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| User Info | Pimco's McCulley And Sustainable Home Ownership in forum [Ticker] | ||||
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Genesis Posts: 71431 Incept: 2007-06-26 
KD^2 
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http://market-ticker.denninger.net/archi....
---------- "The monetary base in ALL modern monetary systems is the sum of unencumbered assets against which one is both WILLING AND ABLE to borrow." - Me
2008-07-29 22:16:59
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Fidgit Posts: 14065 Incept: 2008-02-18 
AllyBammy
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Good angle!
---------- I say it's spinach, and I say the hell with it.
2008-07-29 22:37:26
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Nomullet Posts: 3422 Incept: 2007-11-11
Duke City
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Check out this leverage chart: http://www.nakedcapitalism.com/2008/07/h.... ---------- if you crap more than once a day you are eating too much
2008-07-29 22:45:35
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Forn2008 Posts: 208 Incept: 2008-03-28 Pittsburgh
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Great ticker there Karl. Short and to the point. Too bad politicians are blind to those realities. Lower the price of a home and more people will buy one.
2008-07-29 23:22:16
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Forn2008 Posts: 208 Incept: 2008-03-28 Pittsburgh
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That is one scary chart there NOMULLet. That sure points to a deflation scenerio. The other peak there occured during the Great Depression, which was defaltionary as well.
2008-07-29 23:25:17
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Burya_rubenstein Posts: 305 Incept: 2007-08-08
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Quote:
This is what I've been trying to say all along! I certainly hope THIS ticker has been faxed to the relevant politicians.
2008-07-29 23:41:26
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Vegasradar Posts: 3956 Incept: 2007-07-11
CA
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Nice and succinct — Thank You 
---------- Remember, all Bennie has is dollars. He destroys the currency, he destroys himself. —Karl Filling in the Pieces- an economic overview: http://storage.denninger.net/ppt/teapart....
2008-07-30 00:04:29
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1000ohms Posts: 7384 Incept: 2007-09-06 
aka inflam Banned
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Thanks KD - great stuff ---------- I make somewhat of a sport out of costing people their merchant accounts doing this. I recognize that small tickets are a problem but the solution isn't do violate the rules you voluntarily agreed to when you got your merchant account. - Genesis
2008-07-30 00:06:47
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Blackswan Posts: 3601 Incept: 2007-11-06
Ponzi Roller Coaster
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Politicians can't let home prices deflate. That will destroy the collateral and **** their banker friends even more. Bank America crafted this bill if I am not mistaken. ----------
2008-07-30 00:40:54
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Gen_maximus57 Posts: 2263 Incept: 2007-09-03
Miami
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The Bailout Bill does very little to support housing prices other than the tax incentive. However, it will actually increase the speed of the declines if the banks start writing down principle. NoMullet - Thanks for the chart, that is really scary ---------- Whenever destroyers appear among men, they start by destroying money, for money is men's protection and the base of a moral existence. Destroyers seize gold and leave to its owners a counterfeit pile of paper.
2008-07-30 01:26:55
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Stkmktbear Posts: 35 Incept: 2007-07-23
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the way to deflate the home price would be to raise interest rates. if you raise interest rates, a lower home price may not necessarily equal a lower payment.
2008-07-30 04:44:33
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Stkmktbear Posts: 35 Incept: 2007-07-23
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also, if someone forecloses and becomes a "credit risk," it will be even more unlikely that the payment will be lower with higher interest rates.
2008-07-30 04:46:48
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Rbrooks7 Posts: 182 Incept: 2007-06-29 london
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Karl, can i make a general TICKER comment. A few months back the ticker was engaged on the whole in discussing markets, stocks, bonds, commodities, currencies, etc.... Lately there has been more and more political debate about the housing bill and the state support of market losses. These eco-polotical discussions are excellent, but i personally feel they are diluting the more market based discussions that the ticker - well you really - raised in fantastic detail. I know this is your site and your blog etc.... but as a reader commenting back to the editor - i feel the swing towards politics and away from market based and economics debate is not why many people love the Ticker - hope you don't mind a bit of feedback - regards RB7
2008-07-30 05:59:31
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Baldy Posts: 6555 Incept: 2008-05-16
Pittsburgh
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Doesn't Nomullet's post of the NC chart illustrate the math issue Mr D mentions?: if everyone tries to deleverage in a given asset class at once, and therefore prices for that asset fall even more, that paradoxically leverage can actually increase because the denominator (the value of the assets) can fall faster than you can disgorge the numerator (the paper you allegedly have "secured". IMO, it MUST. There is NO way people were able to get MORE credit during the depths of the Depression... ---------- FY2011 Budget - Hist'l Tables (PDF 2.0 MB) http://www.whitehouse.gov/omb/budget/fy2011/assets/hist.pdf 1996-2011 budgets: http://www.gpoaccess.gov/usbudget/browse.html Last modified:
2008-07-30 07:17:21 by baldy
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Nomullet Posts: 3422 Incept: 2007-11-11
Duke City
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I guess if your GDP falls 30% and your leverage was 200% than it would shoot up another 60%. I did post the chart as an adjunct to what KD was saying about the leverage increase. ---------- if you crap more than once a day you are eating too much
2008-07-30 09:36:47
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Mango Posts: 240 Incept: 2008-02-08
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McCulley's article sure looks like an incontrovertible admission of fraud to me. I'm thinking of sending it CA AG Brown.
2008-07-30 10:14:31
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Mango Posts: 240 Incept: 2008-02-08
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Quote:if everyone tries to deleverage in a given asset class at once, and therefore prices for that asset fall even more, that paradoxically leverage can actually increase because the denominator (the value of the assets) can fall faster than you can disgorge the numerator Quote:Time to Lever Up Uncle Sam’s Balance Sheet First he admits that prices must go down in a self fulfilling negative feed back loop. Than tries to claim that the only solution is for the taxpayer to foot the bill, specifically so that he and his company can extract a profit that would otherwise not be there, a trade they entered with this express purpose. This is diabolical. A full and total confession if you ask me. I'm going through this article and some news items by PIMCO where they publicly stated that they recently increased their Fanny and Freddy holding by dramatic amounts, again, for the express purpose of dumping this on the government, dumping an asset that is knowingly mis-priced as he glaringly admits here. Wow!!!!!!!!!!!!!! talk about in your face!
2008-07-30 10:41:37
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Sunriser1 Posts: 1879 Incept: 2007-10-30
lake tahoe nevada
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Great ticker short enough for Realtors and the public to understand. One question and sorry in advance if it has already been answered. How and Who will decide what the current market value of a home is when the people try to refi according to the housing bail out bill? Seems like it would be worthless to go back to the same appraisers who got us into this mess. ---------- "CHAPTER 9"
2008-07-30 13:43:03
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Txdomer Posts: 968 Incept: 2007-11-07
Ding-dong, the Fed is dead!
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Sounds good in theory, but could a 'homeowner' that defaults really expect to be able to get a mortgage later to buy the home back? ---------- "Economics is not practiced as a science. Rather, it is a pretentious way to covertly promote political prejudices." - Fred Harrison http://renegadeeconomist.com
2008-07-30 13:56:20
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Templar223 Posts: 397 Incept: 2008-04-28
Champaign, IL
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Follow the money: Deflating home values will also reduce property tax revenue eventually. And we know how much our pols LOVE tax revenue to **** away on their pet spending and income redistribution projects. John Last modified:
2008-07-30 14:10:57 by templar223
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