<p>Listen to “This American Life” this weekend on NPR. Actual interviews with people on the ground from mortgage companies to Ibanks. Very clearly showed exactly what happened and why. Most excellent.</p>
<p>I found this article from the NYTimes to be very enlightening as well
Can’t Grasp Credit Crisis? Join the Club </p>
<p><a href=“http://www.nytimes.com/2008/03/19/business/19leonhardt.html?_r=1&oref=slogin&pagewanted=print[/url]”>http://www.nytimes.com/2008/03/19/business/19leonhardt.html?_r=1&oref=slogin&pagewanted=print</a></p>
<p>NPR’s was MUCH better. First there was SO MUCH money to be invested in the global market–the amount had risen from 37 trillion to twice that in a few years. It needed a place to invest and US mortgages seemed like a good bet. The flood of money and some self-delusion on the safety of the home market lead to looser underwriting so that the demand for more investments by capital owners could be met. The heard mentality on Wall street and self-delusion based on sophisticated underwriting risk analysis kept the machine going until payments on loans stopped coming in in late 2006. Things came to a halt around Valentine’s Day 2007 as Wall Street stopped buying most loans.</p>
<p>We are seeing light at the end of tunnel now. Blackrock is out there buying MBS from some Ibanks, anticipating an up turn. Many people believe those securities have been marked down too low.</p>
<p>
The heard mentality is now channeling all that money into commodities. This is totally a bubble…“oh, oil prices are never going to come down because it’s getting scarcer…it’s the new reality…” Beginning to look like the definition of a bubble if you ask me.</p>
<p>Good point. That’s a bubble bust I will look forward to.</p>
<p>Speaking of oil, do any of you worrying about having gasoline stolen</p>
<p>out of your car tank?</p>
<p>No, but I’m sure it’s happening. Around Seattle we had a bold thief who went to gas stations and filled 50 gallon drums with gas. He had some way way of bypassing the pump controls. They finally got him.</p>
<p>[Seattle</a> Criminal Defense: Police chase down suspected gas thief](<a href=“http://seattle-criminaldefense.blogspot.com/2008/03/police-chase-down-suspected-gas-thief.html]Seattle”>http://seattle-criminaldefense.blogspot.com/2008/03/police-chase-down-suspected-gas-thief.html)</p>
<p>The Boston Globe has a story today about foreclosed houses being stripped of copper. It is even happening in tony suburbs. In one case the copper that was stolen was worth a few hundred dollars but the damage amounted to $15k.
This is making the sale of houses even harder.
[In</a> empty houses, thieves see copper profits - The Boston Globe](<a href=“http://www.boston.com/business/articles/2008/05/14/in_empty_houses_thieves_see_copper_profits/]In”>http://www.boston.com/business/articles/2008/05/14/in_empty_houses_thieves_see_copper_profits/)</p>
<p>Warren Buffet (unquestionably the world’s most successful investor) was recently quoted as saying that he read the annual reports of a bunch of these banks and said he didn’t understand most of it and more importantly didn’t understand what they were actually investing their money in. His philosophy has always been “if you don’t know what you’re investing in, don’t invest in it.” That’s what he said when he refused to buy onto the .com hype (and hence why he didn’t lose his shirt like lots of folks) and looks like he wins again by staying away from the crazy world of mortgage backed securities and derivatives ;-).</p>
<p>Haven’t heard recent reports of thiefs stealing gas from car tanks, but I have heard of thiefs stealing catalytic converters for the precious metals.</p>
<p>The crank heads up here, of which there are many, are stealing any metal they can. They have taken the wire out of HS stadium lighting, railroad rails, steel guardrails, lightposts, and cat converters. It’s crazy. They busted a couple of metal dealers for taking in the stuff that was obviously stolen.</p>
<p>I recycle aluminum cans at a salvage dealer. I asked the woman about</p>
<p>how the limit on copper thing is going, she said everyone knows about the</p>
<p>limit, they just bring the copper in, in smaller batches.</p>