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  #21  
Old 01-26-2008
gary4205
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Quote:
Originally Posted by SundayNiagara
He most definitely did. The story was there first, by a country mile.
The only thing he had out there was his editorial bad mouthing Torco about the already reported "boycott".

Burk is kinda known for running with rumors with or without confirmation. Case in point, a few years back he ran a story that the track here in Temple was closing after nearly 50 years.

It just so happened that the track had been sold a year before after the son of the original owner had died, and his wife decided she didn't want to keep running it. After a year, the sale to the new owner, who had been running the track on a lease basis, didn't work out. So Linda took over the operation of the track again.

In fact Burk's story broke on the same weekend of Linda's first big weekend back in charge. We don't know who put the story out there. As soon as I saw the story, I called Burk myself. I really didn't push the issue of asking who gave him the information, because I knew he wouldn't tell me.

The bottom line is this: Burk never attempted to contract the track for confirmation. The track phone was the same (at the time) and it was not hard to contact Linda. Nor was it hard to contact the fellow who had worked at buying the track. And yes, I know this because I was working for Linda at the track. I grew up at the place, literally. Clifford, the one who died, and his brother are around my age, so we all ran around together, raced together and so on.

I've never posted this before, but I feel it's about the right time to put this out.

I still read DRO. And yes, I've even fallen for some of his "scoops". I read the guy's editorials, agreeing with some and disagreeing with others. But frankly, after the last few "scoops" of his, I want to read it elsewhere also.

One thing I can tell you. When I read it on the Comp Plus site (not the forum) I know that an effort was made to verify the story, rather than scoop the world.
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  #22  
Old 01-26-2008
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dragracer3773 dragracer3773 is offline
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Quote:
Originally Posted by gary4205
OK, maybe we are heading t'ward one. The media has certainly been cheerleading for it. At some point, if you say it long enough, as they have, it will become a self fulfilling prophecy.

But if you look at the technical definition of recession, we aren't there. We have seen steady economic growth every month for years. To be a real recession, you have to have two consecutive quarters of negative growth. The unemployment numbers have risen, and that may very well indicate a recession is coming. But I can remember when 5 percent unemployment was considered full employment!

What worried me last year was the incredible growth in the stock market. It rose 2000 points. Anything that happened that fast just felt like it could lead to disaster. And yeah, it dropped as quick as it rose, but the markets still ended up showing growth for the year.

Look, I'm just a dumb old boy from Texas, but I think what needs to happen is for everyone to take a breath, slow down and pay attention. Yes, the economy has slowed, but this isn't 1980, or 1987, or 1929 for that matter. This is however an election year, and the rhetoric is flying.
Quote:
Just pay attention to your money and make decisions based on sound economic principals, and not emotion.
Gary,
With that kind of thinking the economy would have ground to a halt a couple of years ago. Where would we be without people buying houses they can't possibly afford and maxing out their credit cards. Have you seen the figures on consumer debt for last year?
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  #23  
Old 01-26-2008
gary4205
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Originally Posted by dragracer3773
Gary,
With that kind of thinking the economy would have ground to a halt a couple of years ago. Where would we be without people buying houses they can't possibly afford and maxing out their credit cards. Have you seen the figures on consumer debt for last year?
Oh, I totally agree. And if you look at the majority of the sub-prime loans that are going sideways, the applicants lied on their applications. To me, instead of bailing out these people, like the dims want to do, they should look at prosecuting them for fraud!

It is way too easy to get credit. Most of these home loans were done with little or nothing down. (we used to call those people renters) The same for interest only loans.

I would have thought the entire world learned it lesson from the 1980's. Back then adjustable rate mortgages (ARMs) were popular, because of high interest rates. When the rates went up, the same think happened as now. It was a bloodbath! Throw in the Savings and Loan issues, and we had problems.

I had just bought a home back then with a fixed rate loan. It was a new subdivision and it got so bad that homebuilders were going out of business, leaving contractors holding the bag. We had one of the safest neighborhoods going, because the banks hired off duty cops to patrol the subdivision 24 hours a day, because contractors had started coming in and pulling their stuff, like plumbing, appliances, and even HVAC systems out! Home prices took a hit back then too.

What's happened now, is people went into these ARMs, qualifying at those rates for way more house than they could afford. Many compounded the problem by doing so with little or no money down. So when their rates went up, they could no longer afford to make the payments. Being little more than renters, many have just said screw it!

The good news is almost 90 percent of the sub-prime loan holders are making their payments as agreed. But it only takes 10-15 of these loans failing to send shock waves through the entire country. What kills me is interest rates were already at historically low levels. There was absolutely no justification for bringing ARMs back. Interest rates only had one way to go, UP!

