What are these CDO's really worth???

Today a received an email from a friend of mine who works on Wall St.
As we all know these guy’s are frantically trying to determine values of these CDO’s (collateralized debt obligations/ mortgage backed securities) because more and more of these funds are getting redemption requests from investors. A lot of these firms are simply LOCKING OUT investors. They CAN NOT get their money out. Some are declaring bakruptcy (Bear Stearns) because thier assets are worthless. The remaining funds are trying to figure out WHAT THESE THINGS ARE WORTH.

My friend’s bank needs to get 50 cents on the dollar for this particular CDO. The computer models the market uses to value these instruments put the ACTUAL VALUE at about 3 CENTS ON THE DOLLAR!!!

That is NOT GOOD. not good for us, not good for home buyers, not good for Wall st.

The financial fall out can not be determined. CAN NOT be DETERMINED!!!

What a surprise, Pete foresees more gloom AND more doom.

AAAiiiiii!!! Scream!!! Hide the women and children :shocked.

We got the point like 100 threads ago man, please stop.

It has really, REALLY, gotten sad that someone of your caliber, petemfa, has fallen into this…whatever you want to call it… worthless lunatic rant on housing doom.

Vader’s right. I believe that everyone here as got it. You think that the world is coming to an end (or at least real estate). Why do you feel the need to continue? If one can read (and I do assume that that is a requirement to invest in REI) or heck, even watch TV, they’ve already heard it. If you’re in the business, then you are definitely aware of your market and are (are should be) planning for whatever you feel is coming.

You’re a knowledgable person. I hope that this fanatical approach to the RE doom&gloom hasn’t totally damaged your place on this forum. I hope you realize what it’s doing and stop before it does.



Based on the dozens of emails I have received from people who ACTUALLY LEARNED something from these posts and THANKED ME FOR THEM, I won’t lose too much sleep over my “totally damaging my place on this forum.”

I personally know of one divorced mother of 3 who was about to purchase a home that she THOUGHT was a great flip deal, it wasn’t. I told her to REALLY LOOK at what is going on in HER market. We ran the numbers. Her market IS slowing considerably, and flipping with the numbers she was using would have been a mistake. What impact do you think it would have had on THAT family IF she HAD gone through with the purchase??? That was 3 months ago. Are you sitting here telling me you don’t think the market for housing has gotten WORSE since then??? And guess what RAJ, She would have been trying to SELL INTO THIS MESS RIGHT ABOUT NOW!!!

Listen I KNOW some of you guy’s are sick of hearing this stuff. BUT…you guy’s have got to rememeber NOT EVERYONE here has experience. I’ve read your posts Roger, you know your stuff and I’m sorry if reading these posts offends or sickens you. Here’s my advice…


My post was from a friend ON WALL ST. who contacted me. HE IS GOING TO LOSE HIS JOB OVER THIS MESS!!! HIM and THOUSANDS of others. Not opinion… FACT!!!
It’s NOT DOOM and GLOOM, it’s called REALITY!!!
Where does he go ROGER? He’s got 2 little ones at home and a wife to support. Do you think HIS firm is the ONLY one experiencing HUGE losses??? He’s already been told he’s losing his job. What happens when he can’t sell his home in Conn. because jumbo loans are going the way of the dinosaur. Add to that all his formers co-workers putting For Sale Signs on THEIR front lawns at the same time.
These aren’t MY questions. THOSE WE’RE HIS QUESTIONS TO ME!!!

I find it a little ironic that ROGER use to constantly tell me I was wrong about the real estate market going into the toilet. “NOT IN MY BACK YARD” Right RAJ?
How’s that back yard looking now buddy?? Neighbors crab grass starting to take root? Naa, not in Mr. Roger’s neighborhood.

Roger, do me a HUGE favor…Don’t read my posts.

Better yet, let’s hear YOU give this guy some ADVICE! Come on ROGER we all know you can B*tch. Let’s here some solutions for a guy with no job and a $700,000 mortgage in Conn. selling into one of the biggest financial messes this country has faced in a LONG, LONG TIME.

I rest my case, Pete. What was once a good topic has become nothing more than a fanatical rant for you. That’s a shame, because the housing market’s condition IS something that should be discussed. Note…discussed. Look above. Something was said that wasn’t what you wanted to here. Is there discussion? No, it’s just a flaming post in retaliation.

