SubPrime Dominoes - Page 2 - Mercedes-Benz Forum

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post #11 of 18 (permalink) Old 10-22-2007, 05:03 PM
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Life is wonderful! Life is good! BOUDADA! BOUDADA! How does you wife like your new career professor?
She doesn't have to pretend to have headaches no more It's either put out or I will find some of it at work Now she is the sluttiest thing I know

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post #12 of 18 (permalink) Old 10-22-2007, 05:03 PM
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Once the subprime fiasco catches up to reality, here is the next domiino....

IMF chief warns dollar may suffer 'abrupt fall'

The head of the International Monetary Fund, Rodrigo Rato, warned Monday there are risks of an "abrupt fall" in the dollar, linked to a loss of confidence in dollar assets.
"There are risks that an abrupt fall in the dollar could either be triggered by, or itself trigger, a loss of confidence in dollar assets," Rato told the IMF board of governors.

He also appeared to suggest that Europe could take steps to temper the strong appreciation of the euro.

"There is a risk that exchange rate appreciation in countries with flexible exchange rates -- including the euro area -- could hurt their growth prospects, and that in these circumstances protectionist pressures could worsen," he said on the final day of the annual meetings of the IMF and the World Bank.

The outgoing IMF managing director spoke as the European single currency hit a new high of 1.4347 dollars and global equity markets tumbled amid growing fears a US housing-related credit crunch could pitch the world's biggest economy into recession.

"The uncertainty ... comes from downside risks that are much higher than they were six months ago. The turbulence in the credit markets is a warning that we cannot take the benign economic environment of recent years for granted," he said.

"We still do not know the full effects of the decline in the housing market and the subprime problems of the US economy. Further disruption in financial markets and further falls in housing prices could lead to a global economic downturn."

A crisis in the risky US subprime mortgage sector, where loans are given to homebuyers with poor credit histories, erupted this year as borrowers defaulted on mortgages amid rising interest rates and a sharp slump in US housing prices.


The spillover of the US credit crunch into global financial markets roiled stock markets worldwide in August and although they have recovered somewhat, the uncertainties of the extent of the credit problems continues to weigh on investors.

Rato warned that a downturn would exacerbate other risks that already exist in the world economy, citing some emerging economies' reliance on capital inflows and the potential that central banks may not curb rising inflationary pressures.

"Some emerging economies that have relied on external financing to fund large current account deficits could be tipped into crisis by a combination of reduced demand for their exports and tighter financial market conditions," he said, adding that those developments would also worsen the prospects of low-income countries.

"And there is a risk that central banks may falter in fighting the inflation which has been spurred in some countries by higher oil and food prices."

Rato told the governors of the 185-nation financial institution aimed at fostering global financial stability that it was imperative to take action to avoid such a calamitous downturn from global imbalances.

"All of these risks make action on already agreed policies more urgent," he said.

"Major economies need ... to take supporting policy actions," said the former Spanish finance minister, who is stepping down nearly two years before the end of his five-year mandate.

His successor, Dominique Strauss-Kahn, a former Socialist finance minister of France, takes office on November 1.

In an apparent reference to recent pressures from France and other members of the 13-nation eurozone on the European Central Bank to take action to curb the euro's sharp appreciation, which is weighing on eurozone exports, Rato said: "Policymakers need to respect the independence of central banks and support their vigilance on inflation."

IMF chief warns dollar may suffer 'abrupt fall'
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post #13 of 18 (permalink) Old 10-22-2007, 05:04 PM
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^^^
Time to buy American!

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post #14 of 18 (permalink) Old 10-22-2007, 06:14 PM
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^^^
Time to buy American!
Obviously still drunk from all those free drinks those babes bought you at work.....

What does America produce anymore? Oh thats right they are more services industry now instead of production.......would you like 1 bag or 2 bags of that service.......
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post #15 of 18 (permalink) Old 10-22-2007, 06:17 PM
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^^^
Time to buy American!
Owkay, but how many hamburgers can a guy eat? (Not including Jaypork of course).
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post #16 of 18 (permalink) Old 10-22-2007, 08:39 PM
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For the first six years of the Bush Administration the Economic model was Free Market, damn the consequences. Now that we have the consequences we have an administration that is pouring our grandchildren's tax dollars in to the bucket as security bailouts for those "free market" excesses.

So we are changing from an abridged Free Market model which did not work [except for global corporations and stock market] to one of nanny state bailout for the global financial sector that failed to use sound economic principles when shooting up for the Ditech High. The rehab and withdrawal afterwards is a real bitch.

And it is going to cost at least $2Trillion before it is over [we are already 30% there]. There are at least two more quarters to sort through.
Don't know if you saw, but it turns out that mortgage loans made in the first half of 2007 are defaulting at an even faster rate than those made in 2005 and 2006. This perfect market of ours tends to adjust slowly, and late, if at all.
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post #17 of 18 (permalink) Old 10-22-2007, 09:28 PM Thread Starter
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Don't know if you saw, but it turns out that mortgage loans made in the first half of 2007 are defaulting at an even faster rate than those made in 2005 and 2006. This perfect market of ours tends to adjust slowly, and late, if at all.
I believe that was the sector rewriting loans in an effort to push out the bad news as long as possible. The argument was if they had 1000 bad loans and flipped them and "only" 950 defaulted then they were up 50. Problem was they increased the package balance in the process so the total value of the 950 defaults outweighed the original 1000 - AND they did not get the percentage of clean loans they expected.

The analogy is when you burn the limit on credit card X and take credit card Y to pay the balance AND get a few things with the new limit. Now you have the same problem that got X in trouble but you have now got additional load.

We were supposed to have both Federal and State Banking regulators that do not allow that kind of fiduciary irresponsibility in lending institutions. Instead we had an economic policy that tried to be a free market without care or understanding of the consequence and that failed.

The biggest fallout [after folks lose their houses, stockholders lose money and banks default] will be that new regulations will tighten the credit industry making it harder to buy houses, harder to get credit for durable goods and that will cause a continued stalling of the economy.

McBear,
Kentucky

Being smart is knowing the difference, in a sticky situation between a well delivered anecdote and a well delivered antidote - bear.
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post #18 of 18 (permalink) Old 10-22-2007, 10:01 PM
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Well, that's the case:

Those borrowers are the poor stupid bastards.

System got them.

They are seeing their payments go up 40%t to 100%.

What are they going to do?

Play nice?

Or walk?

So maybe the System needs to fucking help those poor souls out and give them 30-year fixed at reasonable rate so they can possibly pay it back?

Or no?

Let's fuck them, repocess, lose tens of thousands in the process, default on the mortgage securities..

Greed and Fear.

Perfect example.
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