The Economy In Denial: Fallout from the Bursting Housing Bubble | |
paladin (OP) User ID: 127529 United States 09/21/2006 09:03 PM Report Abusive Post Report Copyright Violation | hello out there.....people did you read this.. (snip) By keeping inflation expectations low and the threat of an economic slowdown high, the Federal Reserve (Fed) has engineered an environment where home owners have the opportunity to move out of adjustable rate mortgages into longer-term, fixed-rate mortgages. The Fed publishes a "Financial Obligations Ratio" (FOR) that tries to capture all forms of debt service payments from lease payments on cars and other debt service payments such as mortgage payments as a percentage of disposable income. Please have a look at the chart that shows that breaks this ratio into debt service payments due to mortgage payments and those due to other consumer spending (the total Financial Obligations Ratio would be the sum of the two, not shown); the charts also shows the Fed Funds Target Rate, which the target interest rate the Fed charges other institutions for overnight lending. At the time of this writing, data have only been published through the end of the first quarter of 2006: get your ass in gear....people paladin |
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Anonymous Coward User ID: 145966 United States 09/21/2006 09:32 PM Report Abusive Post Report Copyright Violation | they have been saying this crap for years and it never happens, as an economist myself i can tell you there is no crystal ball. its a guess and if your wrong there is no penalty........... |
paladin (OP) User ID: 127529 United States 09/21/2006 09:34 PM Report Abusive Post Report Copyright Violation | |
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paladin (OP) User ID: 127529 United States 09/21/2006 09:40 PM Report Abusive Post Report Copyright Violation | here we go....as reported on.. [link to www.lemetropolecafe.com] <<<<<<<<<<<<<<<<<<<<<<<<<<<<< U.S. Housing Slump May Lead to First Drop Since 1930s (Update1) By Kathleen M. Howley and Matthew Benjamin Sept. 18 (Bloomberg) -- Nancy and Brian Christopherson are asking $389,900 for their eight-room Colonial Revival home in Westford, Massachusetts, featuring a new kitchen with maple cabinets. Even at that price, they'll lose $14,100. [link to www.bloomberg.com] I won't post the whole thing......because I don't think people will read it all.. go to the link if you want to read it.... paladin |
paladin (OP) User ID: 127529 United States 09/21/2006 09:44 PM Report Abusive Post Report Copyright Violation | how could you possibly compare the EU and Japan to our economy??????? Quoting: Anonymous Coward 145966why not compare California's economy to the whole EU... now I know you are BS'ing me here.. I ask....what is the saving's in the USA .......with the EU and Japan?? paladin |
Anonymous Coward User ID: 145966 United States 09/21/2006 09:44 PM Report Abusive Post Report Copyright Violation | |
Anonymous Coward User ID: 62021 United States 09/21/2006 09:45 PM Report Abusive Post Report Copyright Violation | there was no housing bubble! only those with disposable income took the gamble. they only have lost the return of the next best investment and just a little of their initial cash investment. Quoting: Anonymous Coward 145966they have been saying this crap for years and it never happens, as an economist myself i can tell you there is no crystal ball. its a guess and if your wrong there is no penalty........... There is a housing bubble and even people who are not speculating and trying to make a killing are going to suffer if they bought their homes in the last 5-10 years because they might end up owning more than the depreciated value of the home. I am talking about people who were even buying fairly modest homes, all prices are sure to drop and the more your house was worth, the worse it will be. |
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paladin (OP) User ID: 127529 United States 09/21/2006 09:48 PM Report Abusive Post Report Copyright Violation | there was no housing bubble! only those with disposable income took the gamble. they only have lost the return of the next best investment and just a little of their initial cash investment. Quoting: Anonymous Coward 145966they have been saying this crap for years and it never happens, as an economist myself i can tell you there is no crystal ball. its a guess and if your wrong there is no penalty........... ok...I will ask you this.. what is the market Value of the USA Housing market compare to the USA GDP this will hit everyone.. paladin |
