Confused with the current market

[KSMountain]

Let’s say a more real “recovery” really starts next year. If there are signs of inflation then I could see the Fed bumping say 0.5% next fall, and then another 0.5% at the very next meeting.

I don’t think that would be unprecedented.

So then blammo, you’d be 1% higher (on the fed funds rate anyway) in a pretty short amount of time.

[Arraya]

There is NO recovery next year. No way, no how, not a chance in hell. No matter how hard you wish for it, it is NOT coming.

What is going to recover? This is a multi-decade hyper-credit expansion that collapsing before our eyes. There are 10s of trillions in losses out there, and growing, and banks are not following accounting rules now. They are deferring losses until next year. They can’t process the losses they have now and their IS a tsunami coming back. Whether they release the properties to the market is another story. The losses are still there and will have to be recognized at some point. This is not accounting for ALL the other forms of debt defaulting to historic levels and climbing. Builders should just take several years off.

Credit is contracting and this is not going to stop anytime soon. It is quantifiable. You can easily forecast this by looking at the default trajectories. It is not stopping next year. This is what is driving unemployment. They can jigger with the numbers all day but tax receipts don’t lie and the are fall precipitously. This will lead to massive state budget shortfalls and falling services.

This credit expansion excesses DWARFs the great depressions. You can’t just wave a wand and make that go away. The way money, credit and banking work has not changed that much in the last hundred years. Unless you count all the financial engineering that is blowing up in there face now.

We should be in for the largest economic contraction for at least several hundred years, if not ever and it will be global. All the printing in the world can not stop this.

[Arraya]

There is NO recovery next year. No way, no how, not a chance in hell. No matter how hard you wish for it, it is NOT coming.

What is going to recover? This is a multi-decade hyper-credit expansion that collapsing before our eyes. There are 10s of trillions in losses out there, and growing, and banks are not following accounting rules now. They are deferring losses until next year. They can’t process the losses they have now and their IS a tsunami coming back. Whether they release the properties to the market is another story. The losses are still there and will have to be recognized at some point. This is not accounting for ALL the other forms of debt defaulting to historic levels and climbing. Builders should just take several years off.

Credit is contracting and this is not going to stop anytime soon. It is quantifiable. You can easily forecast this by looking at the default trajectories. It is not stopping next year. This is what is driving unemployment. They can jigger with the numbers all day but tax receipts don’t lie and the are fall precipitously. This will lead to massive state budget shortfalls and falling services.

This credit expansion excesses DWARFs the great depressions. You can’t just wave a wand and make that go away. The way money, credit and banking work has not changed that much in the last hundred years. Unless you count all the financial engineering that is blowing up in there face now.

We should be in for the largest economic contraction for at least several hundred years, if not ever and it will be global. All the printing in the world can not stop this.

[Arraya]

There is NO recovery next year. No way, no how, not a chance in hell. No matter how hard you wish for it, it is NOT coming.

What is going to recover? This is a multi-decade hyper-credit expansion that collapsing before our eyes. There are 10s of trillions in losses out there, and growing, and banks are not following accounting rules now. They are deferring losses until next year. They can’t process the losses they have now and their IS a tsunami coming back. Whether they release the properties to the market is another story. The losses are still there and will have to be recognized at some point. This is not accounting for ALL the other forms of debt defaulting to historic levels and climbing. Builders should just take several years off.

Credit is contracting and this is not going to stop anytime soon. It is quantifiable. You can easily forecast this by looking at the default trajectories. It is not stopping next year. This is what is driving unemployment. They can jigger with the numbers all day but tax receipts don’t lie and the are fall precipitously. This will lead to massive state budget shortfalls and falling services.

This credit expansion excesses DWARFs the great depressions. You can’t just wave a wand and make that go away. The way money, credit and banking work has not changed that much in the last hundred years. Unless you count all the financial engineering that is blowing up in there face now.

We should be in for the largest economic contraction for at least several hundred years, if not ever and it will be global. All the printing in the world can not stop this.

[Arraya]

There is NO recovery next year. No way, no how, not a chance in hell. No matter how hard you wish for it, it is NOT coming.

What is going to recover? This is a multi-decade hyper-credit expansion that collapsing before our eyes. There are 10s of trillions in losses out there, and growing, and banks are not following accounting rules now. They are deferring losses until next year. They can’t process the losses they have now and their IS a tsunami coming back. Whether they release the properties to the market is another story. The losses are still there and will have to be recognized at some point. This is not accounting for ALL the other forms of debt defaulting to historic levels and climbing. Builders should just take several years off.

Credit is contracting and this is not going to stop anytime soon. It is quantifiable. You can easily forecast this by looking at the default trajectories. It is not stopping next year. This is what is driving unemployment. They can jigger with the numbers all day but tax receipts don’t lie and the are fall precipitously. This will lead to massive state budget shortfalls and falling services.

This credit expansion excesses DWARFs the great depressions. You can’t just wave a wand and make that go away. The way money, credit and banking work has not changed that much in the last hundred years. Unless you count all the financial engineering that is blowing up in there face now.

We should be in for the largest economic contraction for at least several hundred years, if not ever and it will be global. All the printing in the world can not stop this.

