59 minutes . . .

[Russ H]

OK, I've spent the past month trying to find articles that explain what's going on to the world financial markets.

The following link is the best I've found, by a long shot, at talking about just what happened to all of the money that was going to mortgages and the increase in housing prices.

This link is for a radio show-- the segment is about an hour long (59 min).

I would suggest making time to hear in start to finish-- I got distracted a few times, and had to back up-- there is so much info in here, that you don't want to miss the examples. Great explanations that make things easy to understand, even if you're not familiar w/investing in the markets or buying real estate.

And get this-- just the reasons, no blame, no politix, no conspiracies.

Here's the link:

This American Life

There is a second show, that aired today (Sunday) that is as good-- and builds on the show above. But it's not avail for online listening yet. I'll post a link as soon as it's avail.

I realize that listening to this will come as a shock to some here- to others, it will only confirm what they know already.

But to all of us, it draws a compelling, and I believe accurate, image of how we got to where we are right now.

And I think it's vitally important that all of us understand that, so we can make plans for how we're going to move forward.

Thanks,

-Russ H.

 

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[Russ H]

Curious if this has been helpful for any?

-Russ H.

 

[Runum]

I listened to it Russ. Good stuff but not much I hadn't heard. It did put names and voices with some of the participants. Here is the part I wonder about, when I was making my REI purchases, in talking to the mortgage brokers, they would tell me about the loans they made. We also had a lender on the TV pushing loans that were 125% LTV. During all that mania, anyone with a HS math education knew that it would last long. Not only that someone would have to make it up, somehow, to make the loans right. I knew in the back of my mind that property values in LA can't keep escalating at rate they were. I knew people could not afford mortgages and car loans of that magnitude on the income they were making. I knew it all seemed convoluted but I wasn't playing that game.

Even around here, we didn't have the run up on values like others did but we still had people that called themselves "investors" buying RE that made no sense mathematically. I knew that those buys didn't make sense but I wasn't doing them.

The one thing I didn't see coming was that even though I didn't play the speculation, appreciation game I would still suffer some consequences. I didn't foresee that my tax money would eventually pay for those $1000 bottles of wine or the multi million dollar house that these guys bought.

I resent that I didn't get to play the high flying game but that I am required to pay for others that did play that game, and won/lost.

 

[Russ H]

Runum-

Agree w/ the RE craziness.

What I did NOT know was that these horrible mortgages have poisoned more than 30 TRILLION dollars of AAA securities.

When I heard that, my heart stopped.

How is a measly $700B gonna correct this if RE prices keep dropping (or even stay where they are), people keep defaulting, and mom and pop all over the world find out that their super conservative AAA Mutual Funds and other bonds are junk?

That was my shock, and primarily why I posted this.

Suddenly the bank and ins co failures make sense.

-Russ H.

 

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[Runum]

I knew that the mortgages had been resold and cut up and resold. I did not realize how many iterations of this had been done though. I also didn't realize how deep it went. The Texas Retirement System(TRS) was involved in it. That includes my wife's retirement.

This also explains the credit freeze. All the financial people were lying to each other and all of them knew it. Now they got caught and no one trusts anyone.

No one knows how much each bank is exaggerating the value of their holdings. How is trust in the market going to be rebuilt?

I would like to listen to the second segment whenever they publish it.

 

[Runum]

Yep, it's a multitrillion dollar game of liars poker and we are the bank covering all bets. I always wondered what it would be like to own a bank. Now I have an interest in several banks, I don't like it.:cheers:

 

[andviv]

I will need to find the time to listen to it all at once. Great resource.

It just makes me wonder, why do I bother making my mortgage payments? Why to pay the loans if being honest will only make you lose? Damn, being honest just does not pay, does it?

I think not too many people have questioned how the bailout will force the banks to start lending again (it doesn't) or where does the 700B number came from (proctonumerology, definitely).

 

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[Runum]

I think not too many people have questioned how the bailout will force the banks to start lending again (it doesn't) or where does the 700B number came from (proctonumerology, definitely).

:smilielol:

 

[andviv]

Just in case people here got concerned about the length of the show, they do have a transcript available...
http://www.thisamericanlife.org/extras/radio/355_transcript.pdf

 

[fanocks2003]

I will need to find the time to listen to it all at once. Great resource.

It just makes me wonder, why do I bother making my mortgage payments? Why to pay the loans if being honest will only make you lose? Damn, being honest just does not pay, does it?

I think not too many people have questioned how the bailout will force the banks to start lending again (it doesn't) or where does the 700B number came from (proctonumerology, definitely).

Being too nice does not pay.

 

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[Jonleehacker]

Russ posted the 2nd program here:

http://www.thefastlanetomillions.co...ssion/16859-crash-course-current-economy.html

In case you missed it, it is just as good.

It just makes me wonder, why do I bother making my mortgage payments? Why to pay the loans if being honest will only make you lose? Damn, being honest just does not pay, does it?

This gets me thinking. If my bank goes bust (or even if it doesn't), is there a way I could track down and buy back my own mortgage at a discount?

Hell if no-one else wants it, I can buy it for cash at 10 cents to the dollar!

 

[andviv]

If my bank goes bust (or even if it doesn't), is there a way I could track down and buy back my own mortgage at a discount?

I talked to a lawyer that does that... I don't know how successful he is when trying to buy mortgages that are current. If it is classified as good paper then they will expect top dollars from it. The way he did that was by faxing an offer to the bank for that loan in particular.

Based on my conversations with him, this works relatively well when the homeowner is in default or late more than 30 days.

 

[Jonleehacker]

If it is classified as good paper then they will expect top dollars from it.

Isn't that the whole rub here, that crappy "no income, no assets" mortgages were classified as "good paper" and were actually worthless.

Therefore, in my mind (which is not reliable at all ), I'm thinking that there must be "real: good paper (like my mortgage) being sold at bargain prices.

It is probably just a pipe dream though, as I learned from the audios that these mortgages were all sliced into a million bits and then sold as packages to attempt to lower risk.

Apparently finding out who actually owns an individual mortgage right now is next to impossible.

 

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[andviv]

Yes, that was the point...

That paper was AAA when created...

as soon as the homeowner stops paying, the paper loses its top-notch ranking

That is when makes sense for the mortgage owner to sell at a discount

Problem is, as you mention, that many times it is not clear who the real mortgage owner is.

 

[Cat Man Du]

Just in case people here got concerned about the length of the show, they do have a transcript available...

Can you post the second one as well. Thanks

 

[Russ H]

Happy to see that some folks are getting something out of this.

Of all the stuff I've read/seen/heard over the past month, these 2 shows are the best I've found at pulling it all together.

Definitely worth a serious listen without distractions. :smx2:

-Russ H.

 

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[andviv]

Can you post the second one as well. Thanks

in this same thread, answer #13, jonleehacker posted the link.