And let’s get something straight, friend. I have NEVER disagreed that the US housing market is NOT declining. I just don’t agree with you on the pending implosion of the market. Sorry that that bothers you so much. In fact, in one of your first posts on this subject, I believe that I mentioned it was going to be the guys in the middle of this mess, the one’s that don’t see it as rosy nor going to hell in a handbasket that would take the brunt of the blows on this.

As far as saving the world, or the people caught up in this mess, I guess we’re all doing what we feel we can. Do I suggest that everyone begin buying property? No. In fact, my suggestion is for people NOT to become investors at all until they thoroughly learn their market and the basics of REI. People get into trouble with RE all the time, in all market conditions. Is it my fault? If not, why rant on me?

Now, the backyard thing. In fact, my market is doing pretty well, for my market, really, it’s doing great. Most of NC and the southern states in general, had an overall growth in the market, of about 5%, if memory serves. That’s including tanking market FL, and the Katrina damaged areas, not to mention the declining coastal NC markets. So, if you’re not in one of those areas, you do the math. Will it continue? Don’t know. Just part of knowing your market.

All the media wants to report the declining US Housing Market. Why? Because it makes for good stories. (on a side, on a previous post, Funder reported good news from the media. Your response, pete…“the media isn’t being told the REAL truth.” Yet, when you report it, they are? But I digress). The US Housing Market is a myth. Heck, even the D&G websites admit this. Real estate is local in it’s market. What is affecting one marketing negatively may be affecting another positively, or not at all.

Last report… 43 of the major housing markets were in decline, according to the D&G info. What they fail to mention is that many of those markets were the ones experiencing double digit annual appreciation for several years. Did bubbles exist in those markets? HECK YEAH!!! And quite frankly, Pete, if people didn’t think that those markets were going to decline SOMETIME, then there’s more problems there than a few posts are going to fix. What is a decline actually? Well, if you’re trying to report on the negative, it’s ANY decline. So of those 43, how many do you think had annual declines of 3-5%, not 10 or 20%? More rather than less, I’d wager. Unfortunately, details aren’t given.

Pete, Your posts don’t offend or sicken me. Truth is, I don’t want you kicked off this site for this. And it’s very possible. You yourself have already mentioned that you’ve been asked to cool it. Common sense would dicate that someone on a rant about the pending housing implosion on a website dedicated to real estate investments would be a problem. I see that you feel too strongly about this at this point to care about that or even to have sensible conversations about it.

You want a look into the future, I’ll give you one. I foresee a decline in the posters for these forums. If this is the future, it can start with me.


Hi petemfa I don’t know how old you are but I was around in the 1980s and remember when the housing bust happened here in Houston. There were houses that under normal conditions would sell for $200k were selling for $80k. I wished I could have bought all that there were. Those times are here again. Everybody has a different goal for doing real estate. Some people buy fix up and sell and some people buy fix up and hold. If you are a buy and sell guy this financial deal is eating your lunch. But if you are a buy fix up and hold person, you have just died and gone to heaven. This is GREAT NEWS. This is your chance to buy a hundred houses and come out owning half of your town. People are getting foreclosed on (more houses for me) and the banks are panicking (they are looking for people like me to loan to) and banks are panicking (they are selling me their house cheaper than before) and jobs are strong (there are tenants waiting). It is the perfect storm. Get in there and find some deals. This is your opportunity to become a genuine real estate tycoon.

You’ll have to talk louder, petemfa doesn’t live here anymore…



Can you spell G-O-N-E

John $Cash$ Locke


I go back to the bust in Las Vegas, when you could purchase any new house for $15 dollars down and no credit check from the builders and there were plenty of them. Payments back then were $150 - $175 a month.

A friend of mine started buying and buying, rented them out even if he made up the difference in the payment, we were working at the Nevada Test Site at the time. We were considered the money people in Las Vegas, because of of the overtime and high wages being paid. So he had the money to carry through until the market stabilized and the prices began to sky rocket even back then.

Eventually he sold and I will tell you it was the last time he ever worked for anyone again. There are those that get creative in a poor market and those that just beef about it. Guess who made all the money?

John $Cash$ Locke