Four Corners monday night has a special on the mortgage meltdown in the USA.
http://www.abc.net.au/4corners/content/2007/s2032799.htm
http://www.abc.net.au/4corners/content/2007/s2032799.htm
Mortgage Meltdown ABC 4 Corners Monday night
- Thread starter twobobsworth
- Start date
Scary stuff ! Hard to comprehend that approx 2 million people will be without homes over the next 2 years. Where would all of them live ? How will Cleveland function with 2 million displaced people ?
Thanks for sharing anyway,
Thanks for sharing anyway,
Cleveland East Ohio Gas Explosion
As the gas mixture flowed and mixed with air and sewer gas, the mix ignited. In the ensuing explosion, manhole covers launched skyward as jets of fire erupted from depths of the sewer lines. One manhole cover was found several miles east in the Cleveland neighborhood of Glenville.
http://en.wikipedia.org/wiki/Cleveland_East_Ohio_Gas_Explosion
As the gas mixture flowed and mixed with air and sewer gas, the mix ignited. In the ensuing explosion, manhole covers launched skyward as jets of fire erupted from depths of the sewer lines. One manhole cover was found several miles east in the Cleveland neighborhood of Glenville.
http://en.wikipedia.org/wiki/Cleveland_East_Ohio_Gas_Explosion
Bump ..........
Just bumping to remind all - 830pm tonight ABC tv
will be interesting to see what spin the ABC adopt. am unsure whether the story is primarily about the US or Oz market...
will be interesting to see what spin the ABC adopt. am unsure whether the story is primarily about the US or Oz market...
So, what do you think the last words in this show?
quote:
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY (referring to graph): The blue line here shows real home prices in the Herengracht region of Amsterdam since 1629; from 1629 to 1973, and you can see that there have been periods for like a half a century when they went up, and periods like a half a century when they went down.
PPR: I guess the interesting thing about this graph is that whenever it goes up it comes down again.
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY: That’s right.
PPR: I mean it doesn’t go up and go along the top. It goes up and it goes whoom.
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY: You know some people think that home prices go up 10 per cent a year. Do you know what Amsterdam would be worth today if it went up 10 per cent a year for the last 350 years? And if people know about the power of compound interest it would be worth more than the solar system or something. It can’t happen.
So if you look about long term trends in real estate maybe one per cent a year, tops, over long, over centuries. Otherwise it’s just, it doesn’t fit. It’s just not going to work.
PPR: No one would be able to afford a house.
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY: No one could afford it.
PAUL BARRY: Sell, sell. ----------------------------
What do you think? Why do we still invest in properties?
quote:
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY (referring to graph): The blue line here shows real home prices in the Herengracht region of Amsterdam since 1629; from 1629 to 1973, and you can see that there have been periods for like a half a century when they went up, and periods like a half a century when they went down.
PPR: I guess the interesting thing about this graph is that whenever it goes up it comes down again.
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY: That’s right.
PPR: I mean it doesn’t go up and go along the top. It goes up and it goes whoom.
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY: You know some people think that home prices go up 10 per cent a year. Do you know what Amsterdam would be worth today if it went up 10 per cent a year for the last 350 years? And if people know about the power of compound interest it would be worth more than the solar system or something. It can’t happen.
So if you look about long term trends in real estate maybe one per cent a year, tops, over long, over centuries. Otherwise it’s just, it doesn’t fit. It’s just not going to work.
PPR: No one would be able to afford a house.
PROFESSOR ROBERT SHILLER, ECONOMICS, YALE UNIVERSITY: No one could afford it.
PAUL BARRY: Sell, sell. ----------------------------
What do you think? Why do we still invest in properties?
Had a chuckle about sub prime catch phrases
NINJA Loans - no income, no job, no assets
and
Liar Loans
NINJA Loans - no income, no job, no assets
and
Liar Loans
What a waste of 50 minutes.
It was interesting to see those new surburbs in LA and the inner surburbs of Cleveland, where all the For Sale signs were.
It sounds like the lack of regulation of the mortgage brokers selling higher interest rate loans to people who could have got lower rates is now starting to bite them. But at the same time, these people should not have trusted their mortgage brokers.
It sounds like the lack of regulation of the mortgage brokers selling higher interest rate loans to people who could have got lower rates is now starting to bite them. But at the same time, these people should not have trusted their mortgage brokers.
Ok, you've convinced me. I'm putting my IP's on the market tomorrow. Hopefully an investor will pay me top dollar for them and I can then hide my cash under the matress! lol!
the interesting point i noted (that wasn't point out clearly in the program as a critical factor) was that unemployment was running exceptionally high in the areas where the subprime is biting hard - ie, cleveland, where businesses are closing down exponentially.
they did point out that the unregulation of the mortgage business allowed brokers to sell high interest loans where a low interest loan would have sufficed - had me doing a mental check of my rates!
it will be interesting to see how the subprime problems affect australia due to our factors of high employment (low unemployment) and brokers not deliberately screwing their customers (i hope). i can see that credit will tighten, but how will that affect those of us already in the investment cycle, with loans in place?
they did point out that the unregulation of the mortgage business allowed brokers to sell high interest loans where a low interest loan would have sufficed - had me doing a mental check of my rates!
it will be interesting to see how the subprime problems affect australia due to our factors of high employment (low unemployment) and brokers not deliberately screwing their customers (i hope). i can see that credit will tighten, but how will that affect those of us already in the investment cycle, with loans in place?
