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carlsbadworker
ParticipantI find people on this board routinely under-estimate the power of delaying the inventory hitting the market. So what if it fails to stop defaults? The normal population growth probably requires 1.2-1.3M new houses every year, and the builders are only building 500K per year right now. If they can spread the “shadow inventory” into many many years, the effect of this inventory on the housing price (which we care most) is going to be rather negligible.
In the end, procrastination is like masturbation. It looks like you’re just screwing yourself, but it also has many hidden benefits that people just don’t advertise about it.ParticipantI find people on this board routinely under-estimate the power of delaying the inventory hitting the market. So what if it fails to stop defaults? The normal population growth probably requires 1.2-1.3M new houses every year, and the builders are only building 500K per year right now. If they can spread the “shadow inventory” into many many years, the effect of this inventory on the housing price (which we care most) is going to be rather negligible.
In the end, procrastination is like masturbation. It looks like you’re just screwing yourself, but it also has many hidden benefits that people just don’t advertise about it.ParticipantI find people on this board routinely under-estimate the power of delaying the inventory hitting the market. So what if it fails to stop defaults? The normal population growth probably requires 1.2-1.3M new houses every year, and the builders are only building 500K per year right now. If they can spread the “shadow inventory” into many many years, the effect of this inventory on the housing price (which we care most) is going to be rather negligible.
In the end, procrastination is like masturbation. It looks like you’re just screwing yourself, but it also has many hidden benefits that people just don’t advertise about it.ParticipantI find people on this board routinely under-estimate the power of delaying the inventory hitting the market. So what if it fails to stop defaults? The normal population growth probably requires 1.2-1.3M new houses every year, and the builders are only building 500K per year right now. If they can spread the “shadow inventory” into many many years, the effect of this inventory on the housing price (which we care most) is going to be rather negligible.
In the end, procrastination is like masturbation. It looks like you’re just screwing yourself, but it also has many hidden benefits that people just don’t advertise about it.Participant[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.
Participant[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.
Participant[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.
Participant[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.
Participant[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.
Participantsdr, as I said on this board before, based on the track record, you are the best predictor among all piggs. It’s a wonder how some dose of reality can polish one’s skill just compare it with all the armchair quarterbacks on this board. Keep up the good work!
Participantsdr, as I said on this board before, based on the track record, you are the best predictor among all piggs. It’s a wonder how some dose of reality can polish one’s skill just compare it with all the armchair quarterbacks on this board. Keep up the good work!
Participantsdr, as I said on this board before, based on the track record, you are the best predictor among all piggs. It’s a wonder how some dose of reality can polish one’s skill just compare it with all the armchair quarterbacks on this board. Keep up the good work!
Participantsdr, as I said on this board before, based on the track record, you are the best predictor among all piggs. It’s a wonder how some dose of reality can polish one’s skill just compare it with all the armchair quarterbacks on this board. Keep up the good work!
Participantsdr, as I said on this board before, based on the track record, you are the best predictor among all piggs. It’s a wonder how some dose of reality can polish one’s skill just compare it with all the armchair quarterbacks on this board. Keep up the good work!
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