[Soultrader]

Original Article Here

[ammo]

i talked to a freind at UBS and he said on his street all the houses are around a million dollars,he said if one was sold at foreclosure for 200k,that the value of all the others would artificially drop,the banks are having the same problem and artificially dropping in value becuase all the other owned real estate is only temporarily deflated in price and when this housing market stabilizes things will be o.k. I don't know if that is 6 months out or six years but i would bet on the six months.

[OAC]

I remember a Merrill Lynch housing analyst recently said the bottom of the housing market is probably still three years away.

[goumie]

Yeah that same Merrill Lynch analyst will probably tell you Merill is the best broker on the street.


The truth is analysts can say what they want but if they really knew what was going to happen with the market they would have predicted this mess to begin with and as far as I know the only notable broker to do this was Goldman Sachs.

[james_gsx]

Originally Posted by goumie »

Yeah that same Merrill Lynch analyst will probably tell you Merill is the best broker on the street.


The truth is analysts can say what they want but if they really knew what was going to happen with the market they would have predicted this mess to begin with and as far as I know the only notable broker to do this was Goldman Sachs.

I think everyone knew this mess was coming. The problem was when, and how bad. The issue was most banks were so balls deep in easy money trends (as Wall Street loves to do) that they weren't able to move the massive investments before shit hit the fan. GS was also involved, but was luckily hedge well enough to walk away with a profit. In fact, it was only a few guys in the firm who knew they were shorting the entire subprime market, the rest of the guys buying up the junk had no clue. So is that really GS, or is it just a firm that was smart enough to listen and make a move?

The interest rate was at 1% for far too long, anyone with any interest could have told you that would create problems. For the most part, the "mess" was about as bad if not a little better than most people expected. It's interesting because it's going to last longer than expected, but be a little more shallow then people had expected.

So overall, I wouldn't say it was a bad case of missing the writing on the wall, but more or less not managing risk properly

Originally Posted by james_gsx »

The interest rate was at 1% for far too long, anyone with any interest could have told you that would create problems.

OK, I'll bite. Specifically, what problems?