Anybody get the email from Key Financial?

[James]

I can't take it anymore. James, your grammar and grasp of the English language is horrible. Your transitions in your sentences are terrible. In the above paragraph you use "worst" TWICE when it shouldn't have been used at all. The correct word is "worse". I understand typo's, but that's no typo. That's how you speak. And if that's how you speak, God help you in this business. That's assuming you're dealing with educated people. There are several other errors in your post, but what's the use. At least you're not saying "yet, though" all the time like you did in the past. So kudos there.

I actually posted about my speech some time ago, years ago I had to deal with my speech pattern and make it work for me, which I have done. Outside of that, no I don't talk like I write here, yes I have to concentrate when speaking and keep things short and spiffy. So believe what you will, no skin off my back.

As for your percentage on foreclosures, not even close. There are estimates that 15%-20% of all subprime loans will result in foreclosure. As of last June, 5.1% of all subprime loans were already in foreclosure. The simple fact that you don't think it's a big deal tells me you don't understand it's full impact on our economy.

So what is the foreclosure rate now? I have not paid attention lately so I can not come up with a number right off my head. Okay just look, last quarter of 07' we are seeing a 2.47% foreclosure rate over the entire market. I'm sorry but, I see more fear of what may happen then what is happening! Plus, this is more severe in certain geographic areas then others, obviously certain markets had to go down.

Does that mean I want to government bailing us out on everything? Absolutely not. But if they can prevent the full impact this will cause on our economy, let them lower rates. It may not be the best solution, but it beats the alternative. Aren't you one of those "refinance your home and invest in an EIUL" guys? If so, you should be happy they are lowering rates. It gives you more suckers to go after.

No, the it doesn't beat the alternative, the only thing it does is guarantee that the market will only correct later and, unfortunely that correction will be just that more severe. I think I was clear about my practice, no I don't rely on the refinancing of the home, just their qualified money! Just kidding dude, lighten up.

Lastly, you said you always play by your rules and never planned on selling securities. I don't know if you could pass the securities exams. And if you always play by your rules, how do you explain following the rules that are set up for selling insurance? You had to meet the requirements and pass a test to get an insurance license. You have to follow the rules the carrier puts in place to get contracted with them. You have to follow their rules on submitting applications. You have to follow the rules set forth by local authorities as it pertains to speed limits. You have to follow the rules retailers have in place for purchasing items in their stores. The list goes on and on. You can claim to be this rebel, but we all have rules to follow.

If you haven't notice, at times I may overstate issues. I do have enough tickets to suggest that while driving I play by own rules! Yet, as I age I notice police don't ticket me like they once did. I'm barely 50, gee I'm thinking when I'm 60 I'll get away with a lot!

 

[sman]

So what is the foreclosure rate now? I have not paid attention lately so I can not come up with a number right off my head. Okay just look, last quarter of 07' we are seeing a 2.47% foreclosure rate over the entire market. I'm sorry but, I see more fear of what may happen then what is happening! Plus, this is more severe in certain geographic areas then others, obviously certain markets had to go down.

James,

Do you follow trends? While 2.47% may not seem like much to you, the trend is moving higher. And that percentage is of ALL foreclosures. Not just the subprime loans. I recently read that 10 years ago the foreclosure rate was around 1%.

As to the trends, 2007 saw a 79% increase in foreclosure filings compaerd to 2006. In December alone, they increased 97% over the same time period in 2006. It was the 5th consecutive month with foreclosure filings of over 200,000. In addition, more than 1.8 million subprime loans are going to reset to higher interest rates this year and next. I'm willing to bet some of those people will lose their homes as well.

So, you may see more fear of what may happen than (not then) what is happening, but I see some BIG problems if the trend continues. Eventually we will hit the end and the markets will have corrected. I would just rather some of these people be able to get some refinancing done and keep their homes than to let them all become homeless. I would also like to potentially soften the downturn so it isn't prolonged.

No, the it doesn't beat the alternative, the only thing it does is guarantee that the market will only correct later and, unfortunately that correction will be just that more severe.

