Came close. Will we be back?

"We were in a plane flown by pilots who didn't know what was going on. Eventually it was going to crash"

Well, we had our 20% euphoric rise off the lows after the governments of the world gave it everything they had. Assuming that was it, now what?

You gotta believe the governments are out of ammo at this point.

Now, the long hard slog.

It was a fun ride though for a couple of days.

So now what?

Can we all agree now, Democrat, Independent and Republican, that this man has been an epic and total failure?

Last debate to replace this fool is tonight.

Oh, what a mess he's left.

HousingPANIC Funny Flashback Quote of the Day

“When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing.”

- Charlie Prince, former CEO of Citigroup, explaining to the world why he was set about destroying his company and ruining the lives of millions, all for his own personal gain, July 2007

So do you think people who 'bought' homes with leveraged loans now understand the difference between an 'asset' and a 'liability'?

Do you think people now understand the difference between 'liquid' and 'illiquid'?

Do you think people now understand that when the government encourages you to 'buy' something regardless of price, that those prices are artificially inflated?

Do you think people now get the fact that they should save, or face ruin?

Do you think people now understand that their government has lied to them, and that there will be no social security as promised?

Do you think people now grasp the fact that houses are risky investments, and not savings accounts or ATMs?

Do you think people now understand that they should never, EVER, trust someone on commission?


Some pretty basic questions, but if one good thing comes out of this crash it will be a generation who will save, who will no longer over-consume, who will educate themselves in regards to personal financial matters, and who will no longer see debt as a lifestyle.

Ignorance was not bliss.

HousingPANIC Stupid Question of the Day

Should 20% down be required by law?


Bonus: Does anyone remember the 105% mortgages just a year or so ago? I'd sure love to see what percent of those are now in default...

And then, right on schedule, the government part-privatized the banks

Right on schedule.

Any questions?

And now, the panic is over. And while the needed and justified dramatic drop in home prices worldwide continues, the cleanup, investigations and arrests can begin.

U.S. to Buy Stakes in Nation's Largest Banks

The government is set to buy preferred equity stakes in Goldman Sachs Group Inc., Morgan Stanley, J.P. Morgan Chase & Co., Bank of America Corp. -- including the soon-to-be acquired Merrill Lynch -- Citigroup Inc., Wells Fargo & Co., Bank of New York Mellon and State Street Corp., according to people familiar with the matter.

Some of the big banks were unhappy about the government taking equity stakes, but acquiesced under pressure from Treasury Secretary Henry Paulson in a meeting Monday. During the financial crisis, the government has steadily increased its involvement in financial markets, culminating with a move that rivals the breadth of the government's response to the Great Depression. It intertwines the banking sector with the federal government for years to come and gives taxpayers a direct stake in the future of American finance, including any possible losses.

So, do you think the housing crash, stock market crash, credit crunch and economic panic will have a fundamental and positive impact on Americans?

Will they save more?

Will they treat houses as homes and not lottery tickets?

Will they no longer trust realtors and people on commission?

Will they demand an investigation of the corruption in DC?

Will they cut up their credit cards?

Will they stop with the over-consumption?

Will they appreciate non-material things more?

Will they understand the importance of a basic a financial education?

Will they want their leaders to address the entitlements timebomb?

Will they demand the guilty be arrested and the REIC be controlled?

Will they turn off the video games and TV and pick up a book?

Will they come to see that China now owns us?

Will they take power away from the Baby Boomers and turn it over to leaders who will behave responsibly and ethically and in the best interests of the world?

Will they turn off the housing porn?

Or.....

Will they shrug it off, forget about it in a few days, and go right back to the destructive behavior and attitudes that got them and us into this mess?

Way down, then right back up. And then...?

I see trendlines.

I hope there are tons of stories out there like this one

Here's a note from a reader that made my day. I hope there are lots of stories out there like this one. People who didn't believe their realtor, their mortgage broker, their leaders, their MSM, or those housing porn shows, and who stood their ground and made wise financial decisions these past few years.

Thank god for the internets and the google and the blogs. Here's his letter, with his permission, but details blacked out.

(p.s. I'll be on trains the next two days - comments will be slow)

___________

Keith, I wanted to write a heartfelt letter of thanks. You have personally saved me from financial ruin and set me in a position that I'm about to make money hand over fist when the market returns to its pre financial crisis levels. I've been a daily reader since the Summer/Fall of 2005 after I visit to my local countrywide office with my then wife about getting pre-approved for a mortgage because my wife (much like Suzanne)was nagging me to buy a house.

