Our financial system is crumbling this week.

[Popeye_Card]

Downtown took a heavy beating in late '06. It's back up now.

[greenback44]

Going back a bit...

This is where we differ. Like I said in my previous post, they shouldn't be anywhere near a mortgage that has the potential to bankrupt them. Even with the housing prices falling, that doesn't impact their mortgage payment, so, in theory, they should be able to afford their mortgage still. These people got greedy b/c they're 100% ignorant of finances apparently. Now, the intelligent, down to earth people are paying for other people's stupidity and greed (not just buyers). That, imo, is wrong.

I agree with your fundamental point, but it's a bit more complicated than this. Some naifs, with the same background and same motivations as your greedy jerks, made money on this nonsense. And look at it on the flipside, that investors who were convinced in 2005 that the housing market was a bubble lost their shirts shorting the various suspects that are now headed to bankruptcy. What distinguishes the successful from the unsuccesful is simply timing. That's not surprising as we built a huge-ass pyramid scheme sanctioned by the federal government (both D and R), "the market" and Arthur Dent's favorite experts at NPR. I don't like it, and get a couple of beers in me and I'll contribute more than my share of moral outrage towards these buyers. But I have a lot more trouble with the CFAs, the MBAs and the PhD's getting paid millions ostensibly to allocate capital who were grossly negligent in their duties. I don't know if these people were gaming a system they were supposed to maintain or if they were horribly mis-trained. What I do know is that our system broke down and your greedy jerks have some plausible deniability here.

[Arthur Dent]

Arthur Dent's favorite experts at NPR.

Turn back a few a few pages...

I've been impressed with NPR's ability to explain things in some depth and in clear terms. That's not to say that they haven't done some bad stories. Their reporting while the bubble was inflating was generally awful.

[TimeForGuinness]

My area: Princeton Heights

BTW...I bought in October of 2006...right in that dip.

[Popeye_Card]

My area: Princeton Heights

BTW...I bought in October of 2006...right in that dip.

That's been quite a roller coaster since '00.

[TimeForGuinness]

My area: Princeton Heights

BTW...I bought in October of 2006...right in that dip.

That's been quite a roller coaster since '00.

There are a lot of 2 family flats in certain parts of the neighborhood...slowly, people are taking them and making them single family. Plus, our neighborhood reaches across Kingshighway and picks up a lot of smaller houses ~800 sq feet...so it tends to balance out the area. A little bit of a roller coaster ride, but not too dramatic of a swing. Most of the older people have been moving on, and the younger crowd is moving in and rehabbing/updating.

All and all it's a great neighborhood and the majority of people there are between 25-35 with kids that they send to St. Katherine (Our Lady of Sorrows), St. Gabe's, or St. Raph's. Most of the teenagers go to DuBourg High School...which boarders out west side.

If you get a chance to stop by Macklind between Chippewa and Eichelberger, there is a nice little business area with Big River Running, The Mack, Home Eco (green hardware store), Keith's, Macklind Deli, some candle store, and Murdoch Perk Coffee house.

[AWvsCBsteeeerike3]

That's why I said "in the bubble markets". For the most part, the Midwest wasn't a bubble market. If you lived in San Diego on the other hand, you were going to pay a bubble price. Your alternatives were to rent or move. I have trouble characterizing everyone who didn't do that as greedy.

It doesn't matter if you paid way too much for your house, if you were responsible, you would still be able to afford the mortgage. Do you disagree with that, AD? I continue to see you say, "Well, the housing prices fell, so they were screwed." Well, yeah, kind of. But, it really doesn't effect their cashflow. I have friends that bought houses and are still making the payments even though in my area there was a sizeable bubble and they paid a bubble price. I think housing is down way more than 10%.....maybe shy of 20% though.

The bubble bursting - which wouldn't have happened this abruptly if people had continued paying their mortgages, so the people taking out way too big of loans, the people i'm talking about, largely caused this - didn't make people's current mortgages change all that much.

[lukethedrifter]

My area: Princeton Heights

BTW...I bought in October of 2006...right in that dip.

and I thought you were SoHa cool.


Check out the new Billy Goat Chip Factory and fried chicken joint yet?

[ghostrunner]

Why are they buying a house if they are month to month on their bills? That's a horrible idea. If someone bought a house in 05 and got laid off in 08 and has a year of mortgage payments built up and in 09 runs out of money, then that i understand.....however, that's not what is going on. a lot of people bought thinking they'd make a quick buck, then foreclosed when they realized they couldn't/couldn't afford their mortgage.

Just b/c a lot of people did it doesn't make it any less dumb.

Well define "month to month on their bills". Like I said, I have a stable income, savings, etc. And I own a house. But if I lose my job--and in the current job market it's no sure thing that you'll find a new one soon--I would look to put my house on the market about 1 month after being jobless. Because right now, it'll take several months to move a house unless you absolutely slash the price. And while my savings can last me a little while, without dipping into my 401k etc., I can't afford to make house payments for over a year.

If nobody bought houses unless they could cover the payments for over a year in case of emergency, hardly anyone would be buying a house.

Not month to month: (Savings + Unemployment for a year)/12 - Monthly Bills > 0

I guess that doesn't really define "not month to month" and it ignores a lot of stuff. But, back to my original point, that's how I would approach any loan, not just a mortgage.

I think you're expecting a lot. Most people were told to treat a house payment rather differently than other loans because they were supposed to think of them as assets which would appreciate and could even be used to secure additional loans. We got a home equity line of credit in order to make some improvements on the house, which now doesn't look so smart. My father is pretty smart about this stuff and he had no objection to it. My bank, which is pretty well respected and still in decent shape (and I'm very pleased with on the whole), was marketing this as though it were a good idea. Even Dave Ramsey makes homes an exception to his debt-free spiel. So homes have been treated as something different than other loans. I didn't know much about it at the time, and I trusted what other people said I could afford. We actually played it rather conservative considering what many people were willing to loan us.

That all may seem to go against common sense, but the word from most experts was that common sense didn't apply in this area.

[TimeForGuinness]

My area: Princeton Heights

BTW...I bought in October of 2006...right in that dip.

and I thought you were SoHa cool.


Check out the new Billy Goat Chip Factory and fried chicken joint yet?

I am not SoHa cool...by about 4 blocks. Funny story, there is a salon at the end of my block called SoHa (even though it is in Princeton Heights)...she's gotten angry calls from people in the South Hampton neighborhood complaining that she technically isn't in SoHa so she should change her name. Amazing.

I haven't checked out the Billy Goat Chip Factory and fried chicken joint yet...where are they at?