can someone explain to me about the 2008 housing market crisis? how did it happen and do you see something to the same degree, or even worse, happen again in the next 5 years?
Can someone explain to me about the 2008 housing market crisis...
Jack Ross
Other urls found in this thread:
youtube.com
globest.com
en.wikipedia.org
nbcnews.com
twitter.com
Zachary Anderson
jews
Caleb Nguyen
The short answer is no. I see a lot of people on here pretend there's going to be another housing crash. No, there isn't.
The future is more and more mass immigration. What is the one thing people need? A place to live. What is finite? Land. What gets built slower than demand? Housing.
Due to mass immigraiton, housing prices will INCREASE. Just look at California, it is the land of the new "Landed Gentry." There are people there who are making 6 and even 7 figures just renting our their grandmas old houses she bought in the 50s.
Relatively soon, this Californian-esque real estate market will spread throughout the rest of the states and western world. It's no longer going to be a city problem, it's going to be everywhere.
In a nutshell, stop saying the housing market is going to crash, because smart money is buying up land in the midwest and non-coastal states as we speak to rent out to the future goblin population. I am not going to cast too many pearls before swine, but anybody with an IQ greater than 110 should be able to figure out where the next boom markets are going to be.
Easton Davis
Housing market = Crypto market
Now you know.
Jace Bennett
>Jews accept anyone and everyone for a mortgage, including lots of people who clearly couldn't manage it
>package these loans into what is called collaterized debt obligations
>fraudulently rate packages higher than they should be
>sell them off to other banks
>no one cares because everyone is making money
>everyone wants to buy a house, prices skyrocket
>all is fine until people start defaulting on their mortgages en masse
>house of cards comes falling down
Aiden Price
Wasn't the last housing crash at least in part due to banks being incentivized to offer loans to risky customers such as the immigrants you mention? Land may be finite, but qualified buyers are finite as well. Mass immigration in your model would only cause another bubble.
Chase White
Housing market won't crash similarly to 2008 but if we see a financial market crash the housing market will take a hit simply due to demand dropping and prices lowering in response. Won't be anything like 2008. Some markets which are hot now will likely only drag their feet a little.
Angel Baker
housing crash was due to lowered standards in mortgage lending and rampant mortgage fraud as a result, as well as mismanagement of loan documentation. without the government stepping in and 5xing the monetary base for the next 10 years basically giving the banks a bunch of free money the entire entire global system would have come to a standstill and there likely would have been the breakdown of society as the vast majority of banks would have failed, although they could have taken that route and then literally printed dollars with the FDIC to make all depositors whole, but that would have been bad for the bankers so they just made a bunch of fake money. the next crisis won't be similar because lending standards have been kept strict for the most part. The crisis in play is a monetary crisis bigger than ever seen in history, it's uncertain how it will play out as far as I can tell, but it's the biggest reason I like bitcoin
Jackson Roberts
And thats exactly why you buy now meaby? To sell at the top of the bubble?
Dont be a pussy
Charles Turner
You're making the argument for long term bullishness on housing. This says nothing of the short term outlook. The 2008 housing crash only lasted a couple years.
No matter how fast beaners reproduce, you're going to be waiting centuries before they fill up vacant land in flyover states.
Kevin Wood
this basically
The market crashed in 2008 because borrowers couldn't pay for their sub-prime mortgages.
If another housing crash happens (and it will), it will only be a regular cyclical crash, not the same magnitude as 2008 unless literally the rest of the market goes into a depression.
Jonathan Russell
what do you think are the next boom markets user?
Brandon Ortiz
current reason for housing prices is all supply, nothing else.
1.) banks and hold, still hold, majority of the housing notes they recieved due to toxic securities. Then these cock suckers got a bail out, and now theyre holding on to these notes squeezing supply dry.
2.) Zoning regulations, on top of skilled laborers leaving to heavy industry, have significantly curbed housing construction. There was a TON of fucking houses being built during G.W. bush. Now with stricter loans, construction is out of the question for many.
I am desperately hoping stocks crash, and interest rates go beyond 10% so it will crash this terrible housing market.
We simply need to build more, and get those fucking notes out of (((their))) hands they got with our fucking money to begin with.
Jason Fisher
We had women vote, and they voted for inflationary policies and GSEs like Frannie and Freddie that massively inflated the housing market into a bubble by increasing the velocity of money. There is a reason why (((Wall Street))) want to empower women so much and give the most money to to democrats.
Nathaniel Johnson
long story short, they thought they could keep pumping the cost of housing by selling real estate at prices nobody could afford. When home values couldn't go up another penny, the pyramid scheme imploded.
Austin Gomez
Now is the top of the bubble.
Matthew Evans
But they're no longer lending to risky buyers. It's kind of hard to get a loan right now.
