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How many of you are re-watching The Big Short?

https://www.bbc.co.uk/iplayer/episode/b06vq3yn/the-big-short

 

I ask - because I am -- and I am LOVING it......  LOVING it!!

AND --- Do any of you out there think - as you watch that lovely film 2-3 times  - [the more you watch the more you see how HPC is THE HOLY GRAIL] --- how many of you are thinking to yourselves ---

THE UK IS YET TO HAVE IT'S BIG SHORT MOMENT.  THE UK "AVOIDED" THE REALLY BIG SHORT MOMENT.  THE UK OBFUSCATED AND SPUN AND FRAUDULENTLY & IRRESPONSIBLY PUT INTEREST RATES TO THE LOWEST IN HISTORY FOR WELL OVER A DECADE --- AND IT HAS PRINTED MONEY - AND IT HAS ALOWED THE SEISMIC MASSIVE CRIMINALITY OF "HELP TO BUY" - - [etc., etc...] -  AND SO THE BIG SHORT MOMENT HAS BEEN ENDLESSLY BEEN PUT OFF -- THE CAN HAS BEEN KICKED AND KICKED AND KICKED DOWN THE ROAD --- --- AND MAYBE WE'RE JUST BEGINNING TO HAVE OUR 'BIG SHORT' EVENT?????????

Edited by eric pebble

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22 minutes ago, eric pebble said:

How many of you are re-watching The Big Short?

..//..

AND MAYBE WE'RE JUST BEGINNING TO HAVE OUR 'BIG SHORT' EVENT?????????

March 1st 2007!!!!!!!!!

https://money.cnn.com/2007/02/28/magazines/fortune/subprime.fortune/index.htm

 

 

11th February 2004!!!!!!!!    THAT'S WHEN I TWIGGED ABOUT THE WHOLE THING GUYS!!!!!  WHEN I READ THAT - AND HAD WATCHED THAT BBC MONEY PROGRAMME ON MORTGAGE FRAUD JUST A FEW MONTHS BEFORE.....

http://news.bbc.co.uk/1/hi/business/3478635.stm

 

IN 3 PARTS:

 

 

 

 

Edited by eric pebble

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8 hours ago, eric pebble said:

March 1st 2007!!!!!!!!!

https://money.cnn.com/2007/02/28/magazines/fortune/subprime.fortune/index.htm

 

 

11th February 2004!!!!!!!!    THAT'S WHEN I TWIGGED ABOUT THE WHOLE THING GUYS!!!!!  WHEN I READ THAT - AND HAD WATCHED THAT BBC MONEY PROGRAMME ON MORTGAGE FRAUD JUST A FEW MONTHS BEFORE.....

http://news.bbc.co.uk/1/hi/business/3478635.stm

 

IN 3 PARTS:

 

 

 

 

14 years ago and they have managed to prop it up. Yes, a crash may happen but the plates have been spun for a generation. So when a crash does happen ,

many on here will be a lot older 

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The next step is resolving a bank.

Im expecting sldemore to go under, but its not really big.

The 2007 delayed moment will be when Nationwide goes under.

CoventryBS is equal favourite but its not well known or big enough.

Im alwayd watching the sofly softly BoE approach of digging themsekves and some banks out if the massive hole.

Theres an late entry io btler i know. I get an update every 6 months.

Im buying an investment - 2014ish.

Im making 200 profit - spread between rent and mortgage payment.

Ive remortgaged - 2016ish.

I cant remortgage, my svr term ends. Ive extract 100k from my OO so i can get a good rate. 2018.

Ive eome monet left over. Ill get anotyer btl, i need to make up the extra  ost on tge oo mortgage.

....

Im awaiting tge sh1t n fan moment when they do tax return.

Im also expecting the loss of a tenant soon.

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32 minutes ago, spyguy said:

 

 

Theres an late entry io btler i know. I get an update every 6 months.

Im buying an investment - 2014ish.

Im making 200 profit - spread between rent and mortgage payment.

Ive remortgaged - 2016ish.

I cant remortgage, my svr term ends. Ive extract 100k from my OO so i can get a good rate. 2018.

Ive eome monet left over. Ill get anotyer btl, i need to make up the extra  ost on tge oo mortgage.

....

Im awaiting tge sh1t n fan moment when they do tax return.

Im also expecting the loss of a tenant soon.

What area did they buy in, do you know how much they paid and what it is wotrh now?

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Love the big short. However, I think that was a true black swan and not likely to repeated in the same manner. 

My understanding is that there were a few things at play.

1. Liar loans (sub-prime) at high or zero deposit LTVs

2. Securitisation of the debt, that is packaging and reselling of the debt into CDOs and flogged to muppet public

3. Credit ratings wrongly (whether through fraud or incompetence) applying top credit ratings to a product underpinned by a stripper's ability to make the repayments on houses she couldn't afford to buy. 

