[DeTomaso] Very little Pantera content-what triggered it

Asa Jay Laughton asajay at asajay.com
Fri Nov 20 09:56:23 EST 2009


So it had more an appearance of being coincidental.  I can see that.  
Your explanation seems sound.

Asa Jay Laughton, MSgt, USAFR, Retired

& Shelley Marie
Spokane, WA

1971 Mach I Mustang  [ASA JAY]
1973 Pantera L 5533  [ASASCAT]
    
******************************     
http://www.asajay.com
http://www.teampanteraracing.com
  



Peter Kovacs wrote:
> Part of it was perception (self fulfilling prophecy) and part of it was unique financial instruments that defied the fundamentals and caused people to ignore common sense. When people chose to believe housing prices were going to go up, everyone tried to buy and the prices skyrocketed, so more wanted a piece of that and they went up more. Buyers, sellers and lenders ignored the relationship between true supply, demand, need for housing, income for the area, etc,etc,etc. Lenders came out with unique flexible programs and they performed. They performed not because they were responsible and made sense, but because if a owner got into trouble, they could refinance or sell and make a handsome profit. As long as 3 items were in place, the most irresponsible loans still performed. Stable or decreasing rates, increasing values, and stable or easing qualifications. As the economy heated up, everyone got on board. Auto manufacturers and dealers got used to
>  sales boosted by excess equity spending. Home Depot did the same etc. As the economy heats up, the short term rates are raised to keep inflation under control.
>
> So when the rates ticked up, some of the adjustable started to show their true risk. So the most flexible of programs were pulled. Those loans adjusted up and the borrowers had no new loan to exit to. The either listed their home or lost it....or both. Increasing supply and tightening guidelines caused people to think maybe there was a bubble. 'Maybe it isn't a good time to buy'. Demand went down, supply went up and guidelines tightened further. As the portion of non fixed loans adjusted, these people had to adapt. Some could and some couldn't. 
>
> The self fulfilling prophecy turned the corner and now runs the other way. People in fixed loans they can afford, decide that they don't want to pay back more than the property is worth. Blame it on the 'subprime mortgage crisis and short sell or walk away. Values drop, and the cycle continues. IRS removes 'debt relief' under certain circumstances as a taxable event, more people walk away or short sell. Autodealers, Home Depot employees lose their incomes. The cycle continues and the cities lose tax revenue and lay off teachers and police etc, and their 30 yr fixed full doc loans go into default too.
>
> Some rather unscrupulous people do short sales to uncles pretending not to be related, and get into a $150k debt leaving the previous lender to absorb $200k of the $350k debt. The market here is still ignoring the fundamental of true supply, demand, need for housing, income for the area but are way under valued rather than overvalued. With most builders out of business and the ability to purchase for far less than the cost to construct, we are already working on our next housing shortage while the values are still going down.
>
> So in my opinion, gas prices had little or nothing to do with it. They we just a manipulated commodity just like housing had been just before it.
>
> Any questions? 
>  
> Peter Kovacs
> 209 345-6708 
> 209 436-2000 fx
>
>
>
>
> ________________________________
> From: Asa Jay Laughton <asajay at asajay.com>
> To: detomaso at realbig.com
> Sent: Thu, November 19, 2009 9:20:52 PM
> Subject: Re: [DeTomaso] Very little Pantera content
>
> I keep wondering what triggered it all.  Because it seems to me nothing 
> really started tanking until the price of gas went sky high last year.  
> I know I may be way off here, it's just a "perception" thing.
>
> So, the price of gas goes up, but people still need to get to work, so 
> they pay the higher gas price (if they can't find alternatives to work, 
> like the bus or carpools, etc.).  So those poor shmucks now have less to 
> pay against their home mortgage, eventually falling behind in their 
> payments.
>
> Fuel surcharges for shipping goods around the country go up.  It now 
> costs companies more to bring us goods.  They raise prices but now 
> people are buying less, so they have to lay off people.  Now people 
> can't pay their mortgages at all.  The banking industry starts calling 
> in loans, people can't pay, the banks start to panic.  (kind of like a 
> run on banks, but in reverse).......  and the economy tanks.
>
> So what do you think triggered it all?
> I just hope to be able to drive my Pantera next year.
>
> Asa Jay
>
> Asa Jay Laughton, MSgt, USAFR, Retired
>
> & Shelley Marie
> Spokane, WA
>
> 1971 Mach I Mustang  [ASA JAY]
> 1973 Pantera L 5533  [ASASCAT]
>     
> ******************************    
> http://www.asajay.com
> http://www.teampanteraracing.com
>   
>
>
>
> Bill Lewis wrote:
>   
