Do interest rates worry you?

[jpinpb]

I agree the government will drag this out as long as possible so it will be less painful. I don’t think it will help much, but they will try. I just think of Japan and their lowering of rates and how it did not really help them.

On another note, I reconsider that higher rates will lower houses. I remember somewhere there was a thread that charted rates and housing prices. There was a time when prices were high and rates were high also.

Still, though, I think it’s a different animal this time b/c of the amount of free money, the teaser rates that allowed people to buy double the house – doubling the price. An abrupt turning off the spigot of free money is resulting in declines. I believe raising rates will push prices lower. JM2C.

[JWM in SD]

“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”

Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.

[JWM in SD]

“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”

Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.

[JWM in SD]

“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”

Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.

[JWM in SD]

“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”

Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.

[JWM in SD]

“JWM I THOROUGHLY agree with your argument that in the future rates will have to go up. I simply do not see how they cannot. However I am not so sure they will happen in the timeframe you are speaking of or at the pace you are hoping for… Personally I would love to see it happen as well because for me as a potential buyer with alot of cash saved up, it would serve to increase my purchasing power, somewhat. However I have given up trying to make statements such as this or that HAS to happen.”

Actually, I’m not really hoping for anything. That timeframe is an amalgamation of predictions that I’ve gathered from various posts at sites like Calculated Risk (not CR personally), Mish Shedlock, The Mess that Greenspan Made, Market Ticker (I don’t agree with KD on all, but some posters there are very astute), and The Big Picture. Personally, I don’t care. My timeframe for letting this whole mess sort itself out is well into 2012. I’ve pushed the idea of buying a house completely out of my mind and emotions. It just is not a consideration until I see certain macro level changes take place on both a national and state level.

[JWM in SD]

AN,

You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.

You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.

[JWM in SD]

AN,

You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.

You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.

[JWM in SD]

AN,

You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.

You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.

[JWM in SD]

AN,

You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.

You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.

[JWM in SD]

AN,

You are confusing a couple of things I think. The FED doesn’t have absolute control over the interest rates in the general market. They only control FFR which is the interbank rate. Banks are not lending to each other right now because they don’t know who is solvent and who is not.
That situation can and will lead to higher unemployment at some point.

You still have not explained how we can’t have a recession and inflation simultaneously. I can explain it…we already had the inflation…only it was largely within a couple of different asset classes namely Real Estate and the Financial Sector (hedge funds). That is where the money went…well it went there and ultimately ended up on wall street after realtors, mortgage brokers, securitizers, Bond Insurers, etc, took their cuts from the money. Volcker raised rates because he took monetarist view of the problem as opposed to a supply side perspective. He hastened a recession that might have been worse otherwise. It needs to happen now as well.

[an]

JWM in SD, I think we were debating about different things. I was referring to FFR.

You still have not explained how we can’t have a recession and inflation simultaneously.
Why can’t we have both at the same time? Wasn’t that what happened in the 70s before Volcker took control? Inflation was high and GDP was negative, so they actually declared recession. That’s what they called stagflation. But I guess you don’t believe that was what happened.

[an]

JWM in SD, I think we were debating about different things. I was referring to FFR.

You still have not explained how we can’t have a recession and inflation simultaneously.
Why can’t we have both at the same time? Wasn’t that what happened in the 70s before Volcker took control? Inflation was high and GDP was negative, so they actually declared recession. That’s what they called stagflation. But I guess you don’t believe that was what happened.

[an]

JWM in SD, I think we were debating about different things. I was referring to FFR.

You still have not explained how we can’t have a recession and inflation simultaneously.
Why can’t we have both at the same time? Wasn’t that what happened in the 70s before Volcker took control? Inflation was high and GDP was negative, so they actually declared recession. That’s what they called stagflation. But I guess you don’t believe that was what happened.

[an]

JWM in SD, I think we were debating about different things. I was referring to FFR.

You still have not explained how we can’t have a recession and inflation simultaneously.
Why can’t we have both at the same time? Wasn’t that what happened in the 70s before Volcker took control? Inflation was high and GDP was negative, so they actually declared recession. That’s what they called stagflation. But I guess you don’t believe that was what happened.

[Author]

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