Why do you think the Federal Reserve raises and lowers interest rates over time? They do it to either try and prevent a recession or to slow down inflation. These are corrections in either direction. If they didn't do this, the swings in the market would be even more volatile. We'd have huge run ups in the cost of goods and services followed by extended periods of recession. While we don't always agree with their timing and cuts/raises, overall we need those protections in place. The alternative is to let the country fall into a deep recession. Which in turn would cause a global recession. If the lowering of interest rates and the prodding of lenders can stave this off without costing the tax payers too much money, I say let's do it (by the way, I am not for this latest stimulus package). At this point, I really don't expect you to understand why some of this is necessary. You are entitled to your opinion no matter how wrong it is.

 

[James]

James,

Do you follow trends? While 2.47% may not seem like much to you, the trend is moving higher. And that percentage is of ALL foreclosures. Not just the subprime loans. I recently read that 10 years ago the foreclosure rate was around 1%.

As to the trends, 2007 saw a 79% increase in foreclosure filings compaerd to 2006. In December alone, they increased 97% over the same time period in 2006. It was the 5th consecutive month with foreclosure filings of over 200,000. In addition, more than 1.8 million subprime loans are going to reset to higher interest rates this year and next. I'm willing to bet some of those people will lose their homes as well.

So, you may see more fear of what may happen than (not then) what is happening, but I see some BIG problems if the trend continues. Eventually we will hit the end and the markets will have corrected. I would just rather some of these people be able to get some refinancing done and keep their homes than to let them all become homeless. I would also like to potentially soften the downturn so it isn't prolonged.

Do you have an ounce of historical perspective? I'm going to do this once so please listen up.

1940's; 122 to 130 million people lives in the US, about 44% own their home.

2008; 300 million people lives in the US, about 68% own their home!

Now between 1940 to 2008 we had years like 1977 which witness nearly double digit foreclosure rates. Depending upon what area you look at specifically, nationally in 77' I think the foreclosure rate was closer to 7% with double digit inflation.

Sir, I don't know where you receive your education but, obviously it didn't teach historical perspective! Civilization did not start when you were born.

Why do you think the Federal Reserve raises and lowers interest rates over time? They do it to either try and prevent a recession or to slow down inflation. These are corrections in either direction. If they didn't do this, the swings in the market would be even more volatile. We'd have huge run ups in the cost of goods and services followed by extended periods of recession. While we don't always agree with their timing and cuts/raises, overall we need those protections in place. The alternative is to let the country fall into a deep recession. Which in turn would cause a global recession. If the lowering of interest rates and the prodding of lenders can stave this off without costing the tax payers too much money, I say let's do it (by the way, I am not for this latest stimulus package). At this point, I really don't expect you to understand why some of this is necessary. You are entitled to your opinion no matter how wrong it is.

This by itself shows me your lack of knowledge about economies and what really drives them. Obviously, you have never went beyond Keynesian theories that were long ago debunked.​

 

[sman]

Do you have an ounce of historical perspective? I'm going to do this once so please listen up.

1940's; 122 to 130 million people lives in the US, about 44% own their home.

2008; 300 million people lives in the US, about 68% own their home!

Now between 1940 to 2008 we had years like 1977 which witness nearly double digit foreclosure rates. Depending upon what area you look at specifically, nationally in 77' I think the foreclosure rate was closer to 7% with double digit inflation.

Sir, I don't know where you receive your education but, obviously it didn't teach historical perspective! Civilization did not start when you were born.



This by itself shows me your lack of knowledge about economies and what really drives them. Obviously, you have never went beyond Keynesian theories that were long ago debunked.​

Dude, do you really want to start talking about education and lack of knowledge? One look at the way you write and people wonder if you even graduated high school. If you want to know what really drives the economy, it's the consumer. The consumer makes up about two-thirds of the economy. When the consumer starts losing value in their homes, losing their homes and paying more for goods and services, they get nervous and stop spending. Thus, the economy slows. If something isn't done to ease those concerns (i.e. - lower interest rates), we go into a recession. Plan and simple.

As for your figures on foreclosures, where is your factual data? I believe your 7% figure to be pulled out of your arse. If I'm wrong, show me the data. Here's a link to a study done by the FDIC, http://www.fdic.gov/bank/analytical/working/98-2.pdf

This study is an older study (data from 1950-1997). As you will see on page 2, it clearly states that, "...rates rose in the early 60's, peaked at 0.78% in 1966 then declined in the late 60"s to relatively low levels experienced throughout the 70's." A far cry from the 7% you are claiming. Keep in mind, this study is speaking only of conventional and FHA mortgages. Before we had the new wave of creative loans over the past decade. You'll also see, beginning in the 80's, foreclosures starting trending higher.

