note of the web camera set-up. One room occupied by eastern european chick, by accent as was creepy seller (car w/ NY plate in the driveway). Can happen anywhere, but we crossed that town off the list. Should have saved that story for a weekday when J was around.

  55. Al "The Thermostat" Gore says:

    50.

    Bob,

    You should publish that statement.

  56. still_looking aka Tan-Less says:

    Off to the pit again.

    Can’t believe the things I’m seeing…

    will check in later if I can…

    sl

  57. Where’s the naked Wiccan house? I like skyclad Wiccans.

  58. freedy says:

    hey BC ,, good piece.

  59. nw says:

    #50

    Bob, if him boasting doesn’t offend you, then that’s your perogative. You cashed out on a fool like Pesche by your own admission here.

    On the flipside, there is a group of people who have been on the sideline waiting, watching idiots/wannabes like Pesche overextend and hang themselves financially, and we’re largely the ones left holding the bag.

  60. meter says:

    @29 Grim,

    Respectfully disagree. You make the fallacious assumption that revulsion of bank behavior and bailouts means that any actions by individuals is automatically absolved. Ever hear the saying “two wrongs don’t make a right?”

    Also, have you stopped to consider that – as bad as things are – people like freedy are making it worse for people like us? (presumably you are, like me responsible regarding your financial commitments).

    Have you also followed this through to its logical conclusion? Where does this end? What happens when you sell someone some goods or services and they just decide not to pay? When you check your online statement for your last deposited check only to find your employer has taken the stance that “We’re just not paying you for the past two weeks.”

    What choices are we left with at that point other than medieval bartering? Is that the kind of society you are advocating?

    If that’s where we’re going please tell me now so I can get off this ride.

  61. meter says:

    On my comment at 60, again I am not speaking just of his strategic default, but the follow up comments that he plans to default on his credit card payments, cable bill, etc.

    I find him disgusting actually. A festering zit on the already-pimpled ass of society.

  62. safeashouses says:

    #18 lishoosh,

    I’m interested. Can you get my email from grim?

  63. freedy says:

    only playing the system ,whats the matter
    can’t figure it out yet?

    wait till you try yourself to deal with these
    banks,, the moron’s that they are robbing,looting the taxpayers by the day.

    driving the country to a BK court.

    who’s kidding who. I’m glad to see this
    has hit a hot button. as fields said.”never give a sucker an even break”

    and we the American Taxpayers are suckers, and they know it.

    from the local tax office right to the top
    they look at the taxpayer as a sucker.

  64. blindjust says:

    60/61 – Exactly. And what will be the reaction of bankers/investors to this situation? Higher risk premium / mortgage rates. Only a fool would believe that a +/- 150 bp risk premium over the 10 yr will hold in the future regardless of inflation.

  65. Mr Hyde says:

    Meter 60

    you seem to want to maintain the vampire squid of a bankng system as we now have it for fear of what to do without it.

    What happens if we kill the vampire squid? Look at 2000 Russia or 2001 argetina. People lost all faith in the local bankng system. In both places things were hard, but continued to fnction above medievel levels.

    Banking is a two way relationship that also includes the social contract a bank is implicitly party to. The banks have long abrogated their end of the social contract and have been aided and abetted by the highest levels of government.

    The only workable solution is a reboot of the system.

    Jefferson was correct when he said banks were a greater threat then any standing army ( gross paraphrasing)

    what has happened time and again when large banking systems fail is to return to local banking. You won’t have 500 atm’s or 30 branches. It maybe a single location. Transaction ate based on trust as the banker most likely knows you personally not as a revenue stat

  66. Pat says:

    meter, nobody can buy with the confidence until the festering zit is popped. Freedy’s behavior, in my opinion, clears the market much more efficiently than banks holding inventory.

    It’s not even a zit. It’s like that cyst that they have on youtube they squeeze and squeeze, but it never stops oozing.

  67. nw says:

    I agree with everyone on one point. Freedy does provide a powerful insight into the otherwise nameless sheeple.

