For a minute there I thought I had to get off my couch, when all the while the fact is we don't have to do anything much but keep things afloat for just a few decades more! In fact, we'd best shut up about PO, because if our offspring finds out we knew about it all along, they'll turn and wring our necks come 2036!
Joined: Apr 27, 2007 Posts: 4262 Location: The Great Sonoran Desert
Posted: Tue Apr 08, 2008 10:57 am Post subject: Re: Housing & Economic Collapse - In Progress
Eli wrote:
I could make an argument for deflation here but I won't bother.
Karl Denninger said the exact same thing yesterday on TF.
We are moving into hyperinflation...THEN a deflationary collapse. _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Joined: May 19, 2005 Posts: 759 Location: Merry Ol' USA
Posted: Tue Apr 08, 2008 11:33 am Post subject: Re: Housing & Economic Collapse - In Progress
Ok, time for some funny real estate quotes from the National Association of Realtors!
NAR Mar 07 wrote:
David Lereah, NAR's chief economist, said the strong gain is a bit of a surprise. "Some of the rise in home sales may be from mild weather that brought out shoppers in December, but fundamentals have improved in the housing market and buyers see a window now with historically-low mortgage interest rates and competitive pricing by sellers," he said. "Even so, winter storms last month discouraged shopping, and buyers were chilled with the third coldest February on record. These unusual weather patterns mean home sales that close in March may decline before rebounding later this spring."
NAR Aug 07 wrote:
Lawrence Yun, NAR senior economist, expected the decline. “The unusual disruptions in the mortgage market, including a significant rise in jumbo loan rates, resulted in a fairly high number of postponed or cancelled sales, with many buyers having to search for other financing when loan commitments fell through,” he said. “Lower sales contributed to a buildup of unsold inventory.”
Yun wrote:
Yun said a $10,000 downpayment on a median-priced home, at a typical appreciation rate of 5 percent, would be worth $110,000 after 10 years. That same amount invested in the stock market for the same amount of time, assuming 10 percent annual appreciation, would be worth $23,600. “That’s why housing is the best long-term investment most families ever make – the longer you own, the better your investment,” he said.
Wtf kind of math is this?
NAR Nov 07 wrote:
Lawrence Yun, NAR chief economist, expected the sluggish performance. “As noted last month, temporary mortgage problems were peaking back in August when many of the sales closed in October were being negotiated. We continue to see the biggest impact in high-cost markets that rely on jumbo loans,” he said. “Mortgage availability has improved as evidenced by much lower mortgage interest rates and a sharp jump in FHA endorsements for home purchases.
NAR Apr 07 wrote:
“Because of reductions in home sales and new home construction, the economy will expand at a subpar pace in 2007,” Yun said. “As housing market conditions improve going into 2008, the economy will reach back to its growth potential next year.” Growth in the U.S. gross domestic product is estimated at 2.0 percent this year, lower than the 3.3 percent growth in 2006. Yun forecasts GDP to grow 3.0 percent in 2008.
I enjoy reading funny stories! _________________ After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.
Joined: May 19, 2005 Posts: 759 Location: Merry Ol' USA
Posted: Tue Apr 08, 2008 11:43 am Post subject: Re: Housing & Economic Collapse - In Progress
PS: Completely off-topic, but how in the hell do I change my signature? Every time I change it, the old one comes back. I'm stuck with Efarmer's quote! I asked in tech help, but no answer - maybe one of you people know...? _________________ After fueling up their cars, Twyman says they bowed their heads and asked God for cheaper gas.There was no immediate answer, but he says other motorists joined in and the service station owner didn't run them off.
Posted: Tue Apr 08, 2008 11:51 am Post subject: Re: Housing & Economic Collapse - In Progress
jdmartin wrote:
Yun wrote:
Yun said a $10,000 downpayment on a median-priced home, at a typical appreciation rate of 5 percent, would be worth $110,000 after 10 years. That same amount invested in the stock market for the same amount of time, assuming 10 percent annual appreciation, would be worth $23,600. “That’s why housing is the best long-term investment most families ever make – the longer you own, the better your investment,” he said.
Wtf kind of math is this?