I left the Countrywide office feeling very uneasy because they were going to approve us for a loan that would have been a monthly payment that was 50% of our combined take home income. I went home and did a Google search for housing bubble and came across boring Ben's blog, Another f-d borrower, and housing panic. I immersed myself in reading and educated myself by reading Manias, Panics, and Crashes and Empire of Debt and truly started to understand the fundamentals of the market.

To make a long story short, in the Summer of 2006 my wife asked for a divorce because she wanted a house and I didn't budge. She re-married and her and her new husband bought a new house in the Fall of 2007.

I'm a XXXXXX, with no debt and I live frugally on about 25% of my take home income. I ride my bike to work, support my local library, and listen to NPR. I didn't have the stomach (and didn't understand enough to make a play) in gold or shorting any of the financial, homebuilder, or mortgage stocks. I live close to the things that I enjoy, skiing, great beer, hiking, climbing, and cycling. But moved out of stocks in November of 2007 I've slowly been building a war chest each month in my Money Market account waiting for the right moment to deploy my tremendous cash position.

I used about 10% of that money as mad money (that I didn’t' mind losing) and had 300% return on SDS, DUG, and XLF, which I got out of earlier this week. The moment that I've been patiently waiting for has arrived this Friday afternoon October 10, 2008. I'm moving my cash position back into stocks that I thought were value stock bargains before the crash and vanguard mutual funds. If you are ever in Colorado, I'd like to buy you dinner and a few beers.

Better late than never.. TIME magazine wakes up to the housing panic and credit meltdown.. and the implosion underway in London

Remember my reports a couple years back of Ferrari's, Lamborghini's and Porsche's everywhere in London? Or about that closet-sized apartment selling for like $500k? Or that going to see a movie cost $50? Or that you could rent a flat for 1/4 the cost of 'buying it'? Or that financial services represented more than 10% of the entire UK economy?

Well, we know how that story ends.

Badly.

They now expect 150,000 grotesquely paid financial services workers to lose their job in London with this blow-up. And no, those jobs won't be coming back, for a long, long time. And those 150,000 supported another 500,000 jobs I'd imagine. London will be ugly. But cheaper, that's for sure.

Here's TIME, for the first time in awhile actually reporting some news. London's Sinking. Yes, it is. In a flood of unregulated financiers who gamed the system, and wrecked the economy.

You know, just like they did in the 1990's, and the 1980's, and the ....

Here's the 35 year old kid who's about to give $700 billion away to Hank Paulson's best friends

Gee, won't it be a shock when it's Goldman, JPMorgan, Wells and BofA? Any more Friends of Hank that you'd like to bet on?

A few corrupt men got a hold of the treasure of the United States. Some squandered it on a stupid war. Others gave it away to themselves, and their friends.

And nobody went to jail, and not a shot was fired.

America, 2008.

Treasury to Invest in `Healthy' Banks, Kashkari Says

Oct. 13 (Bloomberg) -- Neel Kashkari, the U.S. Treasury official overseeing the $700 billion rescue of the financial system, said government equity injections will be aimed at ``healthy'' firms.

``We are designing a standardized program to purchase equity in a broad array of financial institutions,'' Kashkari, who heads the department's Troubled Asset Relief Program, said in a speech in Washington. ``The equity purchase program will be voluntary and designed with attractive terms to encourage participation from healthy institutions.''

U.S. officials are hurrying to address frozen credit markets that led France, Germany, Spain, the Netherlands and Austria to agree to commit $1.8 trillion to guarantee interbank loans and take equity stakes in banks. Buying shares of financial institutions has become the latest focus of Treasury Secretary Henry Paulson's rescue plan.

``While the U.S. tends to shy away from nationalizing or even partially nationalizing its financial institutions, it would appear that it has no choice but to follow suit,'' Win Thin, a senior currency analyst with Brown Brothers Harriman & Co. in New York, said in a research note today.

Say what you will, Cramer was spot-on

Panic over? Everyone go back to what you were doing?

HousingPANIC Stupid Question of the Day

Why do our leaders hate children and renters so much?

I mean, why else would they want to artificially inflate home prices, so that prospective home buyers and future generations would never be able to be a part of the "American Dream"?

Well, I'd say Dow 30,000 by the end of the year is looking kinda like a longshot at this point, wouldn't you? But hey, snake oil sold great back then

Maybe he and Lereah hang out? Or maybe he was pricing in a massive US dollar devaluation?