  68. blindjust says:

    63 – unless you can pay cash for your house and have no use for unsecured credit, you need the bankers and investors. The sucker is the one who is so bold as to think they won the “game” without recourse.

  69. relo says:

    60: Goods and services consumed are one thing, which is analagous to your example of employee/er relationship. Strategic default is a different contractual agreement.

  70. Mr Hyde says:

    Meter

    Have you also followed this through to its logical conclusion? Where does this end? What happens when you sell someone some goods or services and they just decide not to pay

    this has happened time and again n failed economies. The solution is self generating. A return to localized economies. Once again look to Argentina and Russia. Once the banking system and general trust break down business only occurs between parties that have some level of trust and new partners/customers must prove themselves. It’s actually a much more sound system then a distribted system like we currently have. A failure of the system in ne locale does not bring down the overall system and broader impacts ate limited.

  71. relo says:

    As you said in 61, had I read on.

  72. meter says:

    Don’t like the large banks? Neither do I.

    Put your money into small community banks or credit unions and refuse to do business with the Citibanks, Chases, Bank of Americas etc. of the world.

  73. freedy says:

    screw the banks, credit scores ets.

    how many on you on the blog, wake up every
    morning, wishing you could find another job, with less stress, knowing that the company
    or the man could care less about you.

    look in the mirror,, how many are one pay check from being shown the door.

    i ‘m been self employed for many years, and far from what many on the blog may think,
    i am far from tapped out. on the contrary
    thats why i’m taking the approach;

    screw the credit cards, the auto finance
    ops, mortgage companies, the “sheep”have been trained to go right to the edge and over unless the “sheep dog” turns them around. To many Americans have followed the
    the Pols right over the cliff.

    Well, I’m not.

  74. blindjust says:

    73: Fewer than you think.

    “how many on you on the blog, wake up every
    morning, wishing you could find another job, with less stress, knowing that the company
    or the man could care less about you.

    look in the mirror,, how many are one pay check from being shown the door.”

  75. Mr Hyde says:

    Realize that prior to the 30’s. Most homes carried no more then a 25-30% LTV mortgage. In historical terms the rise of bedt as money and super leveraged economies is a blip on the radar.
    We only need the banks as much as we do now because of all if us live highly leveraged lives.

    Milton freedman stated that Long term inflation was an insidious for if theft, and it has indeed been so. We have had constant inflation since the 30’s and as a result now need to use substantial leverage in the form of consumer credit and 3rd world manufacturing in order to maintain our lifestyles

  76. BC Bob says:

    NW [59],

    I cashed out on a fool?

    Quick overview, I held an asset which I considered extremely overvalued. Everybody said I was crazy, don’t sell, lever up, buy 2-3 more. However, when an asset which normally appreciates at/near the rate of inflation depicts the soybean pit, in the middle of a drought, I decided to make a move.

    Remember, at that time I was foolish. The other side of the table, an Ivy League MBA, not a fool by any means. He was putting down 50% cash. Without getting into detailed specifics, let’s just say we had opposite views regarding the market/what was fueling the market. Isn’t that the structure of any market? Quite simply, a market of conflicting views. I reacted/he reacted, side A and Side B of a trade. At that time, I was not concerned if I was right, I just wanted out.

    Back then, 9/05, the “fool” [your words] closed on a score, a colonial in Red Hot Red Bank! Easy to express your view in 2010. However, in the midst of a raging bull market, I was the fool who liquidated a grand slam. The present market, 05, clearly indicated this. Fast forward, he is now a fool? Where were you then? Sounds like nothing more than Monday Morning QB, simply viewing the events thru the rear view mirror.

    Fascinating how market direction, in a few years time, help construct opinions which transform the brilliant into idiots.

  77. meter says:

    @73 –

    Hopefully someone you do business with sticks you with a humungous bill. Soon.

  78. safeashouses says:

    nw & meter,

    The banks can preach morality once Jamaica hosts the Winter Olympics.

  79. freedy says:

    some body post the fha lending standards as 6 more banks close overnight. they don’t have the hanging to close all the banks that should
    be closed.

    we would have more chaos than we already have.

