Home › Forums › Financial Markets/Economics › QE3 Away!: (EDIT: Now on the special unlimited nights and weekend spending plan)…
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Coronita.
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September 13, 2012 at 9:47 AM #20121September 13, 2012 at 9:51 AM #751403
barnaby33ParticipantStuck in deflation and ZIRP?!? I for one am shocked.
September 13, 2012 at 9:55 AM #751404CoronitaParticipantWell it’s clear now…
when the headlines reads
“Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates”They want the rates to go to 0%.???????…
DAMN….Should have bought more rental property last year.. Damnit damnit damnit.
It’s not like supply in some areas aren’t constrained already. I can kiss sweatheart deals in MM and CarmelV goodbye for the foreseeable future.
Should have done something. Really should have done something earlier.
September 13, 2012 at 10:12 AM #751408SD Realtor
ParticipantAgreed FLU… I almost feel compelled to buy something just because the money is so damn cheap. Looking at another 4plex this weekend out of state.
September 13, 2012 at 10:28 AM #751409livinincali
ParticipantMortgages rates have tended to be flat to up during the actual periods of QE. They’ve tended to drop after QE was over for whatever reason. QE1 started at about 5.33 and ended at 5.15 (End of Nov 2008 to End of March 2010). QE2 started at 4.20 and ended at 4.55 (Nov 3, 2010 to June 30 2011). In the year after QE2 we’ve gone from 4.55 to 3.57. Probably was a good time to act before QE because everybody front runs it and then sells into it. The rumor of QE is more effective than the actual QE.
As for the stock market history says it should rise during the duration of QE3. That makes sense as those front running the QE sell their bonds to the fed and put that money into the stock market.
September 13, 2012 at 12:00 PM #751410bearishgurl
Participant[quote=flu]…
* And wow, no rate increases until Mid-2015….[/quote]
Yes, thank you, Fed!
My 30-yr ARM (never refied), taken out over 12 years ago, is now at just over 3.75%!
And acc to “reliable” projections …
http://mortgage-x.com/general/indexes/cofi_rate_forecast.asp
my index should continue to fall and is not projected to rise above what it is now until sometime in early 2016!
I wanted to sell in 2014 when I’m planning on moving but if mortgage-x’s prognostications are true, this will give me more time to wait the market out (at a very, VERY low mortgage interest rate) for a higher sales price while renting it out!
I’ve enjoyed a tremendous run of downward adjustments for several years without even having to spend ONE DIME on refi!!
I’ve had these types of ARMSs since the eighties and have NEVER had this long and deep of a period of downward adjustments …
It’s AWESOME!
Folks, contrary to what the MSM would have us believe, OPTION ARMs are NOT EVIL. They are GOOD … that is, if you are a PRIME borrower who CHOOSES to AMORTIZE every month. (My current purchase money transaction cost only $2800 out the door to close.)
:=D
September 13, 2012 at 12:09 PM #751411Participant[quote=flu]Well it’s clear now…
when the headlines reads
“Fed Pulls Trigger, to Buy Mortgages in Effort to Lower Rates”They want the rates to go to 0%.???????…[/quote]
Don’t feel too bad, flu. My “0%” is actually a floor of 2.75%, which is my current “margin,” lol …
It’s all good though as my remaining balance is well under $200K so my monthly payment (recast once annually) is very, very reasonable … much cheaper than rent, actually.
September 13, 2012 at 3:18 PM #751420NotCranky
ParticipantYou have the fever, flu. It sounds like your comfort zone is small. Look what SDRealtor just said he’s doing. Find out what active players are doing.
September 13, 2012 at 7:54 PM #751427paramount
ParticipantRates projected to go down sounds like a bad time to be a re investor.
Obviously the fed is encouraging home ownership with qe3.
September 13, 2012 at 9:29 PM #751428no_such_reality
Participant[quote=bearishgurl]
Folks, contrary to what the MSM would have us believe, OPTION ARMs are NOT EVIL. They are GOOD … that is, if you are a PRIME borrower who CHOOSES to AMORTIZE every month. (My current purchase money transaction cost only $2800 out the door to close.)
[/quote]BG, in California 24% of students drop out of high school. On top of that, only 25% of of 8th graders are proficient at 8th grade math or reading.
In other words, 75% of 8th graders probably can’t read that paragraph let alone understand what those terms mean. And not to be cynical, I seriously doubt how much better it gets by graduation. Which is not meant to be a political dig, it’s a point on the capabilities of the populace.