>> ------Back in the 1980's we were on two commercial loans - floating prime plus 2.  At one point we were paying 18% - folks, that's a lot of money on a commercial loan!!------Did anyone read "Rich Dad, Poor Dad?"  That is one of my all-time favorite books.------And, is anyone, besides me, hearing about trouble brewing in the commercial real estate market - big trouble!  --Bill
>>
>>
>>
>>
>>
>>   
>>     
>>> Date: Thu, 19 Nov 2009 19:14:15 -0800
>>> From: kenn_green at yahoo.com
>>> To: peter-kovacs at sbcglobal.net; pantdino at aol.com; detomaso at realbig.com; teampantera at yahoo.com
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>> The truth is that all the lenders were telling people:
>>>   
>>> "don't worry, I'll just get you another (negatively amortized, variable rate, low doc) loan when this loan adjusts"
>>>   
>>> then house prices dropped, and oh well ...
>>>   
>>> Ken
>>>
>>> --- On Thu, 11/19/09, Mad Dog Antenucci <teampantera at yahoo.com> wrote:
>>>
>>>
>>> From: Mad Dog Antenucci <teampantera at yahoo.com>
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>> To: "Peter Kovacs" <peter-kovacs at sbcglobal.net>, pantdino at aol.com, detomaso at realbig.com
>>> Date: Thursday, November 19, 2009, 7:01 PM
>>>
>>>
>>> Hmmm, blaming the people who didn't know what the hell they were signing is like blaming everyone who is out of a job....or blaming all those people whose 401K's became 201K's overnight.
>>>
>>> Credit just got too easy during the last 20-25 years......Soon as I got a job when I came home from Nam I applied for an American Express card.....they turned me down :-)
>>>
>>> When I bought my first house mortgage interest was 12-14%.....if you were lucky you could get a VA or FHA ZERO down loan but the interest rate in those days was still 12-14%.... I was happy to get a loan with zero down and I suspect the overwelming majority of people during the previous 5 or so years as you say Peter would have done what they could have to buy a home....it is after all the American dream.........turned into a nightmare for many when those subprime loan mortgage payments doubled and tripled. Yea, shame on those really dumb people.......shame on them.
>>>
>>>
>>> Mad Dawg Antenucci 
>>> Team Pantera Racing 
>>> The 1st & still the only vintage race team in open road racing 
>>> www.teampanteraracing.com
>>>
>>>
>>>
>>>
>>> ________________________________
>>> From: Peter Kovacs <peter-kovacs at sbcglobal.net>
>>> To: pantdino at aol.com; detomaso at realbig.com
>>> Sent: Thu, November 19, 2009 6:12:21 PM
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>> ....and even if the mortgage originator explained the terms in detail (which rarely happened), buyers often took the plunge anyway because they were so sure that the value would go up $100k the next year and the terms of the mortgage were irrelevant compared to the profit they would make.
>>>
>>> Peter Kovacs
>>> 209 345-6708 
>>> 209 436-2000 fx
>>>
>>>
>>>
>>>
>>> ________________________________
>>> From: "pantdino at aol.com" <pantdino at aol.com>
>>> To: detomaso at realbig.com
>>> Sent: Thu, November 19, 2009 4:22:48 PM
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>>
>>> The key here was that the bad mortgages were being bundled and sold as AAA-rated instruments.  Had they been accurately described as "worse than junk" few people / institutions would have bought them and the game would have ended because the banks would not have been able to sell them on.
>>>
>>> The notion that "the instruments were too complex to understand" or that "no one could have done anything" is nonsense and is insulting because it assumes people are dumb enough to believe it.
>>>
>>>
>>>
>>> -----Original Message-----
>>> From: Mad Dog Antenucci <teampantera at yahoo.com>
>>> To: Daniel Miller <classicmusclecars at att.net>; pantdino at aol.com; detomaso at realbig.com
>>> Sent: Thu, Nov 19, 2009 4:12 pm
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>>
>>>
>>>
>>> Someone said a while back there was plenty of blame to go around......and I agree.....Greed drove allot of decisions.....those who were not just unqualified for the loans, but those in banks who wrote the loans, those who reviewed and approved the loan packages, the appraisers, inspecters, no regulations and Greenspan who was part of the problem during Clinton and Bush years recently said, he doesn't think he could have done anything to stop it!!!
>>>
>>> Which takes us back to putting some of these people in jail might be  a good start.
>>>   
>>> Mad Dawg Antenucci 
>>> Team Pantera Racing 
>>> The 1st & still the only vintage race team in open road racing 
>>> www.teampanteraracing.com
>>>
>>>
>>>
>>>
>>> From: Daniel Miller <classicmusclecars at att.net>
>>> To: pantdino at aol.com; detomaso at realbig.com
>>> Sent: Thu, November 19, 2009 3:58:48 PM
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>> Actually even most regular mortgage bankers knew what was going to come down the pike.  I know several and they told me repeatedly that it was going to be ugly when the loans all started changing terms.  And they dealt with John Q. Public every day.  But they still made the loans, knowing what they were doing, and made lots of money and.... well we all know the rest.  Dan Miller in San Diego. 
