I feel like Macke or santelli....
I can't bet the inflation plays...
It Felt to me, Note the past tense, that with some time things would correct. Mortgages need to go to 7% for people to be interested in loaning money to borrowers.
Corporate rates need to be at 8-9%.... This is assuming normal employment.
Forcing rates to 4%...
The Housing market has 2 problems,
- People with reseting arm's at 1-3% cant afford the resets, Even worse anyone who could afford a home purchased one, so besides people who can't afford it, there is no demand.
- Nobody is willing to loan money at 5%, except to the treasury. the only written new mortgages will be either refi, or to impressive Credit raitings...
The market needs to heal... but it is going to take higher rates... not lower... the lower Mortgage rates go, the less likely that those people who can buy a house, will find financing....
damn.... seems like this just needs to ruminate
4 comments:
I'm not sure how many mortgage holders are at 1-3%, but it's not that many. Most ARMs are at 4.5% plus or minus, and the fed will try to get banks to give these folks something similar. Sure, people who are really underwater will be foreclosed, but that's a relatively small number in most communities, and the goal will be to get solvent mortgagees to stay in their homes and keep paying.
The result will be to falsely prop up home prices, but what does a little inflation matter now?
I'm going to hang onto gold, silver, OIH and GDX until Spring.
I was talking about teaser rates. and your right they aren't that low.
kind of what i'm getting at is that the whole housing bubble has cleared out all the buyers, and the oversupply will fill the needs of the few buyers there are.
then there are the 2 million unemployed, with 2 income families making telemarketer income, tough to get the bills paid.
I just feel like my head is full of nonsense on all fronts.
It's going to be a tough decade.
It's been a tough decade.
I'm in melodically mode, I was just thinking;
1996 I was doing finish carpentry, then specialty construction, web design into that bubble, Network management and engineering. Into this nonsense...
I'm reading Marx right now, maybe that is what has me going...
My old man did the same job for 40 years, I haven't stayed in the same sector of the economy for longer than 6.
Social security is fucked, and do you have any idea what it's going to take to retire...
all I've ever wanted to do is just work, and get paid, and be able to afford to live.
Seems like unless you are a high end employee of a multinational, You are just a proletariat.
It's going to take 2 generations till we figure out what a problem this all is, and either socialize or ... start slitting necks...
Ya... I think it's the marx... I should push through it.
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