Roubini on the current economic situation, with predictions

[peterb]

Prices move through the RE market slowly compared to most other markets. Foreclosures will turn into rentals as more investors purchase them and knife-catchers move into the market to own at these new and appealing prices. This should drive down rental prices as historically happens in most recessions and all depressions.

CA real unemployment is probably around 10% and rising. There already is deflation in most every asset class.

The only caveat on rentals I would have is that there may be more pressure on areas that are highly desirable for a while, as renting has more options than purchasing.

Forecasting involves identifying trends that are not reversing and following them to their conclusion or reversal. Just looking at today’s environment for rentals and not following out the progression of all these events is rather foolish and typically how we get into the problems like we are now seeing.

[urbanrealtor]

[quote=peterb]Prices move through the RE market slowly compared to most other markets. Foreclosures will turn into rentals as more investors purchase them and knife-catchers move into the market to own at these new and appealing prices. This should drive down rental prices as historically happens in most recessions and all depressions.

CA real unemployment is probably around 10% and rising. There already is deflation in most every asset class.

The only caveat on rentals I would have is that there may be more pressure on areas that are highly desirable for a while, as renting has more options than purchasing.

Forecasting involves identifying trends that are not reversing and following them to their conclusion or reversal. Just looking at today’s environment for rentals and not following out the progression of all these events is rather foolish and typically how we get into the problems like we are now seeing.[/quote]

Again, I think we are talking past each other on this. I agree with you long term. But economic strategy (fiscal, monetary, or investment) is all about timing. I don’t mean trying to time the bottom but in being able to accurately say where one is at now. Right now, we are in situation where we have noticeably fewer buyers than properties. However, we have (in some micromarkets) more people than available space.
In those areas, it seems unlikely that buying with lower carrying costs than rent (for owner occupied) is particularly suicidal. Housing has an intrinsic value that other measures of wealth (even commodities) do not. Would you disagree?

http://www.signonsandiego.com/uniontrib/20080928/news_1h28rent.html

[urbanrealtor]

[quote=peterb]Prices move through the RE market slowly compared to most other markets. Foreclosures will turn into rentals as more investors purchase them and knife-catchers move into the market to own at these new and appealing prices. This should drive down rental prices as historically happens in most recessions and all depressions.

CA real unemployment is probably around 10% and rising. There already is deflation in most every asset class.

The only caveat on rentals I would have is that there may be more pressure on areas that are highly desirable for a while, as renting has more options than purchasing.

Forecasting involves identifying trends that are not reversing and following them to their conclusion or reversal. Just looking at today’s environment for rentals and not following out the progression of all these events is rather foolish and typically how we get into the problems like we are now seeing.[/quote]

Again, I think we are talking past each other on this. I agree with you long term. But economic strategy (fiscal, monetary, or investment) is all about timing. I don’t mean trying to time the bottom but in being able to accurately say where one is at now. Right now, we are in situation where we have noticeably fewer buyers than properties. However, we have (in some micromarkets) more people than available space.
In those areas, it seems unlikely that buying with lower carrying costs than rent (for owner occupied) is particularly suicidal. Housing has an intrinsic value that other measures of wealth (even commodities) do not. Would you disagree?

http://www.signonsandiego.com/uniontrib/20080928/news_1h28rent.html

[urbanrealtor]

[quote=peterb]Prices move through the RE market slowly compared to most other markets. Foreclosures will turn into rentals as more investors purchase them and knife-catchers move into the market to own at these new and appealing prices. This should drive down rental prices as historically happens in most recessions and all depressions.

CA real unemployment is probably around 10% and rising. There already is deflation in most every asset class.

The only caveat on rentals I would have is that there may be more pressure on areas that are highly desirable for a while, as renting has more options than purchasing.

Forecasting involves identifying trends that are not reversing and following them to their conclusion or reversal. Just looking at today’s environment for rentals and not following out the progression of all these events is rather foolish and typically how we get into the problems like we are now seeing.[/quote]

Again, I think we are talking past each other on this. I agree with you long term. But economic strategy (fiscal, monetary, or investment) is all about timing. I don’t mean trying to time the bottom but in being able to accurately say where one is at now. Right now, we are in situation where we have noticeably fewer buyers than properties. However, we have (in some micromarkets) more people than available space.
In those areas, it seems unlikely that buying with lower carrying costs than rent (for owner occupied) is particularly suicidal. Housing has an intrinsic value that other measures of wealth (even commodities) do not. Would you disagree?

http://www.signonsandiego.com/uniontrib/20080928/news_1h28rent.html

[urbanrealtor]

[quote=peterb]Prices move through the RE market slowly compared to most other markets. Foreclosures will turn into rentals as more investors purchase them and knife-catchers move into the market to own at these new and appealing prices. This should drive down rental prices as historically happens in most recessions and all depressions.

CA real unemployment is probably around 10% and rising. There already is deflation in most every asset class.

The only caveat on rentals I would have is that there may be more pressure on areas that are highly desirable for a while, as renting has more options than purchasing.