  80. willwork4beer says:

    57 Lost

    The house is in West Amwell, southern Hunterdon County. But that’s just where you send your registration for the clothing optional gatherings. The gatherings are held in Maryland.

    http://www.freespiritgathering.org

  81. safeashouses says:

    #77 meter

    A mtg, car loan, etc are backed and secured by an asset, hence the term asset backed security. If the borrower stops paying, the bank takes the asset back. That’s completely different from stiffing someone for a goods or service.

  82. freedy says:

    without the FHA,, its game over for housing.

    Grim know that , i’m sure many on the blog
    know it as well.

    and they are tightening lending standards, why?

  83. BC Bob says:

    I buy a stock at $15. It subsequently rises to $50. I feel that it is extremely overvalued, put out a sell limit order. On the flip side, a hedge fund, who feels that the stock will rise to $80 steps up and hits my limit. In a years time the stocks falls back to $50. Was the hedge fund foolish or possibly just misread/mispriced the fundamentals and technicals of stock/stock market at that time?

  84. BC Bob says:

    Once again;

    Disclaimer: I am only addressing Pesche’s decision, not his boasting.

  85. Cindy says:

    http://www.youtube.com/watch?v=T7TI-AJi2O8

    Here’s what they are doing at a high school in Washington…

  86. nw says:

    #78 Who is supporting the banks?

  87. meter says:

    Bragging on defaulting on a mortgage aside (which is distasteful but not unethical) as stated and agreed yesterday…

    This slime bag has been soliciting advice for defaulting on credit card balances, cable bills, utility bills, etc.

    Same response? It’s okay to stick it to ‘the man’?

    What if you work for ‘the man’ and you get laid off because too many freedy’s take it upon themselves to put your employer out of business.

  88. nw says:

    #76

    I don’t think everyone who bought a house at the peak is a moron like Pesche, but it didn’t take a Ivy MBA to know that the housing boom was unsustainable, and if you couldn’t see it, you were fooled. That’s the majority of peak buyers.

    Some gambled and lost. A few probably knew, and didn’t care about that they would lose equity.

    I don’t for sure know which group your buyer falls into. He could be happy as hell in that house right now with it nearly paid off.

  89. freedy says:

    you lost your job? to bad welcome to the
    new america. got no money, go on welfare.

    employer out of business, get a gov. job.

    laid off, check you talent,,try walmart,
    home depot, oh, wait they just has large layoff’s.

    welcome to the new /new

  90. blindjust says:

    88: Because he’s self employed, he implies he’s beholden to no one. Does he not have clients or customers? Do any of these clients or customers work for or have any relationships with “the man”? Course not.

  91. 80 Beer
    You ever notice that those who feel so free to be publicly naked often blind others?

  92. safeashouses says:

    #88 meter

    I actually did get laid off because my company had a cash flow crunch from aged AR. Except the clients weren’t little guys, they were all companies and institutions.

    I used to think it was immoral to walk away from a mtg that you could pay, but no longer. As BC Bob pointed out, with AG crooning about the beauty of ARMS, while long term rates were near 50 year lows, Wall St recklessly gambling and the taxpayer bailing them out, the NY Fed taking over AIG and paying claims at par for things worth maybe 25 cents on the dollar, banks earning record bonuses while 25% of kids in the US collect foodstamps, I no longer think so.

    Freedy made a decision to walk away from business transaction. If companies can ship our jobs overseas so the execs get bigger bonuses and more stock options, retail can shut down underperforming stores, commercial re investors walking away from upside down properties, why can’t the little guy do the same?

  93. willwork4beer says:

    Lost,

    Yup.

    BTW, the website now gives a Lambertville PO Box as the mail-in registration address. But through the magic of Google, the original street address in West Amwell will live on into eternity…

  94. meter says:

    @93 – again, mortgage aside, is it okay to welch on utility bills, cable bills, phone bills, credit card balances? Where does it end since freedy has repeatedly on this very board sought advice on how to do all of the above.

