Goldman Sachs bet on housing meltdown -- and won

[MarketMasher]

Quote from the1:

Sadly, eventually America will fail much the way Great Britain failed, the way Rome failed, and the way economic super powers before them failed. It's the natural course that all economic powerhouses take. I think we are witnessing the beginning of the end for the US but that doesn't mean life won't go on. As far as I know, Rome is still there.

Like Lincoln (Abe) said:

"At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we ourselves must be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide."

It's an inside job.

When the next Genghis Khan or Hitler or Stalin comes along, America is going to already be too weak, so better hope those communist countries come to the rescue.

 

[the1]

This is exactly correct. The walls are being weakened from within. If you research the health care reform bill you'll notice it grants the Executive Branch of Office incredible powers. The next pillar to come under attack could be the 22nd Amendment. If that happens it lays to footwork for the next Hitler inside the US.

Quote from MarketMasher:

Like Lincoln (Abe) said:

"At what point then is the approach of danger to be expected? I answer, if it ever reach us, it must spring up amongst us. It cannot come from abroad. If destruction be our lot, we ourselves must be its author and finisher. As a nation of freemen, we must live through all time, or die by suicide."

It's an inside job.

When the next Genghis Khan or Hitler or Stalin comes along, America is going to already be too weak, so better hope those communist countries come to the rescue.

 

[asiaprop]

very fair point. For the first time in any of the GS threads someone is assuming some sort of responsibility on the consumers' side. I laud that.

Of course greed has motivated lenders to also become irresponsible. Those who did not see it coming or did not even bother became the AIGs, the Lehmans, the BSs. Those who read the markets and did their homework were the GSs. Simple as that. Should I be surprised that those who lost money over the past year or two (in whatever way) now jealously watch how GS is collecting the chips? Well those were chips earned on very smart and good bets. Losers are losers are losers. What else to say...I am happy to join your camp when GS is put on trial and convicted of a massive market manipulation scam. Until then losers should shut up and rather learn from those who made the right decisions.

Quote from the1:

What you're describing is human nature. It's nothing out of the ordinary for an unqualified borrower to walk through the door. In previous years they would have been denied. Why, all of a sudden, did the "denied" stamp find it's way into the circular file? YES, the borrowers have to accept their fair share of the blame but if someone with a 450 credit score walked through the door today would the "denied" stamp still be in the circular file? Not a chance. Lenders today have it in the center of their desk and only set it aside if the borrower has all their ducks lined up. This is how it USED to be and this is how it is again, and how it will remain until the next time.

 

[asiaprop]

I spoke for myself.

About your "experience", do you think anti-Americanism is built into the genes of non-Americans? If not then maybe the reason is to be found under the surface when you start digging...

Quote from LincolnArmy:

"not everyone who lives outside the US is against the US or wants to see Americans fail, maybe you wanna update your antiquated cold war beliefs...."

I have lived in a number of different countries around the globe. There's a lot that I like about America and I would probably be viewed as pro-American among Europeans especially, though it's not something that I would boast about and I would appreciate it if you could keep that to yourself.

Shall I finally get to the point?

Well what surprises me is that for every person in the wide world that wants America to do well, there are 10, or more like 100 who wants to see America fail.
This isn't a scientific survey, just my experience.

 

[asiaprop]

"the raw story"? LOL. Yeah Elliot knows how to make history, he is the man for the INSIDE job to summarize the past 2 years. He knows how to get the JOB done.

Quote from jem:

I agree capitalism should be tough. - all that creative destruction stuff.

What sucks was when GS got paulson to bail them out with billions of taxpayer dollars.

Plus we have no idea how many billions or trillions? of bad assets have been lifted out of banks books by the fed.
It has been said by elliot spizer the fed paid trillions. I am not sure if that is true - but if it is.

http://rawstory.com/08/news/2009/07/25/spitzer-federal-reserve-is-a-ponzi-scheme-an-inside-job/

 

[jficquette]

Quote from jem:

There is nothing more pathetic than cheerleading the systematic looting of America.

a little context...

Many people took the mortgages because they were concerned housing prices were streaking by their ability to ever buy a house.

