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powayseller
ParticipantWhen you plot % change yoy, you see this trend holds true back to 1986 after all. “This chart shows that the stock market did not completely ignore the housing market in the earlier period. Whenever the HMI fell, the rate of change of the S&P 500 did tend to fall, even when the index itself did not fall.”
ParticipantThe government says oil will go back to $70 for most of the year
I am disappointed in Zeal. It just goes to show that every trader has a good and a bad run, and Zeal’s winning streak is definitely running out. They rode the commodity bull, but once that ended, so did their good calls.
September 12, 2006 at 6:23 AM in reply to: Is deflation more likely than inflation, next year? #35041ParticipantI now realize that oil prices were temporarily too high due to speculators. OPEC has been at max capacity for a few years, and will keep pumping at that high capacity, even though there is an oil surplus now. I do think we are at peak oil, but I just can’t explain the volatility of oil. Now I understand why the oil and food prices are not in core CPI; they are very volatile. Chevron’s find is a drop in the bucket, and if it had any effect on oil prices it would be psychological only. Oil sands have been around but are expensive to pump, so oil must be at $70/barrel or higher (I think) before it is cost effective to extract oil.
Perhaps commodities are dropping due to changes in pricing by speculators. Are they forward looking, seeing the global slowdown?
The Fed tried to slow the economy by raising interest rates, and it is starting to work. So what is the difference between a slowing economy and deflation? Aren’t energy and commodity prices, which are volatile anyway, supposed to drop when the economy slows?
When rent, health care, tuition, and groceries drop in price, then I will believe deflation is here. If we truly had deflation, the CPI would be negative.
Mish is convinced of deflation, and Eric Janszen of iTulip.com talks about the kaPoom theory: high inflation followed by deflation.
Participantbgates and sduuude, your rebuttals are worthy of another post, and I will put that as one of the first stories to do on my new website.
September 12, 2006 at 6:12 AM in reply to: “Secret Seconds” Raise risk of MBS default, unknown to investors #35039Participantdavelj, your answer makes perfect sense to me. That’s why I don’t understand why the 2nd lien holder is not required to notify the 1st lien holder of the new loan; the vendor whose link I posted sells the information on CLTV to the MBS holders (or 1st lien holders)?
So it sounds like the 1st lien holder can’t do anything about it. Even if they know the guy got a HELOC, they cannot raise the interest rate or require his income or home value to be higher, since it’s too late for that. The 2nd lien holder makes the decision if the borrower qualifies, but the 2nd lien holder could have different underwriting guidelines, much looser…
ParticipantIf they get the Option ARM because they cannot qualify for the interest only, what is the typical payment they make, and how do you know what payment they make?
Which lenders have the most exposure to Option ARMs? Are you refinancing any people out of these products? Any comments on foreclosures? I understand if you have to maintain some anonymity…
Participantanxvariety, it takes real courage to list your losses. I admire that very much! It’s easy to brag about the wins, but owning up to the losses takes a real man. Here’s hoping that more people will share their losses too, because that helps our piggington community learn from each other.
ParticipantI know some engineers from Nokia, and they bought nice houses, so I thought they are paid a good wage. Otherwise, how could they buy a $700K house on a $50K salary… and pay for all those trips back to India/Korea every other year.
ParticipantLots of sellers are bringing checkbooks to closing. If you don’t the IRS taxes you on the forgiven debt at your regular tax rate.
Participantcontraman, how widely used is the new hybrid Option ARM? Why do people use the Option ARM instead of getting the I/O loan? How much of your business if from people refinancing out of a risky loan, how much from cash-out refis?
ParticipantWomen and men use emotion when reason should be used. Two posters, men, wrote on the forum, “It is my gut feeling that house prices will drop x%”. What in the heck do feelings have to do with economics? Is God talking to you? Geez!
My husband wants to own more than I do. I could rent for 10 more years, I just love it! He misses the house projects. After sitting at his desk all day, he looks forward to using his creativity, as well as his hands and body to move materials like concrete, lumber, dirt, etc. and build stuff. he loved chopping down the trees, trimming bushes, mowing the lawn, fixing the roof, building patio covers.
We women have that nesting instinct, but we can make a nest at a campsite. So I wouldn’t blame the nesting instinct for wanting to buy a house, just like a man’s need to provide shelter wouldn’t make him more likely to want to own a house either.
I think anyone’s desire to own a house now is more related to their lack of interest in finances. Could it be that people interested in finances, building wealth, economics, are more likely to sell their house now and rent.
September 11, 2006 at 1:35 PM in reply to: Quick Poll: Year of trough & decline from peak to trough #34979Participantinv was 3K in April, 6K in summer, and 12K in Sept 04. It was definitely slowing in 04; my friend sold her condon in March 04 in a day, but her neighbor tried selling in June when inventory had doubled and it took her a long time and some price reductions. Condos got hit first, and the ripple effect moved up to mid pricedhomes in05.
On the way down, RE is sticky. Prices come down very slow. The big drops will occur later on, when ARMs reset, and sellers finally realize they’ve got to drop their prices if they want to sell.
Look at my other post about my 3 neighbors chasing down the market. None of them shaved off 10%, ie doing the reverse of what it did on the way up. Each of them is 20% overpriced, if not more.
I think the biggest percentage drops will come in spring 08, as sellers realize that the spring 07 rebound did not happen, and RE is dead.
ParticipantBugs, I made up the stories, but they are based on actual events. The perky lady spent her home equity on breast implants. The examples show how people have been spending their home equity.
I spoke with a realtor yesterday who was teling me the huge price drops over at 4S Ranch. He said the homes have dropped several hundred K, and blames the high Mello-Roos. Maybe I should change the 650K to 750K?
“are screwed” or “got screwed”, you’re right that I should have put more responsibility on the lenders. I bet the lawsuits on this will be huge! Bigger than asbestos… We’re going to find out the disclosure documents were not up to par.
Well, you can all have fun trashing my post, but I am just analyzing what I see, and providing some posts to a forum that has lost a little steam going into September.
September 11, 2006 at 12:44 PM in reply to: “Secret Seconds” Raise risk of MBS default, unknown to investors #34969ParticipantThat’s what perplexes me about this story; it sounds like subordination does not require notifying the primary lien holder.
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