  95. freedy says:

    by the way call Chase internal loss recovery
    and you will find that : Guess What?

    its in ASIA,, do a job search for chase
    asia, and you will see all the job openings
    one of the qualifications? handling american
    citizens, how that for another screw job.
    they outsourced collections .

  96. freedy says:

    come on now meter utility /phones/cables

    small potatoes

  97. Veto That says:

    freedy, what did the cable comany do that made you stiff them?
    how about the auto company.
    Where does it stop?
    I agree with strategic default for most people but you are taking it to a whole different level.

  98. freedy says:

    now why would i want to pay for about 100
    channels that nobody watches. ?

    gave me pleasure to have a shot a cablevision

    ever call them for an appointment to come to you home , oh, ya, we’ll be there oh,lets see
    how about between 9/12. dont like it ,screw you. but my cable was out for 3 hrs, dont like screw you , i have no money can i get a discount ,no screw you , pay of we cut you off.

  99. freedy says:

    gmac:

    got laid off, screw you we want the money.

    we got to pay the tarp money back.that enough?

    how about , the car’s broke, any discounts
    no, screw you pay up.

    how about i buy the car when it comes off lease? any discounts on the residual, no
    screw you pay the full residual.

    anybody get fired at GMAC, no, talking about the high up,, screw you we got the tarp money

  100. Veto That says:

    “i have no money can i get a discount”

    you just told us you have plenty of money.
    You are mad they called bs on you so you felt justified to stiff them.
    I dont think you represent the avg american who is a victim of this crisis. I think you represent the small percentage of liars and thieves who always existed. Every year there are people who fake injuries from car accidents and that type of fraud makes insurance rates higher for all the honest people with integrity.

  101. freedy says:

    part of my point:they stole the money in
    plain site of all of america. and
    most americans have not figured it out yet.

    screw you : we want to take all your money and make you our wards.

  102. freedy says:

    come on veto ., your off point you can do better than that.

  103. freedy says:

    i dont represent the ave american, most of them have yet to figure out , how screwed
    they are. wait ,

  104. Veto That says:

    the govt mad ethe decision to pass the bailout so the whole financial system didnt collapse.

    What are your plans for the irs?

  105. Veto That says:

    When you bought the house and car and signed up for cable, didnt you realize that the responsibility to pay was on you?

    You say you have plenty of money so why did you feel the need to stop paying?

  106. freedy says:

    screw the irs, what s the problem you can
    always settle with them.

    thats what i got CPA’s for , thats what i got
    securities attorney’s for.

    that’s what i got civil, real estate, attorneys for. and they need the work these days, for the most part. another sector that have been hit hard , and its sad, a lot of talent going to waste.

  107. Pat says:

    Wow. First step from a contract to a barter society has been accomplished.

  108. safeashouses says:

    #95 meter

    I said earlier there is a difference between walking away from an asset backed loan like a mtg/car and stiffing someone for goods or services.

  109. freedy says:

    safe. as you probably know, in an asset backed deal, you can reach a point, where, and its going on right now,

    “go ahead take the asset” cheaper for us.

    we walk. just happened at sty town,,,

  110. freedy says:

    goods/services

    friend of mine dealing with a major international company . performed services,

    owned alot of money,, company said screw you
    we owe you x we are paying y, business is bad.

    too bad, that’s all we are going to pay,

    you want to continue to be the vendor, screw you here’s what we’re going to pay.

    but we have a contract , screw you , sue us.
    almost put my friend out of business.

    his bank with his credit lines: screw you we cut your lines,, and pay up what you owe us.

  111. fly-over says:

    This seemingly never-ending stream of spleen venting troll texcrement has become the most boring and useless waste of internet bandwidth I’ve yet seen on blog.

  112. Pat says:

    I’m learning from it.

  113. Veto That says:

    “troll texcrement”

    no troll. he is dead serious. about all of it.

  114. pg says:

    Just a question.

    Even if NJ lowered property taxes wouldn’t houses just increase in price by the amount taxes are reduced?