I grew up with firearms. I had firearm training as a tween. Most of my male peers growing up had firearm training as tweens. We didn’t hunt until we had completed the firearm training.
Taking a loan, just sign your name.
September 13, 2012 at 9:31 PM #751429spdrun
ParticipantRick Perry is an ass, but he was right about Ben-Shalom being a traitorous viper. Ah well, plenty of properties to pick from on this coast (basically like SD in late 2008).
September 13, 2012 at 10:40 PM #751432zk
Participant[quote=SD Realtor]Agreed FLU… I almost feel compelled to buy something just because the money is so damn cheap. Looking at another 4plex this weekend out of state.[/quote]
What state are you looking in?
September 14, 2012 at 1:19 AM #751437CA renter
Participant[quote=barnaby33]Stuck in deflation and ZIRP?!? I for one am shocked.[/quote]
Deflation? What deflation?
LOL! Right there with you, Josh. 😉
September 14, 2012 at 1:27 AM #751438Participant[quote=bearishgurl][quote=flu]…
* And wow, no rate increases until Mid-2015….[/quote]
Yes, thank you, Fed!
My 30-yr ARM (never refied), taken out over 12 years ago, is now at just over 3.75%!
And acc to “reliable” projections …
http://mortgage-x.com/general/indexes/cofi_rate_forecast.asp
my index should continue to fall and is not projected to rise above what it is now until sometime in early 2016!
I wanted to sell in 2014 when I’m planning on moving but if mortgage-x’s prognostications are true, this will give me more time to wait the market out (at a very, VERY low mortgage interest rate) for a higher sales price while renting it out!
I’ve enjoyed a tremendous run of downward adjustments for several years without even having to spend ONE DIME on refi!!
I’ve had these types of ARMSs since the eighties and have NEVER had this long and deep of a period of downward adjustments …
It’s AWESOME!
Folks, contrary to what the MSM would have us believe, OPTION ARMs are NOT EVIL. They are GOOD … that is, if you are a PRIME borrower who CHOOSES to AMORTIZE every month. (My current purchase money transaction cost only $2800 out the door to close.)
:=D[/quote]
Call me crazy, BG, but I’d say that when interest rates are at their lowest point, it is time to SELL if you ever intend to sell/move.
Don’t project the price trends over the past ~50 years to continue. Asset owners have had the effects of baby boomers entering their peak purchasing years (they are going to be entering their peak selling years now), and continuously lower interest rates over the past ~30 years. I think there is a definite danger of a prolonged period of asset price declines if interest rates ever get away from the Fed, or even if they start rising in a “controlled” fashion.
I think this is a dangerous trap that many are getting into. Just my 2 cents…
September 14, 2012 at 7:01 AM #751441Participant[quote=CA renter]
Don’t project the price trends over the past ~50 years to continue. Asset owners have had the effects of baby boomers entering their peak purchasing years (they are going to be entering their peak selling years now), and continuously lower interest rates over the past ~30 years. I think there is a definite danger of a prolonged period of asset price declines if interest rates ever get away from the Fed, or even if they start rising in a “controlled” fashion.I think this is a dangerous trap that many are getting into. Just my 2 cents…[/quote]
If you just look at how the population budge of the boomers moved over time you can really explain just about everything we’ve seen economically. In the 1970’s boomers were finishing school, getting jobs, and starting families. The demand for home was high and the demand for loans was high so we ended up with an environment where home prices and interest rates went up.
In the 1980’s private companies started realizing that there was no way they’d be able to make good on pension promises and the government created 401Ks for retirement. So people started plowing money into 401Ks and the stock market because they had a long time until retirement. Behold the stock market goes on a 20 year bull run as the boomers start investing for their retirement.
In 2000’s the boomers have to start paying for their kids college, start having to think about more conservative investments and the stock market starts suffering while income producing assets increase (bonds, rental properties, etc go up). People nearing retirement start gambling in bubbles because they are short of funds for retirement. In the decades going forward this boomer demographic will likely sell assets, and will likely drive income producing assets to microscopic yields. Boomers are in the peak asset collection phase right now. They move to a liquidation phase later as they trade assets for goods and services.
I expect stocks the suffer the most, then bonds, and finally real estate. It’s really a simple game of competing for goods and services that next generation will produce. What does that next generation value and how many goods and services are available after they provide for themselves.
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