And anytime you hear someone say "it's different this time" - just slap 'em. It's NEVER different this time. Silly humans.

But for fun, get your predictions in for the Dow's Friday close.

I'll jump in with both feet and say 10,000. I was gonna say 30,000, but thought that was a bit too optimistic.

Here we are, October 12, 2008, the day the world went to the brink. So, what does a complete collapse of the worldwide financial system look like?

We're at the brink HP'ers. Right now. Today.

There is now a chance, and a real possibility, that the entire worldwide financial system could implode, as early as tomorrow.

Let that sink in.









OK?






So, what does that look like? Riots in the streets? Fuel deliveries halted? No food on the shelves? Banks and markets are closed and no access to cash at the ATMs? Dow 1,000? Companies disappearing in the night? Mass disorder and confusion? People selling everything for anything they can get? Paper currencies go worthless? World Series canceled? Flights grounded?

I have no idea what it looks like. I'm not sure if anyone truly does. But we're here. The brink. If it doesn't get better this week, starting Monday, we might fall off the cliff. The whole world. There will be no safe haven.

The only immediate solution? The nations of the world nationalize (or guarantee) their banks, or in cases like the UK and US, they pick the superbanks that get to go forward with government guarantees and equity stakes, and then let the others try to make it on their own. Or more likely, simply fail.

And this must be done today. And I think it will be.

May you live in interesting times.

From FT:

No G7 official was sure the plan would work, so deep is the financial crisis. If it does not, the next steps would be one of two nuclear options: to guarantee all liabilities of banks, in effect nationalising the financial system, or for governments to seek to bypass financial institutions by lending directly to companies and households.

From the New Statesman:

We are witnessing the collapse of the world financial system. To have said that even a month ago would have been to invite ridicule, but now it seems only a statement of the obvious as banks implode, governments panic and investors run. The initial liquidity crisis that broke in August 2007 and drove Northern Rock to the wall has evolved into a crisis of insolvency and finally into a crisis of confidence in the entire financial system.

From the IMF:

The global financial system is on the brink of a meltdown and additional steps must be taken immediately by the richest nations to calm jittery bankers and investors, the International Monetary Fund warned Saturday.

"Intensifying solvency concerns about a number of the largest U.S.-based and European financial institutions have pushed the global financial system to the brink of systemic meltdown," said Dominique Strauss-Kahn, IMF managing director.

FLASH: Here's a report on the UK part-nationalizing Halifax HBOS, Lloyds TSB, Royal Bank of Scotland and Barclays banks tonight

Rumors that the market over here might not open on Monday...

Stay tuned. The bank nationalizations are here.

And they said it could never happen.

Never say never.

Any guesses on who the nationalized US superbank survivors will be?

FROM AMERICAPANIC: Here's John McCain, running as a Communist now, and his great idea to use your money to discount the mortgages of gamblers

Call it what it is.

Communism.

McCain wants to use $300 billion to "put a floor under home prices", buying mortgages at the face value and letting gamblers (and their lender) enjoy the new lower market price. Obviously not understanding what contracts are, what the free market is, or that high home prices were and are the problem, not the solution.

What an idiot, my friends. What an idiot.

And I have no idea what's happened to John McCain. I think he's truly lost his mind. Because he sure has lost his way. How anyone even in the GOP can support this guy any longer shows you how clueless that crowd must be.

I've never seen a more desperate candidate for president in my life. It's amazing what desperation does to a man. He'll sell the last thing he has left. His soul.

Did Hank Paulson, Ben Bernanke, George Bush and the monkeys in Congress crash the stock market and just make matters worse?

If they had just let the market cleanse itself, and let the bad companies go bankrupt, instead of running around like lunatics with a different plan every day, would we be better off right now?

Methinks 'twas so.

Capitalism is messy, free markets are messy, but you need to trust them. Once you're banning short sales, closing down trading, propping up some companies while not propping up others, and rushing around trying to stop asset prices from falling, well, then this is what you get.

A disaster.

But now, here we are. Now we have a disaster. Because of a total and complete loss of confidence and trust.

Having Paulson, Bernanke and Bush running around for a year saying "subprime is contained", "the fundamentals are strong" and then a few days ago do a 180 and tell us the world is ending unless we cough up $700 billion within hours, well, that didn't do much for trust or confidence folks. At that point, they were exposed as liars at best or incompetent and clueless at worst.