    People are essentially just buying a monthly payment. Therefore the market is setting prices based on what the monthly payment is on the home including property taxes. Even if you reduced the taxes the price of the house would increase by the difference,right?

  115. Barbara says:

    pg,
    you posit this as if there’s no such thing as eventually owning your house outright.

  116. pg says:

    Thats true, its not a factor then. What percentage of people own their house outright?

    Im just talking about the market price for real estate. It seems like it is set with the property tax payment factored in.

  117. blindjust says:

    115: Not feasible to leverage any one approach to the price a buyer is willing to pay. Similar to debt/equity valuation methods. My valuation of RE is based off of the pre-bubble valuation + an average annual rate of RE return.

  118. fly-over says:

    re:

    ‘he is dead serious. about all of it.’

    irrelevant

  119. blindjust says:

    119: Well … relevant in terms of understanding perspective.

  120. lisoosh says:

    safe- will do.

  121. lisoosh says:

    For years Peche/freedy was initially excoriated for all of his illegals posts and then generally ignored.
    Now suddenly he’s the center of attention and even a couple of the “cool guys” deigned to actually speak to him directly.

    It’s gone completely to his head, he’s all excited, the little tyke.

  122. blindjust says:

    122: Come one … little tykes don’t own their own business, employ CPAs or securities attorneys!

  123. Mr Hyde says:

    Meter, freedy

    I am self emoyployeed and have had a company who I performed services for pay me less then owed and basically dated me to sue them.

    Why didn’t I sue? They are a very big player in my field (high school janitor) and would bleed me to death in drawn court battles and the associated attorney fees. I would also be blacklist by a number of clients.

    The best business decision was to eat the loss and move on. I am a little fish who got screwed over by a whale.

    This is not a unique situation. Companies do this on a regular basis if they think the other party is small enough to not have the resources to fight back.

    Your fantasy world has not existed since the late 70’s meter.

  124. confused in NJ says:

    Christie, New Jersey brace for massive influx of Haitian refugees

  125. safeashouses says:

    Meter,

    When a whale reneges on a deal it’s called being a tough negotiator, good for the shareholders, etc, yet a little guy does it and is a lowlife?

    You ever consider freedy, strategic defaulters, and debtors who sue their creditors/collectors are the shock troops in what could turn into a populist movement?

    Personally I could care less if freedy pays his bills or not. Theoretically I think his credit score should take a hit, and any company that wants to provide a service for him should charge him higher fees, interest rates, requier a large deposit, etc.

    The morbidly obese couch potato and careless drivers/texters cost you and me a lot more every year then the guy who stiffs the cable company.

  126. Mr Hyde says:

    116 barb,

    you think you own your house after you pay off the mortgage??????

    property taxes are no different then rent. miss a tax payment and see ho quickly the town/state reminds you of who has control of the property

  127. blindjust says:

    126: No.
    “You ever consider freedy, strategic defaulters, and debtors who sue their creditors/collectors are the shock troops in what could turn into a populist movement?”

  128. relo says:

    129: More likely as unemployment climbs. This remains THE fundamental issue.

  129. relo says:

    127: This James/Al theory of one global government is not as far-fetched as I first thought. The problem of one currency w/out one government, as the Euro is showing, is a tough nut to crack.

    “What is essential now is that we work with other nations hosting large financial markets to reach a broad consensus on an outline for the needed structural reforms, certainly including those that the president has recently set out”.

  130. relo says:

    Disclaimer: it is 8pm and I am 1/2 – 3/4 in the bag. Not bragging like freedy, just the facts.

  131. Cindy (11)-

    A local scammer called me two weeks ago with the news that FHA was tossing the seasoning requirements on flips. Natch, he wanted to know if I would work with him on some totally bogus, straw man-type deals.

    Oy vey, is this ever gonna end badly!

  132. grim (29)-

    The argument has been fun, but I must say that I’m 100% in the camp of you and pesche, too.

