Eleua
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- Eleua
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There is no DIRECT link, but as risk rises, ROI needs to rise. You can have, as in Japan's example, the BOJ print so much Yen that interest rates collapsed in the face of rising risk. Perhaps that is why it took so long for them to recover. H…
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Sniglet, In order for "good" borrowers to get low rates is for the overall interest rate environment to be very low. Rising defaults will eventually cause rising rates - for everyone. Yes, I know my prediction of 50-80% discounts is complet…
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I predict the "sticky" myth will be buried along side the "real estate always goes up," and "buy now, or be priced out forever" myths. If I am sitting on a $500K house at the top of the market and want to sell, but the high bidder comes in at $42…
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For "stickiness" to hold up prices, people have to sit on homes and pay the maintenance and carrying costs. That only works if the downturn is shortlived, or interest rates actually decline during the "sticky" period. Over the past housing downtur…
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To more directly answer your question, if you plan to sell your house anytime prior to the end of the mortgage (most do), you will have a hard time recovering from an interest rate rise. The capital destruction is too great. That is assuming you h…
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Yes. Interest rates are a huge mover of home prices. We saw that in spades during the most recent runup, and I think we will see it on the way down. This is a hobby horse of mine. If you start with the assumption that people buy houses on th…
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Could they at least mow the lawn?
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Good grief! How bad does it have to get before someone in the banking sector stains his shorts?
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Tim, Gov't numbers being trash is exactly my point. That Shadow Stat site is pretty good, but I don't have a subscription to it. The modern era is just a huge example of people believing what they are told versus what they are experiencing. …
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Actually, my question does not revolve around vacant homes for sale. My question concerns how a home sells and then is never occupied. Why spend $400K+ on a home and never move in?
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Where do talented US kids want to work? Finance sector or law. That has been one of the biggest growth sectors since the 81-2 recession. Our most talented individuals are trading paper so we have to bring in foreign talent to keep things runnin…
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Alan wrote: Bringing in foreign workers to keep wages low also removes incentive for Americans to go into technology. It will only exasberate the problem. AMEN! Sing it Brother Alan! So true...so true.... Immigration in just about ev…
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One thing to keep in mind is China is a brainwave away from massive civil unrest. Tens of millions of rural Chinese are moving to the cities for jobs. Tens of millions, if not more, are speculating in their stock market in such a fashion that make…
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sniglet wrote: we have to go through a depression every few generations to sear the wisdom of economic prudence into our collective consciousness once again. The further we get from past periods of economic hardship, the less people really believe…
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finance wrote: BTW: It appears the predicted 2Q07 GDP is going to be ~2.5% to 3.0%, up from 0.7% 1Q07...so even the economy is starting to rebound. Also, why hasn't the economy already crashed if the several overheated RE markets have been defla…
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finance wrote: People as a whole in the Seattle area are getting wealthier and being shown through the increased demand for housing. Over the past several years we have had significant increases in people moving to Seattle (1.5% increase in the l…
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finance wrote: WOW! It seems you pessimists are quite serious with your predictions, yet I wouldnt discount the American drive to get through situations and invent new ways around problems...we always have in the past! Panglossian platitud…
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finance wrote: My suspicion is that most of the pessimists on this blog are democrats and they hate Bush so much that they only wish the economy would plunge into the next depression under his presidency...am I wrong? Not here. Conservativ…
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Inflation or deflation... Either way, housing is totally screwed. If the ROW economy is able to right itself after the American consumer pukes, then we are totally screwed and we will be in an inflationary hell. If not, your scenario is proba…
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deejayoh wrote: I love it when I find people who make me feel like I'm an optimist I have that effect on most people. It is a free service I provide. You don't have to go to your local shrink to feel better. Sniglet, I'm with you o…
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Snig, I'm with you (partly). Deflation in home prices does not mean overall deflation. When the US Peso is losing much of its value to buy other necessities, I can't see how that isn't inflation. For deflation to occur, you would need the US…
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I say we get inflation first, then deflation. The US Peso is really in for a major whacking, which will drive up energy, food, and raw materials (inflation). Interest rates will climb rapidly, which will put downward pressure on anything purch…
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Anyways, diversity is a joke. There's nothing wrong about working with people of various backgrounds, it's just there's nothing intrinsically right about it either. WOW! If it wasn't for the ugly reality of HIV, I'd ask you to be my blood br…
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Deejayoh, I think it's improbable that we will have massive inflation and huge nominal drops in home prices I think that is EXACTLY what we will get. I like your idea, but it has a major flaw. IF (and that is a HUGE "if") we have wa…
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While gas prices are not insignificant, I think it has more to do with creditworthiness of the borrower. "Drive until you qualify" is the mantra for many. This is why the outlying areas are starting the burn.
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Finance, We are in uncharted waters with this housing runup. Remember, the entire purpose of the housing bubble was to mask the effects of the tech bust. We have two bubbles to pay off, and it isn't going to happen with a teensy weensy little 2…
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If we only roll back 25%, what does that take us back to? 2005 prices? Does anyone actually believe that the largest runup in US history, on the back of the two biggest bubbles in US history will only result in a 24 month rollback of prices? No…
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Florida and Michigan are not deflating very slowly. Texas in the 80s had a pretty fast drop. Once the lending system seizes up, you can bet the housing market will fall off a cliff - even in Bellevue, Ballard, and Bainbridge. That Bear Sterns…
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50% off the peak - guaranteed. 67% off the peak - median depreciation for normal markets 75% off the peak - zany market depreciation 80% off the peak - headliner case I'm looking at '96-7 prices. We have two bubbles we have to pay off, …