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Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

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Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#61

Post by YourMatt »

diminoten wrote: post #44
H8crilA wrote: post #2

Mortgage debt will probably not be a problem in this cycle. People have this bias to remember most recent event, but it's rarely the same thing twice in a row: https://imgur.com/a/0dT7iHK Corporate debt may be: https://imgur.com/a/b54hMSg And frankly with the amount of outstanding US govt debt and underfunded pension & healthcare liabilities the USD may either get dethroned and devalued or sent into the negative inte…

Going through mortgage application now, they grill the shit out of you on every little detail of your life now. They're aware of the last crash, and have done a lot to compensate.

On the other hand, I recently sold a house that received a lot of offers. Only one person actually had the down payment money. Everyone else's loans were approved, but most were people were coming with low cash and lower income than I would have expected. Some looked like irresponsible loans to me.

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#62

Post by bryanlarsen »

xwdv wrote: post #35
Vysero wrote: post #26

Earlier quoted context omitted.

I have only been investing for 2 years I am currently 32. So I think most investors wouldn't mind me keeping my stocks but I saw my mother and father loose hundreds of thousands of dollars back in 09 and I am not about to bite that bullet.

Take advice from someone who has been investing for the past 10 years and has made ridiculous money while these perma-bears are still poor. You can’t time the market. Keep buying stocks like they will continue to go up, at the end of the day, if the market crashes and values tank, it’s no big deal. Keep holding your stocks, they will recover, in fact buy while everything is super cheap. If you would have bought back…

> "they will recover"

If you invested in 1914 German stock market, it didn't recover until 2014.

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#63

Post by losteric »

notadoc wrote: post #45
H8crilA wrote: post #2

Mortgage debt will probably not be a problem in this cycle. People have this bias to remember most recent event, but it's rarely the same thing twice in a row: https://imgur.com/a/0dT7iHK Corporate debt may be: https://imgur.com/a/b54hMSg And frankly with the amount of outstanding US govt debt and underfunded pension & healthcare liabilities the USD may either get dethroned and devalued or sent into the negative inte…

> Mortgage debt will probably not be a problem in this cycle. Disagree if you consider that many people are getting mortgages on overvalued properties at or near market peaks now, and in another significant downturn those could easily be underwater by 15%-50%. The same thing happened widely in the prior real estate bust in many trendy areas, leading to many foreclosures.

I only see this happening in exploding tech markets like SF, where the impact would honestly be minimal - some people might have to downsize but we wouldn't see mass unemployment or homelessness/crippling debt like after 2008.

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#64

Post by subsaharancoder »

YourMatt wrote: post #61
diminoten wrote: post #44

Earlier quoted context omitted.

Going through mortgage application now, they grill the shit out of you on every little detail of your life now. They're aware of the last crash, and have done a lot to compensate.

On the other hand, I recently sold a house that received a lot of offers. Only one person actually had the down payment money. Everyone else's loans were approved, but most were people were coming with low cash and lower income than I would have expected. Some looked like irresponsible loans to me.

Mind if I ask which state? I'm asking because I live in CA and all I keep hearing is people being outbid and some times with cash offers.

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#65

Post by CyanLite2 »

skybrian wrote: post #16
H8crilA wrote: post #2

Mortgage debt will probably not be a problem in this cycle. People have this bias to remember most recent event, but it's rarely the same thing twice in a row: https://imgur.com/a/0dT7iHK Corporate debt may be: https://imgur.com/a/b54hMSg And frankly with the amount of outstanding US govt debt and underfunded pension & healthcare liabilities the USD may either get dethroned and devalued or sent into the negative inte…

Is there a reason why Japan shouldn't monetize the debt? The usual explanation is that it would cause inflation, but I'm not sure how that works for government debt that trades near 0% anyway. It's a tradeable store of value that you can trade 1:1 for money, so might as well be money?

Japan however is shrinking in population and missed the whole baby boomer generation for obvious reasons. Without the population growth, they can't grow their GDP to get their debt levels in a reasonable range.

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#66

Post by bduerst »

diminoten wrote: post #48
landryraccoon wrote: post #38

Earlier quoted context omitted.

> CN bookkeeping’s suspect... IMO Americans are biased to overweight this. It doesn't matter as long as China can keep up appearances better than other countries for long enough. Investors will happily invest in a bubble believing that they are smart enough to get out before everyone else if things go south. Bad bookkeeping doesn't keep the NBA and Activision from kowtowing to China, I don't see why it would keep peo…

Americans aren't the only ones to overweight the shady monetary policy in China, and as a result it'll not become the defacto standard like the US Dollar is, as long as that shadiness remains.

Such as who? I agree with GP and still think this is biased projection. Factors such as growing trade control over APAC and a middle class larger than the population of the U.S. only speak in favor of the Yuan. Also, what you call shady currency control can be viewed as a be a signal of ensuring stability.

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#67

Post by jariel »

landryraccoon wrote: post #38
mc32 wrote: post #5

Earlier quoted context omitted.

So if the USD becomes weak, who out there could be in a position to become stronger? I don’t see any candidate. Euro growth is weak. CN bookkeeping’s suspect...

> CN bookkeeping’s suspect... IMO Americans are biased to overweight this. It doesn't matter as long as China can keep up appearances better than other countries for long enough. Investors will happily invest in a bubble believing that they are smart enough to get out before everyone else if things go south. Bad bookkeeping doesn't keep the NBA and Activision from kowtowing to China, I don't see why it would keep peo…

[dead]

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#68

Post by roenxi »

Vysero wrote: post #11

So should I pull out on all my stocks and stuff everything into bonds then?

There are still risks. The money to pay for the 2008 recession was ultimately assembled from taxpayers and people who hold their savings in fixed income (like bonds) who have basically just lots purchasing power for a decade; especially relative to stocks.

Depending on the exact strategy it might go well or poorly.

Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up

#69

Post by Vysero »

maximente wrote: post #30
Vysero wrote: post #11

So should I pull out on all my stocks and stuff everything into bonds then?

since jan 2 2019 S&P 500 is up from 2510 => 3074 so if you read a doom porn article and liquidated on 12/30 you missed out on insane growth spurt this is no different. you have to factor in potential lost growth when you go risk averse mode; it's against our loss aversion bias but has to be done when thinking long term.

I think the general trend has been an increasingly healthy stock market since around 09 correct? That was 10 years ago, how much longer can this balloon rise? Currently I am about 70/30 stocks/bonds perhaps I should just stay put considering I really don't know.
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