"Banking is rock solid! Housing is booming -- for condos over 3.2 million on the Upper West Side & Washington D.C., and everything else is just ducky with the general economy!"
Posted on 01/10/2008 4:47:58 PM PST by TigerLikesRooster
Man, we are in for a rough ride. I hope FReepers wake up soon!
People who make big trades for a few hours make money going in both directions. What they want is volatility.
People have been using their house as a credit card............and the bubble has burst!
Fire up the printing presses, after flooding the market with dollars ... we will give them even more to offset our shaky economy.
Historically speaking, the Fed seems unconcerned with taking the same path as Germany and Argentina which led to the collapse of their economies. It may not happen for decades, but turning an economy the size of America away from the upcoming iceberg does not get easier when the captain is heading straight toward it at full speed.
Bankers and traders love free markets until their schemes backfire and then they can’t seem to get enough fiat money to bail themselves out, even if it is an artificial way to protect themselves against the natural consequences of their actions in a free market.
It used to be that way, too. However, now that the world economy is interconnected as never before, especially world finance, it is all the more true.
The reason there is so much distress in the market now is no one has a clue how bad the overleveraged securitized toxic debt is going to be when it unwinds. This is why the Fed in both Europe and the USA are flooding the banks with liquidity to help them ride this mess out. Most of the toxic debt resets in April, 2008, so we are in the beginning stages of the unwinding. Thanks to hedge funds who are major players in the global economy, there is no safe place to hide because they will be forced to liquidate their good stuff to cover their losses.
so
Interconnectivity is wonderful for the global economy and information flow, but it also sets up the domino effect when things start collapsing. The market hates this type of unpredictable risk and will continue to flounder until it is has unwound and they know who the losers and winners are and which way to go. The foreign money men (China, Saudi, etc.) are already bailing our guys out to keep this from happening, so they are well aware that the US economy could suck everyone down with it if this unfolds in a worse case scenario.
This particular reset is going to be very unpredictable ... so get your popcorn ready.
"Banking is rock solid! Housing is booming -- for condos over 3.2 million on the Upper West Side & Washington D.C., and everything else is just ducky with the general economy!"
Our local economy is so bad, all of the illegals left.
AMEN BROTHER!!!
You can buy a put just as easy as a call...
Thank you for affirming my point.
Enjoy your self-fulfilling prophecy.
ex-texan and I posted here about 18 months ago that this bubble was going to burst and BIG! We take no happiness in this. He and I have been in banking and finance all our lives. We know how banking and mortgages work.
That is not an exclusive club...
Quite a few that post on these financial oriented threads fit that bill. (That was a hint, BTW.)
My original point still stands. The more people that are flinging around the "!!!!!!!" to whatever daily news comes out as this _______ unfolds, the worse the ______ will be.
I am only too willing to acknowledge that the party is over, much in way that it was over in May 2000. Guess what? We're still here, some of us are in better shape than we were 7-8 years ago, and not every home buyer, investor, hedge fund, or mortgage bank doing their things in the past 10 years were complete idiots.
Ok, so you want indicators?
In the last recession, it wasn’t until Nov 2001 that economists actually recognized we were officially in a recession and had been for months. It was about 2 years later they announced that the recession ended in Nov 2001.
In other words, they didn’t even recognize the recession until it had already ended....
So, with the rate cuts, how long should I hold out before I refi?
What kind of refi are you looking for? Going from what sort of product to what sort? That can make a difference.
If you have a 3/1 ARM and want to go 30 year fixed, you’ll have to go through the whole application process - might be worth waiting awhile.
If you’re on a 30 year fixed and want to refi to a lower rate on a 30 year fixed, try just calling your current bank and asking for the lower rate.
Believe it or not, that’s what I did a couple years back and they reduced my rate .75% for free with no application. They kept the payments the same (which I wanted to do as well), but just reduced the term.
But it all is up to individual circumstances. Rates are (and have been for awhile) near all-time lows. Reducing your rate on a 30 year fixed from 6.25% to 5.8% really isn’t going to save you that much, particularly if you can’t negotiate lower closing fees (without them increasing the rate or rolling the fees in the balance of the loan). There really isn’t an easy answer..... unless you’re in an ARM right now - in which case my conservative judgment says to refinance now and get out of that horrid arrangement.
Thanks! I am in an ARM right now and can easily afford a 30 year fixed as my circumstances have changed since I got into the ARM. My ARM does not adjust until December 2009 so I have some time. Do you think I should wait until the next rate cut?
“So, with the rate cuts, how long should I hold out before I refi?”
Do it now!
ROTFLMAO!!!!
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