Homestead mailing list

[Rob <becida AT comcast.net>]

At  9/6/2008 04:35 PM,bob ford wrote:
> Among members of this list are some very bright people.  Perhaps one 
> of you can explain to me how this can be brought, in any way, to a 
> long-term desirable conclusion.  Yet, its not being portrayed as 
> such an awful thing on the news .

I'm not the bright person you are looking for but I have been 
watching this. Near as I can tell....

Over the last few years a LOT of houses were sold for inflated prices 
with 'easy to get' and 'creative' financing. Laws and such were 
changed to allow this. A lot of money was created for this and a LOT 
of money was made. A LOT of money...
These loans for the houses created a great deal of 'paper wealth'. A 
house is worth $100k, it's sold with no down for $125k and has a 
really low adjustable interest rate. On paper this has house sale has 
a value of $125k and with luck it's value will keep going up and up and up.
These loans are bundled together and sold as a real estate bond (I 
forget the term) with the value of the real estate plus the interest 
on the loans over the life of the loan. They were broken up, re 
grouped and resold and so forth. Someone getting a cut everytime, a 
lot of money was being made on these large (really large) loans 
backed by the inflated real estate values. There have been banks 
trying to foreclose on houses they could not prove they owned, this 
is massive and really spread out. I saw a guy on the tube a few 
months back, he was  going into the first big broker house that 
melted down and he stopped and told the reporter that they had no 
idea how many of these loans were out there or where they were but he 
thought there were trillions of dollars floating around.

Ok, we are getting closer. Trillions of dollars in loans floating 
around backed by those foreclosed houses that are being stripped for 
the fixtures, people still walking away from zero down loans where 
they owe more than the house is worth. The drop in house values 
continues and hit's those who were not high risk to begin with.
"They" are trying to stall things, maybe things will be better later, 
maybe someone else will be blamed for it when the vigilantes have the 
ropes and are looking for someone to string up. Maybe someone can 
come up with a fix? Maybe there is more money to be made before the end?

It's too big a tiger we are riding to let go now, going to have to 
continue to hold on.  That's what's happening with bailout, we are 
'holding on' because if we let go now the tiger eats us.

It would have been a good year to have a garden, next year it will 
even be a better year to have a garden.

Rob
becida AT comcast.net