  133. Cindy says:

    134 – Clot

    You figure 29 was Grim then? I wasn’t sure. The writer uses “then” instead of “than” twice and failed to use an apostrophe on a possessive noun. There was even a misspelled word! just sayin…

    It didn’t appear to be Grim’s writing style. He is very exact. But if you say so…

    Grim?, Grim?…You @ 29?

  134. Veto That says:

    Cindy, yes 29 is grim.

    Here is my vote for best post over last two days. (from Stu)

    “I was really hoping that the first strategic defaulter on this blog would not have been such a douche.”

  135. Veto That says:

    “I’m 100% in the camp of you and pesche, too.”

    I think everyone here is basically all for strategic default. that was never really the argument.
    The argument was if freedy is a serial bankruptcy case that would have walked if the bank deserved it or not.
    i think the answer is yes.

  136. safeashouses says:

    #135 Punch

    Bed Bath and Beyond will take expired coupons. I have purchased 3 items at a time and turned in an expired store coupon for each one. Green shoots?

  137. Cindy says:

    135 139 – So…What ever happened to my “Frugal Families” show? It was part of my 09 predictions. What a wash out – I was so sure….

    They could teach us all how to haggle and use expired coupons….

  138. freedy says:

    charley brown’s will take em too,,

  139. blindjust says:

    128: I’d think that ownership implies the name on the deed. While you are obligated to pay for the local services provided by your tax $$, they have no right to your property unless you don’t pay.

  140. Al "The Thermostat" Gore says:

    127. Relo, do your own research. It is real. Most people wont believe until they hear it on the tv set. In addition, it is too late to stop it. Best people can do is prepare for when our current system completely collapses.

  141. freedy says:

    hey, veto ,, you did not get the memo yet.

    why go BK, when you can stiff them,they
    come around sooner or later and beg you to make some kind of a payment , any payment
    so we can “extend and pretend”

  142. Al "The Thermostat" Gore says:

    I suspect Freedy will be a valuable resource should principal cramdowns become a reality.

    Not sure why he is being harassed.

  143. freedy says:

    i can find CPa’s , securities attorney’s,
    civil, etc all day long who want to be in
    the deal, not employed.

    lots of talent around waiting to be in the deal.

  144. freedy says:

    principle reductions are being worked on
    as we speak., that ‘s a given,,

  145. freedy says:

    there is no doubt in my mind, that if i had
    chosen to stay, or could not have found
    a buyer,, i could have had a principle
    reduction on my transaction.

    Chase did not want the joint back, that
    we all agreed on

  146. Essex says:

    144. They will take what they can get in an era of diminishing returns. The old can’t get blood from a stone reality.

  147. freedy says:

    essex, that is exactly whats going on.

    a lender will go over and above not to write
    down a loan, residential or commerical.

    same with the credit cards,lets keep dancing

  148. freedy says:

    well lets change the topic.

    christie admin: bracing for massive influx
    of Haitian refugees. housing problem in
    NJ solved.

  149. Veto That says:

    freedy,
    if you had plenty of money, why did you default in the first place.
    job change?

  150. cobbler says:

    Interesting discussion of short sales and changes to the rules supposedly coming in April on this thread at Zillow:

    http://www.zillow.com/advice-thread/10-days-to-respond-to-Short-Sale-Offers/318546/

  151. freedy says:

    i defaulted because i was underwater and
    the trade was going against me.

    cut the loss,, drew out all the equity with the heloc,, and moved on.

  152. freedy says:

    and i settled with the bank, was not a short
    nor was it a foreclosure.

  153. freedy says:

    another item or several,the maintenance
    increases ,,, crazy plus the taxes on a condo

    9k forget it, was not worth it anylonger.

    cheaper to rent.actually 9.6 can see over 10
    shortly. to live in a place going down in
    value,,

  154. Pat says:

    freedy, your priest has absolved you. Say three Hail Marys and two our fathers. You’ve done the work, made the decision, and now your penance is complete with the edumacation you’ve offered so many. Go in peace.

    Now it’s Make’s turn. We need to schedule weekly updates with Make. Friday at 3 pm…what were the communications, if any, what was the deal, and future timing.

