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In the News II

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August 3rd, 2023 at 8:01:10 AM permalink

AZDuffman

Member since: Oct 24, 2012
Threads: 137
Posts: 21195

Quote: DoubleGold
Quote: AZDuffman
Quote: DoubleGold
Quote: Tanko
Not ridiculous.

He is referring to Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Singapore, Australia and Canada. All of which have sharply lower debt to GDP ratios than the basket case USA.

On top of that, the U.S. Debt is expected to keep growing.

US Debt to GDP 133%
Germany 59.8%
Denmark 33.2%
Netherlands 48.6%
Switzerland 25%
Australia 33.8%
Canada 36.3%

Singapore shows a 140% ratio, but claims to have Zero net debt, since its external debts are mainly foreign deposits in Singapore banks. Which may be true since it maintains an AAA rating.

In addition to a low debt to nominal GDP ratio, nations must also be stable.

Russia has a ratio of 23%, but only has a 'C' rating.

What are the percentages for an underwriter to limit an individual's debt to income ratio?

For a house mortgage, it used to be around 25%.

So anything over 25% for a home lender, could be extra risky.

When I last did mortgages max DTI was 43-45%.

Was that with private insurance or extra insurance?

Fannie. Freddie gave a little more allowed but we only used them if we had to.

War is peace. Freedom is slavery. Ignorance is strength

August 3rd, 2023 at 8:03:19 AM permalink
AZDuffman Member since: Oct 24, 2012 Threads: 137 Posts: 21195	Quote: Mission146 I have to know when! Was it pre-2008? 2016-2017. Most homeowners have over 50% DTI since they also have car payments and other credit. Last investment property I was at like 10% it blew their minds. No car payments is a great thing. War is peace. Freedom is slavery. Ignorance is strength

August 3rd, 2023 at 8:11:00 AM permalink

Mission146

Administrator
Member since: Oct 24, 2012
Threads: 23
Posts: 4147

Quote: AZDuffman
2016-2017. Most homeowners have over 50% DTI since they also have car payments and other credit.

Last investment property I was at like 10% it blew their minds. No car payments is a great thing.

I wonder what they were accepting before the bubble burst? Anything under 100% was kosher?

"War is the remedy that our enemies have chosen..let us give them all they want." William T. Sherman

August 3rd, 2023 at 8:12:29 AM permalink

DoubleGold

Member since: Jan 26, 2023
Threads: 34
Posts: 4244

Quote: AZDuffman
Quote: DoubleGold
Quote: AZDuffman
Quote: DoubleGold
Quote: Tanko
Not ridiculous.

He is referring to Germany, Denmark, Netherlands, Sweden, Norway, Switzerland, Luxembourg, Singapore, Australia and Canada. All of which have sharply lower debt to GDP ratios than the basket case USA.

On top of that, the U.S. Debt is expected to keep growing.

US Debt to GDP 133%
Germany 59.8%
Denmark 33.2%
Netherlands 48.6%
Switzerland 25%
Australia 33.8%
Canada 36.3%

Singapore shows a 140% ratio, but claims to have Zero net debt, since its external debts are mainly foreign deposits in Singapore banks. Which may be true since it maintains an AAA rating.

In addition to a low debt to nominal GDP ratio, nations must also be stable.

Russia has a ratio of 23%, but only has a 'C' rating.

What are the percentages for an underwriter to limit an individual's debt to income ratio?

For a house mortgage, it used to be around 25%.

So anything over 25% for a home lender, could be extra risky.

When I last did mortgages max DTI was 43-45%.

Was that with private insurance or extra insurance?

Fannie. Freddie gave a little more allowed but we only used them if we had to.

Makes sense.

From the wires the same day as USA got downgraded.

------------------------

"Fitch downgrades mortgage giants Fannie and Freddie from AAA to AA+"

------------------------

August 3rd, 2023 at 8:14:13 AM permalink
DoubleGold Member since: Jan 26, 2023 Threads: 34 Posts: 4244	So it looks like the USA guaranteed mortgage funds wrote a bunch of garbage notes before Covid.

August 3rd, 2023 at 8:37:27 AM permalink
DoubleGold Member since: Jan 26, 2023 Threads: 34 Posts: 4244	So if a country is able to borrow money at a DTI over what Freddie and Fannie are allowed, then I wouldn't touch the garbage.

August 3rd, 2023 at 10:56:22 AM permalink
Tanko Member since: Aug 15, 2019 Threads: 0 Posts: 2470	In addition to the lower AA+ credit rating, Fitch gives the US a 'Negative' outlook rating. Another downgrade and the US will have the same credit rating as Kuwait.

August 3rd, 2023 at 11:13:50 AM permalink

DoubleGold

Member since: Jan 26, 2023
Threads: 34
Posts: 4244

Buffett, Dimon, and Yellon are downplaying the seriousness of the high debt relative to GDP.

I'd like to see them buy newly issued USA Treasuries after the downgrade and put their money where their mouth is.

It's like John Kerry pretending to represent climate and he is one of the worst carbon abusers on the planet.

Similar with Biden and Obama buying beachfront property and then telling others not to abuse the planet.

August 3rd, 2023 at 11:22:43 AM permalink
DoubleGold Member since: Jan 26, 2023 Threads: 34 Posts: 4244	And all three of those persons I mentioned, want the stock market to go up.

August 3rd, 2023 at 12:11:01 PM permalink

AZDuffman

Member since: Oct 24, 2012
Threads: 137
Posts: 21195

Quote: DoubleGold
Buffett, Dimon, and Yellon are downplaying the seriousness of the high debt relative to GDP.

I'd like to see them buy newly issued USA Treasuries after the downgrade and put their money where their mouth is.

It's like John Kerry pretending to represent climate and he is one of the worst carbon abusers on the planet.

Similar with Biden and Obama buying beachfront property and then telling others not to abuse the planet.

The thing is it doesn't matter much as if the Treasury defaults everything else is worthless anyhow. Instead of defaulting they will inflate it away same as they did with debt from the WWII-Vitenam era.

War is peace. Freedom is slavery. Ignorance is strength

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