Honestly though, what scares me the most is the government WILL do something. The dims, and some Republicans are bound and determined to bail these home owners out. That would be a disaster. You would be telling the nation that never mind you signed a legally binding contract. Never mind you were told that in the case of an ARM, your rates and payment "might" go up, and in the case of the teaser rates they WOULD go up. Never remind the idea of personal responsibility. The Nanny State will hold your hand and take care of you! So, in the future, when people do stupid things, like buy more than they can afford, they will look to government to come to the rescue again.

As cold hearted as this may sound, a bailout would absolutely undermine our entire banking system. It would basically void the concept of legal contracts, such as the one these people signed.

What needs to happen, is the banks need to write their loses off, and move forward. As in the past, once this happens, things will get back to normal. In the mean time, the inventory of unsold homes and the amount of foreclosures will rise, lowering real estate values, and making credit harder to get.

Hopefully, THIS TIME the banking industry will learn it's lesson and stop with these ARMs and no money down home loans. This is one place where government DOES need to step in. If not, we'll see this again.
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  #24  
Old 01-26-2008
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Willy Willy is offline
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Quote:
Originally Posted by gary4205
OK, maybe we are heading t'ward one. The media has certainly been cheerleading for it. At some point, if you say it long enough, as they have, it will become a self fulfilling prophecy.

But if you look at the technical definition of recession, we aren't there. We have seen steady economic growth every month for years. To be a real recession, you have to have two consecutive quarters of negative growth. The unemployment numbers have risen, and that may very well indicate a recession is coming. But I can remember when 5 percent unemployment was considered full employment!

What worried me last year was the incredible growth in the stock market. It rose 2000 points. Anything that happened that fast just felt like it could lead to disaster. And yeah, it dropped as quick as it rose, but the markets still ended up showing growth for the year.

Look, I'm just a dumb old boy from Texas, but I think what needs to happen is for everyone to take a breath, slow down and pay attention. Yes, the economy has slowed, but this isn't 1980, or 1987, or 1929 for that matter. This is however an election year, and the rhetoric is flying. Just pay attention to your money and make decisions based on sound economic principals, and not emotion.
Gary, from what I have experienced, a gradual slowdown has been happening for about 12 months. It seems to have accelerated recently with the confluence of all the bad loans that big banks are holding (these guys should know better), big consumer debt (most don't know better), depressed new home construction, and higher energy and food costs. The current bear stock market finally is now reflecting the reality of the situation. (My CFA says buy, stocks are cheap.)
So I don't believe it's cheerleading, or a preference on the part of the media. Granted, I don't watch news on the TV, but the print, web and radio news outlets which I prefer, report what's going on in business and the economy with facts, practicality, and even handedly when opinion is offered.
As for me, as soon as the renewal for my weekend pass to the Nationals in Joliet gets here, They will have my order. And the lousy situation my employer is in? A good part of it's his own making. I personally can weather this storm, and in fact will be replacing "Old Blue", my '92 Ranger. Besides stocks, now is also the time to buy a vehicle.
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  #25  
Old 01-26-2008
Ron Burke Ron Burke is offline
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gary,

The banks never learn. It seems like every 15 or 20 years the exact same scenario repeats itself. It's a little worse now because of the way local banks sold the loans packaged to large financial institutions.

For those who have not seen this before it starts as:

a. House prices start going up at a rapid rate usually because of some government action like restricting building or the Fed bank lowering the interest rate too low for current financial conditions.

b. Banks start making low or interest only (ballon) loans figuring that by the time people default the property will be worth a lot more so their loan is covered and then some.

b.1 (New wrinkle) local banks package their loans into securities and sell them to larger financial institutions who sell these securities to the general public. This gives the local banks no incentive to adequately screen loan applicants as they have no more skin in the game after they unload the mortgages upward.

c. Financially unsophisticated people start buying houses they cannot possibly afford figuring they will flip them in a year.

d. Other financially unsophisticated people take out second mortgages/new larger mortgages and spend the money on non revenue producing items.

e. Prices stop going up and all those in b,c and d start to get nervous. Some attempt to sell which gluts the market and according to the law of supply and demand housing prices start to fall.

f. Asshole politicians attempt to ride to the rescue by bailing out all those who screwed up thereby ensuring the same thing will happen again 15 or 20 years down the road.

g. In about 2023 go back to a. and start all over with the possible exception of repackaging large amount of loans into securities.
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  #26  
Old 01-26-2008
gary4205
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Quote:
Originally Posted by Willy
Gary, from what I have experienced, a gradual slowdown has been happening for about 12 months. It seems to have accelerated recently with the confluence of all the bad loans that big banks are holding (these guys should know better), big consumer debt (most don't know better), depressed new home construction, and higher energy and food costs. The current bear stock market finally is now reflecting the reality of the situation. (My CFA says buy, stocks are cheap.)
So I don't believe it's cheerleading, or a preference on the part of the media. Granted, I don't watch news on the TV, but the print, web and radio news outlets which I prefer, report what's going on in business and the economy with facts, practicality, and even handedly when opinion is offered.
As for me, as soon as the renewal for my weekend pass to the Nationals in Joliet gets here, They will have my order. And the lousy situation my employer is in? A good part of it's his own making. I personally can weather this storm, and in fact will be replacing "Old Blue", my '92 Ranger. Besides stocks, now is also the time to buy a vehicle.
You got it absolutely right, except one thing. The media has been harping on how bad the economy is since oh...about January 2001. However, the last couple of years it's been a constant drumbeat. It absolutely has had some effect on the economy.

