The Second Foreclosure Tsunami Is Coming [Archive] - Glock Talk

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Ruble Noon
04-05-2012, 09:12
http://www.zerohedge.com/news/second-foreclosure-tsunami-coming-and-about-kill-any-hopes-housing-bottom

Guss
04-05-2012, 09:27
Bargains coming up for those who saved.

random southpaw
04-05-2012, 09:47
Several years ago, a bank friend shared that there are laws on the books that prolong our housing market misery.

Basically, banks (or other entities) who have foreclosed on homes do not have to take a negative hit to their balance sheets unless and until they actually sell those foreclosed properties. Thus, as the article referenced above states, there is a "shadow inventory" of foreclosed homes just waiting for a green light of some kind to be dumped onto the housing market.

Bottom line?: Do not be expecting any kind of pricing improvement until all of the shadow inventory has been sold. And even after those homes are sold, there will likely be buyer expectations of lower prices for quite a while.

So, do not be suckered by anyone who tells you that a housing recovery is "just around the corner."

boomhower
04-05-2012, 10:27
It is a good time to get a deal and looks like it could get even better for those buying. I just bought my first home at around 50% of build cost.

Principle reduction is a horrible idea. The buyer decided the home was worth it when they bought it, just because it dropped the tax payers shouldn't have to foot the bill. I am all for more lax refinance rules so those that have taken a hit to their credit can refinance to a lower payment with the lower rates these days. If we at going to pay for principle reductions are we going to start paying for those that lost money in their 401k's in the stock market? Govt bail outs have to stop or thus country is going to need a bail out.


Sent from my iPhone 4S using Tapatalk

brickboy240
04-05-2012, 10:31
The funny thing is that most of big media is selling the story that the worst is over and that we are in a slow recovery.

Many here also have been lulled into believing this nonsense.

Yes, those of us that have always lived below our means, saved and prepared are going to be ok. Those that did not are in for a huge surprise and a huge downgrade in the way they go about their daily lives.

- brickboy240

Toyman
04-05-2012, 11:42
People don't realize that banks were sitting on a ton of foreclosed homes waiting on the ruling about the whole MERS debackle, which halted foreclosures of many homes.

Jonesee
04-05-2012, 17:17
Several years ago, a bank friend shared that there are laws on the books that prolong our housing market misery.

Basically, banks (or other entities) who have foreclosed on homes do not have to take a negative hit to their balance sheets unless and until they actually sell those foreclosed properties.


This is absolutely not true. Bank examiners and CPA's will insist on write-downs to the bank's balance sheet.

They can also accomplish this by increasing loss reserves as an alternative.

http://seekingalpha.com/article/426671-on-monetizing-the-debt

"That is why the banks are holding the cash rather than lending it. They need the cash as a buffer to their write-downs of bad mortgages and their foreclosures. The banks need for liquidity is why lending is so tight today." (url citation above"

and I didn't have to hear all that from a friend...

Javelin
04-05-2012, 17:21
The graph showing unemployment checks are running would be a good parable.

:wavey:

coastal4974
04-05-2012, 18:05
Did someone say that the economy is improving and that unemployment is going down?

Oh, that must have been NBC, CBS, ABC, MSNBC, CNN, never mind.

Javelin
04-05-2012, 18:08
Did someone say that the economy is improving and that unemployment is going down?

Oh, that must have been NBC, CBS, ABC, MSNBC, CNN, never mind.

Statistically pure numbers I think so. They only count those on unemployment. When your unemployment benefits run out in a year you are no longer counted as unemployed.

Instant decrease ---> made easy!

coastal4974
04-05-2012, 18:12
Statistically pure numbers I think so. They only count those on unemployment. When your unemployment benefits run out in a year you are no longer counted as unemployed.

Instant decrease ---> made easy!


Yep, at this rate no one will have a job but we will have 2% unemployment.


Not a problem wen all we have to do is borrow more money from China. After all, we won't have to pay it back.

