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FATAL FLAW – This article makes no mention of debt.

It assumes that everything people spend their money on is an indication of their wealth. You can’t trade your car, or flat screen TV, or your college degree in for a home. He’s confusing earning potential with real income.

This article is not in touch with reality. It confuses Debt with Wealth. People aren’t paid in gold nor does the vast majority trade it. Gold’s more relevant to the value of the dollar than house prices. As gold goes up, incomes do not inherently follow.

“The nation’s wealth and its permanent income are growing”

And outgrowing both of those is DEBT.

If people weren’t losing their homes at a record pace than I might believe prices could be sustained. Someone show this guy year over year prices.

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FATAL FLAW – This article makes no mention of debt.

It assumes that everything people spend their money on is an indication of their wealth. You can’t trade your car, or flat screen TV, or your college degree in for a home. He’s confusing earning potential with real income.

This article is not in touch with reality. It confuses Debt with Wealth. People aren’t paid in gold nor does the vast majority trade it. Gold’s more relevant to the value of the dollar than house prices. As gold goes up, incomes do not inherently follow.

“The nation’s wealth and its permanent income are growing”

And outgrowing both of those is DEBT.

If people weren’t losing their homes at a record pace than I might believe prices could be sustained. Someone show this guy year over year prices.

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Cutting rates to 1% may as well have been 0%.

I just think it’s interesting to hear people say prices can’t drop, real estate always goes up, and has never gone down. Thumbs up their asses.

I can’t handle Cramer, he’s going to have a heart attack. He doesn’t add anything but over zealous, after the fact reactions to what already happened. Take a pill dude. Take a dozen of them.

[cr]

Cutting rates to 1% may as well have been 0%.

I just think it’s interesting to hear people say prices can’t drop, real estate always goes up, and has never gone down. Thumbs up their asses.

I can’t handle Cramer, he’s going to have a heart attack. He doesn’t add anything but over zealous, after the fact reactions to what already happened. Take a pill dude. Take a dozen of them.

[cr]

Cutting rates to 1% may as well have been 0%.

I just think it’s interesting to hear people say prices can’t drop, real estate always goes up, and has never gone down. Thumbs up their asses.

I can’t handle Cramer, he’s going to have a heart attack. He doesn’t add anything but over zealous, after the fact reactions to what already happened. Take a pill dude. Take a dozen of them.

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I agree the cut won’t do much to help the housing crisis, the only real benefit will be for banks and businesses who borrow money to do business.

But the dollar is already the weakest it’s been since, in what, 10 years? 15? Now Helicopter boy drops nearly $100 Billion into a bad market, then cuts rates again.

I thought inflation was the FED’s number one enemy? Now it seems as if their own policies are.

What’s worse is as housing continues to deteriorate, subprime, (that “measly” 1-2% of all mortgages) Alt-A, and even better loans go bad, it’s just going to get uglier.

This country is screwed. I’m moving to Canada, Eh.

[cr]

I agree the cut won’t do much to help the housing crisis, the only real benefit will be for banks and businesses who borrow money to do business.

But the dollar is already the weakest it’s been since, in what, 10 years? 15? Now Helicopter boy drops nearly $100 Billion into a bad market, then cuts rates again.

I thought inflation was the FED’s number one enemy? Now it seems as if their own policies are.

What’s worse is as housing continues to deteriorate, subprime, (that “measly” 1-2% of all mortgages) Alt-A, and even better loans go bad, it’s just going to get uglier.

This country is screwed. I’m moving to Canada, Eh.

[cr]

I agree the cut won’t do much to help the housing crisis, the only real benefit will be for banks and businesses who borrow money to do business.

But the dollar is already the weakest it’s been since, in what, 10 years? 15? Now Helicopter boy drops nearly $100 Billion into a bad market, then cuts rates again.

I thought inflation was the FED’s number one enemy? Now it seems as if their own policies are.

What’s worse is as housing continues to deteriorate, subprime, (that “measly” 1-2% of all mortgages) Alt-A, and even better loans go bad, it’s just going to get uglier.

This country is screwed. I’m moving to Canada, Eh.

[cr]

I don’t recall anyone calling long term RE a horrible investment. Most here are against speculative bubble RE investment, and would encourage long term property ownership. Two completely different things.

But to answer your question anyway-

– You would also have to factor in what the renting couple earned on interest on the $80,000 they didn’t spend on a down payment, at whatever rate they can get. Easily mid 5%, higher with more risk. Even at 15% the dollar amount is lower, but…

– The 15% return on the purchase is equity, and only liquid if the house is sold. Selling the house will eat up a lot of that $12,000.

– As it applies to homes in today’s markets, most are depreciating so you lose on your “investment”. 4% may be a historical average, but the bubble saw double digit gains, and I expect the correction to see double digit losses.

That’s what started this bubble: people think of real estate as a short term investment. As a result the market is anything but normal. Assuming 4% is typical over 30 years, you could do better with a money market account.

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I don’t recall anyone calling long term RE a horrible investment. Most here are against speculative bubble RE investment, and would encourage long term property ownership. Two completely different things.

But to answer your question anyway-

– You would also have to factor in what the renting couple earned on interest on the $80,000 they didn’t spend on a down payment, at whatever rate they can get. Easily mid 5%, higher with more risk. Even at 15% the dollar amount is lower, but…

– The 15% return on the purchase is equity, and only liquid if the house is sold. Selling the house will eat up a lot of that $12,000.

– As it applies to homes in today’s markets, most are depreciating so you lose on your “investment”. 4% may be a historical average, but the bubble saw double digit gains, and I expect the correction to see double digit losses.

That’s what started this bubble: people think of real estate as a short term investment. As a result the market is anything but normal. Assuming 4% is typical over 30 years, you could do better with a money market account.

[cr]

I don’t recall anyone calling long term RE a horrible investment. Most here are against speculative bubble RE investment, and would encourage long term property ownership. Two completely different things.

But to answer your question anyway-

– You would also have to factor in what the renting couple earned on interest on the $80,000 they didn’t spend on a down payment, at whatever rate they can get. Easily mid 5%, higher with more risk. Even at 15% the dollar amount is lower, but…

– The 15% return on the purchase is equity, and only liquid if the house is sold. Selling the house will eat up a lot of that $12,000.

– As it applies to homes in today’s markets, most are depreciating so you lose on your “investment”. 4% may be a historical average, but the bubble saw double digit gains, and I expect the correction to see double digit losses.

That’s what started this bubble: people think of real estate as a short term investment. As a result the market is anything but normal. Assuming 4% is typical over 30 years, you could do better with a money market account.

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If you have the new IE you can do change the size in the lower right corner.

Yes, I also use an MS browser, I am sorry.

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If you have the new IE you can do change the size in the lower right corner.

Yes, I also use an MS browser, I am sorry.

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If you have the new IE you can do change the size in the lower right corner.

Yes, I also use an MS browser, I am sorry.

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Thanks XBox that helps.

So as long as the banks can repay the money the FED is essentially loaning them to float their operations, then everything will be hunky dory? That of course assumes the FED does that in a timely manner, and that the banks can repay the loans.

Enter the mortgage crisis

So if banks need borrowed liquidity to operate as a result of deliquent loans, and those loans continue to go bad, the borrowed money is virtually gone, right? Do the banks go under, or is that considered a bailout?

I view lowering rates as adding fuel to this fire. People need to be encouraged to curtail their spending to fit within what they can afford. Heresy! I know, saving money?!? Lowering rates may help banks, but once consumers are out of money and buried in hopeless debt, the economy will be toast anyway.

Thanks again.

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