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Alex_angel.
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June 12, 2007 at 3:49 PM #58797June 12, 2007 at 3:49 PM #58826
SD Realtor
ParticipantPerry –
I think that you conveniently omit that effect of high interest rates on corporate spending as well as commerical and small business lending. Not to mention other capital investments. Also you are promoting an inflationary environment. I am not saying this is not needed but I just am saying that there will be other ramifications that nobody seems to mentioning or considering.
Yes I heartily agree that a tight money supply will help week out undesireable consumerism. That is fine and is necessary. However I do not agree that a broad swath saying high interest rates are good, should be made without contemplating other ramifications.
Yes we all want a housing market that is affordable. A previous post was made that was VERY correct about how the real rate of inflation has been hidden and that is very true. So that is starting to unwind and it is necessary that it does.
SD Realtor
June 12, 2007 at 3:53 PM #58803drunkle
Participantit’s probably high time in the course of us history for economic upheaval and the resultant political calamity. the ‘free market’ running its course since reagan has no choice but to experience social/political “blowback” (word of moment).
high interest rates and economic recession/depression killing the little guy. the little guy is what most of america is made of. when the little guy stands up to the big guy, there’s gonna be some interesting television. it’ll be better than a fox reality show, although hell’s kitchen is pretty damn entertaining.
then again, under homeland security, guantanamo may become home to some 70 million people.
June 12, 2007 at 3:53 PM #58832Participantit’s probably high time in the course of us history for economic upheaval and the resultant political calamity. the ‘free market’ running its course since reagan has no choice but to experience social/political “blowback” (word of moment).
high interest rates and economic recession/depression killing the little guy. the little guy is what most of america is made of. when the little guy stands up to the big guy, there’s gonna be some interesting television. it’ll be better than a fox reality show, although hell’s kitchen is pretty damn entertaining.
then again, under homeland security, guantanamo may become home to some 70 million people.
June 12, 2007 at 4:11 PM #58807Anonymous
GuestFrom a socio-economic stand point sellers are essentially being forced into compromising and lowering their listing prices. Buyers can only afford so much in monthly payments therefore they (we) have been waiting on the sidelines for prices to drop to a normalized and fair level. And sellers are not budging on price because they do not want to take the loss of their imaginary profit margins, or because they cannot afford to reduce the price to less then they paid. Therefore we all sit at a stalemate with no one really moving on either side by any noteable amount. The third player at this party has also been sitting on their hands watching and waiting. That player is the feds. By the feds increasing lending rates sellers will be forced into lowering prices to make their homes more affordable for buyers. With the market not self adjusting fast enough it seems the govt has decided to quitely step in and nudge the situation. How much nudging is needed to spur the market, and will it help or hurt the market remains to be seen?
~Just my HO~I am sure that all Pigginton’s are hoping that it knocks some serious sense into sellers. Game On!!
June 12, 2007 at 4:11 PM #58836GuestFrom a socio-economic stand point sellers are essentially being forced into compromising and lowering their listing prices. Buyers can only afford so much in monthly payments therefore they (we) have been waiting on the sidelines for prices to drop to a normalized and fair level. And sellers are not budging on price because they do not want to take the loss of their imaginary profit margins, or because they cannot afford to reduce the price to less then they paid. Therefore we all sit at a stalemate with no one really moving on either side by any noteable amount. The third player at this party has also been sitting on their hands watching and waiting. That player is the feds. By the feds increasing lending rates sellers will be forced into lowering prices to make their homes more affordable for buyers. With the market not self adjusting fast enough it seems the govt has decided to quitely step in and nudge the situation. How much nudging is needed to spur the market, and will it help or hurt the market remains to be seen?
~Just my HO~I am sure that all Pigginton’s are hoping that it knocks some serious sense into sellers. Game On!!
June 12, 2007 at 4:24 PM #58809jeeman
ParticipantRecessions are always NEEDED to wash out excesses in business. While it temporarily hurts everyone, it enhances progress in all aspects of life. Look at what happens under socialism/communism…when inefficiences are not cleansed out of “business”, then the whole system becomes unwieldy and uncompetitive.
America was in decline during the late 60s and 70s. Thanks to JFK, he cut the top marginal tax rate from 90% to 70% which bought a few more years. Reagan cut it from 70% to 33%. Only then was an sustained economic boom started which, except for a few years, continues until today. Excesses are found in every market, and that is a part of human psychology.