Gunnut 45/454
04-05-2012, 18:38
Just another good reason to Vote out the Obamanation so he can't do another bailout! Let the market correct it's self!!!:supergrin:

Jonesee
04-05-2012, 19:31
Even if you take unemployment numbers out of it:

The S&P has returned over 11% YTD. The Dow 7% YTD and the Nasdaq is on tear and has returned 18.25% YTD...

Businesses are making money and building their balance sheets. Investment has started again.

Isn't that capitalism and the free market at work?

That is a recovery on my book.

Ruble Noon
04-05-2012, 19:51
Even if you take unemployment numbers out of it:

The S&P has returned over 11% YTD. The Dow 7% YTD and the Nasdaq is on tear and has returned 18.25% YTD...

Businesses are making money and building their balance sheets. Investment has started again.

Isn't that capitalism and the free market at work?

That is a recovery on my book.

No. That is the FED propping up the market.

Jonesee
04-05-2012, 20:00
No. That is the FED propping up the market.

Do the math and add the increase in market capitalization across just the 3 markets I mentioned. Then add to that the increase in equity derived from profits on the balance sheets across America. The fed is not moving all those numbers.

The bump from QE is long gone.

The gloom and doom crowd is always looking at the glass half empty, But the economy is recovering.

You may choose to say woe is me, or you may invest and make some money.

Ruble Noon
04-05-2012, 20:03
Do the math and add the increase in market capitalization across jus the 3 markets I mentioned. Then add to that the increase in equity derived from profits on the balance sheets across America. The fed is not moving all those numbers.

The bump from QE is long gone.

The gloom and doom crowd is always looking at the glass half empty, But the economy is recovering.

You may choose to say woe is me, or you may invest and make some money.

That's why we were downgraded again I guess, It's a recovery! :rofl:

Jonesee
04-05-2012, 20:05
That's why we were downgraded again I guess, It's a recovery! :rofl:


We were downgraded before the recovery began. There is already talk of a potential upgrade. At least get your timeline right.


And you said "again" I believe only S&P downgraded the USA and they did it only once. There may have been another smaller rating agency that followed, but none come to mind.

coastal4974
04-05-2012, 20:07
No. That is the FED propping up the market.


That's exactly what it is, amazing what printed money can do.

Ruble Noon
04-05-2012, 20:09
We were downgraded before the recovery began. There is already talk of a potential upgrade. At least get your timeline right.


And you said "again" I believe only S&P downgraded the USA and they did it only once. There may have been another smaller rating agency that followed, but none come to mind.

http://www.glocktalk.com/forums/showthread.php?t=1413367

Jonesee
04-05-2012, 20:17
That's exactly what it is, amazing what printed money can do.

The movement in the market is not from QE.

The strength in the market now is coming from the FRB commitment to keep rates at virtually 0% for the near future.

The net effect of that is businesses' debt service is reduced and predictable. The other impact is that investment is directed back into the capital markets rather than savings. Savings, as in bank savings, is actually dis-savings in an economic sense. it takes money out of the the capital markets (investment).

Money is flowing back into the capital markets now. And, businesses as a whole are more profitable. The issue is, companies have not hired additional employees yet to support their businesses.

Again, you can blame the gov and say woe is me, or invest. Totally your choice.

Ruble Noon
04-05-2012, 20:24
The movement in the market is not from QE.

The strength in the market now is coming from the FRB commitment to keep rates at virtually 0% for the near future.

The net effect of that is businesses' debt service is reduced and predictable. The other impact is that investment is directed back into the capital markets rather than savings. Savings, as in bank savings, is actually dis-savings in an economic sense. it takes money out of the the capital markets (investment).

Money is flowing back into the capital markets now. And, businesses as a whole are more profitable. The issue is, companies have not hired additional employees yet to support their businesses.

Again, you can blame the gov and say woe is me, or invest and get your share of the investment returns. Totally your choice.

