Reply to: I'm 29 Years Old With Nearly $1,000,000 In Debt

[vetran]

Would make for a good subject in the Monday links ...

Indeed

[NigelJK]

As I recall, it was recently shown that much of the turmoil in the US housing market arose from middle class (in the British sense) people using easily-obtained mortgages to purchase multiple BTL properties, then walking away from their "investment" when things started going pear shaped. Though many people on lower incomes undoubtedly screwed up, they were far from being the crux of the problem.

Would make for a good subject in the Monday links ...

[scooterscot]

The working classes are about to be rogered again. And it's not their fault. Still should provide some nice buying opportunities.

[NotAllThere]

As I recall, it was recently shown that much of the turmoil in the US housing market arose from middle class (in the British sense) people using easily-obtained mortgages to purchase multiple BTL properties, then walking away from their "investment" when things started going pear shaped. Though many people on lower incomes undoubtedly screwed up, they were far from being the crux of the problem.

According to the Big Short film, it was people getting BTL, but it wasn't middle class, it was working class.

[NickFitz]

Indeed. Teaser rates they could afford. Once that ended they were stuffed.

Also playing a part was mortgage securitization. And the reuniting of retail and investment banks.

I heard of someone at Lehman. £4m house. £4m mortgage. Secured on Lehman shares. So when Lehman went, he ended up with his parents.

As I recall, it was recently shown that much of the turmoil in the US housing market arose from middle class (in the British sense) people using easily-obtained mortgages to purchase multiple BTL properties, then walking away from their "investment" when things started going pear shaped. Though many people on lower incomes undoubtedly screwed up, they were far from being the crux of the problem.

[DimPrawn]

I remember those seminars on how to become a property millionaire starting by putting down a deposit on a credit card.....

Where are they now eh?

Probably sitting on £10m worth of property equity.

[woohoo]

It's not that it is wrong as much as that financial crisis is a broader term for banking crisis.

Well as the old saying goes, if you owe the bank 80k you have a problem. Owe a million and they have the problem.

[scooterscot]

It's not that it is wrong as much as that financial crisis is a broader term for banking crisis.

[GreenMirror]

It wasn't a financial crisis, it was a banking crisis.

Wikipedia disagrees.

HTH BISDI

[GreenMirror]

I remember those seminars on how to become a property millionaire starting by putting down a deposit on a credit card.....

The ones you were invited to by a taxi driver who had done the same?

[Jog On]

I remember those seminars on how to become a property millionaire starting by putting down a deposit on a credit card.....

[scooterscot]

However, looking at Financial crisis of 2007–2008 - Wikipedia

It wasn't a financial crisis, it was a banking crisis.

A financial crisis is still to come. The financial crisis is the collapse of FIAT currencies from emerging markets, which will eventually flow into the US, UK and even may collapse the derivatives market. It is already begun with the selling of US debt. The US will be forced to increase interest rates to compensate. In so doing it'll ignite the debt crisis.

The debt crisis is something else entirely. Entitled Westerners believing they should have it all and accumulating massive debts in the process. New monied Chinese are falling into the same trap. When the consumers decide not to spend anymore the stock markets will pullback.

After all those crisis are showing signs of receding I'll consider converting my gold back into FIAT. Perhaps buy a Pied-à-terre in Chelsea to save me using awful Heathrow airport hotels.

[scooterscot]

I see Pooper deleted his nonsense post.

What nonsense post? You've lost the plot...

[GreenMirror]

I always thought the light blue touch paper moment was when Clinton observed that people on lower incomes were rarely offered mortgages, so he regulated to encourage lending to them. This ultimately became the toxic debt.

Indeed. Teaser rates they could afford. Once that ended they were stuffed.

Also playing a part was mortgage securitization. And the reuniting of retail and investment banks.

I heard of someone at Lehman. £4m house. £4m mortgage. Secured on Lehman shares. So when Lehman went, he ended up with his parents.

[NigelJK]

I see Pooper deleted his nonsense post.

However, looking at Financial crisis of 2007–2008 - Wikipedia

The US Financial Crisis Inquiry Commission reported its findings in January 2011.[52] It concluded that:

... the crisis was avoidable and was caused by:

widespread failures in financial regulation, including the Federal Reserve's failure to stem the tide of toxic mortgages;
dramatic breakdowns in corporate governance including too many financial firms acting recklessly and taking on too much risk;
an explosive mix of excessive borrowing and risk by households and Wall Street that put the financial system on a collision course with crisis;
key policy makers ill prepared for the crisis, lacking a full understanding of the financial system they oversaw;
and systemic breaches in accountability and ethics at all levels.
— Financial Crisis Inquiry Commission – Press Release – January 27, 2011

I always thought the light blue touch paper moment was when Clinton observed that people on lower incomes were rarely offered mortgages, so he regulated to encourage lending to them. This ultimately became the toxic debt.