[Arraya]

There is NO recovery next year. No way, no how, not a chance in hell. No matter how hard you wish for it, it is NOT coming.

What is going to recover? This is a multi-decade hyper-credit expansion that collapsing before our eyes. There are 10s of trillions in losses out there, and growing, and banks are not following accounting rules now. They are deferring losses until next year. They can’t process the losses they have now and their IS a tsunami coming back. Whether they release the properties to the market is another story. The losses are still there and will have to be recognized at some point. This is not accounting for ALL the other forms of debt defaulting to historic levels and climbing. Builders should just take several years off.

Credit is contracting and this is not going to stop anytime soon. It is quantifiable. You can easily forecast this by looking at the default trajectories. It is not stopping next year. This is what is driving unemployment. They can jigger with the numbers all day but tax receipts don’t lie and the are fall precipitously. This will lead to massive state budget shortfalls and falling services.

This credit expansion excesses DWARFs the great depressions. You can’t just wave a wand and make that go away. The way money, credit and banking work has not changed that much in the last hundred years. Unless you count all the financial engineering that is blowing up in there face now.

We should be in for the largest economic contraction for at least several hundred years, if not ever and it will be global. All the printing in the world can not stop this.

[Scarlett]

I agree with you
[quote=Arraya]There is NO recovery next year. We should be in for the largest economic contraction for at least hundred years and it will be global.[/quote]

I believe that IS the most likely scenario but in this case – what do you think would happen to the rates and the house prices in the next FEW years? I would think they’d keep the rates low, no more than 1-2% increase in the next FEW years, and the prices might fall a little. Any other thoughts for THIS scenario?

[Scarlett]

I agree with you
[quote=Arraya]There is NO recovery next year. We should be in for the largest economic contraction for at least hundred years and it will be global.[/quote]

I believe that IS the most likely scenario but in this case – what do you think would happen to the rates and the house prices in the next FEW years? I would think they’d keep the rates low, no more than 1-2% increase in the next FEW years, and the prices might fall a little. Any other thoughts for THIS scenario?

[Scarlett]

I agree with you
[quote=Arraya]There is NO recovery next year. We should be in for the largest economic contraction for at least hundred years and it will be global.[/quote]

I believe that IS the most likely scenario but in this case – what do you think would happen to the rates and the house prices in the next FEW years? I would think they’d keep the rates low, no more than 1-2% increase in the next FEW years, and the prices might fall a little. Any other thoughts for THIS scenario?

[Scarlett]

I agree with you
[quote=Arraya]There is NO recovery next year. We should be in for the largest economic contraction for at least hundred years and it will be global.[/quote]

I believe that IS the most likely scenario but in this case – what do you think would happen to the rates and the house prices in the next FEW years? I would think they’d keep the rates low, no more than 1-2% increase in the next FEW years, and the prices might fall a little. Any other thoughts for THIS scenario?

[Scarlett]

I agree with you
[quote=Arraya]There is NO recovery next year. We should be in for the largest economic contraction for at least hundred years and it will be global.[/quote]

I believe that IS the most likely scenario but in this case – what do you think would happen to the rates and the house prices in the next FEW years? I would think they’d keep the rates low, no more than 1-2% increase in the next FEW years, and the prices might fall a little. Any other thoughts for THIS scenario?

[SD Realtor]

Scarlett yes I would say that if our international creditors continue to fund our debt then yes, rates will be kept artificially low. The secondary market for mortgages is essentially a socialized market backed by taxpayer money. Institutional and private investment disappeared.

Think of it this way. You buy a home. Wells or BofA originates your loan. It is then sold off on the secondary market to who? Well most likely one of the GSEs. Maybe even the Fed. Where did that money come from? In this day and age it was just tossed on our tab.

Furthermore our administration is wholeheartedly spending money and building up debt faster then any of the previous ones. This is what the majority of people in our country want. It is much easier to be taken care of then to take care of things.

So yes as long as everyone plays nice the dominoes will not fall. Todays dollar compared to 10 years ago dollar is about worth 62 cents. When the dominoes do fall we will see substantially higher rates. There may be some political horsetrading to lessen the blow. For instance maybe Taiwan will be a sacrificial lamb to China in exchange for another few years of credit extension.

Not sure if you lived here in the 1980s mortgages of 12% and higher were the NORM. If you have a big cashpile you are stoked. If you do not then you are screwed.

I am not really saying buy or dont buy now. Many people are buying now for various reasons however none of them that I know are buying because they think it is a market bottom. If you look at the most bearish posts on this site, those posters harp and harp on the fact that knifecatching buyers are doing so because they think it is a market bottom. There is a blind eye and ear to the fact that people buy homes (and other things for that matter) for other reasons then timing a market. Another hard to swallow fact is that alot of these buyers do have the resources to be able to do this. Even lately there is the “overbearing spouses” reasoning, that people are all buying because they are forced to buy thier overbearing spouse.

So whatever the reason is, people are buying, for better or for worse.

Keep your eyes open whatever you do.