Alexander Lewis
>housing expert here
It was a culmination of a number of factors involving incredibly low interest rates and a deregulated market with rising home values.
Im just going to bullet point in for the sake of brevity.
>interest rates go from 20% in 1980 to all time low 0.25% in 2008
>Housing prices are rising rapidly due to attractive mortgage rates
>g.w.Bush deregulates market and allows for looser credit approval and 40 year 0 down mortgages
> home ownership becomes cheaper than renting and min wage burger flippers are buying homes
>people are buying multiple homes and flipping them at juicy margins
>life is good.
>banks start pushing home ownership on anyone with variable rates.
>they package these assests into hedge funds and sell them around the world
>market is heating up fast, inflation is becoming a problem
>the inevitable happens
>feds raise rates to slow down massive inflation
>people with these variable rates are now owing far more than they can afford for their homes
>the cost of the mortgage minus equity is now greater than the initial buy price.
>owner owes more for home than its worth"fuck it heres the keys" ill go bankrupt
>banks are left holding trillions in assets no one can afford
>hedge fund prices die
>banks liquidity dries up, cant give crefit anymore
>lehman brothers, aig, fanny mae, freffy mac all fucked because sold homes to losers
>massive sell off of banks
>panic ensues
>people flee markets
>companies lose trillions in investment dollars, lay offs, etc
Game ogre
Jose Torres
Watch the movie The Big Short and you will know
Jayden Wright
Here's a quick summary. A crash course, if you will.
youtube.com
Brayden Sanchez
I can try to explain it for you in simple terms.
Part I.
A mortgage is just a loan and loans are made by a bank. Sometimes banks turn around and sell their loans to other banks i.e. investment banks. Investment banks bundle these loans together and turn them into a security like an equity (stock) . To bundle the loans and make them attractive they group the class "A" rated mortgages and shit rated "junk" mortgages to hedge the risk associated with junk. Because the US residential and commercial real estate marketplace was so hot for so long these bundles seemed like a great asset to invest in. The mortgages were not only residential home loans... they were also commercial loans. So here is where the perfect storm of hell comes in:
Jeremiah Wright
Part II.
1.) retail banks were lending $300,000+ home loans to people who could not afford them, like bus drivers on $25K income 2.) the US was speculating on commercial RE for over a decade, building office, retail and commercial real estate in anticipation of continued growth and demand 3.) when the investment banks made the budles aka MBS and CMBS (commercial mortgage backed securities) they derived a security based on the value of the bundle, a derivative, that they held on their books until they could sell it for a profit to some unfortunate asshole in Dubai or china.
Gabriel Miller
you fucking kike
you don't deserve a dignified response and you typed all of that garbage out and left this thread
Asher Hughes
Part III.
The securities being traded could never be repaid. Current cashflows from the people taking the loan could not, the banks could not, even the investment banks did not have the capital to cover the value of money borrowed. This is what being over- leveraged means. All of these practices, 1-3, are now known as shadow banking. Does it still occur? Yes. Are banks still leveraged? Yes. Are practices better? Yes. Will it occur again. It's possible. A recession will happen again in the next 2 years but I don't think the world is stupid enough to forget what shady banking & overcomplicated financial instruments can do to the world economy.
Ian Sanders
informative post, thanks
Caleb Long
This is why immigration will never be allowed to stop. It keeps land prices up, consumption growing, and wages down.
Benjamin Howard
The short answer
It started with Bill Clintons repeal of the Glass steagal act. This act was put in place after the great depression to shield us from what happened in 2008. It gave banks ultimate power over the money we deposit and fractional banking was created. (google the act if you want to understand more)
The repeal of the Glass stegal act made financial institutions increadibly wealthy but then created the sovereign debt crisis of 2008. Banks took our deposited money and loaned it out 10x upon 10x upon 10x. So much loaning, so much debt, people couldn't pay it back which trickled up to the institutions to the bond owners so on and so on.
We had two options at that point. Let the banks fail because they gave bad loans or save them.
You know what happened next.
Could it happen again? yes if the Glass steagal act is not implemented. It will happen over and over again creating a non stop boom bust cycle.
Christopher Long
> RealEstate market spills over to MoneyMarket via complex link between liquid money market instruments and MBS (Mortgage Backed Securities)/ABS
Oliver Roberts
Brilliant summary. Going to save this.
CMBS still pretty common -
globest.com
Sebastian Foster
Don’t forget his big push for low income housing and HUD initiatives/subsidies which led to rampant subprime lending and price inflation
Gavin Howard
I still don't understand how MBS (residential; not CMBS) could be legal ?
Angel Gonzalez
No it's not, you fell for a subtle troll post. He changed the narrative and people because he knew you'd be dumb enough to believe it. If you want to debunk the rest of it you can look for yourself, but for example, the person that added in a regulation to the Community Reinvesting Act saying that banks essentially had to approve everyone, regardless of their ability to actually pay back the loan, was Bill Clinton.
