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Old 01-21-2014, 08:13 AM
 
8,487 posts, read 5,538,323 times
Reputation: 1113

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Quote:
Originally Posted by middle-aged mom View Post
Blackstone did not receive a bail out. The others have repaid those loans. The percentage of properties that have been acquired by investment bankers is rather insignificant, albeit concentrated in areas that experienced more foreclosures than others.
You seem to just be referring to TARP. However, that would be a whole other topic. Not even dealing with effects of QE either.
Breakdown of the $26 Trillion the Federal Reserve Handed Out ...
Bernanke's Obfuscation Continues: The Fed's $29 Trillion Bail ...
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Old 01-21-2014, 02:31 PM
 
Location: Old Town Alexandria
14,505 posts, read 22,796,625 times
Reputation: 8817
Quote:
Originally Posted by CDusr View Post
That reminds me of this comedy song. Very funny. Warning the f*bomb is everywhere.
However, it seems really appropriate now, lol.

I Didn't F*ck It Up - Katie Goodman of Broad Comedy - YouTube
Heh

Love that Katie Goodman video, and its appropriate since state of the Unions coming up. Dedicated to the 1%, who wonder why Xmas sales and consumerism was so dismal this year. (like they give a **)


Kind of done ANY articles now touting ANY economic recovery in real estate and retail. A bank VP once told me Money magazine and all those shill articles are written by peddlers selling the very same product. Its all sales bs and propaganda.



In the 1980s, Michael Milken was known as the junk bond king. A junk bond (also called a high-yield bond) is nothing more than a debt investment in a corporation that has a high probability of default, but provides a high rate of return if it does pay the money back. If you wanted to raise money through these bonds, Milken was the person to call. He used them to finance mergers and acquisitions (M&As) as well as leveraged buyouts (LBOs) for corporate raiders. (Despite their reputation, the debt securities known as "junk bonds" may actually reduce risk in your portfolio. Learn more in High Yield, Or Just High Risk?)

But what he was doing was nothing more than creating a complex pyramid scheme. When one company would default, he would then refinance some more debt. Both Milken and Drexel Burnham Lambert would continue to make their fees as a result of this behavior. The company made at least half of its rofits from the work of Milken. (Considering joining an "investment club" that promises phenomenal returns on your sign-up fee? Read What Is A Pyramid Scheme?)

Later on, Milken also started purchasing stock in companies that he knew would become potential takeover targets. Boesky, when charged with insider trading in 1986, helped implicate both the firm and Milken in several insider trading scandals. This led to criminal charges against the firm and more than 70 charges against Milken, who pleaded guilty, was sentenced to 10 years in prison and paid $1 billion fines.

4 History-Making Wall Street Crooks


When WorldCom filed for bankruptcy, it admitted that it inappropriately booked the losses from its acquisitions from 1999 to 2002. Ebbers also took personal loans from the company. He resigned as CEO in April 2002 and was later convicted of fraud, conspiracy and filing false documents with the SEC. He was sentenced to 25 years in prison.

Ebbers' legacy led to tighter reporting standards with the creation of the Sarbanes-Oxley Act of 2002, as well as the forbidding of personal loans to company officers and stiffer penalties for financial crimes. (Learn about how a company keeps its management in check can affect the bottom line in Governance Pays.)



For more on this subject, read Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street, The Ghouls And Monsters On Wall Street and Tales From Wall Street's Crypt.
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Old 01-21-2014, 03:14 PM
 
Location: San Diego California
6,797 posts, read 5,992,675 times
Reputation: 5157
Quote:
Originally Posted by middle-aged mom View Post
The more prudent and unassisted mortgage lending is, the fewer who will qualify.

Pre the Great Depression most folk needed a 50% down stroke and the note matured in 5 years. At that time the owner could pay it off or refinance at current interest rates or lose the home.

About 50% of homes went into foreclosure during the Great Depression.

Government gave homeownership a huge boost with the GI bill and worked to expand maturities to 30 years.

A 65 +/- % homeownership rate has been the norm since the 60's. It peaked during the bubble.
The reason people came in with higher down payments and lower loan maturities is that home prices in the pre-WWII era were not inflated by the banking / real estate industry to the point where they needed to make an obscenity like a 30 year mortgage necessary.

As time has gone on the banking industry has made having a roof over your head paramount to something requiring the majority of your income for the majority of your working life.