[SD Realtor]

Scarlett yes I would say that if our international creditors continue to fund our debt then yes, rates will be kept artificially low. The secondary market for mortgages is essentially a socialized market backed by taxpayer money. Institutional and private investment disappeared.

Think of it this way. You buy a home. Wells or BofA originates your loan. It is then sold off on the secondary market to who? Well most likely one of the GSEs. Maybe even the Fed. Where did that money come from? In this day and age it was just tossed on our tab.

Furthermore our administration is wholeheartedly spending money and building up debt faster then any of the previous ones. This is what the majority of people in our country want. It is much easier to be taken care of then to take care of things.

So yes as long as everyone plays nice the dominoes will not fall. Todays dollar compared to 10 years ago dollar is about worth 62 cents. When the dominoes do fall we will see substantially higher rates. There may be some political horsetrading to lessen the blow. For instance maybe Taiwan will be a sacrificial lamb to China in exchange for another few years of credit extension.

Not sure if you lived here in the 1980s mortgages of 12% and higher were the NORM. If you have a big cashpile you are stoked. If you do not then you are screwed.

I am not really saying buy or dont buy now. Many people are buying now for various reasons however none of them that I know are buying because they think it is a market bottom. If you look at the most bearish posts on this site, those posters harp and harp on the fact that knifecatching buyers are doing so because they think it is a market bottom. There is a blind eye and ear to the fact that people buy homes (and other things for that matter) for other reasons then timing a market. Another hard to swallow fact is that alot of these buyers do have the resources to be able to do this. Even lately there is the “overbearing spouses” reasoning, that people are all buying because they are forced to buy thier overbearing spouse.

So whatever the reason is, people are buying, for better or for worse.

Keep your eyes open whatever you do.

[SD Realtor]

Scarlett yes I would say that if our international creditors continue to fund our debt then yes, rates will be kept artificially low. The secondary market for mortgages is essentially a socialized market backed by taxpayer money. Institutional and private investment disappeared.

Think of it this way. You buy a home. Wells or BofA originates your loan. It is then sold off on the secondary market to who? Well most likely one of the GSEs. Maybe even the Fed. Where did that money come from? In this day and age it was just tossed on our tab.

Furthermore our administration is wholeheartedly spending money and building up debt faster then any of the previous ones. This is what the majority of people in our country want. It is much easier to be taken care of then to take care of things.

So yes as long as everyone plays nice the dominoes will not fall. Todays dollar compared to 10 years ago dollar is about worth 62 cents. When the dominoes do fall we will see substantially higher rates. There may be some political horsetrading to lessen the blow. For instance maybe Taiwan will be a sacrificial lamb to China in exchange for another few years of credit extension.

Not sure if you lived here in the 1980s mortgages of 12% and higher were the NORM. If you have a big cashpile you are stoked. If you do not then you are screwed.

I am not really saying buy or dont buy now. Many people are buying now for various reasons however none of them that I know are buying because they think it is a market bottom. If you look at the most bearish posts on this site, those posters harp and harp on the fact that knifecatching buyers are doing so because they think it is a market bottom. There is a blind eye and ear to the fact that people buy homes (and other things for that matter) for other reasons then timing a market. Another hard to swallow fact is that alot of these buyers do have the resources to be able to do this. Even lately there is the “overbearing spouses” reasoning, that people are all buying because they are forced to buy thier overbearing spouse.

So whatever the reason is, people are buying, for better or for worse.

Keep your eyes open whatever you do.

[SD Realtor]

Scarlett yes I would say that if our international creditors continue to fund our debt then yes, rates will be kept artificially low. The secondary market for mortgages is essentially a socialized market backed by taxpayer money. Institutional and private investment disappeared.

Think of it this way. You buy a home. Wells or BofA originates your loan. It is then sold off on the secondary market to who? Well most likely one of the GSEs. Maybe even the Fed. Where did that money come from? In this day and age it was just tossed on our tab.

Furthermore our administration is wholeheartedly spending money and building up debt faster then any of the previous ones. This is what the majority of people in our country want. It is much easier to be taken care of then to take care of things.

So yes as long as everyone plays nice the dominoes will not fall. Todays dollar compared to 10 years ago dollar is about worth 62 cents. When the dominoes do fall we will see substantially higher rates. There may be some political horsetrading to lessen the blow. For instance maybe Taiwan will be a sacrificial lamb to China in exchange for another few years of credit extension.

Not sure if you lived here in the 1980s mortgages of 12% and higher were the NORM. If you have a big cashpile you are stoked. If you do not then you are screwed.

I am not really saying buy or dont buy now. Many people are buying now for various reasons however none of them that I know are buying because they think it is a market bottom. If you look at the most bearish posts on this site, those posters harp and harp on the fact that knifecatching buyers are doing so because they think it is a market bottom. There is a blind eye and ear to the fact that people buy homes (and other things for that matter) for other reasons then timing a market. Another hard to swallow fact is that alot of these buyers do have the resources to be able to do this. Even lately there is the “overbearing spouses” reasoning, that people are all buying because they are forced to buy thier overbearing spouse.

So whatever the reason is, people are buying, for better or for worse.

Keep your eyes open whatever you do.

[Author]

Posts