  155. Barbara says:

    Mr Hyde says:
    January 30, 2010 at 7:37 pm

    116 barb,

    you think you own your house after you pay off the mortgage??????

    property taxes are no different then rent. miss a tax payment and see ho quickly the town/state reminds you of who has control of the property

    Hyde,
    that was kinda my point, if you think that taxes and mortgage are one in the same, you are wrong. Mortgages end, taxes do not.

  156. Bystander says:

    #61 meter,

    LOL. Channeling your inner Bukowski.

  157. Cindy says:

    http://www.tampabay.com/news/business/realestate/woman-sues-mortgage-lender-saying-she-should-never-have-received-the/1069335

    Whoa Nellie…

    “Soronen wants her mortgage voided and punitive damages of $10 million dollars.”

  158. Barbara says:

    TEAM FREEDY!

    who cares if he’s a jerk? Its hardly the point. In fact, I sense a whole lot of displaced anger. Pathetic that an anonymous msg board poster with a story is more “accessible” than The Boys In The Teflon Suits, so posters over react because it feels good.

  159. Pat says:

    TEAM MAKE!

  160. Pat says:

    Call dibs on copyright.

  161. Pat says:

    I’m going with Team Make because Freedy clearly missed out on at least 8 months of free rent. What a pansy. I asked him about that when he first mentioned the deal, and he was all fruity about the timeline.

  162. Veto That says:

    “Freedy clearly missed out on at least 8 months of free rent.”

    good point pat, i can also bet that freedy didnt even take any of the copper pipes on his way out.

    amateur.

  163. njescapee says:

    was at our annual hoa meeting today 14% of units are more than 90 days past due.
    board was bitchin’ but boy was I relieved that it is only 14%. think that is pretty good for florida keys.

  164. Essex says:

    It is ‘deal making’ and you negotiate from whatever position you have. I figure if a credit card co. can change my interest rate at will, then we really have no binding terms. And I play rough.

  165. BC Bob says:

    “the govt mad ethe decision to pass the bailout so the whole financial system didnt collapse.”

    Veto, Veto? Come on, you know better. There were only 2 saviours, FASB and OBS garbage bins. Nothing was bailed. The culprit, OTC Dervivatives, are still rotting on balance sheets or transferred to Fedco. OBS shenanigans, makes Enron appear to be a 4 inning spring scrimmage. There have been zero structural changes, TBTF has become TBIGGERTF. In addition, the same arsonists are still involved, shuffling similar paper to different parties.

    As you are well aware, there are unintended consequences. Has the “bailout” resulted in sovereign debt becoming the new subprime? Have we created the mother of all carry trades? If SD is the new subprime, who bails out this out. A debased currency joined at the hip with increasing taxes.

    Some other thoughts, if true, system was bailed out, why AIG and not Dick Fuld? Oh fcuk, Hank broke the buck. How is this possible? Trillions of slop thrown against the wall, yet Hank broke the buck? What bailout? Why FASB a few days after DF got his heart pulled out? Why was rule of law abandoned, senior debt holders pushed to the back of the line in favor of unions?

    Was the system really bailed out or simply certain entities tossed oxygen masks? Have we recorded the final out or just struggling to get thru the top half of the fifth?

  166. Deflationary debt destruction crises are really a bitch, aren’t they?

    Sometimes I think TPTB are trying to trigger inflation because it’s simply a more familiar- therefore, comfortable- pain.

    I’m now thinking about Bergabe like a 14 y/o teenage girl who’s a cutter.

  167. Here’s a new way to be uncomfortable: watch the Breakfast Club with your teenage kid.

    You get bonus points if you were past your teenage years when it came out. In fact, that makes it doubly alienating…if not, triply so.

  168. Looking back, I can’t believe nobody shot up my prep school.

    For sure, that place shoulda been the first Columbine.

