Kramer talks about CA

[svelte]

I am baffled that people thought the US Govt would sit by idly and do nothing. That’s what Hoover did in 1929 and they aren’t about to repeat that purist “no federal relief” stance of his that prolonged the pain for years.

This time around, there will likely be a 3 pronged attack to head off dire straights:
– Government bailout to the greatest extent possible.
– Infusions from countries that we have a trade deficit with (witness the oil producing region and Citibank)…they don’t want us to stop buying their stuff!
– If the first two don’t work, I would look for a spike in inflation….they have a built-in excuse with rising energy costs. If paychecks increase, house values may stop falling and the number of owners underwater can be minimized. The big losers if this does indeed happen: renters and those living on fixed incomes.

This is gonna be painful, but I doubt it will be catastrophic given the new interdependencies of economies around the world.

Should one buy or rent right now? The consensus here is clearly that renting is the only way to go. I’m not so sure it is that black and white. Ladies and gentlemen, place your bets and let’s roll those dice!

[LA_Renter]

” If paychecks increase”

I don’t see that inflation going into paychecks. Look the housing bubble popped as in past tense. We are way past the point of propping this up. Japan, which is looking like a good comparison with each passing day is a classic example. Their property market has fallen for 20 years with a ZIRP policy. The housing correction is going to play out, even the blow hards on wall street acknowledge that.

[LA_Renter]

” If paychecks increase”

I don’t see that inflation going into paychecks. Look the housing bubble popped as in past tense. We are way past the point of propping this up. Japan, which is looking like a good comparison with each passing day is a classic example. Their property market has fallen for 20 years with a ZIRP policy. The housing correction is going to play out, even the blow hards on wall street acknowledge that.

[LA_Renter]

” If paychecks increase”

I don’t see that inflation going into paychecks. Look the housing bubble popped as in past tense. We are way past the point of propping this up. Japan, which is looking like a good comparison with each passing day is a classic example. Their property market has fallen for 20 years with a ZIRP policy. The housing correction is going to play out, even the blow hards on wall street acknowledge that.

[LA_Renter]

” If paychecks increase”

I don’t see that inflation going into paychecks. Look the housing bubble popped as in past tense. We are way past the point of propping this up. Japan, which is looking like a good comparison with each passing day is a classic example. Their property market has fallen for 20 years with a ZIRP policy. The housing correction is going to play out, even the blow hards on wall street acknowledge that.

[LA_Renter]

” If paychecks increase”

I don’t see that inflation going into paychecks. Look the housing bubble popped as in past tense. We are way past the point of propping this up. Japan, which is looking like a good comparison with each passing day is a classic example. Their property market has fallen for 20 years with a ZIRP policy. The housing correction is going to play out, even the blow hards on wall street acknowledge that.

[NotCranky]

I still don’t see how any of this will stop the depreciation of homes. The fundamental fact is that wages aren’t rising and the average person can’t afford the average house and there won’t be a return to easy lending and interest only loans.

Radelow, posts in the last couple of days, on various threads seemed to bring the consensus to the point where it is agreed house hold incomes have risen? Of course there are exceptions for RE related and will be for not so recession proof positions.

I look at loan modification, moratoriums, credit infusions and rate manipulation to the downside as potential delay tactics and damage control. I would think they should have some effect. There are so many unsalvagable properties out there that the correction will be fast despite any efforts to the contrary but the floor will be brought up to the extent any salvage can be successful. Just food for thought.

[NotCranky]

I still don’t see how any of this will stop the depreciation of homes. The fundamental fact is that wages aren’t rising and the average person can’t afford the average house and there won’t be a return to easy lending and interest only loans.

Radelow, posts in the last couple of days, on various threads seemed to bring the consensus to the point where it is agreed house hold incomes have risen? Of course there are exceptions for RE related and will be for not so recession proof positions.

I look at loan modification, moratoriums, credit infusions and rate manipulation to the downside as potential delay tactics and damage control. I would think they should have some effect. There are so many unsalvagable properties out there that the correction will be fast despite any efforts to the contrary but the floor will be brought up to the extent any salvage can be successful. Just food for thought.

[NotCranky]

I still don’t see how any of this will stop the depreciation of homes. The fundamental fact is that wages aren’t rising and the average person can’t afford the average house and there won’t be a return to easy lending and interest only loans.

Radelow, posts in the last couple of days, on various threads seemed to bring the consensus to the point where it is agreed house hold incomes have risen? Of course there are exceptions for RE related and will be for not so recession proof positions.

I look at loan modification, moratoriums, credit infusions and rate manipulation to the downside as potential delay tactics and damage control. I would think they should have some effect. There are so many unsalvagable properties out there that the correction will be fast despite any efforts to the contrary but the floor will be brought up to the extent any salvage can be successful. Just food for thought.

