Fed cuts discount rate by 50 basis point.

[Coronita]

Thanks Chris for the advice. You’re advice is noted.

I haven’t short recently myself, just trying to move in and out of long positions on the volatility. But I’m going to stop any day now 🙂 And it’s just play money right now.

[Coronita]

There is still the basic problem here, It takes about 250K a year income to buy a 600K – 800K house if you ever plan on paying it off anyway. (unless you bring a lot $ to the table of course). No amount of band aids is going to change that. 20% raises anyone ????

 

 

Nor-LA-Temcu-SD-Guy, Sorry, I should have started this thread as off-topic. Because, I was more concerned about the stock market instead of the housing market.  I don't care about housing right now, because it's not where the opportunity is right now. Trying to figure out how to take advantage of this volatility in the stock market these days.

 

[Coronita]

There is still the basic problem here, It takes about 250K a year income to buy a 600K – 800K house if you ever plan on paying it off anyway. (unless you bring a lot $ to the table of course). No amount of band aids is going to change that. 20% raises anyone ????

 

 

Nor-LA-Temcu-SD-Guy, Sorry, I should have started this thread as off-topic. Because, I was more concerned about the stock market instead of the housing market.  I don't care about housing right now, because it's not where the opportunity is right now. Trying to figure out how to take advantage of this volatility in the stock market these days.

 

[Coronita]

There is still the basic problem here, It takes about 250K a year income to buy a 600K – 800K house if you ever plan on paying it off anyway. (unless you bring a lot $ to the table of course). No amount of band aids is going to change that. 20% raises anyone ????

 

 

Nor-LA-Temcu-SD-Guy, Sorry, I should have started this thread as off-topic. Because, I was more concerned about the stock market instead of the housing market.  I don't care about housing right now, because it's not where the opportunity is right now. Trying to figure out how to take advantage of this volatility in the stock market these days.

 

[GoUSC]

Well I think he was pointing out that fundamentally, the economic outlook for the economy in general is poor because regardless of what the FED does, their are still tons of risk from sub-prime out there.

[GoUSC]

Well I think he was pointing out that fundamentally, the economic outlook for the economy in general is poor because regardless of what the FED does, their are still tons of risk from sub-prime out there.

[GoUSC]

Well I think he was pointing out that fundamentally, the economic outlook for the economy in general is poor because regardless of what the FED does, their are still tons of risk from sub-prime out there.

[HereWeGo]

Of course. But this stops the possibility of a near term disaster. Housing will still fall, exotic mortgage products will still be very, very hard to get. That does not change, IMO.

[HereWeGo]

Of course. But this stops the possibility of a near term disaster. Housing will still fall, exotic mortgage products will still be very, very hard to get. That does not change, IMO.

[HereWeGo]

Of course. But this stops the possibility of a near term disaster. Housing will still fall, exotic mortgage products will still be very, very hard to get. That does not change, IMO.

[privatebanker]

This is only helping the banks stay a float… I don’t view this as a positive. If anything, it further confirms that things are getting really bad.

“The current crisis is the result of the normal ebb and flows of
credit cycles, and the free market will amply handle the correction
that is already happening. Calls for Federal Reserve intervention or
for other governmental involvement — including an increase of the
Fannie Mae/Freddie Mac lending limits — must be rejected.

In the free market, those that made bad credit decisions must be
allowed to pay the price, and only by paying dearly can lessons truly
be learned. Borrowers who were unwitting and took on too much debt
must learn that there are consequences for their actions. Homebuilders
that built too many homes or overpaid for land need to face the
consequences. Wall Street firms that provided credit to all of these
activities with too much laxity must also pay a price. This is all
part of a healthy correction.

All of these players reaped benefits during the housing boom that
preceded the current crisis. Certain homeowners were able to
temporarily live above their means. Homebuilder and bank profits have
been exorbitant, and shareholders and executives of these companies
have profited mightily in the boom. To not permit losses now would be
a direct violation of the free-market ideals at the foundation of our
economy.”

[privatebanker]

This is only helping the banks stay a float… I don’t view this as a positive. If anything, it further confirms that things are getting really bad.

“The current crisis is the result of the normal ebb and flows of
credit cycles, and the free market will amply handle the correction
that is already happening. Calls for Federal Reserve intervention or
for other governmental involvement — including an increase of the
Fannie Mae/Freddie Mac lending limits — must be rejected.

In the free market, those that made bad credit decisions must be
allowed to pay the price, and only by paying dearly can lessons truly
be learned. Borrowers who were unwitting and took on too much debt
must learn that there are consequences for their actions. Homebuilders
that built too many homes or overpaid for land need to face the
consequences. Wall Street firms that provided credit to all of these
activities with too much laxity must also pay a price. This is all
part of a healthy correction.

All of these players reaped benefits during the housing boom that
preceded the current crisis. Certain homeowners were able to
temporarily live above their means. Homebuilder and bank profits have
been exorbitant, and shareholders and executives of these companies
have profited mightily in the boom. To not permit losses now would be
a direct violation of the free-market ideals at the foundation of our
economy.”

[privatebanker]

This is only helping the banks stay a float… I don’t view this as a positive. If anything, it further confirms that things are getting really bad.

“The current crisis is the result of the normal ebb and flows of
credit cycles, and the free market will amply handle the correction
that is already happening. Calls for Federal Reserve intervention or
for other governmental involvement — including an increase of the
Fannie Mae/Freddie Mac lending limits — must be rejected.

In the free market, those that made bad credit decisions must be
allowed to pay the price, and only by paying dearly can lessons truly
be learned. Borrowers who were unwitting and took on too much debt
must learn that there are consequences for their actions. Homebuilders
that built too many homes or overpaid for land need to face the
consequences. Wall Street firms that provided credit to all of these
activities with too much laxity must also pay a price. This is all
part of a healthy correction.

All of these players reaped benefits during the housing boom that
preceded the current crisis. Certain homeowners were able to
temporarily live above their means. Homebuilder and bank profits have
been exorbitant, and shareholders and executives of these companies
have profited mightily in the boom. To not permit losses now would be
a direct violation of the free-market ideals at the foundation of our
economy.”

[LA_Renter]

It appears the Fed is trying to restore some sort of order here. The root cause of all these problems are bad mortgages which resulted from ridiculously low rates and literally no underwritng, the Fed recognizes this. I don’t think they see the Fed Funds rate as being too high. I imagine the market will price in a pretty steep Fed Funds rate cut, I don’t think that is going to happen and in the face of a structurally weak dollar I still think it would be a mistake. IMO they need to send the message that they will not bail lenders out of the bad loans and poor practices. This latest action was not a bail out and was probably the right move.

[LA_Renter]

It appears the Fed is trying to restore some sort of order here. The root cause of all these problems are bad mortgages which resulted from ridiculously low rates and literally no underwritng, the Fed recognizes this. I don’t think they see the Fed Funds rate as being too high. I imagine the market will price in a pretty steep Fed Funds rate cut, I don’t think that is going to happen and in the face of a structurally weak dollar I still think it would be a mistake. IMO they need to send the message that they will not bail lenders out of the bad loans and poor practices. This latest action was not a bail out and was probably the right move.

[Author]

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