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SDEngineer
Participant[quote=peterb]30% of mortgages in SD county are upside down. Unemployment is rising, still. Commercial RE is starting crack in a big way. Give yourself some more time if you can. This is a recipe for pure disaster.[/quote]
Bear in mind though that housing is a leading indicator in economic downturns – in past economic downturns, housing has turned positive before the economy hit rock bottom. Both commercial investment and unemployment lag recoveries by a significant amount (both still trend worse well after housing has recovered, and after the economy has rebounded).
Of course, this is likely to be the worst downturn since the Great Depression (though I believe in total effect it still currently trails the double-dip recession of the early 80’s, however, this downturn isn’t finished yet).
Of course, I’m biased, since I’ve decided that it is a reasonable time to buy, and am currently under contract for a new townhome in the east county. There’s no chance I would buy at the coast or in the higher end areas at this time though – the higher end and coastal areas are historically the last to adjust. Maybe next year if I was looking at 4S Ranch.
Participant[quote=peterb]30% of mortgages in SD county are upside down. Unemployment is rising, still. Commercial RE is starting crack in a big way. Give yourself some more time if you can. This is a recipe for pure disaster.[/quote]
Bear in mind though that housing is a leading indicator in economic downturns – in past economic downturns, housing has turned positive before the economy hit rock bottom. Both commercial investment and unemployment lag recoveries by a significant amount (both still trend worse well after housing has recovered, and after the economy has rebounded).
Of course, this is likely to be the worst downturn since the Great Depression (though I believe in total effect it still currently trails the double-dip recession of the early 80’s, however, this downturn isn’t finished yet).
Of course, I’m biased, since I’ve decided that it is a reasonable time to buy, and am currently under contract for a new townhome in the east county. There’s no chance I would buy at the coast or in the higher end areas at this time though – the higher end and coastal areas are historically the last to adjust. Maybe next year if I was looking at 4S Ranch.
Participant[quote=peterb]30% of mortgages in SD county are upside down. Unemployment is rising, still. Commercial RE is starting crack in a big way. Give yourself some more time if you can. This is a recipe for pure disaster.[/quote]
Bear in mind though that housing is a leading indicator in economic downturns – in past economic downturns, housing has turned positive before the economy hit rock bottom. Both commercial investment and unemployment lag recoveries by a significant amount (both still trend worse well after housing has recovered, and after the economy has rebounded).
Of course, this is likely to be the worst downturn since the Great Depression (though I believe in total effect it still currently trails the double-dip recession of the early 80’s, however, this downturn isn’t finished yet).
Of course, I’m biased, since I’ve decided that it is a reasonable time to buy, and am currently under contract for a new townhome in the east county. There’s no chance I would buy at the coast or in the higher end areas at this time though – the higher end and coastal areas are historically the last to adjust. Maybe next year if I was looking at 4S Ranch.
Participant[quote=peterb]30% of mortgages in SD county are upside down. Unemployment is rising, still. Commercial RE is starting crack in a big way. Give yourself some more time if you can. This is a recipe for pure disaster.[/quote]
Bear in mind though that housing is a leading indicator in economic downturns – in past economic downturns, housing has turned positive before the economy hit rock bottom. Both commercial investment and unemployment lag recoveries by a significant amount (both still trend worse well after housing has recovered, and after the economy has rebounded).
Of course, this is likely to be the worst downturn since the Great Depression (though I believe in total effect it still currently trails the double-dip recession of the early 80’s, however, this downturn isn’t finished yet).
Of course, I’m biased, since I’ve decided that it is a reasonable time to buy, and am currently under contract for a new townhome in the east county. There’s no chance I would buy at the coast or in the higher end areas at this time though – the higher end and coastal areas are historically the last to adjust. Maybe next year if I was looking at 4S Ranch.
Participant[quote=peterb]30% of mortgages in SD county are upside down. Unemployment is rising, still. Commercial RE is starting crack in a big way. Give yourself some more time if you can. This is a recipe for pure disaster.[/quote]
Bear in mind though that housing is a leading indicator in economic downturns – in past economic downturns, housing has turned positive before the economy hit rock bottom. Both commercial investment and unemployment lag recoveries by a significant amount (both still trend worse well after housing has recovered, and after the economy has rebounded).
Of course, this is likely to be the worst downturn since the Great Depression (though I believe in total effect it still currently trails the double-dip recession of the early 80’s, however, this downturn isn’t finished yet).
Of course, I’m biased, since I’ve decided that it is a reasonable time to buy, and am currently under contract for a new townhome in the east county. There’s no chance I would buy at the coast or in the higher end areas at this time though – the higher end and coastal areas are historically the last to adjust. Maybe next year if I was looking at 4S Ranch.
Participant[quote=partypup][quote=SDEngineer]
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.[/quote]That’s the point I’m trying to make, SD. How can a less-inflated currency be at greater risk than a more inflated currency? I don’t understand.[/quote]
The answer is that it will depend on which method is more effective at turning an economy around.
After all, in a fiat money system, money essentially represents a portion of that country’s GDP in proportion to the total amount of currency. The U.S.’s actions are causing that money supply to grow, which means that holding GDP constant, the money is worth less than in Europe where their monetary supply is growing slower. The U.S. is betting that the money spent will end the recession and cause the GDP to rise proportionally faster than Europe’s. If this does happen, than the U.S.’s method worked better (at least in this case) than Europe’s.
Only time will tell which method works better – but we do have a recent example in Japan which largely avoided inflating their currency to deal with a similar economic bubble – and the results of that were not exactly good. Maybe neither of these approaches will work either – but it’s really uncharted territory.
Participant[quote=partypup][quote=SDEngineer]
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.[/quote]That’s the point I’m trying to make, SD. How can a less-inflated currency be at greater risk than a more inflated currency? I don’t understand.[/quote]
The answer is that it will depend on which method is more effective at turning an economy around.
After all, in a fiat money system, money essentially represents a portion of that country’s GDP in proportion to the total amount of currency. The U.S.’s actions are causing that money supply to grow, which means that holding GDP constant, the money is worth less than in Europe where their monetary supply is growing slower. The U.S. is betting that the money spent will end the recession and cause the GDP to rise proportionally faster than Europe’s. If this does happen, than the U.S.’s method worked better (at least in this case) than Europe’s.
Only time will tell which method works better – but we do have a recent example in Japan which largely avoided inflating their currency to deal with a similar economic bubble – and the results of that were not exactly good. Maybe neither of these approaches will work either – but it’s really uncharted territory.
Participant[quote=partypup][quote=SDEngineer]
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.[/quote]That’s the point I’m trying to make, SD. How can a less-inflated currency be at greater risk than a more inflated currency? I don’t understand.[/quote]
The answer is that it will depend on which method is more effective at turning an economy around.
After all, in a fiat money system, money essentially represents a portion of that country’s GDP in proportion to the total amount of currency. The U.S.’s actions are causing that money supply to grow, which means that holding GDP constant, the money is worth less than in Europe where their monetary supply is growing slower. The U.S. is betting that the money spent will end the recession and cause the GDP to rise proportionally faster than Europe’s. If this does happen, than the U.S.’s method worked better (at least in this case) than Europe’s.
Only time will tell which method works better – but we do have a recent example in Japan which largely avoided inflating their currency to deal with a similar economic bubble – and the results of that were not exactly good. Maybe neither of these approaches will work either – but it’s really uncharted territory.
Participant[quote=partypup][quote=SDEngineer]
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.[/quote]That’s the point I’m trying to make, SD. How can a less-inflated currency be at greater risk than a more inflated currency? I don’t understand.[/quote]
The answer is that it will depend on which method is more effective at turning an economy around.
After all, in a fiat money system, money essentially represents a portion of that country’s GDP in proportion to the total amount of currency. The U.S.’s actions are causing that money supply to grow, which means that holding GDP constant, the money is worth less than in Europe where their monetary supply is growing slower. The U.S. is betting that the money spent will end the recession and cause the GDP to rise proportionally faster than Europe’s. If this does happen, than the U.S.’s method worked better (at least in this case) than Europe’s.
Only time will tell which method works better – but we do have a recent example in Japan which largely avoided inflating their currency to deal with a similar economic bubble – and the results of that were not exactly good. Maybe neither of these approaches will work either – but it’s really uncharted territory.
Participant[quote=partypup][quote=SDEngineer]
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.[/quote]That’s the point I’m trying to make, SD. How can a less-inflated currency be at greater risk than a more inflated currency? I don’t understand.[/quote]
The answer is that it will depend on which method is more effective at turning an economy around.
After all, in a fiat money system, money essentially represents a portion of that country’s GDP in proportion to the total amount of currency. The U.S.’s actions are causing that money supply to grow, which means that holding GDP constant, the money is worth less than in Europe where their monetary supply is growing slower. The U.S. is betting that the money spent will end the recession and cause the GDP to rise proportionally faster than Europe’s. If this does happen, than the U.S.’s method worked better (at least in this case) than Europe’s.
Only time will tell which method works better – but we do have a recent example in Japan which largely avoided inflating their currency to deal with a similar economic bubble – and the results of that were not exactly good. Maybe neither of these approaches will work either – but it’s really uncharted territory.
Participant[quote=partypup]
Hat, I keep hearing the same thing about Europe’s predicament, and I must confess that my knowledge is sparse here. But isn’t it the case that the ECB has chosen NOT to inflate it’s way out of this mess?
“EU presidency: US economic plans ‘a road to hell'”
http://www.google.com/hostednews/ap/article/ALeqM5iiXCmvt7Z8-97sodbSHsAd03V0AwD97540HG0
Granted, the whole world is in a world of s*** now, but am I missing something, or would people not gravitate to a currency that is not being debased as quickly as the dollar? I am not challenging you; I simply want to understand the thought process. I personally have come to suspect most of the information coming out of the U.S. mainstream media, and their goal in recent months seems to be aimed at trashing Europe with the “we suck, but they suck more” argument for supporting the dollar.[/quote]
Bear in mind that the President of the EU is a rotating assignment, not an elected one, and what that person says may not reflect “official opinion”. In this case, the Presidency just rotated to the Czechs – who’s government has just collapsed on a “no confidence” vote. I’d take with a very large grain of salt any economic advice he feels like dispensing (especially since it appears much of the rest of the EU is backpedaling from his assertions).
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.
Participant[quote=partypup]
Hat, I keep hearing the same thing about Europe’s predicament, and I must confess that my knowledge is sparse here. But isn’t it the case that the ECB has chosen NOT to inflate it’s way out of this mess?
“EU presidency: US economic plans ‘a road to hell'”
http://www.google.com/hostednews/ap/article/ALeqM5iiXCmvt7Z8-97sodbSHsAd03V0AwD97540HG0
Granted, the whole world is in a world of s*** now, but am I missing something, or would people not gravitate to a currency that is not being debased as quickly as the dollar? I am not challenging you; I simply want to understand the thought process. I personally have come to suspect most of the information coming out of the U.S. mainstream media, and their goal in recent months seems to be aimed at trashing Europe with the “we suck, but they suck more” argument for supporting the dollar.[/quote]
Bear in mind that the President of the EU is a rotating assignment, not an elected one, and what that person says may not reflect “official opinion”. In this case, the Presidency just rotated to the Czechs – who’s government has just collapsed on a “no confidence” vote. I’d take with a very large grain of salt any economic advice he feels like dispensing (especially since it appears much of the rest of the EU is backpedaling from his assertions).
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.
Participant[quote=partypup]
Hat, I keep hearing the same thing about Europe’s predicament, and I must confess that my knowledge is sparse here. But isn’t it the case that the ECB has chosen NOT to inflate it’s way out of this mess?
“EU presidency: US economic plans ‘a road to hell'”
http://www.google.com/hostednews/ap/article/ALeqM5iiXCmvt7Z8-97sodbSHsAd03V0AwD97540HG0
Granted, the whole world is in a world of s*** now, but am I missing something, or would people not gravitate to a currency that is not being debased as quickly as the dollar? I am not challenging you; I simply want to understand the thought process. I personally have come to suspect most of the information coming out of the U.S. mainstream media, and their goal in recent months seems to be aimed at trashing Europe with the “we suck, but they suck more” argument for supporting the dollar.[/quote]
Bear in mind that the President of the EU is a rotating assignment, not an elected one, and what that person says may not reflect “official opinion”. In this case, the Presidency just rotated to the Czechs – who’s government has just collapsed on a “no confidence” vote. I’d take with a very large grain of salt any economic advice he feels like dispensing (especially since it appears much of the rest of the EU is backpedaling from his assertions).
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.
Participant[quote=partypup]
Hat, I keep hearing the same thing about Europe’s predicament, and I must confess that my knowledge is sparse here. But isn’t it the case that the ECB has chosen NOT to inflate it’s way out of this mess?
“EU presidency: US economic plans ‘a road to hell'”
http://www.google.com/hostednews/ap/article/ALeqM5iiXCmvt7Z8-97sodbSHsAd03V0AwD97540HG0
Granted, the whole world is in a world of s*** now, but am I missing something, or would people not gravitate to a currency that is not being debased as quickly as the dollar? I am not challenging you; I simply want to understand the thought process. I personally have come to suspect most of the information coming out of the U.S. mainstream media, and their goal in recent months seems to be aimed at trashing Europe with the “we suck, but they suck more” argument for supporting the dollar.[/quote]
Bear in mind that the President of the EU is a rotating assignment, not an elected one, and what that person says may not reflect “official opinion”. In this case, the Presidency just rotated to the Czechs – who’s government has just collapsed on a “no confidence” vote. I’d take with a very large grain of salt any economic advice he feels like dispensing (especially since it appears much of the rest of the EU is backpedaling from his assertions).
Europe is, in fact, trying to inflate their way out – just as we are. They simply have been trying to inflate less than we have.
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