Esmith are you looking for a job? I need to hire a salesman with false sense of reality! Wow, those claims were mighty bold, but I like the enthusiasm.
We can talk numbers, graphs and charts all you want, but in my opinion they mean nothing. Every move made by our government is unprecedented. There is no possible way any one of us can predict what will truly happen because our economic situation is currently controlled. Maybe Esmith is right from the standpoint that we need to hedge our bet on the opposite of our emotions, but my gut tells me to stay in my short ETF positions and ride them like the wind.
I have heard some interesting moves by the FDIC as of late, which leads me to believe they are expecting some serious trouble here in the near future. They recently leased a 200,000sqft building in Orange County to hire some 600 employees. I also heard a rumor that they only have $6 billion left in cash (not sure if that means anything as they are heavily insured themselves).
Unemployment is a ridiculous topic. If you everyone took a moment to see how unemployment was calculated you would laugh (door to door by the census bureau). By almost all normal calculations you would see that we are already over 10% nationally. 6.7% is merely a way of keeping emotions high in this country.
Let’s be honest we are still greedy and until that changes we won’t see any progression with our economy. We try to help the auto makers and the UAW said that laborers were not willing to take a pay cut to save their companies. What kind of world are we in? Our government has offered our tax dollars to save the Big 3 and they balk because they feel that they deserve $65/hour+/- to build a pile a junk!
All arrows point south at this time and even if the Fed pushes the interest rate down it will do nothing but prop home prices up for a little while longer. When the new shift in inventory begins at the end of Q1, beginning of Q2 we should see some additional corrections in home prices. It is possible that things will stabilize for a short period of time if rates do actually make it as low as 4%, but that seems highly unlikely. At the current rate of 5 3/8% a $500K loan with 10% down is still roughly $3,700+/- PITI with MI. So unless everyone moves to Temecula or Santee I can’t imagine prices won’t continue to move downward. Those $100K salaries for $10K of production are long gone.
I am with those that question WHERE America is going to find that next big bubble to rely on. Right now we can’t build a car right, we are too prideful to flip hambugers, yet we aren’t too proud to beg! Let’s make Americans work hard again for the American dream and stop handing everything out on a silver platter!