Green Man User ID: 108824 United States 09/21/2006 09:50 PM Report Abusive Post Report Copyright Violation | if you think rates are going down...... Quoting: paladinEU is moving rates up Japan is moving rates up.. the USA is moving rates down??? get real.. paladin Exactly. That is the point I think everyone is missing. Our economy is globalized. The Fed can't manage the American economy in isolation from the rest of the world. We need to attract $2 billion per day in foreign investment. In order to do that we have to pay a premium above the rates paid by other countries. Other countries are still raising rates. We have to continue to raise rates. Whether inflation is high/low/zero/negative. Whether the US economy is booming or melting down. The rates have to go up. Either that or they monetize the debt. Which is hyper-inflationary. And they would have to raise rates. What we have is an elaborate SHORT-TERM manipulation of interest rates and commodities prices to create an illusion of improving conditions right before the mid-term elections. The Fed held their ground this month. They will next month as well. Things will take a remarkable turn for the worse at the following meeting (November?). Everyone will be amazed and caught flat-footed. Sitting quietly, doing nothing, spring comes and the grass grows by itself. Hey! I'm a Zen Master! And I thought I was just lazy. |
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paladin (OP) User ID: 127529 United States 09/21/2006 09:58 PM Report Abusive Post Report Copyright Violation | |
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paladin (OP) User ID: 127529 United States 09/21/2006 10:00 PM Report Abusive Post Report Copyright Violation | The Fed held their ground this month. They will next month as well. Quoting: Green ManThings will take a remarkable turn for the worse at the following meeting (November?). Everyone will be amazed and caught flat-footed. hey,,,,Green Man.. this is what I think will happen also.. after the Elections,...all hell will break out paladin |
Omega User ID: 146385 United States 09/21/2006 10:12 PM Report Abusive Post Report Copyright Violation | My take is the real trouble starts around 2008. It usually takes a real estate bubble longer to unwind that other equity bubbles. Handguns are a skill; shotguns an art; rifles a science. _____________________________________ Democracy is two wolves and a sheep voting on whats for dinner. Disarmament is the precursor to Genocide. Better to take action now rather than chances later. Your choice. |
Green Man User ID: 108824 United States 09/21/2006 10:22 PM Report Abusive Post Report Copyright Violation | My take is the real trouble starts around 2008. It usually takes a real estate bubble longer to unwind that other equity bubbles. Quoting: OmegaAbosolutely true, Omega. The first stage is a slowdown of sales. That started late 2005, and has been developing quickly. Builders keep building because: a) building is what they do b) they need to finish the houses under construction c) they really want to fill up the subdivisions under development. Construction stays up, sales go down --> inventories go up. We've been seeing this in many markets this year. Stage two: Speculators are no longer buying, since the 10%-20% per annum appreciations don't seem to be there anymore. Some of them (not all, yet) are liquidating their holdings. That adds to the inventory, and further reduces sales. This is still underway. Stage three: The big problems with ARMs resetting are JUST GETTING STARTED. I think the vast majority of people who took out these suicide loans in the last couple of years had no idea what they signed, and have no idea the time bomb they are sitting on. The big wave of resets hasn't happened yet - it is late this fall through the spring. At that point there will be not only people who actually need to sell a home (because of relocation, job loss, death, divorce, etc.), plus the desperate speculators, plus the people trying to sell to stay out of foreclosure, plus the ones that went into foreclosure. Foreclosure takes a few months to happen. People drag it out, skip payments on other bills, sell the boat, run up the credit cards, etc., before they miss too many payments to initiate foreclosure. The big wave of foreclosure sales will kick in around Xmas 2007. Give those houses three or four months to sit on the market. Summer of 2008 : houses for the prices you saw in 1990. Sitting quietly, doing nothing, spring comes and the grass grows by itself. Hey! I'm a Zen Master! And I thought I was just lazy. |
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paladin (OP) User ID: 127529 United States 09/21/2006 10:23 PM Report Abusive Post Report Copyright Violation | hello out there.....people Quoting: paladindid you read this.. (snip) By keeping inflation expectations low and the threat of an economic slowdown high, the Federal Reserve (Fed) has engineered an environment where home owners have the opportunity to move out of adjustable rate mortgages into longer-term, fixed-rate mortgages. The Fed publishes a "Financial Obligations Ratio" (FOR) that tries to capture all forms of debt service payments from lease payments on cars and other debt service payments such as mortgage payments as a percentage of disposable income. Please have a look at the chart that shows that breaks this ratio into debt service payments due to mortgage payments and those due to other consumer spending (the total Financial Obligations Ratio would be the sum of the two, not shown); the charts also shows the Fed Funds Target Rate, which the target interest rate the Fed charges other institutions for overnight lending. At the time of this writing, data have only been published through the end of the first quarter of 2006: get your ass in gear....people paladin I will bump this....my self this is the point of the thread. paladin |
Omega User ID: 146385 United States 09/21/2006 10:28 PM Report Abusive Post Report Copyright Violation | My take is the real trouble starts around 2008. It usually takes a real estate bubble longer to unwind that other equity bubbles. Quoting: Shadow 108467Omega, I hope like hell you're right. Yeah I have like a 50 mile drive home from work down HWY 290 east from Austin to Elgin everyday. The past two years they have been building LOTS of housing tracks along the highway. In fact, just last month they started two more. Out of curiosity one day I drove thru one that was completed about 18 months ago. I would estimate this track as being about 200 houses, occupancy being 15%, MAX. Not good. Handguns are a skill; shotguns an art; rifles a science. _____________________________________ Democracy is two wolves and a sheep voting on whats for dinner. Disarmament is the precursor to Genocide. Better to take action now rather than chances later. Your choice. |
Green Man User ID: 108824 United States 09/21/2006 10:28 PM Report Abusive Post Report Copyright Violation | By keeping inflation expectations low and the threat of an economic slowdown high, the Federal Reserve (Fed) has engineered an environment where home owners have the opportunity to move out of adjustable rate mortgages into longer-term, fixed-rate mortgages. Quoting: paladinI will bump this....my self this is the point of the thread. paladin The only problem with that, paladin, is that the vast majority of people who took out suicide loans did so because they couldn't afford a fixed rate mortgage when rates were 2 or 3 percentage points lower than they are now. They certainly can't afford it now. They don't have any equity. The house prices are dropping already, and will fall off a cliff soon. They can't make the payments. They can't refinance. Foreclosure. Is. Inevitable. Sitting quietly, doing nothing, spring comes and the grass grows by itself. Hey! I'm a Zen Master! And I thought I was just lazy. |
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Omega User ID: 146385 United States 09/21/2006 10:36 PM Report Abusive Post Report Copyright Violation | WHY do the banks OWN us? 12 years ago I took out a modest mtge (125k) today I owe 95k and I've never missed a payment. Do the math. Quoting: Shadow 108467The rule of 27. NEVER take out a 30 year mortgage Morta-latin for DEATH. PAY TILL YOU DIE!!!!!!! Handguns are a skill; shotguns an art; rifles a science. _____________________________________ Democracy is two wolves and a sheep voting on whats for dinner. Disarmament is the precursor to Genocide. Better to take action now rather than chances later. Your choice. |
Green Man User ID: 108824 United States 09/21/2006 10:38 PM Report Abusive Post Report Copyright Violation | WHY do the banks OWN us? 12 years ago I took out a modest mtge (125k) today I owe 95k and I've never missed a payment. Do the math. Quoting: Shadow 108467Look on the bright side! You never missed a payment, so you have great credit! This puts you in a great position to BORROW MORE MONEY! Sitting quietly, doing nothing, spring comes and the grass grows by itself. Hey! I'm a Zen Master! And I thought I was just lazy. |
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paladin (OP) User ID: 127529 United States 09/21/2006 10:42 PM Report Abusive Post Report Copyright Violation | I have two threads to keep up...... [link to www.buythebottom.com] look at the COT report.. this is the trend...week old paladin |