You can bring up the Keynesian Theory all you want. I am no fan of bigger government. But I am a fan of avoiding a recession if at all possible. And if that can be done by the Federal Reserve temporarily lowering interest rates, then let's do it.

As I said before, you are entitled to your opinion no matter how wrong it is.

P.S. - James, when writing a sentence and using the word "but", the comma generally comes BEFORE the word "but". For example:

Sir, I don't know where you receive your education but, obviously it didn't

The proper usage would have been,

Sir, I don't know where you receive your education, but obviously it didn't

In addition, since you were using past tense in the second half of the sentence, you should have added a "d" on the end of the word receive.

I guess I can steal your line here.

Sir, I don't know where you received your education, but obviously it didn't teach grammar.

 

[Mr. Bill]

natter natter natter.

I attended a seminar last weekend and one of the things the speaker stated was that every incident in a foreclosure proceeding is counted, which automatically skews the numbers. For example, a 30-day late notice, 60-day late, 90-day late, etc., all on the same house, counts as separate incidents for reporting purposes. Therefore, who really knows what the heck is going on out there? All I can say is that Greenspan created this mess and Bernacke is incapable of fixing it.

 

[sman]

natter natter natter.

I attended a seminar last weekend and one of the things the speaker stated was that every incident in a foreclosure proceeding is counted, which automatically skews the numbers. For example, a 30-day late notice, 60-day late, 90-day late, etc., all on the same house, counts as separate incidents for reporting purposes. Therefore, who really knows what the heck is going on out there? All I can say is that Greenspan created this mess and Bernacke is incapable of fixing it.

Even if that's true, it doesn't change the fact that it's trending upward. In the report I cited, I would assume they use the same measuring criteria for all years involved. Countrywide reported yesterday that delinquencies were at 7.47%. That's not the numbers they are quoting as foreclosures, just delinquencies. They said that both foreclosures and delinquencies were the highest on record. I would hope that most would agree, the more delinquencies you have, the more foreclosures you will have. Not saying everyone that is delinquent will be foreclosed, but as the percentages of delinquencies rise, so will foreclosures. Do you dispute that?

And you're right, Greenspan did HELP create this mess and the jury is out on whether or not Bernanke can do much.

But this may be too big and too far along for the Federal Reserve to turn it around. The best we can hope for is that it doesn't crash. This bubble is said to be larger than the tech bubble of 2000. Only time will tell.

 

[James]

This study is an older study (data from 1950-1997). As you will see on page 2, it clearly states that, "...rates rose in the early 60's, peaked at 0.78% in 1966 then declined in the late 60"s to relatively low levels experienced throughout the 70's." A far cry from the 7% you are claiming. Keep in mind, this study is speaking only of conventional and FHA mortgages. Before we had the new wave of creative loans over the past decade. You'll also see, beginning in the 80's, foreclosures starting trending higher.

Obviously I noted the wrong year, outside of that my point is well established. What you are claiming to be devastating, totals if it rise as some suggest, will be 3% of GDP. Not even a hiccup in the larger sense of the total economy.

You can bring up the Keynesian Theory all you want. I am no fan of bigger government. But I am a fan of avoiding a recession if at all possible. And if that can be done by the Federal Reserve temporarily lowering interest rates, then let's do it.

I'm not sure if you are lieing to yourself or me? Really doesn't matter, if you believe in Keynesian theories that Government intrusions can limit the pain of economic corrections then yes, you are a big government type.

Not only that, earlier in this discussion you blame a lot of people but, left out the role of the US government? You sit here and suggest penalties for all those who you disagree with as in loan brokers, bankers that have a hand in these subprime loans. You seek out the government to right your percieved wrongs! All the time you do this you say nothing about the role of government but, suggest that they have the answer?

 

[djs]

I'm not sure if you are lieing to yourself or me? Really doesn't matter, if you believe in Keynesian theories that Government intrusions can limit the pain of economic corrections then yes, you are a big government type.