That is one hell of a price to pay for a small plot of dirt and a little lumber and drywall.

But then that is what happens when you have a country overrun by peasant immigrants who are too ignorant and cowardly to stand up for their own human rights.
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Old 01-21-2014, 03:24 PM
 
Location: USA
12,742 posts, read 9,660,233 times
Reputation: 4152
Has anybody thought about what this practice would do to the American public and Economy?


Why are house prices still so high if there's so many without a home, living with family/friends, etc?? Why are rent prices so high and increasing if wages are stagnant and there's a shortage of quality employment? Why were there so many foreclosures in the first place?


Does anybody else think that maybe our home prices are being fixed by the banks?
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Old 01-21-2014, 03:26 PM
 
Location: Old Town Alexandria
14,505 posts, read 22,796,625 times
Reputation: 8817
Yes, Bank of America illegally foreclosed on thousand of Iraq war veterans. At least in the Depression, vets were not thrown to the wolves.
Bank Of America Will Pay $20 Million For Illegal Foreclosures On Active-Duty Soldiers - Business Insider

Two big banks will pay $22 million in monetary relief for illegally foreclosing on active-duty soldiers. Bank of America and Morgan Stanley foreclosed on 178 members of the military, in violation of the Servicemembers Civil Relief Act, according to the Department of Justice.

What a disgrace and sham.
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Old 01-21-2014, 03:29 PM
 
Location: Deep State
18,251 posts, read 7,524,462 times
Reputation: 14714
Quote:
Originally Posted by CDusr View Post
Meet Wall Street: Your New Landlord
quote:
The world's largest private equity firm has quickly become the largest landlord (of rental homes) in the U.S. and in October, Blackstone offered the first-ever "rental-home-backed" security on Wall Street. One has to wonder if this was the plan all along?
It was rather well-publicized in Fla that this is what Blackstone was doing. They overpaid for many properties, as well, and it was not clear why they were willing to overpay to the extent they did because the Blackstone organization did not appear to be stupid. At the same time, all the the usual suspects--investors, realtors--got back into the business of flipping properties. Cannot predict the future, but Blackstone managed to raise real estate prices substantially in Fla and people who were underwater are now able to sell. So for now, it has greatly helped Fla homeowners to get better prices for their homes. What happens in the future remains to be seen. After waiting years to get equity back, many are getting out while the getting is good. In Fla, this is a really good time to buy, as prices are not going down for the time being. When Blackstone floods the market with all their rentals, who knows what will happen in the RE market.
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Old 01-21-2014, 03:31 PM
 
Location: USA
12,742 posts, read 9,660,233 times
Reputation: 4152
Quote:
Originally Posted by Enigma777 View Post
It was rather well-publicized in Fla that this is what Blackstone was doing. They overpaid for many properties, as well, and it was not clear why they were willing to overpay to the extent they did because the Blackstone organization did not appear to be stupid. At the same time, all the the usual suspects--investors, realtors--got back into the business of flipping properties. Cannot predict the future, but Blackstone managed to raise real estate prices substantially in Fla and people who were underwater are now able to sell. So for now, it has greatly helped Fla homeowners to get better prices for their homes. What happens in the future remains to be seen. After waiting years to get equity back, many are getting out while the getting is good. In Fla, this is a really good time to buy, as prices are not going down for the time being. When Blackstone floods the market with all their rentals, who knows what will happen in the RE market.
But what about the people who need a place to live?? Shouldn't home prices be going down if there's an abundance of housing?
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Old 01-21-2014, 03:36 PM
 
Location: Old Town Alexandria
14,505 posts, read 22,796,625 times
Reputation: 8817
LOL. Yeah Florida in 05 was great too. Good for you enigma. Too bad there's 49 other states that comprise this country. And actual citizens who are affected.

Myopia.
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Old 01-21-2014, 03:48 PM
 
8,487 posts, read 5,538,323 times
Reputation: 1113
Quote:
Originally Posted by dreamofmonterey View Post
Heh

Love that Katie Goodman video, and its appropriate since state of the Unions coming up. Dedicated to the 1%, who wonder why Xmas sales and consumerism was so dismal this year. (like they give a **)


Kind of done ANY articles now touting ANY economic recovery in real estate and retail. A bank VP once told me Money magazine and all those shill articles are written by peddlers selling the very same product. Its all sales bs and propaganda.



