Dow keeps tanking, Subprime mortgages a key factor

[WRESTLINGFAN]

A couple of weeks ago it was at 14,000, over the past 2 weeks or so it has managed to lose a lot of its value dropping about 850 points. Due to the sub prime market going belly up because people can't keep up with their payments or the fact that ARM's will be adjusting, so people who got those sweet teaser rates a few years ago. Companies like Countrywide have been taking heavy losses. Looks like this whole situation is going to get worse. Today it tanked more than 200 points



http://money.cnn.com/2007/08/14/markets/markets_0445/index.htm?postversion=2007081418

[DarkHippie]

I heard that 8 million people are going to lose their homes because of this. Didn't something like this happen in the early ninties with Savings and Loans?

[Ritalin]

It's different. People who deposited money in a Savings and Loan had a reasonable expectation that their money was secure.

People who took out subprime loans and ARMs KNEW that the bill was going to come due. They knew what they were signing when they took the loans, and the hedge funds knew the risk when they bought the loans.

They both gambled that the government would bail them out if things went south.

I hope they were wrong.

[Tenbatsuzen]

I heard that 8 million people are going to lose their homes because of this. Didn't something like this happen in the early ninties with Savings and Loans?

8 is being conservative. The number is between 8-15.

That being said, it's a good time to be a first time home buyer if you've got a secure job that pays well.

[TheMojoPin]

I'm all for another depression. I love the classic bindle look.

[Justice4all]

Well Tens just be careful. With the decline in the market and the lenders bailing out of the business left and right (Sub prime AND A- Paper) there have been some changes in the loan programs out there.

If you have over 700 credit scores many A+ lenders out there will NOT do a Stated Income loan if you are a w-2 wage earner.

And yes the forclosure market is skyrocketing. Things are not going well in the business at all.

[Recyclerz]

Paul Krugman, economist & Bush Hater (who is usually right in both functions) has written that real estate in "Blue America" and more specifically, the Washington-NY-Boston corridor and on the West Coast, had run up to unsustainably high levels for a number of different reasons (this is where the people who benefit most from globalization live, limits on development, Porsche Cayennes loaded with banker boxes of $100 bills being delivered to Wall St. types and hedge funds managers as bonuses, who then bid up the price of everything around them, etc.) so we Coasters could be in for some rough times if the credit markets don't get steady on their pins pretty soon.

On the stock market side, I think this is still just a normal correction from a market that has had a decent run over the last couple of years. (Although I'm not checking my 401(k) or IRA balances for awhile for fear of sounding like ESD inhaling a cigar.) I think (am hoping) the only thing that could crash the stock & bonds markets short term is if China gets fed up with us (& especially FM Jeff) constantly bashing them and starts to dump their $ holdings just to fuck with us. Fortunately for us, their government is planning to make a big "Hey! Look at us and how great we are!" show to the world at the 2008 Olympics so I don't think they want to tank the global financial markets before then. But, if they start acting as impetuously and half-assed as our government has been acting for the last 6.5 years, we could all be fucked. :unsure: