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bsrsharma: Thanks for correcting me. I don’t understand the relationship between the fed gov. and the fed reserve. I just wanted to point out the other high priced projects that precede the housing “bail-out” and not enough money to go around. Are you saying that the war, hurricane clean-up and a mortgage debt bail out won’t be funded from the same source? I understand that mortgages are packaged in securities, but if the gov starts programs to bailout borrowers, will that be tax money?

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Do you have any plan for evading the scorpions?

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More FED costs to consider…

“The war in Iraq could ultimately cost well over a trillion dollars — at least double what has already been spent — including the long-term costs of replacing damaged equipment, caring for wounded troops, and aiding the Iraqi government, according to a new government analysis. The US has already allocated more than $500 billion on the day-to-day combat operations of what are now 190,000 troops and a variety of reconstruction efforts.”Analysis says war could cost $1 trillion:Budget office sees effect on taxpayers for decade,By Bryan Bender, Boston Globe 8/1/07

http://boston.com/news/nation/articles/2007/08/01/analysis_says_war_could_cost_1_trillion/

“The fiscal impact of Hurricane Katrina, the most costly natural disaster in U.S. history, shows no sign of ending.
Congress has already approved $122 billion in spending, and is now paving the way for Gulf Coast states to get billions more. As much as $20 billion for coastal restoration could come from offshore-drilling royalties in the next few decades. Louisiana has been seeking $14 billion for that purpose.” Katrina cost continues to swell
By Richard Wolf, USA TODAY, 8/22/07

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“Half the assets in the entire U.S. banking system—$5.9 trillion of $11.9 trillion, or 49%—are based on commercial or residential mortgages. A simple attempt to bail out those vastly overwatered bank assets with Federal credit and money, while motivated by pressure to help millions of households avoid foreclosure, would be a disaster…

These markets sold off $2.4 trillion in mortgage-backed bonds in 2006, making large profits for hedge funds and banks.”

Article appears in the April 20, 2007 issue of Executive Intelligence Review: Mortgage Crisis Threat to System Dawning on Congressmen? by Paul Gallagher
http://www.larouchepub.com/other/2007/3416mortgage_crisis.html

I posted this just to reiterate the $$ amount involved – whichI think in light of current events, speaks for itself. We are just at the beginning of this fallout.

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What interest rates are likely to be when the bottom is reached? Ie, if by 2010 we reach a 40% correction from 2005 prices – is there any way to predict what happens with interest rates?

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“Assume that the US remains a huge net importer of capital. “

How does he define imported capital?

Just become slaves to foreign money…if we aren’t already there.

Foreign banks and governments are really going to keep propping up US Mortgages (disguised/hidden in investment “products”)while the $ is devaluing?
When the investment evaporates why would they pour more of their capital into the US?

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For Boston area/New England Comparison:
Foreclosure filings in Massachusetts increased 66 percent in the second quarter, according to data released yesterday….lenders filed 4,292 notices of foreclosure against homeowners during the second quarter, up from 2,585 a year earlier, according to ForeclosuresMass Corp., which compiles the data from Massachusetts Land Court. That 66 percent surge in filings compares with a 30 percent rise in first-quarter filings.
By Kimberly Blanton, Globe Staff | July 25, 2006
http://www.boston.com/business/articles/2006/07/25/foreclosure_filings_in_mass_jump_66/

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Boston Now (a tiny free daily) reports that “Mass. foreclosure filings skyrocket” in July – up 67% from the same July 06. 18 months of foreclosures climbing. They got the numbers from “The Warren Group,” a Boston-based real estate data publisher.

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It is a clear fact reiterated ad nauseam that median income should match median home price in affordability across the US. Either 28% of income or 3.5 times income, either way – the current market is not in proportion. SD is no exception and the SD economy will not thrive otherwise. Wages have been stagnant. This is a big gigantic sham and the middle class is being destroyed over it…the backbone of the economy, the middle class, will be broken by the supposed burden of indentured servitude to a mortgage. All sectors of the socioeconomic structure will destabilize if that happens.

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I still think these homes will devalue from 510K. But I am not in SD and not very familiar with that area in Mira Mesa. I think $510K for a 1700 sq foot home is too high and the ARM reset/foreclosure wave of the future will cause the Mira Mesa prices to fall. I suppose if someone can get a 6% loan and are going to stay there for past 2013 or so – then maybe $510 is sort of fair. Just thinking about the home owners expenses in a falling market though, Ie the tax on $510K, etc…it seems like a bad time to pay that for a 1700 sq. foot home, with the little I know about real estate- I think you will do better in 2008 – but I don’t think we’ll reach bottom till at least 2010.

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Is Alex just very naive maybe? Or young…or….

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I am in the NE, north of Boston…..there are homes for sale EVERYWHERE. Both Condos and Single Family.

This morning on talk radio they were talking about housing having reached bottom.

But, aside from hospitals, lawyers and biotech, universities and some tourism, Boston isn’t an industrial place either.

The second wave of ARMs is coming. I think SD had more ARMs than Boston, but the papers and talk shows here are featuring stories about credit&housing. I am pretty certain New England will continue to adjust down. I don’t pay much attention to this NE market, except to notice a lot more for sale signs…

No one’s flocking here for sunshine…that is for sure. About two years ago there were articles about high tech (and Biotech) having difficulty attracting the “best” professionals…due to the exploding cost of living (homes) vs salaries. It’s not at all attractive when you are coming from out of town –there is no premium to live in a blizzard zone. Unless you are one of the strange sailors who live for ice sailing…..

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Not everyone posting expects prices to fall for the opportunity to grab a coastal property. Prices are just inflated all over the market. When homes in City Heights Logan Heights or the Barrio were priced at $450K –Some of these places are so structurally run down and old..it’s questionable whether they would pass inspection w/o a rehaul. The point being,lower markets are overvalued. Also…San Ysidro. It’s obvious and ridiculous.

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Not everyone posting expects prices to fall for the opportunity to grab a coastal property. Prices are just inflated all over the market. When homes in City Heights Logan Heights or the Barrio were priced at $450K –Some of these places are so structurally run down and old..it’s questionable whether they would pass inspection w/o a rehaul. The point being,lower markets are overvalued. Also…San Ysidro. It’s obvious and ridiculous.

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Not everyone posting expects prices to fall for the opportunity to grab a coastal property. Prices are just inflated all over the market. When homes in City Heights Logan Heights or the Barrio were priced at $450K –Some of these places are so structurally run down and old..it’s questionable whether they would pass inspection w/o a rehaul. The point being,lower markets are overvalued. Also…San Ysidro. It’s obvious and ridiculous.

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