Take that, inflation!

They are just doing CYA. Pick-a-pay, illegal immigrant strawberry pickers getting $500k mortgages, and massive loan fraud was all documented and discussed on the internet as early as 2004. This is why I laugh when bank officials say they never saw it coming, if a bunch of hobbyist bloggers saw it and predicted it, why can't the people who get paid hundreds of thousands of $$ per year (or millions) figure it out?

wesd said:...if a bunch of hobbyist bloggers saw it and predicted it, why can't the people who get paid hundreds of thousands of $$ per year (or millions) figure it out?People in all walks of life continually predict all kinds of things. A few of those predictions actually come true, but most do not. The predictions are often in sharp contrast to one another, even diametrically opposed. How do you pick AT THE TIME which predictions are going to be valid and which aren't?

If the housing market hadn't tanked, we could just as easily go back and find videos and website discussions predicting continued appreciation.

It's fun and easy to predict problems. If one continually takes a negative stance, one will eventually be right. That doesn't mean that one actually understood the parameters involved or had a truly effective crystal ball.

In hindsight, it's easy to look back and say, "If a bunch of hobbyists figured it out, why didn't the experts?" However, for every one hobbyist who was right, there probably are a at least 10 who were wrong in their predictions.

If predicting the future were truly easy and accurate, so much so that hobbyists could expect more than random accuracy, such people would be incredibly wealthy, but they aren't.

For those who disagree, I invite you to please make an accurate two-year prediction of the DJIA, price of oil, and median home price change.

Xnarg said:wesd said:...if a bunch of hobbyist bloggers saw it and predicted it, why can't the people who get paid hundreds of thousands of $$ per year (or millions) figure it out?People in all walks of life continually predict all kinds of things. A few of those predictions actually come true, but most do not. The predictions are often in sharp contrast to one another, even diametrically opposed. How do you pick AT THE TIME which predictions are going to be valid and which aren't?

If the housing market hadn't tanked, we could just as easily go back and find videos and website discussions predicting continued appreciation.

It's fun and easy to predict problems. If one continually takes a negative stance, one will eventually be right. That doesn't mean that one actually understood the parameters involved or had a truly effective crystal ball.

In hindsight, it's easy to look back and say, "If a bunch of hobbyists figured it out, why didn't the experts?" However, for every one hobbyist who was right, there probably are a at least 10 who were wrong in their predictions.

If predicting the future were truly easy and accurate, so much so that hobbyists could expect more than random accuracy, such people would be incredibly wealthy, but they aren't.

For those who disagree, I invite you to please make an accurate two-year prediction of the DJIA, price of oil, and median home price change.

You have a point, but this housing bubble and credit crunch was easily predictable based on patterns of data. Without going into boring analysis, the best predictor was when no-brain real estate professionals consistently said we were in a new era of economics. The same was also said in 1929 and 1999.

Basically, when people throw out all economic fundamentals to justify a market that is defying all fundaments (how often have home prices risen much faster than inflation?....only from 2000+) the end of the 'bubble' is near. Another strong indicator was people getting loans for 5-10x their household income when traditionally it's been 2-3x for the past 80 years.

No sane hobbyist is predicting the future. We're just projecting what will likely happen given the parameters of the model. And by the way, I'm not a hobbyist economist. I am an economist - but many hobbyists came to the same conclusion as I did.

SUCKISSTAPLES said:wesd said:They are just doing CYA. Pick-a-pay, illegal immigrant strawberry pickers getting $500k mortgages, and massive loan fraud was all documented and discussed on the internet as early as 2004. This is why I laugh when bank officials say they never saw it coming, if a bunch of hobbyist bloggers saw it and predicted it, why can't the people who get paid hundreds of thousands of $$ per year (or millions) figure it out?

I dont think OP was talking about the Pick A Payment negam loan.

Check out the link

Ha, thanks. I should have checked the link before believing it was tied to the article on CNN yesterday about how "Bernanke didn't see the inflation crisis coming".

Yeah its just a coincidence that Bush radically changed the bankrupcty laws right before this real estate crisis.
Changed them in a way that people who are still earning income are tied to their upside down houses.

Trust me when they passed that they knew what was coming down the pipe, and passed these changes to mitigate the damage to the financials to some degree. That was back in 2005.

SUCKISSTAPLES said:duncan36 said:Yeah its just a coincidence that Bush radically changed the bankrupcty laws right before this real estate crisis.
Changed them in a way that people who are still earning income are tied to their upside down houses.
.Not in CA. In CA you can walk away from your home and owe nothing, if you didnt refi

Correct. As long as you didnt pull equity out of your house, it would be considered a non-recourse loan. I know TX considers all mortgage loans as recourse means you are on the hook for repaying all the loan amount if you walk away.

Xnarg said:wesd said:...if a bunch of hobbyist bloggers saw it and predicted it, why can't the people who get paid hundreds of thousands of $$ per year (or millions) figure it out?People in all walks of life continually predict all kinds of things. A few of those predictions actually come true, but most do not. The predictions are often in sharp contrast to one another, even diametrically opposed. How do you pick AT THE TIME which predictions are going to be valid and which aren't?

If the housing market hadn't tanked, we could just as easily go back and find videos and website discussions predicting continued appreciation.


MY RESPONSE TO Xnarg IS...

Where I live in Utah one used to be able to buy a home for $150,000 around the year 2000. Now one can't hardly get a condo in a bad neighborhood for that price. Most people that I talk to had their market value on their home go up by at least $100,000 in only a few years. They were excited about the equity. When I asked them if they could afford their house at it's new appraised value almost every time they answered no. That is how I knew there was a problem. There is no way the market could sustain false values. People's income didn't go up enough to keep up with the inflation of home values. It had to come down. This is not rocket science or opinions. Just a fact.