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Devaluation Coming.....Yes, Virginia, it can happen here.

Discussion in 'Economics, Business, and Taxes' started by Sgt Staples, Oct 8, 2012.

  1. degsme

    degsme Council Member

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    No Days you do NOT understand money better than anyone here. You STILL have not answered my basic question as to what sort of value money stores.

    Your fundamental flaw in "understanding" money is that you really don't understand what "value" is.

    As to calling you just a loan salesman - that's not Gabriel, that's me. And you have not shown yourself to know much beyond the relatively straightforward processes of loan selling/closing. Yes you posted in Moneybox... and it was just as misguided on the subject of money there as it is here.

    I minored in Econ under a prof that was involved in some of the early work in the subfield of micro-econ that eventually became Behavioural Econ thanks to the work of Kahneman.

    So try again... what is the value that money stores? this is an important question as it is at the root of all the confusion you seem to have.
     
  2. degsme

    degsme Council Member

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    And you offered nothing to substantiate that.

    .
    and that's not true because of TWO reasons:
    1. Beccause the net cost of a foreclsure is between 25% and 50% of the property TYPICALLY and even with 20% down, which was rare after 2001, that leaves the bank underwater on the loan
    2. there wasn't fraud involved at the loan origination level for many of the non-conforming ARM loans. There simply was a lack of understanding of the impact of the 3 year "accelerator" aka "balloon". And in many cases that left the property way underwater


    So your premise here is wrong. and that leads to an incorrect conclusion of what drove the housing collapse.

    A Loan BTW is simply a particular type of financial instrument. No different in that sense than a life insurance policy, a car insurance policy, a bond etc.

    Yes a home sale is a sale. So is a loan. in BOTH CASES there is a contractual exchange of exchanged value. That is the definition of a sale. That you took the Ill Loan Originator license does not make it a BAR (that'st attys) it just makes you a regulated salesman. I


    Simply wrong. And in making that error you underscore that you do NOT know "money" very well at all.

    Actually it is. Precisely because it is a high cost transaction with a variety of regulatory constraings. A Loan App is not necessarily 4 pages. That you state it as such underscores that you are just a salesman filling out forms. A Loan application fundamentally is simply a request to borrow money in return for considerations rendered.

    Now if you want a loan that fits withing certain regulatory frameworks (FHA or GSE resellable) then you have certain data collection constraints. But that is not necessary for loans in general.

    just becaues there are a lot of forms to fill out does not mean you are actually in any sort of decision making or investment management, or risk assessment role. And that is fundamentally what banking is. that it is a lot of work has no bearing on it.
     
  3. Days

    Days Governor

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    Well thanks for your opinion, degs, and I remember your ample contribution over those ten years, I guess the subject didn't interest you, then?

    So if you would like to assert some kind of prowess, make your case. because repeating this open ended question about value isn't saying anything. Cutting down Loan Originators as not real bankers shows some real sharp insight... let me ask you something, though... what exactly is banking? Isn't that something banks do? And what exactly do Loan Officers do? make loans? Is that anything like banking? Before you go off on some strangled analysis of value, and I'll be happy to go there with you if you ever get there, I'd like you to defend the stupidity of this post I am replying to. At the very core of banking is the idea of funding loans or loaning out money... and the guy in charge of doing that is the guy who is actually performing banking; that's what the profession is, fer crissakes. Loan originating is banking. The two are one and the same thing.

    Now, you are stalking also. Here's why. I defended somebody's post where they said they had the right to say certain international bankers were jewish. I did that for an historical reason... and because in principle, your attack was racist. You don't have the right to go around calling posters anti-Semite just for using the word "jewish".

    But, please, make your argument for what type of value money stores. The short answer is "market value"... after all, what is money? But I'm assuming you have some kind of deep dark secret that the rest of us haven't figured out yet... so let's hear it.
     
  4. degsme

    degsme Council Member

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    Actually I contributed quite a bit.. And I called you out a couple of times before I realized you were off the deepe end on monetary conspiracy.

    Well that depends on the Context. Investment banking is the process of identifying, evaluating, structuring, underwriting, and closing customized financial transactions typically involving cash for assets in some form

    Mortgage banking is the process of creating loan products based on pooled risk criteria vs. income, and evaluating, structuring and underwriting them. The sales process is just the sales process. So in some ways Mortgage banking is distinguished from investment banking in that Mortgage banking is involved in creating repeatable cookie cutter processes and products for large volume loan sales transaction.

    And I'm not stalking. You keep making ludicrous claims about money... I keep calling you on it... that's not stalking.