[NotCranky]

I still don’t see how any of this will stop the depreciation of homes. The fundamental fact is that wages aren’t rising and the average person can’t afford the average house and there won’t be a return to easy lending and interest only loans.

Radelow, posts in the last couple of days, on various threads seemed to bring the consensus to the point where it is agreed house hold incomes have risen? Of course there are exceptions for RE related and will be for not so recession proof positions.

I look at loan modification, moratoriums, credit infusions and rate manipulation to the downside as potential delay tactics and damage control. I would think they should have some effect. There are so many unsalvagable properties out there that the correction will be fast despite any efforts to the contrary but the floor will be brought up to the extent any salvage can be successful. Just food for thought.

[NotCranky]

I still don’t see how any of this will stop the depreciation of homes. The fundamental fact is that wages aren’t rising and the average person can’t afford the average house and there won’t be a return to easy lending and interest only loans.

Radelow, posts in the last couple of days, on various threads seemed to bring the consensus to the point where it is agreed house hold incomes have risen? Of course there are exceptions for RE related and will be for not so recession proof positions.

I look at loan modification, moratoriums, credit infusions and rate manipulation to the downside as potential delay tactics and damage control. I would think they should have some effect. There are so many unsalvagable properties out there that the correction will be fast despite any efforts to the contrary but the floor will be brought up to the extent any salvage can be successful. Just food for thought.

[jeeman]

Actually, you should read the “Forgotten Man”. The myth is that the gov’t did nothing, exacerbating the fallout from the stock market.

In reality, the government was raising taxes due to lowered revenues from the stock market losses, etc. The uncertainty that gov’t intervention caused made the Great Depression last all 8 years of FDR’s first two terms. Investors don’t know what to do if they think that owning gold will be illegal or legal, if taxes will be raised, etc.

Think about what would happen if Hillary pushes for raising long term capital gains taxes to your regular income rate by the end of 2009….the market will take a huge nosedive by the end of that year, as everyone rushes take advantage of the 15% rate that is currently in place.

This is the kind of stuff that occurred in the 30s. The left in the this country revised history saying that government is the nice benevolent force that can come to the rescue. This is erroneous.

Jeeman

[jeeman]

Actually, you should read the “Forgotten Man”. The myth is that the gov’t did nothing, exacerbating the fallout from the stock market.

In reality, the government was raising taxes due to lowered revenues from the stock market losses, etc. The uncertainty that gov’t intervention caused made the Great Depression last all 8 years of FDR’s first two terms. Investors don’t know what to do if they think that owning gold will be illegal or legal, if taxes will be raised, etc.

Think about what would happen if Hillary pushes for raising long term capital gains taxes to your regular income rate by the end of 2009….the market will take a huge nosedive by the end of that year, as everyone rushes take advantage of the 15% rate that is currently in place.

This is the kind of stuff that occurred in the 30s. The left in the this country revised history saying that government is the nice benevolent force that can come to the rescue. This is erroneous.

Jeeman

[jeeman]

Actually, you should read the “Forgotten Man”. The myth is that the gov’t did nothing, exacerbating the fallout from the stock market.

In reality, the government was raising taxes due to lowered revenues from the stock market losses, etc. The uncertainty that gov’t intervention caused made the Great Depression last all 8 years of FDR’s first two terms. Investors don’t know what to do if they think that owning gold will be illegal or legal, if taxes will be raised, etc.

Think about what would happen if Hillary pushes for raising long term capital gains taxes to your regular income rate by the end of 2009….the market will take a huge nosedive by the end of that year, as everyone rushes take advantage of the 15% rate that is currently in place.

This is the kind of stuff that occurred in the 30s. The left in the this country revised history saying that government is the nice benevolent force that can come to the rescue. This is erroneous.

Jeeman

[jeeman]

Actually, you should read the “Forgotten Man”. The myth is that the gov’t did nothing, exacerbating the fallout from the stock market.

In reality, the government was raising taxes due to lowered revenues from the stock market losses, etc. The uncertainty that gov’t intervention caused made the Great Depression last all 8 years of FDR’s first two terms. Investors don’t know what to do if they think that owning gold will be illegal or legal, if taxes will be raised, etc.

Think about what would happen if Hillary pushes for raising long term capital gains taxes to your regular income rate by the end of 2009….the market will take a huge nosedive by the end of that year, as everyone rushes take advantage of the 15% rate that is currently in place.

This is the kind of stuff that occurred in the 30s. The left in the this country revised history saying that government is the nice benevolent force that can come to the rescue. This is erroneous.

Jeeman

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