ZUMA DOGG's "Shady Report '07" (Year End Recap of Top Stories) -- Part One of Year End Series (set Google alert)
by Zuma Dogg
This year, a little anomoly of a story ended up not only being the biggest story Zuma Times ended up breaking 3 months before it hit news headlines around the planet, but ended up being the biggest financial news story in a decade.
THE SUB-PRIME BUBBLE BURST
I was contacted on May 5, 2007 by community activist Jose Aguilar from East Los Angeles (a true genius of a gem) over something he heard Senator Chuck Shumer talking about.
It was about this thing called, "sub prime lending", which I knew 0.00% about.
As a community activist, myself, financial lending practices and the housing market was something I had 0.00% interest in covering as a local activist.
But much to the dismay of corrupt local politicains (and those who support them), Mr. Aguilar continues to rip the curtain open, exposing these politicians the way Toto ripped the curtain open exposing that phoney, corrupt Wizard of Oz. He has proven himself (to me, at least) to be ahead of the curve with the "real deal" on all the shady angles these politicians are playing to screw the community -- time and time again.
So when Jose Aguilar talks, Zuma Dogg listens. And if he felt this "subprime thing" was a big deal on May 5, 2007 -- I wanted to hear about it.
It DID end up hitting me as being a big deal, and even though it was completely outside the range of material I had ever covered up to that point, I wanted to post it on the blog, for the record, and to try and warn anyone who believed in the story.
Saturday, May 05, 2007
ZUMA DOGG PUBLIC HEARING: IS THE WRITING IS ON THE WALL FOR A RECESSION STARTING IN SIX MONTHS TO A YEAR?
Oh no...Sen. Chuck Shumer/NY just told Zuma Dogg (indirectly) that we are gonna have a housing bubble-burst and recession starting in about a year. (With the effects starting as soon as six months.) SELL NOW!
They got these things called “sub-prime lending” (high risk, low interest loans). When you have a good economy, you can give some “riskier investments/clients” these low interest loans to jumpstart their American dream of home ownership.
They only pay 1% or 2% the first three years, or so. Then, the rate jumps to the Federal rate (what is it, 5.5%, or something.) Well ZD feels it might go to of 6%, 7% -- is 8% out of the question?)
When the Federal Reserve raises interest rates, more people with subprime loans default. Why? Because these people, coming off 3 year low interst loans, have to jump into a 6% or 7% or even 8 % rate all of the sudden, and they can’t keep up with the new, higher payments each month and then they default.
Well these days, with higher paying jobs being replaced with lower paying jobs; while housing costs, property taxes, and everything else -- people are gonna be defaulting on the loans, more and more. And the banks know that this is going to to become more of a problem, so they are going to stop approving these “low prime lending” rates.
Sen. Chuck Shumer/NY has a bill in congress in about six months to a year they are going to put the clamp down on “sub-prime loans”. This is a major sign that the housing bubble is gonna pop. Then, all these condos will be staying on the market, vacant -- getting cheaper and cheaper by the quarter.
L.A. is leading the nation in this housing bubble burst, as vacancy rates in Los Angeles continue to increase, due to people moving out of the City for all the reasons stated daily by the pueblos.
Posted by Zuma Dogg @ 5/05/2007 10:32:00 AM
So three months later, I was walking down the street and saw the news headlines on all the newspapers about the sub prime mortage mess...and now, it is being called the biggest financial crisis in a decade.
Another three months later (six months to the week/month that the story was originally posted), the stock market tanked. Check the charts from that period in November '07, but you probably don't have if you are an investor.
AND NOW THIS FROM MARKETWATCH.COM
Last update: 12:01 a.m. EST Dec. 22, 2007
NEW YORK (MarketWatch) -- Investors will look for Santa's sleigh to go further into rally mode in the final week of 2007 in an attempt to get over the rough second half of the year, during which markets were rattled by the biggest financial crisis in a decade.
So although it was the one story this year that I covered that had NOTHING to do with my usual fare...I DID feel it was related to City business and felt it would affect the community/readers.
AND, this story really, really highlights the function ZD plays in the community. (And I feel so guilty because I end up getting all the credit for all the knowledge pass onto me by the everday people of the community.) ZD ain't really so smart, y'all, comparitively speaking.
I could never figure out the stuff people pass on to me. So here's what I can take credit for:
a) Interest (Have to have that, I guess.)
b) Like listening to what people have to say. (I always have as a market research person.)
c) Being able to distinguish between good information and bad information and recognizing patterns as to who has the best/most accurate info.
So as much as I would like everyone to think I am the political/economic genius I wish I was; luckily I don't have to be, because I am good at my a), b), c)'s.
And that's the secret sauce of Zuma Dogg. But ha ha...I'm better at "c)" than you are!!! And it sure helps when Jose Aguilar phones in the entire story for you. Thanks, bro!
original zd subprime prediction thread: