REAL WORLD EVENT DISCUSSIONS

Despite what doom/gloomers say, economy roars on Part II

POSTED BY: SIGNYM
UPDATED: Thursday, September 13, 2007 12:30
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Monday, September 10, 2007 12:07 PM

LEADB


Quote:

Originally posted by SignyM:
SOx? The only SOx I know of is "oxides of sulfur".

Anyway, I don't exactly have great faith in a centralized economy either. I just think it's a dodge to throw up your hands and say "People will be people" especially since we just had a savings and loan meltdown not more than 30 years ago for many of the same reasons. It's not as if the people at top are so disengaged that they haven't heard of reverse amortization or exploding loans and "no money down" and "no income verification". And if I could see where this all was heading why couldn't they? It could have easily been nipped by requiring a certain percent money down and income verification. (I can't believe I'm saying this... it's like an exact replay of the last housing bubble.)

So, why didn't they do anything?

SOx = Sarbanes Oxley

Dunno. It's not like concerns weren't expressed in Business Week, Newsweek, etc. so it was not exactly secret. Fletch2 did remark about congress being 'bought and paid for', that is as likely an explanation as any.

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Monday, September 10, 2007 1:19 PM

SIGNYM

I believe in solving problems, not sharing them.


YEP! Sounds about right.

---------------------------------
Always look upstream.

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Thursday, September 13, 2007 9:41 AM

SIGNYM

I believe in solving problems, not sharing them.


Greenspan says didn't see subprime storm brewing
Quote:

WASHINGTON (Reuters) - Former Federal Reserve Chairman Alan Greenspan said he was late to see the storm gathering around U.S. mortgage lending practices
Is he really that stupid? Was he doddering in his last decade as Fed Reserve Chair? Or would he rather plead stupidity than corruption? www.reuters.com/article/ousiv/idUSWBT00756820070913

---------------------------------
Always look upstream.

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Thursday, September 13, 2007 11:16 AM

FLETCH2


Well if you actually read the article he says

Quote:



Greenspan said that as Fed chief he knew about questionable lending practices that were leaving subprime borrowers with adjustable rate loans vulnerable to harm from rising interest rates, but did not recognize those loans would trigger broader problems until fairly recently, CBS said.

"While I was aware a lot of these practices were going on, I had no notion of how significant they had become until very late," Greenspan said. "I really didn't get it until very late in 2005 and 2006."




So in essence they knew about it about 2 years ago. That's still better than the folks still playing the market when it crashed.

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Thursday, September 13, 2007 11:55 AM

LEADB


That's a rough call. That's really the sort of thing you'd need a half hour chat to see what Mr. Greenspan might have expected the fall out to be. He might be referring to the failures of some of the hedge funds; as I mentioned before, I was surprised by that because I simply didn't believe they could be so stupid as to load themselves with poor quality mortgages. I was only expecting some mortgage lenders to fail (being unable to unload so many lemons), who'd dream folks were buying lemons. And of course, the folks stuck with having paid the premium house prices getting burned (greatest fool principle).

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Thursday, September 13, 2007 12:25 PM

FLETCH2


Note the date of this piece, kinda funny

Quote:



BUFFETT IS WAY WRONG AT HOME
By SUZANNE MCGEE
November 5, 2006 -- Even Warren Buffett gets it wrong sometimes.

The Oracle of Omaha's take on a real estate deal, for example, was 100 percent wrong, said the buyer of the property, because the billionaire forgot one of his core rules: Invest only in what you understand.

The buyer, Richard Manchester, was ridiculed by Buffett after the billionaire sold Manchester his oceanfront Laguna Beach house last year for $3.5 million.

Buffett, reducing the sale to an absurd term - $60 million an acre - told a Berkshire Hathaway annual meeting that Manchester was foolish to pay such a high price, especially since Buffettt had paid just $1 million for it nine years earlier.

Buffett told the 20,000 shareholders at the meeting that the house, in the exclusive Emerald Bay neighborhood, had a replacement value of $500,000, and that the purchase price reflected a real estate market that has gotten out of whack.

Manchester fell in love with the house and put in a bid even before the "For Sale" sign went up. He invested a "few hundred thousand dollars" to improve the kitchen, bathroom and other areas. Then he sold it nine months later for $5.45 million.


"The fact that he is Warren Buffett doesn't mean he's going to be dead right on everything," said Manchester, speaking expansively about the deal for the first time.

Manchester is a tax lawyer and financial planner who oversees about $50 million in assets.



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Thursday, September 13, 2007 12:30 PM

LEADB


Greatest fool theory. Perhaps the next chap gets to sell it for $2,000,000. ;-)

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