[The-Shoveler]

I think you would need to pay points to get that,

Anyway,

Historic Move in Rates

https://www.wellsfargo.com/mortgage/rates/

[The-Shoveler]

A little over a month ago you could get a mortgage at about 3%, today it’s about 4.6%.

That’s about as fast as rates have ever moved up.

Someone I think will say something we push 5% IMO.

Pension funds that own treasuries are getting hit fairly hard BTW.

[The-Shoveler]

They definitely could be pushing it harder,

In absents of some other stimulus I don’t see an exit that is not real ugly IMO.

But who know’s maybe they will just step aside.

Wow, I really can’t imagine that.

I mean can you imagine mortgage rates at 6%, how about 8%.

[The-Shoveler]

Yea OK but slowing market right at the usually hottest period I think is a sign,
I guess we need to see what the effect the recent rise in rates will have and where rates go from here.
Bond market is not happy.

Would not be surprised to see the Fed hit the panic button.

[The-Shoveler]

Yes, that’s it.

The only way out is to admit that really you need wages to go up 20-50% in the next few years then you can taper,

More so at the lower end of the wage scale than the higher end of wage scale.

[The-Shoveler]

As in the slowing down thread,

It all depends on the Fed, or some other Gov stimulant.

Automation economy transition is not easy.

[The-Shoveler]

Investors would be last I would worry about, (as long as they are cash flowing over 5% or better), and in lower end range (high end could get burned a lot easier I think).
It would be very expensive for the average Joe six pack is what I am referring to,

Also to local Gov’s

[The-Shoveler]

A pause or a slight slow down would probably not be that problematic, another recession/housing-crash would start to get very expensive from this level IMO.

[The-Shoveler]

I would expect the Fed to have a panic moment fairly soon if things continue on this trajectory.

There is too much, Gov/wallstreet/local-Gov finance at stake,
They are not ready for another recession just yet IMO, (really for most there was no recovery).
Interesting times.

[The-Shoveler]

So your being out inflated, hmm maybe there is a better way to put it.
You’re on the losing end of the currency war, no that’s not quite right.
Oh I give up.

Your being undervalued, that’s almost it, wait your out being out valued…. OK that’s closer

[The-Shoveler]

[quote=ocrenter][img_assist|nid=17338|title=Chinese RMB to US dollar|desc=|link=node|align=left|width=466|height=304]

since 2005 the Chinese RMB has appreciated against the US dollar by 25%. which means a house in CV is now at a 25% discount compared to 2005.

A $1 million dollar home in CV is now just $750k for them.[/quote]

Yes when it comes to Chinese money buying property, I think this explains it best, Guys you got to remember, China has been experiencing 5-15% wage inflation plus house/condo price inflation, then you add the fact that their currency is appreciating against the dollar.

Guys this is the thing.
China gov has been out printing the U.S. fed for several years now, they are the number one currency creator.
They got to spend it somewhere!!

[The-Shoveler]

[quote=FormerSanDiegan][quote=The-Shoveler]OK I will take a stab at it knowing full well I am about to be flamed.

If they raise interest rates without wage inflation then the housing market will crash followed by state and city bankruptcies one after the other because their main source of revenue is property tax.

This will cause a lot of other economic issue etc…

A lot of people I think fail to put two and two together and think housing crash existed in some sort of vacuum.[/quote]

I don;t follow. How would this scenario lead to 7-10% inflation. Sounds deflationary to me[/quote]

Yes absolutely it would be deflationary if the Fed increases rates WITHOUT FIRST there being wage inflation (7-10%),
That’s why I think it will not be any time soon.

Or if they do then they will be FORCED to reverse course very quickly.

[The-Shoveler]

Why I said, I don’t think we will see the fed exit any time soon.

If they do they will be forced to reverse course very quickly IMO.

[The-Shoveler]

Tell that to Garcetti …

Anyway this is going nowhere so I give up.

[The-Shoveler]

There were a lot of hidden close calls (take Texas for instance),

Los Angeles barely escaped last year, I don’t think they have long.

There was a lot of stress out there, (well maybe not in north dakota, but really they don’t count much).

If the housing crash played out again, I think you will see it.

Do a web search on “pension crises”.

[Author]

Posts