In the 1980s, Michael Milken was known as the junk bond king. A junk bond (also called a high-yield bond) is nothing more than a debt investment in a corporation that has a high probability of default, but provides a high rate of return if it does pay the money back. If you wanted to raise money through these bonds, Milken was the person to call. He used them to finance mergers and acquisitions (M&As) as well as leveraged buyouts (LBOs) for corporate raiders. (Despite their reputation, the debt securities known as "junk bonds" may actually reduce risk in your portfolio. Learn more in High Yield, Or Just High Risk?)

But what he was doing was nothing more than creating a complex pyramid scheme. When one company would default, he would then refinance some more debt. Both Milken and Drexel Burnham Lambert would continue to make their fees as a result of this behavior. The company made at least half of its rofits from the work of Milken. (Considering joining an "investment club" that promises phenomenal returns on your sign-up fee? Read What Is A Pyramid Scheme?)

Later on, Milken also started purchasing stock in companies that he knew would become potential takeover targets. Boesky, when charged with insider trading in 1986, helped implicate both the firm and Milken in several insider trading scandals. This led to criminal charges against the firm and more than 70 charges against Milken, who pleaded guilty, was sentenced to 10 years in prison and paid $1 billion fines.

4 History-Making Wall Street Crooks


When WorldCom filed for bankruptcy, it admitted that it inappropriately booked the losses from its acquisitions from 1999 to 2002. Ebbers also took personal loans from the company. He resigned as CEO in April 2002 and was later convicted of fraud, conspiracy and filing false documents with the SEC. He was sentenced to 25 years in prison.

Ebbers' legacy led to tighter reporting standards with the creation of the Sarbanes-Oxley Act of 2002, as well as the forbidding of personal loans to company officers and stiffer penalties for financial crimes. (Learn about how a company keeps its management in check can affect the bottom line in Governance Pays.)



For more on this subject, read Handcuffs And Smoking Guns: The Criminal Elements Of Wall Street, The Ghouls And Monsters On Wall Street and Tales From Wall Street's Crypt.
This is from this article I posted earlier.

How Big Institutional Money Distorts Housing Prices

quote:
There you have it. The rising house prices are being presented as a signal of a "sustained economic recovery" that feeds into consumer confidence and as reason to propel the stock market to new all-time highs. What's not to like in that narrative?
However, if you value context, the above article will leave you disappointed because it omits the main driver of house price gains in the areas mentioned: big, institutional money seeking rental income and future capital gains.
....

He assessed whether local activity was comprised of mom-and-pop individual investors or institutional investors, defined as either entities that have purchased five-plus properties a year under the same name or under an incorporated name.

Here’s what Khater found: institutional investors have been targeting specific markets and then accelerating purchases of REOs in those markets, driving down distressed inventories and leading to notable increases in REO prices that have in turn led to larger market upticks.

Institutional investors have focused buying efforts strongly on south and southwestern cities that were hit hardest by the foreclosure crisis. The cities where investors activity has been particularly robust in the past year are Atlanta, Ga., Detroit, Mich., Las Vegas, Nev., Phoenix, Ariz., and Calif.’s Los Angeles, Riverside and Sacramento.

“In Q4 2012, Phoenix REO prices were 37% higher than a year ago, followed by Las Vegas (30%) and several California markets. All six markets with rising shares of institutional investors experienced double-digit increases and were among the top nine for REO price appreciation.
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Old 01-21-2014, 03:53 PM
 
Location: Barrington
39,785 posts, read 30,373,424 times
Reputation: 13470
Quote:
Originally Posted by Gtownoe View Post
Has anybody thought about what this practice would do to the American public and Economy?


Why are house prices still so high if there's so many without a home, living with family/friends, etc?? Why are rent prices so high and increasing if wages are stagnant and there's a shortage of quality employment? Why were there so many foreclosures in the first place?


Does anybody else think that maybe our home prices are being fixed by the banks?
Market value is a variable. That one cannot afford to pay market value does not mean prices are too high. The flip side of this is that just because the market value is less than the seller needs or wants does not mean prices are too low.

The resale of FNMA, FHLMC and HUD owned properties have an owner-occupied bid process whereby those who intend on occupying the property are given priority and do not have to compete with investors.

BTW, median incomes have been rising.
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