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September 7, 2007 at 5:35 PM in reply to: Countrywide’s message of confidence turned to crisis #83814
hipmatt
ParticipantThe dollar has been falling again lately and gold is over 700 per ounce. I predict the dollar falls much more.
If you think inflation isn’t that bad.. maybe these articles from today will change your mind.
Wheat and Bread Prices rise..
http://www.chicagotribune.com/business/chi-thu_wheat_0906sep06,0,2298435.storyCattle and Hog prices rise..
http://www.bloomberg.com/apps/news?pid=20601103&sid=a_qvoT7Ndz4I&refer=newsOil is back on the rise..
http://www.bloomberg.com/apps/news?pid=20601087&sid=aWHx26cP1kzY&refer=worldwideParticipantWhat a bunch of winners!! I wish I could be a part of that community.
BTW.. if you want strippers, whores, topless sluts, and drunk losers, there is a craphole in the middle of the desert called Las Vegas. It will have everything you need. Lets keep the public beaches safe for everyone.
ParticipantA.. Why are you paying 2700 per month in rent? .. doesn’t seem to smart.. there are many rentals in Lake Elsinore for under 1500 per month.
B.. Those prices still seem high to me for Elsinore. I am not interested in living in Elsinore at any price, but I would say that to be priced right they should be going for 200-300k at the max.
C.. French Valley is 8 minutes from Temecula. Lake Elsinore is 20. There are many more reasons why French Valley is priced higher than Elsinore, but I don’t want to beat a dead horse.
ParticipantSorry if this sounds harsh, but I won’t feel too bad when the job market cleanses itself of all the useless and unproductive careers out there.
There are still too many RE agents, lenders, car salesmen, sleazy financial advisers(the ones with out a degree that sell mostly insurance and mutual funds), and self professed home flippers.
Many of these people will find out what it is like to work a real job in the near future.
ParticipantAnyone who made money selling in the last few years was either smart or lucky. They shouldn’t be punished, they didn’t buy at insane prices. If they bought low, sold high, and currently rent, more power to them. s
I can see a bit of animosity towards the speculators, the FBs, the lenders, the gov., and the shady RE community, but those who sold?
September 3, 2007 at 11:48 AM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #83128ParticipantIn Temecula, I have witnessed first hand, homes go from $100k in 1996 to over 400k in $2006.(400% increase). Example: a 3/2 about 1200sqft in Paloma Del Sol. If these homes fall to $200k or about 2001 prices(very possible if credit responsibility returns again in America), they still will be up 100% from their lows in 96.
ParticipantGood article that has an unbiased view of things and where we are headed.
ParticipantNO bottom in any socal cities for a long while… quit asking. geesh!
Bail OUT PR will have little to no effect as well. This is just the beginning.
ParticipantThe Writing is on the Wall
This week, Larry Kudlow and others strongly chastised Bernanke for his failure to read the writing on the wall and urged the Fed Chairman to quickly slash the Fed Funds rate. Methinks the pundits doth protest too much. For years, Kudlow, who practically coined the term “Goldilocks economy,” has dismissed with scorn suggestions that the American economy was anything less than ragingly healthy. If our economy is really so strong, why does he call so loudly for the artificial stimulus of a significant rate cut?
In truth, the writing has been clearly on the wall all along. A credit bubble has been steadily inflating for at least the last six years, which in its final frenzy produced some of the most absurd mortgage funding products the world has ever seen. To anyone not dependent on the hysteria, a no-doc, no money down, negative amortization, interest only, adjustable rate jumbo mortgage was just as clear a sign of pending catastrophe as was $200 for a share of Pets.com, or 5,000 Dutch guilders for a single tulip bulb.
The one thing all bubbles have in common is that they eventually pop, and ours just did. Unlike the popping of the last bubble in 2000-2001, this one will fall directly to our economy’s bottom line. And this time the Fed can not step up to the plate with unlimited liquidity injections.
A record percentage of our GDP is comprised of consumer spending. The source of this spending was the housing bubble. Would our savings rate really be negative were it not for housing related “wealth?” Could consumers really have spent as much as they did without the benefits of temporarily low teaser rates and the ability to extract equity from their homes? How many service sector jobs are directly related to that extra spending? When the low mortgage payments and home equity disappear, so too will the spending and jobs they engendered.