Forecasting involves identifying trends that are not reversing and following them to their conclusion or reversal. Just looking at today’s environment for rentals and not following out the progression of all these events is rather foolish and typically how we get into the problems like we are now seeing.[/quote]

Again, I think we are talking past each other on this. I agree with you long term. But economic strategy (fiscal, monetary, or investment) is all about timing. I don’t mean trying to time the bottom but in being able to accurately say where one is at now. Right now, we are in situation where we have noticeably fewer buyers than properties. However, we have (in some micromarkets) more people than available space.
In those areas, it seems unlikely that buying with lower carrying costs than rent (for owner occupied) is particularly suicidal. Housing has an intrinsic value that other measures of wealth (even commodities) do not. Would you disagree?

http://www.signonsandiego.com/uniontrib/20080928/news_1h28rent.html

[urbanrealtor]

[quote=peterb]Prices move through the RE market slowly compared to most other markets. Foreclosures will turn into rentals as more investors purchase them and knife-catchers move into the market to own at these new and appealing prices. This should drive down rental prices as historically happens in most recessions and all depressions.

CA real unemployment is probably around 10% and rising. There already is deflation in most every asset class.

The only caveat on rentals I would have is that there may be more pressure on areas that are highly desirable for a while, as renting has more options than purchasing.

Forecasting involves identifying trends that are not reversing and following them to their conclusion or reversal. Just looking at today’s environment for rentals and not following out the progression of all these events is rather foolish and typically how we get into the problems like we are now seeing.[/quote]

Again, I think we are talking past each other on this. I agree with you long term. But economic strategy (fiscal, monetary, or investment) is all about timing. I don’t mean trying to time the bottom but in being able to accurately say where one is at now. Right now, we are in situation where we have noticeably fewer buyers than properties. However, we have (in some micromarkets) more people than available space.
In those areas, it seems unlikely that buying with lower carrying costs than rent (for owner occupied) is particularly suicidal. Housing has an intrinsic value that other measures of wealth (even commodities) do not. Would you disagree?

http://www.signonsandiego.com/uniontrib/20080928/news_1h28rent.html

[stockstradr]

Just wanted to comment that after thinking my post over, I now agree with peterb.

So I no longer agree with the part of my original thread suggesting BUYING A HOUSE NOW. I agree with peterb that it is much smarter to HOLD on any major financial decisions and watch to see which direction this financial meltdown goes.

The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

I also COMPLETELY agree with that. The more I read this peterb, the more I respect his opinions

[stockstradr]

Just wanted to comment that after thinking my post over, I now agree with peterb.

So I no longer agree with the part of my original thread suggesting BUYING A HOUSE NOW. I agree with peterb that it is much smarter to HOLD on any major financial decisions and watch to see which direction this financial meltdown goes.

The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

I also COMPLETELY agree with that. The more I read this peterb, the more I respect his opinions

[stockstradr]

Just wanted to comment that after thinking my post over, I now agree with peterb.

So I no longer agree with the part of my original thread suggesting BUYING A HOUSE NOW. I agree with peterb that it is much smarter to HOLD on any major financial decisions and watch to see which direction this financial meltdown goes.

The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

I also COMPLETELY agree with that. The more I read this peterb, the more I respect his opinions

[stockstradr]

Just wanted to comment that after thinking my post over, I now agree with peterb.

So I no longer agree with the part of my original thread suggesting BUYING A HOUSE NOW. I agree with peterb that it is much smarter to HOLD on any major financial decisions and watch to see which direction this financial meltdown goes.

The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

I also COMPLETELY agree with that. The more I read this peterb, the more I respect his opinions

[stockstradr]

Just wanted to comment that after thinking my post over, I now agree with peterb.

So I no longer agree with the part of my original thread suggesting BUYING A HOUSE NOW. I agree with peterb that it is much smarter to HOLD on any major financial decisions and watch to see which direction this financial meltdown goes.

The odds of a true 0% CPI in the next 6 months are now very good due to the huge commodities price drop in the prior 6 months.

I also COMPLETELY agree with that. The more I read this peterb, the more I respect his opinions

[gracie]

[quote=peterb]I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

peterb…what do you think about having cash available? Do you think we will have limited access to cash/atm withdrawls?

I guess we are all just trying to make sense of what could happen. There are so many rumors; I just want to be as best prepared as I can.

[gracie]

[quote=peterb]I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

peterb…what do you think about having cash available? Do you think we will have limited access to cash/atm withdrawls?

I guess we are all just trying to make sense of what could happen. There are so many rumors; I just want to be as best prepared as I can.

[gracie]

[quote=peterb]I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

peterb…what do you think about having cash available? Do you think we will have limited access to cash/atm withdrawls?

I guess we are all just trying to make sense of what could happen. There are so many rumors; I just want to be as best prepared as I can.

[gracie]

[quote=peterb]I have been researching this issue quite a bit lately. The last 3 recession have seen gold go down in price for the duration of the recession. 1972, 1980 and 1990. So Roubini has recent history on his side for this call.
However, economic historians with strong forecasting skills like Bob Hoye and Marc Faber say that gold increases in price after a large credit bust like what we’re having right now. (This is a far more rare event than the more typical recessions we’ve seen in the past 30 years.) Both the ElliotWave and Candle Stick charts are extremely bullish for gold right now as well.

peterb…what do you think about having cash available? Do you think we will have limited access to cash/atm withdrawls?

I guess we are all just trying to make sense of what could happen. There are so many rumors; I just want to be as best prepared as I can.

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