sunskerr wrote:bwgood77 wrote:sunskerr wrote:I know people say Ishbia is not stupid, must be smart because he built up a company etc., but like, everything he's done here suggests...maybe not?
You can also often times just fail upwards in business if you have the right connections/family. That being said I don't particularly care to investigate his background.
But if I knew nothing about this guy and was working in the front office, I'd probably think he was kind of a moron.
But hey win a championship with this group of players I'll put a picture of him at my bedside.
Also Bradley Beal should get his jersey retired if this team gets blown up over the summer. And next year he can take 52 shots per game.
Also, I don't know how much people here know about finance, and real estate, and mortgages, but there was the first real estate huge bubble in years, because lenders were giving everyone mortgages, even people with bad credit, no credit, etc, and they were selling these mortgages to brokerage houses which were lumping them into huge mutual type fund investments they called "mortgage backed securities" which sounds great, and then people bought these funds thinking they were valuable.
Real estate prices kept going up hand over fist in the early 2000s because of this. I worked with people who made like $40K and were buy 2 or 3 houses to rent thinking housing will double in price every few years...
Anyway, I could get into the details of why it busted, but it was unsustainable and people simply did not make enough at their jobs to pay their mortgages. They had kept afloat by refinancing their houses and taking more loans against them.
Anyway, there is a movie called The Big Short that is very good and goes into this.
And I understand I am probably telling most people here things they already know, but in that climate, it would have been very easy to build a mortgage company with the timing.
It would be like some guy investing in tech stocks in 97 and then having to sell everything in January of 2000 and everyone calling him a genius. No, he was lucky. It was a huge overpriced bubble that crushed multiple peoples riches within a few months starting in March and went on for years before recovering.
The way Ish tries to build the Suns kind of reminds me of these bubbles.
This is a really good post and I love that comparison at the end you did with how Ishbia builds a team. It's WEIRD he just strolls in and starts making moves like that. There's definitely an ego and overconfidence perhaps coming from his background where he had success.
I'll check out that movie. Not much of a finance guy even though I do enjoy economic history every now and then so it should be a good watch.
If's funny, I got to thinking about this movie and watched it last night. Crazy true story. On Paramount right now. Strong cast and great subject matter that can be boring but they keep it interesting and with a sense of humor. However, I I think it appeals to me because I worked in real estate finance back then and followed housing prices and I also had a very smart boss. I'd talk to him about how it doesn't make sense how fast housing prices were going up (early mid 2000s) given that prices were like going up extremely rapidly, like 30%-50% a year and I would say "it doesn't make sense based on simple logic. People buy these based on their income levels, and average American salaries increase at like 3-5%. Where is the money coming from? It's not sustainable based on simple economics. Then prices started going up even more after I left working there and in like late 2005 and 2006 I was telling all my friends who were buying houses and refinancing and buying more that I might take your gains and exit because I won't be surprised if there is a housing correction. I was ridiculed and laughed at by everyone...."housing prices never go down"...then I saw people at work making peanuts buying houses to rent with their sisters, etc.
Anyway, then we had the housing crash, followed by banks going down, stock market crash, and worse yet, the wall street banks that perpetuated this fraud end up being bailed out by taxpayers.
But back to how Ish made his money. His father started Wholesale Mortage Company in 86. And housing started getting out of hand over the next 20 years. Anyone should be able to figure out that housing prices
should overall, go up at roughly the same rate as median household income, unless more debt is being used to buy houses with less equity, over time.
Look at this chart (which really may make it look scary now)
Anyway, you could think wouldn't a bubble/housing crash negatively impact the mortgage business? No, because banks started not to care if people were even qualified for mortgages, and all the mortgage company has to do is process, the sale, take their fee, and then it's the bank's problem, who buy it, bundle it with other mortgages, and sell it into large funds where unknowing people are putting their pensions.
Anyway, if you are outgoing and a salesman, you could be very good at being a mortgage guy, and the real estate market, overall, since around 2000, has been crazy. It did have the crash in 2008 but rebounded a few years later after the taxpayer bank bailout and housing prices were corrected, and it started up again. And LOOK at how fast prices have gone up (which would also mean commissions) since Ishbia took over as CEO in that chart. All he did was ride a wave.
That stuff is a racket. Homes are the easiest things to sell, especially in markets like this where people buy them as investments.
All he had to do to make more money was spend more to expand the business while this newer bubble is going on.
Why can no college students even fathom buying a house? It's not even possible. Back 30 years ago housing prices may have been like 3sx your salary out of college (or less if you graduated with like an engineering degree). Now they are at least 6x the avg salary out of college (if the #s of avg starting salary out of college at nearly $70K is even accurate).
I apologize to those who have zero interest in this stuff. Just ignore.