Those who feel that the economy will keep growing must believe that discretionary consumer spending is unrelated to wealth or expenses. In other words, they believe that individuals will spend as much with no home equity and $3,000 per month mortgage payments as they did with $200,000 in home equity $1,500 monthly payments. Factor in other rising expenses; such as food, energy, insurance, and taxes and discretionary spending will not just slow, it will completely collapse.
With the ugly truth laid bare, many now prod Bernanke and Bush for solutions. Unfortunately there are none. Based on absurd assumptions about real estate, we simply borrowed more money than we can ever hope to pay back. There is no magic elixir we can swallow to cure what ails us. The free market is the only force that can fix this mess. Unfortunately, the fix won’t be pretty. Prudent lending standards will return, guaranteeing that real estate prices collapse. This is an important connection that very few have made. There is no way the average American can afford to buy the average house at today’s prices with a mortgage he can afford. Assuming that the lax standards of 2005-2006 do not return, the only way this can happen is if real estate prices collapse, which is exactly what is happening.
The financial institutions that are calling most loudly for a bailout claim the Government must act to protect homeowners. However, the most severe losses will not be born by homeowners but by those who loaned them the money. Therefore any bailouts will ultimately go to lenders not borrowers. Homeowners who offered no down payment and who have no equity in their homes will in reality lose nothing in foreclosure, except perhaps a debt burden on an overpriced house. In addition, even those homeowners who made down payments likely extracted larger sums in subsequent refinancings or home equity loans. With plenty of available foreclosed homes on the market to rent it is unlikely that these former homeowners will become homeless.
As a result, the only losses for most homeowners will be psychological, as their dreams of real estate riches vanish. For some paper millionaires, the sudden realization that they are flat broke will be somewhat disheartening. Also for those who thought retirement was simply a function of living in a home and allowing it to appreciate, the sudden realization that they will now have to finance their retirement the old fashioned way, by saving up, will be quite an eye opener. However, even if misguided government bailouts enable more borrowers to keep their homes the equity they thought they had will still be gone.
In the final analysis, though it was Wall Street that served the punch, it was the Greenspan Fed that spiked it in the first place. Just as Fed policy enabled Wall Street to flood the world with worthless dot.com stocks it enabled an encore performance with subprime mortgage-backed securities. My guess is the Fed’s bubble blowing days are over. Once the inebriates sober up this time, the hangover will be so severe that no one will drink a drop of Wall Street’s punch again, meaning any more inflation the Fed creates will go strait into consumer prices.
…… by Peter Schiff
ParticipantI think the rate cut is a good sign of things to come, by this I mean more inflation, and further devaluation of the USD. I see no fighting chance for the USD in the long run.
The rate cut is a quick fix, but harmful in the long run. It’s clear, that a country that is defined by our over consumption and negative savings rate, when the fed must lower rates after being at 1% for so long, just illustrates how weak we really are.
Gold was up 8 dollars today, and looks close to a new 52 week high. I expect that gold will do even better after the rate cut.
ParticipantI don’t think Bush’s proposal or Bernanke’s rate cut will do much to help out housing, instead, I believe it will do exactly as it was designed to.. to calm sellers nerves, and give them hope, whether false or not. This will boost consumer confidence a bit.
How will this affect our local RE market.. perhaps it will actually cause MORE inventory. Sellers will think that they may be able to sell their homes, and be motivated to list. IN reality, fixed rate loans won’t go down much, buyers will still be small in numbers, and few in socal will really benefit from either.. what worries me though, is how this could be a preview of an even bigger and more destructive bailout and inflationary policy in the future.
ParticipantI also agree with kewp.
August 30, 2007 at 10:35 PM in reply to: cannot wait anymore, buying a condo now instead of a house at 4S Ranch, and wait to buy a bigger house later? #82699ParticipantI think its a really bad plan.
ParticipantAnother observation.. we went to the local Toyota dealer yesterday to look at a new Tacoma for my friend. Lots of salesmen and few customers(us and one other family).
The sales men approached us, he ended up being decent(didn’t know anything about cars or car sales, but wasn’t pushy and seemed to be honest), but he did say that he was just laid off from a mortgage lending company. Makes you wonder what all of the construction workers and lenders are gonna do now?
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