When history writes the book, they'll find that our government got us into this problem by not properly regulating the financial affairs of the land, because they were corrupted by the REIC. And then our government accentuated this problem with its haphazard, scatter-shot, unpredictable, dishonest and panicked response.

Monkeys.

And people obviously don't trust monkeys.

The Government Is Contributing to the Panic - It's time to let markets do their messy work.

Despite all the hard work and good intentions on the part of our public officials, when economists and historians look back on the current financial crisis they are likely to conclude that government intervention prolonged and deepened it. In particular, officials at the Federal Reserve, the Securities and Exchange Commission and the Treasury Department are to blame for publicly losing confidence in the very economic system they are supposed to protect.

The Fed, the Treasury and the SEC appear to be in a state of panic. A crisis mentality led the custodians of the U.S. capital markets publicly to jettison their lifelong commitments to the capital markets in favor of a series of short-term regulatory quick fixes. Even more troubling, for the past several months the doyens of U.S. fiscal and monetary policy have ignored the most fundamental principle of central banking, which is that the primary responsibility of central bankers is to promote stability and to maintain confidence in the capital markets. Our central bankers appear to have suddenly lost confidence both in their own abilities and in the standard tools of fiscal and monetary policy.

Jim Cramer, going off on the destruction of trust and the market being rigged back when the Dow was still at 11,500

Sorry Cramer haters. Dude was right.

OK, PRETEND YOU'RE DOPES. THE FOOL WHO USED TO POST HERE ABOUT 'SOME CRASH' BECAUSE IPODS WERE SELLING OR SOMETHING LIKE THAT

POOR DOPES. AND I NEVER UNDERSTOOD WHY HE/SHE ALWAYS SHOUTED. BUT I GUESS IT'S ALWAYS THE IGNORANT FOOLS WHO SPEAK THE LOUDEST.

BUT SERIOUSLY, POOR DOPES. HE/SHE MUST BE DESTROYED BY NOW. DESTITUTE, ON A STREET CORNER, MUMBLING SOMETHING ABOUT THOSE DAMN HP'ERS

SO, OPEN THREAD, PRETEND YOU'RE DOPES. TELL US THAT THERE WAS NO HOUSING BUBBLE. AND THAT THE DOW NEVER EVER COULD SEE 8,000, BECAUSE IPODS WERE SELLING, AND RESTAURANTS WERE FULL.

POOR DOPES.

AND YOU KNOW, I ALWAYS THOUGHT DOPES MIGHT BE GREG SWANN. OR LAWRENCE YUN.

Black Monday?

Or bounceback Monday?

Or crazy up and down and all around but break even Monday?

[update - yes, we're supposed to be open on Monday for trading. Let's see if we are]

Ron Paul again nails it. "They're doing exactly what we did in the Depression. The prices of houses have to come down."

When it comes to housing and the dollar, Ron Paul gets it.

The world just witnessed the worst week ever in the stock markets. The worst week ever. Any questions?

Did you all survive, while others were in total and complete panic?

Were you all ready, while others were totally unprepared and over-leveraged?

Were you sitting on cash, while others went on a desperate orgy of cash-raising liquidation?

And now that we've seen the worst week in history, what do you think next week, and the rest of 2008 has in store?

And oh, thank you realtors. Thank you mortgage brokers. Thank you Congress. Thank you bankers. Thank you housing gamblers and mortgage fraudsters.

You f*cked America. You f*cked the world. And you f*cked yourselves.

The Dow lost 128 points, giving the blue chips an eight-day loss of just under 2,400, or 22.1 percent. The average had its worst week on record in both point and percentage terms.

"Fear has been running rampant all over the Street. Fear and greed, that's what rules the Street. I think the carcass has been stripped to the bone," said Dave Henderson, a floor trader on the New York Stock Exchange for Raven Securities Corp.

HousingPANIC Stupid Question of the Day

Again, where were (and where are) the auditors?

Bonus: And isn't violating Sarbanes-Oxley supposed to be a crime?



PricewaterhouseCoopers, Deloitte Touche Tohmatsu, Ernst & Young and KPMG - your day is coming soon. Trillions were lost because of you, and you failed America (again). Your corrupted and incompetent profession needs an enema.

We love our bubbles.

Future generations will laugh at us.

What were they thinking, those idiots!

As they get ready for their next fraud-and-speculation-fueled bubble and get rich scheme.

Silly humans. We love our bubbles. And we hate our crashes.

