JWM in SD

Yes, BB will keep cutting to keep the Deflation (Credit Crunch) from getting out of control. Ultimately, he cannot stop the net contraction of money supply though.

Don’t buy now, you will get your ass handed to you if you do. Watch where long term rates are going and the bond market. They don’t give a shit about how much BB cuts the FFR. They have to account for risk and return of prinicipal and will price accordingly.

Anybody who buys a house now is quite simply a FOOL and will saddled with a rapidly depreciating and illiquid asset and locked into a high debt to income ratio in a deflationary environment. Not a good situation.

JWM in SD

Yes, BB will keep cutting to keep the Deflation (Credit Crunch) from getting out of control. Ultimately, he cannot stop the net contraction of money supply though.

Don’t buy now, you will get your ass handed to you if you do. Watch where long term rates are going and the bond market. They don’t give a shit about how much BB cuts the FFR. They have to account for risk and return of prinicipal and will price accordingly.

Anybody who buys a house now is quite simply a FOOL and will saddled with a rapidly depreciating and illiquid asset and locked into a high debt to income ratio in a deflationary environment. Not a good situation.

Graham

Reading these columns in recent weeks I get the idea that everyone is addicted to fixed rate mortgages.

To get the Bernanke put for housing you are all going to have to get used to ARMs (standard ones I mean and ot the rip-off teaser type) to get the benefit.

If anything, the more Bernanke acts, the greater the risk that fixed rate mortgages will become more expensive.

The mortgage lenders o seem to be bending over backwards to help with their loan to value maximums. Then $64bn question I have about the current mortgage market in SC is why are sane bakers offering mortgages anywhere near 100% to buy in sub-prime high foreclosure areas; even if your income is good. I wouldn’t lend more than 70%.

Graham

Reading these columns in recent weeks I get the idea that everyone is addicted to fixed rate mortgages.

To get the Bernanke put for housing you are all going to have to get used to ARMs (standard ones I mean and ot the rip-off teaser type) to get the benefit.

If anything, the more Bernanke acts, the greater the risk that fixed rate mortgages will become more expensive.

The mortgage lenders o seem to be bending over backwards to help with their loan to value maximums. Then $64bn question I have about the current mortgage market in SC is why are sane bakers offering mortgages anywhere near 100% to buy in sub-prime high foreclosure areas; even if your income is good. I wouldn’t lend more than 70%.

Graham

Reading these columns in recent weeks I get the idea that everyone is addicted to fixed rate mortgages.

To get the Bernanke put for housing you are all going to have to get used to ARMs (standard ones I mean and ot the rip-off teaser type) to get the benefit.

If anything, the more Bernanke acts, the greater the risk that fixed rate mortgages will become more expensive.

The mortgage lenders o seem to be bending over backwards to help with their loan to value maximums. Then $64bn question I have about the current mortgage market in SC is why are sane bakers offering mortgages anywhere near 100% to buy in sub-prime high foreclosure areas; even if your income is good. I wouldn’t lend more than 70%.

Not suggesting anyone run out and buy but we are looking at lower costing homes and lower costing money. At some point you have to start to put a value on locking in a low fixed rate. The paper will beging to offset a portion on the over pay for the home.

For example I don’t particularly liek to pay retail price for a car but I might be willing to pay a slightly higher financed price when they are offereing me 72 months at 0 percent knowing that my own money will be earning me soem rate of retunr over that time and that the payment tomorrow will we worth less due to inflation.

Not suggesting anyone run out and buy but we are looking at lower costing homes and lower costing money. At some point you have to start to put a value on locking in a low fixed rate. The paper will beging to offset a portion on the over pay for the home.

For example I don’t particularly liek to pay retail price for a car but I might be willing to pay a slightly higher financed price when they are offereing me 72 months at 0 percent knowing that my own money will be earning me soem rate of retunr over that time and that the payment tomorrow will we worth less due to inflation.