Mr.Mortgage predicts two bottoms…

[5yearwaiter]

[quote=Bob][quote]
If he decides to pull out, you will see the stock market drop, and at the same time, you will see mortgage rates spike.
[/quote]

Bob, How mortgage rates spike happens if Bernanke pull out the Fed feeding to treasuries?. I know I am not up to your level of guess interms of bond market etc – so this question.

[(former)FormerSanDiegan]

[quote=sdrealtor]Low rates for the foreseeable future…housing prices falling slower and slower…inflation raising the price of everything else and eventually incomes also. Voila!! Back in balance at some point in the future. Since about 2004 I always thought it would be around 2011 or 2012.[/quote]

Balance in southern CA real estate tends to be a discrete point in time which we pass through rather quickly when going from one extreme to the other.
It’s like the Equinox, where for a brief moment, the night and day are in balance, but it occurs at the maximum rate of change between the extremes, resulting in a situation where being close to this perfect balance is a fleeting moment in time.

[(former)FormerSanDiegan]

[quote=sdrealtor]Low rates for the foreseeable future…housing prices falling slower and slower…inflation raising the price of everything else and eventually incomes also. Voila!! Back in balance at some point in the future. Since about 2004 I always thought it would be around 2011 or 2012.[/quote]

Balance in southern CA real estate tends to be a discrete point in time which we pass through rather quickly when going from one extreme to the other.
It’s like the Equinox, where for a brief moment, the night and day are in balance, but it occurs at the maximum rate of change between the extremes, resulting in a situation where being close to this perfect balance is a fleeting moment in time.

[(former)FormerSanDiegan]

[quote=sdrealtor]Low rates for the foreseeable future…housing prices falling slower and slower…inflation raising the price of everything else and eventually incomes also. Voila!! Back in balance at some point in the future. Since about 2004 I always thought it would be around 2011 or 2012.[/quote]

Balance in southern CA real estate tends to be a discrete point in time which we pass through rather quickly when going from one extreme to the other.
It’s like the Equinox, where for a brief moment, the night and day are in balance, but it occurs at the maximum rate of change between the extremes, resulting in a situation where being close to this perfect balance is a fleeting moment in time.

[(former)FormerSanDiegan]

[quote=sdrealtor]Low rates for the foreseeable future…housing prices falling slower and slower…inflation raising the price of everything else and eventually incomes also. Voila!! Back in balance at some point in the future. Since about 2004 I always thought it would be around 2011 or 2012.[/quote]

Balance in southern CA real estate tends to be a discrete point in time which we pass through rather quickly when going from one extreme to the other.
It’s like the Equinox, where for a brief moment, the night and day are in balance, but it occurs at the maximum rate of change between the extremes, resulting in a situation where being close to this perfect balance is a fleeting moment in time.

[(former)FormerSanDiegan]

[quote=sdrealtor]Low rates for the foreseeable future…housing prices falling slower and slower…inflation raising the price of everything else and eventually incomes also. Voila!! Back in balance at some point in the future. Since about 2004 I always thought it would be around 2011 or 2012.[/quote]

Balance in southern CA real estate tends to be a discrete point in time which we pass through rather quickly when going from one extreme to the other.
It’s like the Equinox, where for a brief moment, the night and day are in balance, but it occurs at the maximum rate of change between the extremes, resulting in a situation where being close to this perfect balance is a fleeting moment in time.

[sdduuuude]

[quote=Bob][quote=sdduuuude]
You gotta lotta nerve, there Bob, or should I call you “member for 3 weeks Bob” ?[/quote]

Flattery will get you nowhere.
[/quote]

Don’t worry – I’ll only call you that for another 4 days.

[sdduuuude]

[quote=Bob][quote=sdduuuude]
You gotta lotta nerve, there Bob, or should I call you “member for 3 weeks Bob” ?[/quote]

Flattery will get you nowhere.
[/quote]

Don’t worry – I’ll only call you that for another 4 days.

[sdduuuude]

[quote=Bob][quote=sdduuuude]
You gotta lotta nerve, there Bob, or should I call you “member for 3 weeks Bob” ?[/quote]

Flattery will get you nowhere.
[/quote]

Don’t worry – I’ll only call you that for another 4 days.

[sdduuuude]

[quote=Bob][quote=sdduuuude]
You gotta lotta nerve, there Bob, or should I call you “member for 3 weeks Bob” ?[/quote]

Flattery will get you nowhere.
[/quote]

Don’t worry – I’ll only call you that for another 4 days.

