"The most amazing chart of all time is the one showing home equity since 1952. In a normal non-delusional world, people pay down the principal on their mortgage month after month, resulting in their equity in the house methodically rising. National home prices doubled between 2000 and 2005. One might ask, how in the hell could home equity drop from 60% to 58% between 2000 and 2005 when home prices went up 100%? Equity should have risen to 75%.
Well the delusional Boomers struck again. The banks made it as easy as hitting the ATM to get equity out of your house and the Boomers jumped in with both feet, as usual. Americans withdrew $2.8 trillion of fake equity from their homes between 2003 and 2007. They lived the lifestyles of the rich and famous. BMWs, Mercedes, cement ponds (pools), new kitchens, Jacuzzis, home theaters, exotic vacations, hookers, facelifts, size DDs, and putting a little more in the church basket abounded.
This astounding level of stupidity and hubris left millions of Americans vulnerable when the bubble popped all over their faces. Millions have lost their homes. Almost 11 million more are underwater on their mortgage. There is years of pain to go. Household equity is now at an all-time low of 38.1%. What makes this number even more amazing is that 33% of all homes are owned outright with no mortgage. This means that the 50 million houses with a mortgage have far less than 38.1% equity. The people who sucked hundreds of thousands out of their houses to live the good life deserve to get it good and hard."
http://www.marketoracle.co.uk/Article28632.html
We are going to get just EXACTLY what we deserve.
But, but, home prices never, ever drop, ever!
…and then blame it on the evil banks.
[quote]reddog6376 wrote:
…and then blame it on the evil banks.[/quote]
Politicians and bankers are holding hands in this matter.
[quote]LIFTICVSMAXIMVS wrote:
[quote]reddog6376 wrote:
…and then blame it on the evil banks.[/quote]
Politicians and bankers are holding hands in this matter.[/quote]
They can’t force someone to take out a home equity loan. If people weren’t stupid and, “withdrew $2.8 trillion of fake equity from their homes between 2003 and 2007. They lived the lifestyles of the rich and famous. BMWs, Mercedes, cement ponds (pools), new kitchens, Jacuzzis, home theaters, exotic vacations, hookers, facelifts, size DDs,…” then there never would have been a crisis. The consumer bears a significant amount of the responsibility.
[quote]reddog6376 wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]reddog6376 wrote:
…and then blame it on the evil banks.[/quote]
Politicians and bankers are holding hands in this matter.[/quote]
They can’t force someone to take out a home equity loan. If people weren’t stupid and, “withdrew $2.8 trillion of fake equity from their homes between 2003 and 2007. They lived the lifestyles of the rich and famous. BMWs, Mercedes, cement ponds (pools), new kitchens, Jacuzzis, home theaters, exotic vacations, hookers, facelifts, size DDs,…” then there never would have been a crisis. The consumer bears a significant amount of the responsibility.
[/quote]
No banker would lend to these people under ordinary circumstances.
Cheap and easy credit distorts markets – i.e., people’s perception of their actual wealth.
[quote]LIFTICVSMAXIMVS wrote:
[quote]reddog6376 wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]reddog6376 wrote:
…and then blame it on the evil banks.[/quote]
Politicians and bankers are holding hands in this matter.[/quote]
They can’t force someone to take out a home equity loan. If people weren’t stupid and, “withdrew $2.8 trillion of fake equity from their homes between 2003 and 2007. They lived the lifestyles of the rich and famous. BMWs, Mercedes, cement ponds (pools), new kitchens, Jacuzzis, home theaters, exotic vacations, hookers, facelifts, size DDs,…” then there never would have been a crisis. The consumer bears a significant amount of the responsibility.
[/quote]
No banker would lend to these people under ordinary circumstances.
Cheap and easy credit distorts markets – i.e., people’s perception of their actual wealth.[/quote]
No argument there. If Fannie Mae wasn’t buying all these mortgages, the banks would have been much more prudent. But if people were smart enough to differentiate their true wealth from their percieved wealth, they would not be upside down on their mrotgage now.
[quote]reddog6376 wrote:
But if people were smart enough to differentiate their true wealth from their percieved wealth, they would not be upside down on their mrotgage now.
[/quote]
It is part of the American Mythology to believe in homeownership.
It’s not merely a lack of sophistication but rather that those who lack scruples can convince people to do dumb things in the name of mythology.
[quote]LIFTICVSMAXIMVS wrote:
[quote]reddog6376 wrote:
But if people were smart enough to differentiate their true wealth from their percieved wealth, they would not be upside down on their mrotgage now.
[/quote]
It is part of the American Mythology to believe in homeownership.
It’s not merely a lack of sophistication but rather that those who lack scruples can convince people to do dumb things in the name of mythology.[/quote]
And the worst of it is that the honest and the just are forced to come to the rescue of those responsible for the mess.
[quote]Headhunter wrote:
[quote]LIFTICVSMAXIMVS wrote:
[quote]reddog6376 wrote:
But if people were smart enough to differentiate their true wealth from their percieved wealth, they would not be upside down on their mrotgage now.
[/quote]
It is part of the American Mythology to believe in homeownership.
It’s not merely a lack of sophistication but rather that those who lack scruples can convince people to do dumb things in the name of mythology.[/quote]
And the worst of it is that the honest and the just are forced to come to the rescue of those responsible for the mess.
[/quote]
Also part of the myth that “we owe it to ourselves”.