3 Charts On The 'Real' Deteriorating State Of Corporate Balance Sheets

http://www.zerohedge.com/news/3-charts-real-deteriorating-state-corporate-balance-sheets

rgregoryb
04-05-2012, 20:27
http://markets.money.cnn.com/markets/overview/modules/chart.asp

Jonesee
04-05-2012, 20:29
3 Charts On The 'Real' Deteriorating State Of Corporate Balance Sheets

http://www.zerohedge.com/news/3-charts-real-deteriorating-state-corporate-balance-sheets

If this is what you use for your financial advice, it looks like you have made your choice.

Best of luck.

Ruble Noon
04-05-2012, 20:31
If this is what you use for your financial advice, it looks like you have made your choice.

Best of luck.

Same to you. :wavey:

barbedwiresmile
04-05-2012, 20:56
ZIRP + algorithm-based robo trading + fiat-inflated equities indeces + model marked capital reserves = recovery.

Gotcha

bobthellama42
04-05-2012, 21:33
ZIRP + algorithm-based robo trading + fiat-inflated equities indeces + model marked capital reserves = recovery.

Gotcha



Nailed it!

series1811
04-07-2012, 05:54
This is absolutely not true. Bank examiners and CPA's will insist on write-downs to the bank's balance sheet.

They can also accomplish this by increasing loss reserves as an alternative.

http://seekingalpha.com/article/426671-on-monetizing-the-debt

"That is why the banks are holding the cash rather than lending it. They need the cash as a buffer to their write-downs of bad mortgages and their foreclosures. The banks need for liquidity is why lending is so tight today." (url citation above"

and I didn't have to hear all that from a friend...

You must be a banker. Then tell us about "mark to market", why banks aren't having to do that right now, and then tell us why we shouldn't be worried.

Jonesee
04-07-2012, 11:40
You must be a banker. Then tell us about "mark to market", why banks aren't having to do that right now, and then tell us why we shouldn't be worried.

What I do for a living I keep private. Only one or two members on here know what I do. To answer your questions:

Question 1:
Simply put:

A company, any company, cannot change their basis of accounting just because the market changes. GAAP/FASB/Bank Examiners/IRS et al. will not allow easy and frequent changes. If banks did not use it when the market was booming and the change would have benefitted them, why should/would they be forced to use it when the markets turn south.

Just as a side note. Enron used mark-to-market accounting in their natural gas business. Research it and let me know how that turned out.

And question number 2: why shouldn't you be worried?
Some people worry no matter what, and always see the end of our economy, political system, life as we know it, etc. If you are one of those, I can't tell you not to.

Although there is truth in the parable:
"When the wind dies, row."

While many have been wringing their hands this year, I have made a nice return. Some times I have just have to row and work harder to do it.

You do as you feel you should.

Best of luck to you.

series1811
04-07-2012, 18:59
What I do for a living I keep private. Only one or two members on here know what I do. To answer your questions:

Question 1:
Simply put:

A company, any company, cannot change their basis of accounting just because the market changes. GAAP/FASB/Bank Examiners/IRS et al. will not allow easy and frequent changes. If banks did not use it when the market was booming and the change would have benefitted them, why should/would they be forced to use it when the markets turn south.

Just as a side note. Enron used mark-to-market accounting in their natural gas business. Research it and let me know how that turned out.

And question number 2: why shouldn't you be worried?
Some people worry no matter what, and always see the end of our economy, political system, life as we know it, etc. If you are one of those, I can't tell you not to.

Although there is truth in the parable:
"When the wind dies, row."

While many have been wringing their hands this year, I have made a nice return. Some times I have just have to row and work harder to do it.

You do as you feel you should.

Best of luck to you.

I met the former President of AIG in the Bahamas. He had made a nice return, too. I am not in the group of people you can impress with that.

Jonesee
04-07-2012, 20:32
I met the former President of AIG in the Bahamas. He had made a nice return, too. I am not in the group of people you can impress with that.

Kind of a pointless comment. I never mentioned my returns or how much I invest. Nor in any way tried to impress you.

I just attempted to answer your questions.

Have a great night.