4. To a lesser extent the CDS market being hugely underpriced and therefore all agreements creating massive losses for the losing party.

Once t started to wobble the bank's flow of fresh funds for lending dried up because they couldn't securitise. POp. 

These days I think UK lenders are more prudent. They carry out affordability, stress, and income tests. Not to the high loan multiples could cause some issues, and I agree that BTL is a problem too. 

But let's say I'm talking crap and it does happen. What will the govt and the C.B.s do? The largest financial crash and the longest recession in living memory and property prices fell 20% peak to trough before rapidly climbing again, stagnating and then starting their reach for the skies in 2013. 

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I've been here since the old open forum. I can remember discovering the wonders of securitisation,(2006 I think) from someone on here. From that moment it was obvious where the problems would start, the real question was when.

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Something on here made me think about the communist manifesto the other day so I reread it. What I find incredible is that we have been hurtling from crash to crash since before it was written in 1848... I would like to say "so we will be ok" but terrible things have happened between now and 1848 so that's not so reassuring. I think our only hope is to figure out an alternative to traditional capitalism and in some way i think this is exactly what the debt/financialised economy thing we have going on is. Unfortunately, substituting genuine capital returns for a zero sum game of musical asset chairs doesn't strike me as a satisfactory alternative. Anyway here is the extract I have in mind:

It is enough to mention the commercial crises that by their periodical return put the existence of the entire bourgeois society on its trial, each time more threateningly. In these crises, a great part not only of the existing products, but also of the previously created productive forces, are periodically destroyed. In these crises, there breaks out an epidemic that, in all earlier epochs, would have seemed an absurdity — the epidemic of over-production. Society suddenly finds itself put back into a state of momentary barbarism; it appears as if a famine, a universal war of devastation, had cut off the supply of every means of subsistence; industry and commerce seem to be destroyed; and why? Because there is too much civilisation, too much means of subsistence, too much industry, too much commerce. The productive forces at the disposal of society no longer tend to further the development of the conditions of bourgeois property; on the contrary, they have become too powerful for these conditions, by which they are fettered, and so soon as they overcome these fetters, they bring disorder into the whole of bourgeois society, endanger the existence of bourgeois property. The conditions of bourgeois society are too narrow to comprise the wealth created by them. And how does the bourgeoisie get over these crises? On the one hand by enforced destruction of a mass of productive forces; on the other, by the conquest of new markets, and by the more thorough exploitation of the old ones. That is to say, by paving the way for more extensive and more destructive crises, and by diminishing the means whereby crises are prevented.

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I suppose my point is you are probably right about another crash coming. But historically, that's to be expected. You might as well get on as best you can to prevent it, prepare for it or ignore it. Otherwise you could just spend your whole life waiting for the next disaster. 

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Not me, I won't be watching it. 

Do not want to be reminded that 100's if not 1000's of major financial criminals got off without even a slapped wrist and then had their losses recouped by us the taxpayer. Where the biggest mass fraud in the form of mortgage self-certs was not only ignored to this day, but were rewarded with equity growth and then bailout interests rates and of course homes to live in.

Nope, I am having too good a Christmas to be reminded that crime does pay in the UK

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1 hour ago, prozac said:

What area did they buy in, do you know how much they paid and what it is wotrh now?

Doesnt matter what they paid.

Remortgaging it is sucking all the equity out of their OO.

Thats seems to be the plan, as much as theres a plan.

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1 hour ago, adarmo said:

Love the big short. However, I think that was a true black swan and not likely to repeated in the same manner. 

My understanding is that there were a few things at play.

1. Liar loans (sub-prime) at high or zero deposit LTVs

2. Securitisation of the debt, that is packaging and reselling of the debt into CDOs and flogged to muppet public

3. Credit ratings wrongly (whether through fraud or incompetence) applying top credit ratings to a product underpinned by a stripper's ability to make the repayments on houses she couldn't afford to buy. 

4. To a lesser extent the CDS market being hugely underpriced and therefore all agreements creating massive losses for the losing party.

Once t started to wobble the bank's flow of fresh funds for lending dried up because they couldn't securitise. POp. 

These days I think UK lenders are more prudent. They carry out affordability, stress, and income tests. Not to the high loan multiples could cause some issues, and I agree that BTL is a problem too. 

But let's say I'm talking crap and it does happen. What will the govt and the C.B.s do? The largest financial crash and the longest recession in living memory and property prices fell 20% peak to trough before rapidly climbing again, stagnating and then starting their reach for the skies in 2013. 

Us and UK mortgage markets are v different.

There no such thing as subprime in tge uk, or wasnt.

Us mortgages, to be put in fannie or freddie mac holdings, must meet earning, debt and credit scoring - prime lending.

Us subprime were outside of gov mortgage debt pools, which is why they exploded.

