I wish there was less cheerleading and posturing going on on the on topic threads and more serious discussion about low interest rates in deflationary times.
Mish and Calculated risk had good articles on the topic. I am not saying we are going to have a brutal depression but the desperate measures, which the creation of 4.5% treasury sponsored interest rate and other business and employment related news are cause reflection on that period.
I don’t really understand so much but it seems the gist of it is that, adjusted for the current deflation and its potential, 4.5% interest loans for purchases could be very bad.Related to housing I think this will be true in areas where some homes are in price ranges where much or most of the air is yet to come out.
These rates coudl be a small boon to some minimallyleveraged refinancers, if it becomes a vailable to us but it shouldn’t be taken as a panacea to current buyer’s.
The government is trying to create a softer landing. That in itself is not cause for celebration.Probably the opposite is true. It is way too early to know where things go from here. Debt,on depreciating assets, even at 4.5% could equal poverty. I don’t think “cash is king goes out the window yet” and leveraged upscale private residences are very risky still.That said it probably will grease the wheels for Realtors.