>>>
>>>
>>>
>>>
>>> ________________________________
>>> From: "pantdino at aol.com" <pantdino at aol.com>
>>> To: detomaso at realbig.com
>>> Sent: Thu, November 19, 2009 1:22:50 PM
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>>
>>> My feeling is that some people should go to jail.
>>> My understanding is that the grade BBB loans made to people with no proven income were rebundled as AAA -rated instruments and sold to pension plans and investors.
>>>
>>> In my simple-minded thinking that is fraud and someone should go to jail.
>>>
>>> Likewise the CEOs who walked away with hundreds of millions of dollars and ruined the economy.  They knew what would happen. They should do time
>>>
>>> Jim Oddie
>>>
>>>
>>> -----Original Message-----
>>> From: Ken Green <kenn_green at yahoo.com>
>>> To: detomaso at realbig.com; pantdino at aol.com
>>> Sent: Thu, Nov 19, 2009 1:00 pm
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>>
>>>
>>>
>>> Jim,
>>>
>>>     It's easy to skim a very small percentage of a huge amount of money.  
>>>
>>>     The problem is that the system allowed people to place huge bets, and leave the game with others holding the bag.  I doubt that the people who lost millions in the last year had any idea that their "investments" were being gambled to make or insure loans for over priced property bought by people who clearly could not afford what they were buying.  The way it was explained to me is that killer is that the FED loaned money to lenders and the lenders loaned that money and exposed all of us to huge losses.
>>>
>>>     For example, I suspect that the president of Lehman Brothers had a bonus program that paid him something like $500,000,000 over the past 9 years if he met certain goals.  The risks taken were not part of the formula.  He conveniently ignored warnings that it wasn't a good idea to guarantee loans that were almost certain to go into default.  I don't know if he broke any laws, but what he did to make huge bucks probably destroyed the financial security of millions of other Americans.  I'm sure the hundreds of millions he made have helped him to live with what he did.  
>>>
>>>     I suspect that what happened could be explained to the nation (and damn well should be) but the government is protecting someone.  If someone else can explain what happened better, I'd appreciate it.
>>>
>>> Ken
>>>
>>>
>>>
>>> --- On Thu, 11/19/09, pantdino at aol.com <pantdino at aol.com> wrote:
>>>
>>>
>>> From: pantdino at aol.com <pantdino at aol.com>
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>> To: detomaso at realbig.com
>>> Date: Thursday, November 19, 2009, 12:23 PM
>>>
>>>
>>>
>>> "Down here that means that you 
>>> work for what you have"
>>>
>>> I'm just curious-- does the "working for what you have" idea apply to the 1000 Goldman Sachs employees who each got $1 Million "bonuses" this year?  Does everyone feel the work they do is so difficult and contributes so much to society that that kind of money is justified?
>>>
>>> My feeling is that just because people have figured out a legal scam to make them rich does not mean it is OK.
>>>
>>> Jim Oddie
>>>
>>>
>>>
>>> -----Original Message-----
>>> From: Bill Lewis <lotus0005 at hotmail.com>
>>> To: cuvee at sbcglobal.net; detomaso at realbig.com
>>> Sent: Wed, Nov 18, 2009 4:22 pm
>>> Subject: Re: [DeTomaso] Very little Pantera content
>>>
>>>
>>>
>>>     Curt, I am in Texas, and I only have one friend/acquaintance who admits to 
>>> eing a Democrat.  We are solid middle class.  Down here that means that you 
>>> ork for what you have, and don't want your money going to those who might not 
>>> hoose to work as hard.
>>>     My comment to my one Dem friend, Carl, is, why do I get hundreds of email 
>>> orwards that put down or make fun of the Dems, but so far he has only sent me 
>>> ne of the other.
>>>     I know the commentator won't let us go too far with this thread, but I am 
>>> eally confused about "who" is a Dem - they seem to be a strange crew of 
>>> edfellows.  How can you be a serious Catholic and be Pro-chose?
>>>     And, as to Panteras, I have a question about wheels - 17's & 18's.      
>>> --Bill
>>>
>>>
>>>     
>>>       
>>>> Date: Wed, 18 Nov 2009 10:26:53 -0800
>>>>       
>>>>         
>>> From: cuvee at sbcglobal.net
>>> To: detomaso at realbig.com
>>> Subject: [DeTomaso] Very little Pantera content
>>>
>>> OK... first let me say I'm not looking for a pissing match! I don't care what 
>>> ide of the fence your on.
>>>   
>>> Just asking a simple question....hows Pres. B.O.s Hope and Change working for 
>>> ou?
>>>   
>>> Working or Not Working?
>>>   
>>> Now the Pantera content...Hope and Change has cut my Pantera activity down to 
>>> lim and none.
>>>   
>>> Curt 
>>> _______________________________________________
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