[sdduuuude]

[quote=Bob][quote=sdduuuude]
You gotta lotta nerve, there Bob, or should I call you “member for 3 weeks Bob” ?[/quote]

Flattery will get you nowhere.
[/quote]

Don’t worry – I’ll only call you that for another 4 days.

[carlsbadworker]

[quote=Bob]The problem for the Fed, and they are openly discussing it now, is that in order to avoid continued deflation, they have created inflation, and potentially hyper inflation. Later this summer Bernanke will have to make a very important decision…which is to say, he will have to decide whether or not to pull back on future Fed investment in US treasuries. If he decides to pull out, you will see the stock market drop, and at the same time, you will see mortgage rates spike.[/quote]

I think the biggest risk of the bond market is not that the Fed will pull out of US treasury. They can always buy again when the mortgage rate spikes. The biggest risk of the bond market is that Asia economy (particularly Chinese economy) will recover before the US does (as many economists are predicting that right now). Once the Chinese economy is in firmer footing, they will want to manage the dollar risks. So no matter how much Fed wants to buy in the US treasuries market, the Chinese government has at least 10 times that amount that they want to sell. Fed’s buying will create a perfect opportunity for them to unload their non-performing treasury asset at a much higher price to diversify into other currencies and assets. That’s the dilemma that will soon face Ben: to buy or not to buy.

[carlsbadworker]

[quote=Bob]The problem for the Fed, and they are openly discussing it now, is that in order to avoid continued deflation, they have created inflation, and potentially hyper inflation. Later this summer Bernanke will have to make a very important decision…which is to say, he will have to decide whether or not to pull back on future Fed investment in US treasuries. If he decides to pull out, you will see the stock market drop, and at the same time, you will see mortgage rates spike.[/quote]

I think the biggest risk of the bond market is not that the Fed will pull out of US treasury. They can always buy again when the mortgage rate spikes. The biggest risk of the bond market is that Asia economy (particularly Chinese economy) will recover before the US does (as many economists are predicting that right now). Once the Chinese economy is in firmer footing, they will want to manage the dollar risks. So no matter how much Fed wants to buy in the US treasuries market, the Chinese government has at least 10 times that amount that they want to sell. Fed’s buying will create a perfect opportunity for them to unload their non-performing treasury asset at a much higher price to diversify into other currencies and assets. That’s the dilemma that will soon face Ben: to buy or not to buy.

[carlsbadworker]

[quote=Bob]The problem for the Fed, and they are openly discussing it now, is that in order to avoid continued deflation, they have created inflation, and potentially hyper inflation. Later this summer Bernanke will have to make a very important decision…which is to say, he will have to decide whether or not to pull back on future Fed investment in US treasuries. If he decides to pull out, you will see the stock market drop, and at the same time, you will see mortgage rates spike.[/quote]

I think the biggest risk of the bond market is not that the Fed will pull out of US treasury. They can always buy again when the mortgage rate spikes. The biggest risk of the bond market is that Asia economy (particularly Chinese economy) will recover before the US does (as many economists are predicting that right now). Once the Chinese economy is in firmer footing, they will want to manage the dollar risks. So no matter how much Fed wants to buy in the US treasuries market, the Chinese government has at least 10 times that amount that they want to sell. Fed’s buying will create a perfect opportunity for them to unload their non-performing treasury asset at a much higher price to diversify into other currencies and assets. That’s the dilemma that will soon face Ben: to buy or not to buy.

[carlsbadworker]

[quote=Bob]The problem for the Fed, and they are openly discussing it now, is that in order to avoid continued deflation, they have created inflation, and potentially hyper inflation. Later this summer Bernanke will have to make a very important decision…which is to say, he will have to decide whether or not to pull back on future Fed investment in US treasuries. If he decides to pull out, you will see the stock market drop, and at the same time, you will see mortgage rates spike.[/quote]

I think the biggest risk of the bond market is not that the Fed will pull out of US treasury. They can always buy again when the mortgage rate spikes. The biggest risk of the bond market is that Asia economy (particularly Chinese economy) will recover before the US does (as many economists are predicting that right now). Once the Chinese economy is in firmer footing, they will want to manage the dollar risks. So no matter how much Fed wants to buy in the US treasuries market, the Chinese government has at least 10 times that amount that they want to sell. Fed’s buying will create a perfect opportunity for them to unload their non-performing treasury asset at a much higher price to diversify into other currencies and assets. That’s the dilemma that will soon face Ben: to buy or not to buy.

[Author]

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