Not only that, earlier in this discussion you blame a lot of people but, left out the role of the US government? You sit here and suggest penalties for all those who you disagree with as in loan brokers, bankers that have a hand in these subprime loans. You seek out the government to right your percieved wrongs! All the time you do this you say nothing about the role of government but, suggest that they have the answer?

James - You really need to stop and think about what you are saying. If the question is, can the government limit the pain of economic corrections, then the answer is YES, it has been proven to many times that this is true. Whether you want to believe this or not, does not change the fact that the government CAN play a role. You are jumping past this and going straight to SHOULD they, which nobody but you is bringing up.

Since you insist on bringing it up, the answer is maybe. Controlling the fed rate is a good way for them to pull on some strings. This is no where near as effective as it used to be, but it does have a significant impact over a long term. Indirectly, raising the interest rate is what has lead to the subprime meltdown, though mostly it was unethical mortgage brokers, not taking into consideration the clients needs and desires (at least not long term). And yes, this can be demonstrated if I need to.

Also, I'm the one that talked about mortgage brokers, in comparison to how insurance agents have a fiduciary responsibility to make sure that both the insurance company and the clients interests are taken into consideration, not just selling annuities / whole life policies as a investment replacement without understanding the right thing for the client. I was just trying to point out, using a bunch of incorrect assumptions, similar to how this thread got started, doesn't make for good client protection.

Dan

 

[sman]

Obviously I noted the wrong year, outside of that my point is well established. What you are claiming to be devastating, totals if it rise as some suggest, will be 3% of GDP. Not even a hiccup in the larger sense of the total economy.

OK, what year was it that had the 7% foreclosure rate James? And no, your point isn't well established. You've yet to present any facts. You claimed we had a 7% foreclosure rate in 1977 and now you state that you must have noted the wrong year. Well, which year was it?

If you think for one minute that the current situation is just a "hiccup" you are sadly mistaken. When you've got a lender like Countrywide posting it's first loss in 25 years, that says a lot. When you've got foreclosures reaching all time highs, that says a lot. When you have delinquencies at all time highs, that says a lot. Bury your head in the sand all you want, it doesn't change the facts. And that seems to be something you don't present much of, FACTS. As for your 3% figure on GDP, Annaly Mortgage Management, Inc. CEO Mike Farrell estimates the the current mortgage crisis equals about 15% of the GDP. I'd say he probably knows a little more about it than either of us do. I'm not saying it's 15% of the GDP, but I'm willing to bet it's a larger number than the 3% you once again pulled from your arse.

I'm not sure if you are lieing to yourself or me? Really doesn't matter, if you believe in Keynesian theories that Government intrusions can limit the pain of economic corrections then yes, you are a big government type.

Please explain how having the Federal Reserve reduce interest rates increases the size of government.

Not only that, earlier in this discussion you blame a lot of people but, left out the role of the US government? You sit here and suggest penalties for all those who you disagree with as in loan brokers, bankers that have a hand in these subprime loans.

What? The only people I blame for bad loans are the lenders who write them and the people who sign the papers. When you have someone borrowing 100% of the value of a home based on a 1% negative am teaser rate, only bad things can happen. Especially when interest rates rise and property values fall. Please tell me who you "think" I blame for this.

You seek out the government to right your percieved wrongs! All the time you do this you say nothing about the role of government but, suggest that they have the answer?

Man, you really didn't catch on to the whole comma before but thing did you? I'm not looking for the government to right wrongs. I'm looking for the Federal Reserve to get ahead of the curve and ease the pain. But I really don't expect you to understand it at this point. You've proven you're way more intelligent than me and the economist of the world.

In the immortal words of Ron White:

You can't fix stupid.

 

[James]

http://www.cei.org/pdf/6330.pdf

The latest study I could find at this time. Basically it boils down to this, as always you have the chicken littles running around screaming "The Sky Is Falling". Some suggest the subprime meltdown will equate to the Great Depression! Well, lets just slow down and see where we are at the end of the year, more than likely most will not even remember there is a Mortgage Meltdown. Of course there has been a lot of speculation on home prices in some areas as NY, MA, CA, TX and FL and guess what! These States I do believe have up to 50% plus of all foreclosures! Gee imagine that, States that have experience the highest inflated home prices are the very ones leading the foreclosure rates. I'm thinking it is best to allow the correction, lets bring down prices!

It is hubris to think that the government can control an economy as large as ours.