Yun is [disingenuously, I might add] suggesting that the equity gained in price appreciation of a house would leverage your initial $10k "investment" into $110,000. Of course, if the median price keeps dropping by thousands per month, your original $10k investment would drop to nothing in no time, to say nothing of closing costs, maintenance costs, taxes, etc. Add to this the issue of real estate being a highly illiquid asset, and you suddenly have exposure to a serious downside in the market, a la today.
Median price, Feb. 2008 - $213,500
+5% per annum
2009: 224175
2010: 235384
2011: 247153
2012: 259511
2013: 272486
2014: 286110
2015: 300415
2016: 315437
2017: 331209
2018: $347,769
Price appreciation (projected): $123,594 - $10k down payment = $113,594 net gain
This is the number that Yun arrived at, roughly speaking. If anyone thinks the median price of a home 10 years from now will be $350,000, I have a bridge to sell them. _________________ "It's called the American Dream because you'd have to be asleep to believe it."
George Carlin
Last edited by emersonbiggins on Tue Apr 08, 2008 12:00 pm; edited 1 time in total
Posted: Tue Apr 08, 2008 11:53 am Post subject: Re: Housing & Economic Collapse - In Progress
jdmartin wrote:
PS: Completely off-topic, but how in the hell do I change my signature? Every time I change it, the old one comes back. I'm stuck with Efarmer's quote! I asked in tech help, but no answer - maybe one of you people know...?
Click on "profile" at the top of this page (next to "Forum FAQ, Search..."
Your sig should be editable at the bottom of that page.
Be sure to hit submit. If this doesn't work, log out and log back in, repeat the above steps. _________________ "It's called the American Dream because you'd have to be asleep to believe it."
Joined: Apr 27, 2007 Posts: 4262 Location: The Great Sonoran Desert
Posted: Tue Apr 08, 2008 12:10 pm Post subject: Re: Housing & Economic Collapse - In Progress
emersonbiggins wrote:
jdmartin wrote:
PS: Completely off-topic, but how in the hell do I change my signature? Every time I change it, the old one comes back. I'm stuck with Efarmer's quote! I asked in tech help, but no answer - maybe one of you people know...?
Click on "profile" at the top of this page (next to "Forum FAQ, Search..."
Your sig should be editable at the bottom of that page.
Be sure to hit submit. If this doesn't work, log out and log back in, repeat the above steps.
Needs to be HTML language. _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Joined: Apr 27, 2007 Posts: 4262 Location: The Great Sonoran Desert
Posted: Tue Apr 08, 2008 12:22 pm Post subject: Re: Housing & Economic Collapse - In Progress
Eli wrote:
Rocc which thread? I would like to read it.
The way it has been going the US has been exporting our inflation to China and South Asia, India ok the whole damn world.
The Bond market collapse makes sense, as much as I can make sense of it anyways.
Right here:
KD wrote:
Quote:
Well first it hasn't happened yet and second, the attempt still doesn't mean we'll actually get some sort of hyperinflationary move - if in fact the "printing" is of zero value (or close to it) then there may be very little monetary impact as occurred in The Depression.
Really...monetizing debt is not infaltionary...
And the Great Depression is gonna be what we get next...
And gold is going to $250
And his veggie mobile is gonna save him from PO...
Yeah right...
This is what happens to people full of hubris...the cannot see the forest through the trees.
I will also add that Karl is firmly wearing a tin foil hat...the same one he would have banned you for 6 months ago...
He says this collapse is engineered...
Really Karl...ya don't say bro...you one smart chimp. _________________ "There must be a bogeyman; there always is, and it cannot be something as esoteric as "resource depletion." You can't go to war with that." Emersonbiggins
"... hope is a rotten-thighed whore" Niko Kazantzakis
Posted: Tue Apr 08, 2008 12:43 pm Post subject: Re: Housing & Economic Collapse - In Progress
How does student debt repayment work in the US?
In the UK, it is collected in much the same way as income tax, by the HMRC at a fixed proportion of the debtor's annual income over a certain annual income threshold. There is no way to "default" or "fall behind" as it is automatically deducted from payroll. Nor is it discharged in bankruptcy any more, at least I assume that loophole to have been plugged. The only way such debt can drop in value is if wage expectations fall. That will happen in a deep recession of course, so I expect the escape door of being poor to be slammed shut before long. It would have to be if the government is to have any hope of offloading it onto private buyers, which it has been trying to do for a year now. No-one wants to buy a CDO these days. Maybe this will become the new model in the US, treat it as a tax bill?