Things have indeed slowed down. The mortgage woes are the biggest part of it. It effects everything, as does the price of gas. Just think, if good old Bill Clinton hadn't vetoed drilling in ANWAR, or if later equally good old John McCain hadn't voted against it ( the DECIDING vote btw) while we had both houses of Congress and the White House, we might not be as worried about gas prices. But that's spilled milk.

You have the right idea though. Now is the time to buy stuff, if you can afford it. Every American car manufacturer will be throwing rebates and other incentives at the consumer as fast as they can think them up. I'm sure it will be easy to find all kind of deals out there on all kinds of stuff. It's gonna be a bumpy ride, but we've been there before.
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  #27  
Old 01-26-2008
gary4205
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Quote:
Originally Posted by Ron Burke
gary,

The banks never learn. It seems like every 15 or 20 years the exact same scenario repeats itself. It's a little worse now because of the way local banks sold the loans packaged to large financial institutions.

For those who have not seen this before it starts as:

a. House prices start going up at a rapid rate usually because of some government action like restricting building or the Fed bank lowering the interest rate too low for current financial conditions.

b. Banks start making low or interest only (ballon) loans figuring that by the time people default the property will be worth a lot more so their loan is covered and then some.

b.1 (New wrinkle) local banks package their loans into securities and sell them to larger financial institutions who sell these securities to the general public. This gives the local banks no incentive to adequately screen loan applicants as they have no more skin in the game after they unload the mortgages upward.

c. Financially unsophisticated people start buying houses they cannot possibly afford figuring they will flip them in a year.

d. Other financially unsophisticated people take out second mortgages/new larger mortgages and spend the money on non revenue producing items.

e. Prices stop going up and all those in b,c and d start to get nervous. Some attempt to sell which gluts the market and according to the law of supply and demand housing prices start to fall.

f. Asshole politicians attempt to ride to the rescue by bailing out all those who screwed up thereby ensuring the same thing will happen again 15 or 20 years down the road.

g. In about 2023 go back to a. and start all over with the possible exception of repackaging large amount of loans into securities.
100 percent, totally correct.

Is there some kind of full moon out there or something? I can't believe you and I are in total agreement!
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  #28  
Old 01-26-2008
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Rowdy Rowdy is offline
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You guys all make good points. What people in general need to understand is that they shouldn't spend or borrow more than they can repay. If people would just understand that simple principal there wouldn't have ever been such a thing as sub-prime loans and the housing market and lenders wouldn't be in the shape they now find themselves in. Once all this bad debt is accounted for and absorbed by the market the economy will rebound. It might just take a while.
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  #29  
Old 01-26-2008
SundayNiagara
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Quote:
Originally Posted by gary4205
The only thing he had out there was his editorial bad mouthing Torco about the already reported "boycott".

Burk is kinda known for running with rumors with or without confirmation. Case in point, a few years back he ran a story that the track here in Temple was closing after nearly 50 years.

It just so happened that the track had been sold a year before after the son of the original owner had died, and his wife decided she didn't want to keep running it. After a year, the sale to the new owner, who had been running the track on a lease basis, didn't work out. So Linda took over the operation of the track again.

In fact Burk's story broke on the same weekend of Linda's first big weekend back in charge. We don't know who put the story out there. As soon as I saw the story, I called Burk myself. I really didn't push the issue of asking who gave him the information, because I knew he wouldn't tell me.

The bottom line is this: Burk never attempted to contract the track for confirmation. The track phone was the same (at the time) and it was not hard to contact Linda. Nor was it hard to contact the fellow who had worked at buying the track. And yes, I know this because I was working for Linda at the track. I grew up at the place, literally. Clifford, the one who died, and his brother are around my age, so we all ran around together, raced together and so on.

I've never posted this before, but I feel it's about the right time to put this out.

I still read DRO. And yes, I've even fallen for some of his "scoops". I read the guy's editorials, agreeing with some and disagreeing with others. But frankly, after the last few "scoops" of his, I want to read it elsewhere also.

One thing I can tell you. When I read it on the Comp Plus site (not the forum) I know that an effort was made to verify the story, rather than scoop the world.

Plain and simple: Burk broke the Evan Knoll story first...Nuff said!
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  #30  
Old 01-26-2008
SundayNiagara
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"if good old Bill Clinton hadn't vetoed drilling in ANWAR, or if later equally good old John McCain hadn't voted against it"

**** good thing they did!
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