  169. yikes says:

    grim says:
    January 30, 2010 at 11:17 am

    Sorry folks, but I side with Pesche.

    bednar – this freddy/pesche creation is a fraud. run his IP addy up the flagpole.

    he’s just doing this to get under everyone’s skin. gotta ignore the clown

  170. Pat says:

    Maybe more like a bulimic who can’t find a toilet.

  171. Pat says:

    Cindy, real men from NNJ (and even some from NY) spell ‘than’ as ‘then.’

    There were a bunch of teachers back in the 70’s who taught the second graders the wrong spelling.

    Twelve is greater then six.

    It’s not as bad as where I grew up, where we were taught the correct spelling of haina.

  172. Pat says:

    This is a real estate blog, haina?

  173. PGC says:

    There is a big difference between AIG and Lehman. Lehman was an outlier to the system, AIG was at the core of the whole mess. Lehman could have been saved with 30Bil backstop in the same manner as Bear

    The big thing AIG needed was time and cash to wind out of a lot of positions. This whole mess was built on the premise of, you don’t care what level of default risk, you can always buy insurance from AIG and the like to cover any losses. That’s why it was so easy for everyone on the securitization chain to feel safe as a Vegas bookie as they bought insurance or sold the risk o,n to cover themselves. If AIG had gone down, it would have brought everyone with it. I think the bailout money it got was the best money spent in all of this.

  174. Al "The Thermostat" Gore says:

    Im with team Freedy for sticking it to the white shoe boys. While I reach for my rifle others use more clever tactics.

    Teach us how its done.

  175. Sean says:

    PGC – AIG is a perpetual bailout, they drew another 2 billion last week I believe. The cover up is even worse.

    Things have to change, especially when it comes to derivatives and securitzation, yet it hasn’t.

    Gensler and the CTFC haven’t gotten anywhere.

    The CME and ICE have yet to start clearing CDS.

    Congress is literally frozen on regulation, they are too afraid to act.

    Going to be a long walk home and this fire caused by FIRE will be smoldering for years, with occasional flareups.

  176. PGC says:

    Sean

    A tire fire is a good analogy. It will burn for 30 years until the last of the positions are wound out.

    I think a novel solution for AIG would be to take it under the Fed and fund its defict as a charge on the member banks. It would never happn, but it would be a fun discussion.

  177. Al "The Thermostat" Gore says:

    Secret dollar myths on yahoo news homepage.

    http://shine.yahoo.com/channel/life/15-things-you-never-noticed-on-a-dollar-575113/

    The lid is coming off the secret slowly but surely. Too many people are awake now. Just like how no one bought the Bin Laden “global warming” nonsense. Like a man in a turbin running around in caves gives 2 sh^ts about Al Gore’s global warming scam.

    If they hit us with a false flag this year they risk blowing their cover. It will be interesting to see how it plays out. One thing I can assure you. People wont accept the 9/11 routine again.

  178. sas says:

    Bin Laden is a myth.

    That son of a gun had been dead and gone for years.
    But, he gets dug up to keep up the boogie man image to cause fear.

    fear…like sex.. .sells

    SAS

  179. sas says:

    i see nothing wrong with Freedy.

    but, Veto’s right.

    if you are really a slick rick… you take the copper pipes and everything else on your way out.

    SAS

  180. sas says:

    hell, take the hot water heater too.

    SAS

  181. freedy says:

    Round three

  182. freedy says:

    i have some honor and dignity

    i did not take the Hot water heater or
    the copper pipes.

    place was spotless even left him the expensive paint for the decks. yes , two decks.

  183. I think we’ve just about exhausted this topic.

    Also, the minders who watch this place for the gubmint must love seeing members of our gang turn on each other.

    Just like their plan.

  184. grim says:

    bednar – this freddy/pesche creation is a fraud. run his IP addy up the flagpole.

    I assure you his is a real person.

  185. grim says:

    Hmm, new thread, do over.

  186. yikes says:

    Freddy is a 100% fake. read some of his posts. the guy frames a sentence like a 3rd grader and his spelling – not one or two words, like five per comment – is horrendous.

    he isn’t smart enough to do a strategic default.

    quit letting this jerko!f get under your skin

Comments are closed.