We said trillions would be lost. Trillions and trillions and trillions. Investors in American stocks have lost $8.4 trillion in the past 12 months.

All because of houses.

Let that sink in.










Houses.







F*cking houses.

Come on. How stupid was that?

Investors suffered a paper loss of $2.4 trillion for the week, as measured by the Dow Jones Wilshire 5000 index, and for the past year the losses have totaled $8.4 trillion.

It was even worse overseas on Friday. Britain's FTSE index ended below the 4,000 level for the first time in five years; Germany's DAX fell 7 percent and France's CAC-40 finished down 7.7 percent. Japan's benchmark Nikkei 225 index fell 9.6 percent, also hitting a five-year low. For the week, the Nikkei lost nearly a quarter of its value. Russia's market never even opened.

If you want perma-doom and gloom, go find another blog. We're in the PANIC stage now HP'ers. And as all of you should know, eventually comes hope.

PANIC.

We're there.

Capitulation.

We're there.

Despondency and depression.

They're coming.

Then, oh, yes, then...

HOPE.

Sweet, sweet hope.

Hope that we can right the wrongs.

Hope that we get rid of the incompetent leaders, and replace them with the competent.

Hope that America and the world can rise from the ashes.

Hope that we learn from this debacle and these awful eight years.

Hope that we will tackle our financial issues head on.

Hope that the NAR can be destroyed.

Hope that America can re-invent herself.

Hope that our REIC-corrupted system can be cleansed.

Hope that we will again become a nation of laws.

Hope that Dick Cheney and George Bush and Alberto Gonzales and Chris Dodd and Angelo Mozilo and Michael Perry experience the cold hard reality of jail.

Hope that capitalism and democracy and free markets can and will triumph.

Hope.

The first inkling of hope starts November 5, 2008. And it really begins January 20, 2009. After that, day by day, it'll grow brighter. And we'll start again.

I've told you about it for three years, and you rejected it. Go read the archives. But now that day shall come.

Soon the PANIC will end, while the nasty cleansing continues, and then hope begins. Just look at the chart. It will happen. It's just a question of when.

We are America. We continually reinvent ourselves and move on. We go to the abyss, but we don't fall in. We sometimes elect terribly corrupt and despicable leaders, and then we get rid of them.

We truly are that shining city on a hill. Even when we sometimes suck.

And it hath been foretold.

You knew this day would come. HousingPANIC calls on the Bush Administration to nationalize and recapitalize the banks

It's time.

It's time for the US taxpayer to take on the banks, fire and prosecute their executives, recapitalize them, and move on. And maybe one day sell them off at a profit.

It's time for us to arrest the guilty (hello Angelo Mozilo), seize their ill-gotten gains, and move on.

It's time for us to admit what we all know is true. The banks in the United States are insolvent. They got that way because of lack of regulation, a bastardization of the tax code that over-encouraged home purchases, the incompetence and corruption of the auditors and ratings agencies and FDIC, a gaming of the system by the investment banks, appraisers, realtors and mortgage brokers, and outright bribery of the US Congress.

So let's admit what happened, take over the banks, fire and arrest the executives and associated guilty parties, and move on. Exchange capital for equity, wipe out the shareholders, replace the leadership, and move on.

Now.

And yes, this will happen. Whether you want it or not. We either recapitalize them, or they fail. It's only a question of when.

It hath been foretold.

We are in panic. The only questions are: 1) How long will it last, and 2) What does the world look like after the panic is over?

If you're keeping score at home, we've now seen the entire Manias, Panics and Crashes book played out, over the three years of HousingPANIC.

It's truly stunning. We had the book that told us exactly what was going to happen.

Now I just want to see how this ends.

"The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king"

-Manias, Panics and Crashes, the HousingPANIC bible

MARKET MELTDOWN SPECIAL OPEN THREAD - What, if anything, can stop the stock markets from crashing further?

[UPDATE - DOW CRASHES THROUGH 8,000 - THEN JUMPS. DID WE JUST SEE BOTTOM? OR DO WE HAVE FURTHER TO GO?]


If this isn't panic then I don't know what is.

You'll tell stories about these days for the rest of your life.

But how does the story end?

A SPECIAL HOUSINGPANIC MESSAGE TO THE MONKEYS IN DC: ARREST ANGELO MOZILO. ARREST MICHAEL PERRY. START THE PERP-WALKS. THE MARKET DEMANDS IT.

Confidence will not be restor