Next leg of banking collapse underway

Really2

mbga9pgf wrote: »

Sorry about the arguments, I would prefer to stick to civilized debate. For now, have to agree to disagree!

It's fine mate, i was the same when I joined the first time.;)

HPC is a different beast to this one. It's not who can swear the most on here.

It is who can wind some one up and be sarcastic the most.;)

But we have a reasonable mix on here i am considered a bull on here (but I still expect prices to fall) Just that I did my "activity" in the market early as I thought that was the best oppertunity for me (trading up) with the rate drops and the discount I got it as proved a good stratergy (for me personaly)

But many on here are FTB so I completly understand the importance of finding the bottom as your deposit is money you worked for.
I guess the crash is different for all but dont get bogged down in the only way is down suff.
There will be opertunitys on the way down (especialy just before the bottom)
Good luck finding one and if I was a FTB I would keep one eye on prices but the other eye on transaction rates (as soon as you get MOM climbs in people taking out mortgages get ready to pounce)
You could well get a property below bottom with a low interest rate (somthing I dont think you will get if the market just flatens out.)

PS I enjoyed the argument though:)

IveSeenTheLight

!!!!!!? wrote: »

Bank of America gets huge bailout totalling almost $140 billion only months after it bought out Merrill Lynch:
http://www.bloomberg.com/apps/news?pid=20601087&sid=aZs1pLsWbonk&refer=worldwide

More woes at Citigroup:
http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article5526678.ece

Allied Irish Bank nationalised in Ireland:
http://news.bbc.co.uk/1/hi/business/7832203.stm

Thats on top of bad news yesterday from DB and HSBC.

Surely these institutions have been underpinned and are not collapsing

geoffky

Brown has asked the banks to tell the truth about the amount of bad debts they have on their books...and when did he start telling the truth?

Conrad

Really2

You have a point in so far as none of us know, but there is a spectrum of possible outcomes, and I personaly do try to make a best guess given the facts as to where the most and least lilkely outcomes on the spectrum lie.

I have to say the case for further price falls has to be the most realistic position to take.

StevieJ

mbga9pgf wrote: »

And the writedowns are not set to stop until 2011. Hence why I firmly believe this is going to be long and drawn out.

Some analysts think that that these 22 cent securities could be worth 50 to 70 cents in the future, correct they should be written down today as that is the market valuation and good accounting practise, but we could see significant write backs in the future bearing in mind that these are not 100% sub-prime but contain a mix. The prime mortgages will be hit as well but will not see the ridiculous resets thet dogged the sub-prime with teaser rates of 1% resetting to 10%, I guess the prime market should see resets at lower rates (only guessing though).

Laughing_man

mbga9pgf wrote: »

Really, heres my reason why. snip.

Awesome post. I don't know how Really arrived at the conclusion that Banks are making up fictional losses that probably won't occur to make things seem worse than they are . For some reason alot of posters here are committed to looking for the silver lining and ignoring the cloud.

If anything the situation is the exact opposite. If you're holding a shitload of MBS and CDO's that currently change hands at 20cents on the dollar if you want to sell them on, then thats what they're worth. The writedowns are when the bank admit they probably worth 80 cents, then 60 and so on- so we see x billion written off each quarter- i.e the loss has occured and is being taken in stages, not predicted for the future and being taken now. The writedowns on Alt-A and pay option ARM's (if you want a laugh read Mr Mortgage to find out about these loans, they make Northern Rock look like Ebenezer Scrooge) haven't even seriously begun yet. If you're expecting a recovery in housing in 2010 that graph should be a cause for concern.

Even now toxic crap no-one wants is held on bank balance sheets marked far above what it is worth to a rational investor, to make thier position seem better than it is. If there was a truly persuasive counter argument for this stuff being undervalued the smart money would be all over it, instead the only buyer is the government. Why is that? Why are the rich folk missing out on this generational buy while the taxpayer gets to fill his boots?

StevieJ

Laughing_man wrote: »

Awesome post. I don't know how Really arrived at the conclusion that Banks are making up fictional losses that probably won't occur to make things seem worse than they are . For some reason alot of posters here are committed to looking for the silver lining and ignoring the cloud.

If anything the situation is the exact opposite. If you're holding a shitload of MBS and CDO's that currently change hands at 20cents on the dollar if you want to sell them on, then thats what they're worth. The writedowns are when the bank admit they probably worth 80 cents, then 60 and so on- so we see x billion written off each quarter- i.e the loss has occured and is being taken in stages, not predicted for the future and being taken now. The writedowns on Alt-A and pay option ARM's (if you want a laugh read Mr Mortgage to find out about these loans, they make Northern Rock look like Ebenezer Scrooge) haven't even seriously begun yet. If you're expecting a recovery in housing in 2010 that graph should be a cause for concern.

Even now toxic crap no-one wants is held on bank balance sheets marked far above what it is worth to a rational investor, to make thier position seem better than it is. If there was a truly persuasive counter argument for this stuff being undervalued the smart money would be all over it, instead the only buyer is the government. Why is that? Why are the rich folk missing out on this generational buy while the taxpayer gets to fill his boots?

The bottom line is no one knows how much they will eventually be worth.

Laughing_man

StevieJ wrote: »

The bottom line is no one knows how much they will eventually be worth.

Thats a little trite. The clever people in finance have been doing some very hard sums to try and work this out, it's not hard to find an upside on twenty cents on the dollar and still they're not buying. That should really say something to you about the bottom line on this stuff.
Edit: Investors are accepting record low yields on U.S long term treaury debt, why take this if there is a potential 20-150% return on undervalued mortgage assets that everyone wants to sell now in the same period? It's easy to dust off the old 'no-one has a crystal ball' line but given this set of facts do you really think big writeups are just around the corner?

If you like this board check out http://www.tickerforum.org/cgi-ticker/akcs-www?forum=Breaking and especially read Karl Deniger's blog http://www.tickerforum.org/cgi-ticker/akcs-www?forum=Ticker This guy makes Generali look like a simpleton.

StevieJ

Laughing_man wrote: »

Thats a little trite. The clever people in finance have been doing some very hard sums to try and work this out, it's not hard to find an upside on twenty cents on the dollar and still they're not buying. That should really say something to you about the bottom line on this stuff.

If you like this board check out http://www.tickerforum.org/cgi-ticker/akcs-www?forum=Breaking and especially read Karl Deniger's blog http://www.tickerforum.org/cgi-ticker/akcs-www?forum=Ticker This guy makes Generali look like a simpleton.

Thanks, interesting. BTW who are these clever people in finance? hope they are not the ones who created the CDO's then again :rolleyes:

Laughing_man

CDO's are the brainchild of a twisted genious, imo. If I could find a way to persuade people that poo is really gold I'd be rich too.