Front page of BBC now, Brown seeks to calm housing fears, replacing their earlier headline of something about the biggest house price drop since 1992.
BBC wrote:
Gordon Brown plays down talk of a 1990s-style property crash, saying recent price falls are "containable".
The prime minister said a 2.5% fall in March, recorded by the Halifax, should be seen in the context of 10 years in which property prices had risen 180%.
In an interview with BBC political editor Nick Robinson, Mr Brown said: "We've seen house prices rise by about 180% over the last 10 years and they have risen by about 18% over the last three years, so a 2.5% fall is something that is containable."
Mr Brown's interview comes at a difficult time for the Labour leader, with a Populus opinion poll for the Times suggesting that the Conservatives had 39% support, compared with 33% for Labour and 17% for the Liberal Democrats.
The IMF says that losses are spreading from sub-prime mortgage assets to other sectors, such as commercial property, consumer credit, and company debt.
Many of the current government proposals call for reductions in interest rates. Dan says even that wouldn't be enough:
Sinclair: If they reduced our interest rate back to 4.25, we might be able to make the payments, but I don't think we're going to.
Vigeland: Now, why not?
Sinclair: We would do it if the equity was there, but in a case where we're already so behind... Imagine that for five years, say, we're gonna pay four grand a month and then we're just gonna be back up at what we bought the house for. We feel like we're throwing away money.
The Sinclairs say they want to take responsibility for their debts, but right now it makes more financial sense not to.
Sinclair: I mean, you ask a good question. Is it really the right thing to do to let the mortgage companies take up the difference? That's a really tough ethical question.
Dan says he experienced the various stages of grief, including denial and anger. Now he's just relieved.
Sinclair: We went through months of being skinflints, because we knew that we were going into the red, so we didn't buy anything. All the sudden, we had a bank full of money and we're living rent-free, but we know that's not really our money.
Vigeland: How does that feel?
Esmeralda Sinclair: Great! Like he said, we were so tight with money...
Dan: It does feel great, because all the sudden, we feel like we have a little margin now where we can go out to dinner, get a babysitter...
Vigeland: But you're not paying your mortgage. You're not paying the biggest obligation you have. How does that feel good?
Esmeralda: We already went through the guilt. his is really what we need to do, not what we wanted to do, but what we need to do.
And they say they are paying a price. They're losing their home, most likely and their credit is shot.
Esmeralda: It's also our dream that's just not there anymore. Everybody dreams about owning a house, having a house and now it's gone.
Vigeland: But not everybody would think that they should get into a 3,000 square foot house.
Dan: Yes, you're right...
Esmeralda: ...and that's taught us a lesson
Quit paying your mortgage, and that frees up a lot of money for conspicuous consumption. Maybe Home Depot & Best Buy are safe from a recession after all... _________________ "It's called the American Dream because you'd have to be asleep to believe it."
Posted: Tue Apr 08, 2008 1:38 pm Post subject: Re: Housing & Economic Collapse - In Progress
I will not be suprised to see websites popping up with easy little calculators for J6P to type in the details of his mortgage and see if its not better just to jingle mail and rent till the prices fall enough to get back into the market.
In many of the worst areas you probibly no longer need to rent, just stop paying until they notice you and wait for eviction. You could maybe get 6 months rent free.
Joined: Jun 18, 2005 Posts: 3765 Location: In a van down by the river
Posted: Tue Apr 08, 2008 1:43 pm Post subject: Re: Housing & Economic Collapse - In Progress
Ok I read that, that is not what he is saying in the context, actually he is still squarely in the deflation camp. Truth be known I think it is more of a stagflation situation for us.
Rocc, you are right about his thinking about the cops, I always thought that was very naive. The Cops are co-criminals in this. And yeah what was once tin-foil is now reality.
End the road is the World Central Bank, but that has been the goal all a long hasn't it.
Posted: Tue Apr 08, 2008 1:43 pm Post subject: Re: Housing & Economic Collapse - In Progress
dorlomin wrote:
I will not be suprised to see websites popping up with easy little calculators for J6P to type in the details of his mortgage and see if its not better just to jingle mail and rent till the prices fall enough to get back into the market.
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Wtf kind of math is this?
I enjoy reading funny stories!