I am doing a presentation on Charles Munger’s speech of “24 Standard Causes of Human Misjudgement”. The way to profit from this is to understand human misjudgement and their causes and “exploit it”.
http://www.vinvesting.com/docs/munger/human_misjudgement.html
In America, the little guy firmly believes that their fate is in their own hands. However, many Americans on the left are looking to Uncle Sam to be their sugar daddy and they welcome socialist tendencies. Well, if we ever go that route, we can welcome 10-15% unemployment rates and very heavy tax burdens that the european countries generally enjoy.
Even the rich in Europe create bank accounts in other countries to escape the high tax burden needed to make sure the little man doesn’t have to work too hard.
June 12, 2007 at 4:24 PM #58838ParticipantRecessions are always NEEDED to wash out excesses in business. While it temporarily hurts everyone, it enhances progress in all aspects of life. Look at what happens under socialism/communism…when inefficiences are not cleansed out of “business”, then the whole system becomes unwieldy and uncompetitive.
America was in decline during the late 60s and 70s. Thanks to JFK, he cut the top marginal tax rate from 90% to 70% which bought a few more years. Reagan cut it from 70% to 33%. Only then was an sustained economic boom started which, except for a few years, continues until today. Excesses are found in every market, and that is a part of human psychology.
I am doing a presentation on Charles Munger’s speech of “24 Standard Causes of Human Misjudgement”. The way to profit from this is to understand human misjudgement and their causes and “exploit it”.
http://www.vinvesting.com/docs/munger/human_misjudgement.html
In America, the little guy firmly believes that their fate is in their own hands. However, many Americans on the left are looking to Uncle Sam to be their sugar daddy and they welcome socialist tendencies. Well, if we ever go that route, we can welcome 10-15% unemployment rates and very heavy tax burdens that the european countries generally enjoy.
Even the rich in Europe create bank accounts in other countries to escape the high tax burden needed to make sure the little man doesn’t have to work too hard.
June 12, 2007 at 4:51 PM #58817kewp
ParticipantWell, if we ever go that route, we can welcome 10-15% unemployment rates and very heavy tax burdens that the european countries generally enjoy.
Dear Lord, will we also have to enjoy their universal healthcare, education, lower crime and higher quality of life?
TEH HORRORZ!!!
June 12, 2007 at 4:51 PM #58846ParticipantWell, if we ever go that route, we can welcome 10-15% unemployment rates and very heavy tax burdens that the european countries generally enjoy.
Dear Lord, will we also have to enjoy their universal healthcare, education, lower crime and higher quality of life?
TEH HORRORZ!!!
June 12, 2007 at 4:55 PM #58821Participant“Dear Lord, will we also have to enjoy their universal healthcare, education, lower crime and higher quality of life?”
Right, the universal healthcare and higher quality of life comes about when the rich are paying for your desire to work 3 hours and then take a 3 hour nap and then hopefully go back to work if you’re not too busy drinking your mid-afternoon wine.
Sure, higher quality of life at the expense of those who actually earn the money. But personally it would be depressing to see the lack of motivation and low achievement in those around me. If you look forward to those things, you can enjoy them in France right now. 🙂
Jeeman
June 12, 2007 at 4:55 PM #58850Participant“Dear Lord, will we also have to enjoy their universal healthcare, education, lower crime and higher quality of life?”
Right, the universal healthcare and higher quality of life comes about when the rich are paying for your desire to work 3 hours and then take a 3 hour nap and then hopefully go back to work if you’re not too busy drinking your mid-afternoon wine.
Sure, higher quality of life at the expense of those who actually earn the money. But personally it would be depressing to see the lack of motivation and low achievement in those around me. If you look forward to those things, you can enjoy them in France right now. 🙂
Jeeman
June 12, 2007 at 5:14 PM #58825PD
ParticipantToday, 10 year treasuries rose their to highest in 5 years. We are now seeing 30 year fixed rates flirting with 6.75%. The fed isn’t in control of rates. J6P has no idea…
June 12, 2007 at 5:14 PM #58854ParticipantToday, 10 year treasuries rose their to highest in 5 years. We are now seeing 30 year fixed rates flirting with 6.75%. The fed isn’t in control of rates. J6P has no idea…
June 12, 2007 at 5:16 PM #58827HereWeGo
ParticipantIf you look forward to those things, you can enjoy them in France right now. 🙂
Not for long.
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