Until lenders started giving away money without testing qualifications - Housing prices were a function of peoples ability to borrow.

when you had to put 20% down housing assets were connected to the buyers pool ability to earn.

When the lenders no longer required people to qualify for the mortgages the first non qualified borrowers in got the appreciating assets in a deathmatch of house flipping and mortgage money cheap money to anyone who asked for it.

As they were providing mortgage money to the consumer and selling mbs to consumers pensions they were buying CDOS (read put options) in such large quantity they broke aigs bank.

Then instead of accepting the fact they took foolish counter party risk - they said nope we are more greedy than the rest we will use our ex chairman to create a credit hysteria and get the tax payers to pay us off to the tune of billions.

Jem,

I sold my house in Olivenhain in April 2004. I rented a new house from a Policeman who had bought 10 others, all new (11 total) since 2002. I told him to sell them all asap. He laughed.

John

 

[KINGOFSHORTS]

So What? I bet on the housing meltdown as well and won.

 

[jem]

Quote from jficquette:

Jem,

I sold my house in Olivenhain in April 2004. I rented a new house from a Policeman who had bought 10 others, all new (11 total) since 2002. I told him to sell them all asap. He laughed.

John

I would like to buy into in olivenhain in a few years - especially if there is a second leg down. nice trade. Just about perfect timing.

I sold in la costa valley in 2003 but it was 9 months and about 30 percent too early.

 

[jem]

Quote from asiaprop:

"people were trained"?

So you suggest people are some sort of animals without intellect, willpower, intelligence?

You mean people had no power over whether they signed under their home equity loans, 2nd mortgage, they did not know that they were paying down less than 30% (do some math, the probability of default on a mortgage already rises SIGNIFICANTLY when you pay down 20% instead of 30%).

Whatever you are told you do things because YOU decide to do so, not because some evil banker forces you to. Stop this wining around and seeking excuses. People brought this about all on themselves. And the very same people also staffed banks, the same greed you saw on Wall Street is exhibited in all of us. Its all a matter of how we control it and how much risk we seek for the matching expected reward.

Your arguments are idiotic because they deprive humans of any sort of intelligence and willpower.

You got 2 choices: a) the average person in the US is incredibly dumb, not knowing what they sign, able to be easily manipulated by some evil forces or b) greed took over and people were seeking unbalanced risks.

You suggest the former I the latter. That, I guess is the big difference in our views. But its very short sighted to argue the person on the street had no choice that they were essentially controlled. Yes they were controlled, but by their greed not a smiling mortgage sales man.

you are barking up the wrong tree. Just because I am against bailing out banks with billions and trillions does not mean I am in favor of bailing out borrowers.

Not by a long shot.

I lost money in real estate and I cut my loses before I got negative. it almost cost me my marriage but I had to remove my wife from all serious financial decisions.

By the way the current market is great for my skills. I am making more money now than I have in years.

I am considering trading closer to full time again.

I just despise these bailouts and lack of clarity with fed and bank bailouts. It compromises our future.


I do not have a problem with GS or morgan stanley running their own businesses well. I suspect GS functions at times like our state department and our CIA. I know we do not want them to go down the drain.

I just want to see things like glass steagal put back in place. Let the risk takers take risk. Just don't backstop it with our money.

 

[asiaprop]

fully agree, just funny I dont see anyone starting a thread to shoot down politicians and lawmakers who have actually gotten everyone around this globe into this mess. Looks like everyone is happy (and stupid enough) to jump on the GS-was-it bandwagon.

Quote from jem:

you are barking up the wrong tree. Just because I am against bailing out banks with billions and trillions does not mean I am in favor of bailing out borrowers.

Not by a long shot.

I lost money in real estate and I cut my loses before I got negative. it almost cost me my marriage but I had to remove my wife from all serious financial decisions.

By the way the current market is great for my skills. I am making more money now than I have in years.

I am considering trading closer to full time again.

I just despise these bailouts and lack of clarity with fed and bank bailouts. It compromises our future.


I do not have a problem with GS or morgan stanley running their own businesses well. I suspect GS functions at times like our state department and our CIA. I know we do not want them to go down the drain.

I just want to see things like glass steagal put back in place. Let the risk takers take risk. Just don't backstop it with our money.