Jacob Richardson
This is the only person here who knows what they are talking about.
Nathan Wilson
Bis legislation basal ii forced banks to hold a certain amount of their wealth in mortgages creating an artificial demand that stopped the market from pricing mortgages correctly causing a massive bubble
The banks knew about the bubble but because they couldnt reduce their exposure to mortgages due to the legislation the only way they could make profit was to short themselves which if course they did
Yet another example of central bankers destroying lives in the name of financial repression
Isaiah Jones
Obama
Cameron Gomez
This. Unironically. It's not a documentary, but it actually explains the basics of what happened quite well and accurately. Also it's kino.
Christopher Gonzalez
Id suggest margin call as well. Shows what most likely happened on the bank side of the collapse. Also jeremy irons is a showstealer as the CEO.
Wyatt Robinson
Market crashes are planned decades in advance
10 years ago. Still remember this as if it were yesterday
David Scott
Tent is going up in Cali. House sale prices are starting to drop though, and people are moving out in droves.
Joshua Rivera
yes, all of it.
Basically, the repeal of the Glass Stegal act allowed investment banks to use savings bank deposits to loan out with no limit. The Glass Stegal act kept Savings deposits and investment banks separate.
From here, financial instruments like subprime lending and other financial instruments were created on phantom money upon phantom money that started from .01c.
All that wouldn't have existed if Glass Steagal act was never repealed.
There is a reason the Clintons are beloved by Wall st.. They not only enriched the 1% but also themselves.
Matthew Rivera
Holy shit. Is this real? Just think what shillary would do. She's actually more devious than bill.
Joshua Stewart
Hopefully she will never be president. But yeah, shes running again. break out the popcorn.
Under the Clintons, America is for sale.
Luke Kelly
correct.
There's a primary and secondary housing market. This moron above you is talking about the primary.
Both collapsed in 2008.
Isaac Reed
Are student loans the next big bubble? One way I see it's not is because it's not like a mortgage in which one defaults relatively easy.
Bentley Gomez
OMG. Didn't know this.
Jordan Mitchell
op, i was one of the handful of people who predicted the crash,, 2 months before it happened......... im smart as fuck. found bitcoin in 09......... then smart contrsacts... then sto's/own chx....................... google pre ipo, apple when they announced iphone... im smart as fuck and i know u think im laring because of my typing erorrs, its cos i dont give a fuck,
i hear the music slowing
Levi Cook
When does the music stop senpai?
Michael Morales
Yes, but it won't crash anytime soon because it's currently guaranteed by the government via wage garnishing
It won't last forever though, it can only get so big until debtors have a majority and vote in loan forgiveness, then shit will get real
Brody Long
Just like how AAA housing bonds were guaranteed by the U.S. government. Holy shit it's cyclical.
Charles Jones
I was in high school at the time. my family had just recovered from the '01 tech crash (dad got laid off) and '08 set us back to ground zero (dad's company collapsed).
in the 90's we were quite well off, I remember my mom dressing up in nice clothes and make up, I remember huge gifts under the christmas tree, I remember my mom and dad loved each other. once the money ran out in '01 our family was never the same.
>could it happen again
sure, why not. I'm ready for it. I'm a consummate saver and I have a big cash and stock cushion. I thnk most of the country is always looking towards the next one, that's why I dont think it'll happen. more likely we'll face war with the way the world's been going.
Carson Wright
You are blinded by your partisanship and a political hack. I wasn't trying to diss Bush his heart was in the right place and his policy recieved wide appeoval but it was his 40 year, zero down mortgage that fucked the market.
>President Bush signs massive housing bill
The Associated Press
WASHINGTON — President Bush signed a housing bill Wednesday intended to rescue about 15 percent of the cash-strapped homeowners in fear of foreclosure in the next year or so.
Early in the morning and out of public view, the president signed it without fanfare in the Oval Office, adding his signature to a measure he once threatened to veto. The White House said he was accompanied by Treasury Secretary Henry Paulson, Housing and Urban Development Secretary Steve Preston and other administration officials.
“We look forward to put in place new authorities to improve confidence and stability in markets,” White House spokesman Tony Fratto said. He said the Federal Housing Administration would begin to put in place new policies “intended to keep more deserving American families in their homes.”
nbcnews.com
Jaxon Foster
this guy is correct.
Ryan Reyes
Either student loans or 01-style crash of vc-overinflated startups with their phony "hypergrowth". Or rather both.
t. finance degree from a country with dead capital market, just waiting to see the world burn
Nathan Robinson
Someone tell me the market capitalization of the nasdaq composite. It seems to be a big secret online