    And I have every right to call someone an anti-semite if they use the word 'jewish' in a manner that is historically pejorative and does not enhance the descriptive character of the individual in question. "Banker" is sufficient. "Jewish Banker" adds nothing but does invoke anti-semitism.

    FAIL... because "market value" is priced in monetary terms... so you just defined the value of money as the value of money... That's not a meaningful nor cogent definition.

    try again...

    and no its no great dark secret. What I'm doing is underscoring the weakness in your arguement and understanding of what money is and how it works.

    So try again... Its called the Socratic Method... Open your mind, you might teach yourself something about money.
     
  5. Days

    Days Governor

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    degs, you are way over your head. You don't know mortgage banking. You don't know what happened in the financial meltdown. And you don't understand the core issue in this particular discussion... what was the nature of the losses written off by Wall Street banks 2006-2007-2008.

    BTW, I never saw a 3 year balloon. I think you meant ARM. Either way, what would adjusting interest have to do with property being underwater? underwater is when market value is less than the principle owed on the loan. Now here's what you don't get. Homeowners are underwater, not Wall Street banks. Wall Street banks do not owe anybody money for the property they own. How can they possibly be underwater? They can't. Wall Street banks purchased loans from Lenders; they paid principle plus a yield spread premium... at that point, if they held the loan, they own the Note for the amount they paid for it. The homeowner owes the Wall Street bank, not the other way around. The bank has an investment, an asset that goes on their books. Just like the Treasuries they own, they lend money on this asset/reserve. Now... first off, realize that, Wall street banks are the secondary market, so they hold the paper... who held the most mortgage bonds in America? Goldman Sachs, followed by Lehman Brothers, followed by Bear Stearns. Now let's say the borrower stops paying on the loan and the bank forecloses the property... at that point the bank no longer holds a debt in asset/reserve, because the debt is destroyed in the foreclosure, meanwhile the property is transferred to the Bank. So now, the bank holds the property in asset/reserve. Same difference. The bank goes right on loaning ten times the amount of the asset (prior to the collapse they were loaning 30 times) ... understand? the bank doesn't lose anything in foreclosure, except the cost of foreclosure. Since those were jumbos that went to Wall Street, we are talking one million in property value, and maybe 5% loss to foreclosure costs, but the whole million remains in asset/reserve and ten to thirty million gets loaned out against it. Or they could go the the FED discount window and borrow ten million against the property if they needed capital. Still think foreclosure was the cause of those ten billion quarterly losses posted by Citibank? Are your little eyes starting to open? I know banking degs, you don't.

    Okay, remember the huge fuss over mark-to-market? That was major important to the secondary banks because if those values dropped 30%, it would have reduced the asset/reserve numbers, big time. But remember how they solved that? they cheated, big time. They said they didn't have to mark-to-market unless they sold the property (duh- the sale is the value) ... so they held market value on their books right where it was when they purchased the loans. Once again, the banks were not hurt by the mortgages.

    Fraud, on the other hand, had to be totally written off. The entire price they paid for the loan, with no rescue from title insurance... that's where the big losses were happening.

    As for the rest of your confusion...

    First off, the Note is a bond. You don't seem to understand that. Next, the Loan can be bought and sold like any other debt... that does not make the original loan process equal to a sale. A borrower is not buying anything, he is borrowing. I know you know this, but you persist in this twisted logic. No matter, money loaned is not sold. The borrower pays for processing fees, which is not equal to buying the loan. The borrower does not purchase money from the bank, he borrows money from the bank. A Loan assesses interest according to credit risk... not according to how much money a salesman can swindle from a borrower. Your assertions are both illegal and absurd.

    You don't seem to know anything about mortgage banking. This is a 1003. It was always 4 pages when I did loans. they changed it, now it runs five or six pages. Whether you do FHA or not, you use that form. The single biggest risk assessment an individual goes through in their lifetime is the mortgage loan process. That process assesses the risk of that loan. It is the heart and soul of what banking is. I know, I was a banker... not a lawyer.
     
  6. degsme

    degsme Council Member

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    Yes days I absolutely know what happened in the mortgage meltdown.. I watched it happen very closely and intimately...

     
  7. degsme

    degsme Council Member

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    Fvck Stupid system ate my post.

    No a note is not a bond... a Bond holder cannot foreclose on the bond unless s/he controls the marority ofthe issued tranches... A note holder can

    Form 1003 does not appply toall mortgages... Ive written and bought mortgages that did not...I've also bought over a dozen mortgages that did.

    Still waiting for your definition of money.
     