The creation of synthetic cdo just caused more problems.

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53 minutes ago, spyguy said:

Doesnt matter what they paid.

Remortgaging it is sucking all the equity out of their OO.

Thats seems to be the plan, as much as theres a plan.

You think they will soon have no assets.

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1 hour ago, spyguy said:

Us and UK mortgage markets are v different.

There no such thing as subprime in tge uk, or wasnt.

Us mortgages, to be put in fannie or freddie mac holdings, must meet earning, debt and credit scoring - prime lending.

Us subprime were outside of gov mortgage debt pools, which is why they exploded.

The creation of synthetic cdo just caused more problems.

I have to correct you there - it was small but it definitely grew in the run up to the crisis. Merrill Lynch bought in shortly before everything blew up:

https://www.mortgagestrategy.co.uk/issues/8-november-2004/merrill-lynch-acquires-mortgages-plc/

Why did an investment bank start issuing mortgages?  It was to generate the mortgages so that they could be collateralised. A classic case of the tail wagging the dog. And the margins on subprime were so much higher. Until they failed, of course. 

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2 hours ago, dom said:

I've been here since the old open forum. I can remember discovering the wonders of securitisation,(2006 I think) from someone on here. From that moment it was obvious where the problems would start, the real question was when.

Me too. The old threads are still out there in the history. A clear history of a whole website that had identified housing as the problem and CDOs as central to the issue. 

Watching the Big Short you'd think that only a handful of people in the entire world had a clue what was going on. 

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45 minutes ago, prozac said:

You think they will soon have no assets.

Yes.

Their 'investments' are sucking in their OO equity.

They had to remortgage as the apr went from 3% to 6%, needing them to put about 300m cash to cover the mortgage. Could not remortage at all on the equity they had.

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27 minutes ago, Ah-so said:

I have to correct you there - it was small but it definitely grew in the run up to the crisis. Merrill Lynch bought in shortly before everything blew up:

https://www.mortgagestrategy.co.uk/issues/8-november-2004/merrill-lynch-acquires-mortgages-plc/

Why did an investment bank start issuing mortgages?  It was to generate the mortgages so that they could be collateralised. A classic case of the tail wagging the dog. And the margins on subprime were so much higher. Until they failed, of course. 

Its not sub prime though. Thats US and was connected to low FICO scores, which prevented loan being folded into usgov backed bonds.

The problem with pre MMR UK mortgages is there was no BoE definition of untouchable mortgagee.

Thats insane.

Up to BS demute, most mortgage providors were constrained on how much they could lend.

Your link mentions non conforming, which is as close as it came in the uk- self cert, impaired credit score, self employed.

 

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5 minutes ago, spyguy said:

Its not sub prime though. Thats US and was connected to low FICO scores, which prevented loan being folded into usgov backed bonds.

The problem with pre MMR UK mortgages is there was no BoE definition of untouchable mortgagee.

Thats insane.

Up to BS demute, most mortgage providors were constrained on how much they could lend.

Your link mentions non conforming, which is as close as it came in the uk- self cert, impaired credit score, self employed.

 

Fine - subprime was a particularly US-specific standard, and no equivalent of Fannie Mae and Freddie Mac, so of course we did not have it. But we did have a growth in mortgages being issued to be people with low credit scores in the UK, although not to the same extent.

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1 hour ago, spyguy said:

Yes.

Their 'investments' are sucking in their OO equity.

They had to remortgage as the apr went from 3% to 6%, needing them to put about 300m cash to cover the mortgage. Could not remortage at all on the equity they had.

I assume they are not in london 

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25 minutes ago, spyguy said:

No

The strange thing is, this is area specific, in London house prices have risen so much that the result would be different, even using the same numbers.

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10 hours ago, spyguy said:

Us and UK mortgage markets are v different.

There no such thing as subprime in tge uk, or wasnt.

Us mortgages, to be put in fannie or freddie mac holdings, must meet earning, debt and credit scoring - prime lending.

Us subprime were outside of gov mortgage debt pools, which is why they exploded.

The creation of synthetic cdo just caused more problems.

we might not call it subprime but Northern Rock lending 125% to a bloke who lied about his earnings and then securitising that little bundle of defaulting-Deanos with the others to get the cash to lend to more would probably qualify?

mortgage markets are different, in the USA for example it is standard to have a 25 year fixed rate. 

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37 minutes ago, GreenDevil said:

UK Subprime is HTB.. And its gonna blow soon enough when we hard brexit.

I'm a little slow these days. Can you tell me why leaving with no deal would cause HTB to blow up?

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37 minutes ago, GreenDevil said:

UK Subprime is HTB.. And its gonna blow soon enough when we hard brexit.

Spot on! I’ve never looked at HTB like that, and the timing for repayments couldn’t have been timed better (from a HPC perspective).

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  • 295 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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