  8. Days

    Days Governor

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    I don't believe in banking conspiracy and I always posted that there is no banking conspiracy, so you are lying about that. This is your assessment, this is your idea, that the history of banking is some kind of conspiracy. Then you try to shove that idea down someone else's throat... it is always telling when people here try to post for you. My words, "what conspiracy? there is no conspiracy, only business as usual." Your words, "you are deep in banking conspiracy". No, degs, that would be you, not me.

    You've got a lot of open ended points that drift about and say nothing. Investment banking done by whom? What processes are you pointing at? Goldman Sachs is an investment banker, in their case, what they do is actually broker stocks and bonds. Meanwhile, a mortgage banker can be an investment banker, building a resort in the Bahamas. Wells Fargo is an investment banker in a lot of ways. They also loan money directly to the residential market. I haven't seen any recognition from you as to how mortgage banking is structured for residential and commercial property. Nor do you seem to realize what those processes involve. Neither does any of it jibe with your question about the value of money. You seem to drift around making empirical statements about this and that, without really understanding what is happening in any of it. You are the lyin' Ryan of money and banking.

    ludicrous statements about banking... that would be every post you have ever written. And I straighten them out and you duck and run and then go on pretending you are the authority. My statements, if I made any statements, because usually I am just discussing, but anyway, my explanations are reality based, while your theory is far-flung backed up by total error whenever you try to get specific.

    jewish banker was the historical method of separating public sector from private sector money... 100 years ago. That was universal. If we are discussing the period there's the deal... our own Congressmen refered to it as jewish money. You can call every last person for a couple hundred years a bunch of anti-Semites because that was the vernacular, as you well know. Your pretending that it never existed and trying to say we are originating that vernacular is lying through your teeth. Your attempt to suffocate the history is nothing short of a cover up. Crimes were committed and charges were filed on the floor of Congress. the content of those charges were repeated over and over, and again during the crash. Your over-sensitivity is racist. I'm not jewish, I'm a banker. All I care is the distinguishing between public and private sector... a discernment you fail to make correctly, but you can cover up for your ignorance by screaming antiSemite, as if that changes it... the FED is a 100% stock owned corporation, it is 100% private sector, that obviously is the issue, and that obviously is unConstitutional. You are a lawyer, you should know this, and yet, you make the totally false argument that the FED is part of the government. When we call you on it, you cover up by screaming antiSemite. That's just another way to Lie. You refuse to admit the truth. I explained that the House of Rep investigated who owned the stock of the FED 40 years ago, at which point it is becoming obvious that I know way more than you do about it, and you run screaming antiSemite... why? because you know I am one google away from proving you are wrong. I see right through it, degs. Remember the thread we had on the FED years ago on the fray? I went through all these attacks and none more than those levied by Geoff... and I challenged Geoff to read the book on the creation of the FED, and he read it, do you think he would have readmitted me back into Club Fray if he didn't realize I was right?


    As for the dumb game of asking an open ended question and pretending it means something... all it means is you aren't saying anything.
     
  9. Days

    Days Governor

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    The 1003 is a federal form that is used for every residential mortgage application in America... by law.

    the whole paperwork passed at closing is "the Loan" that is sold to the secondary market. the Note is the payment schedule. Mortgage loans are bonds, they are priced on the bond market, the interest rate in the Note is locked on the open bond market, whether it is Treasury based, or LIBOR based, or COFI based, it is a bond.

    you haven't said hardly one thing correct. But you go right on pretending you are correct and that you are correcting me with all this nonsense. You say you understand what happened on Wall street during the meltdown, certainly not in your prior post, you didn't.

    you aren't fooling me, degs. You are familiar with the cogs and levers, but you don't understand how the machine works.

    It's my bedtime... actually past my bedtime.
     
  10. gabriel

    gabriel Governor

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    my name is gabriel, use it
     
  11. gabriel

    gabriel Governor

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    i know a salesman when i see one pal
     
  12. Woolleybugger

    Woolleybugger Mayor

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    I hope you understand that selling loans is not the same as being a banker. Your role in the financial collapse is pretty obvious to those of us who understand just how irresponsible loan officers and originators were up until they got caught lining their pockets during the period you mentioned. I have a question for you. Did you at any time make loans which resulted in default? Did you make stated income loans? No doc loans? How about loans with interest only for a period of time? Or did you refuse on principal and only make loans with 20% down, good income to debt ratios and so on?
     
  13. gabriel

    gabriel Governor

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    lol, one government suppressing the price of a coomodity available all over the world!! lol
     

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