Posted on 01/21/2008 5:40:44 AM PST by Dukes Travels
"American consumers might benefit if lenders provided greater mortgage product alternatives to the traditional fixed-rate mortgage."
~~Alan Greenspan, February 22, 2004
"We're not about to go into a situation where (real estate) prices will go down. There is no evidence home prices are going to collapse."
~~Alan Greenspan, May 21, 2006
“The damage from the subprime market has been largely contained. Fortunately, the financial system and the economy are strong enough to weather this storm.”
Richard Fisher, Federal Reserve Bank of Dallas President, Apr 4, 2007
"I cannot help but raise a dissenting voice to statements that we are living in a fool's paradise, and that prosperity in this country must necessarily diminish and recede in the near future."
~~E. H. H. Simmons, President, New York Stock Exchange, January 12, 1928
"Stock prices have reached what looks like a permanently high plateau. I do not feel there will be soon if ever a 50 or 60 point break from present levels, such as (bears) have predicted. I expect to see the stock market a good deal higher within a few months."
~~Irving Fisher PhD, leading U.S. economist , New York Times, October 17, 1929
"If recession should threaten serious consequences for business (as is not indicated at present) there is little doubt that the Federal Reserve System would take steps to ease the money market and so check the movement."
~~Harvard Economic Society, October 19, 1929
"This is the time to buy stocks. This is the time to recall the words of the late J. P. Morgan... that any man who is bearish on America will go broke. Within a few days there is likely to be a bear panic rather than a bull panic. Many of the low prices as a result of this hysterical selling are not likely to be reached again in many years."
~~R. W. McNeel, market analyst, as quoted in the New York Herald Tribune, October 30, 1929
“Several brokerage houses tumbled; blue-sky investment companies formed during the happy bull market days went to smash, disclosing miserable tales of rascality; over a thousand banks caved in during 1930, as a result of marking down both of real estate and of securities; and in December occurred the largest bank failure in American financial history, the fall of the ill-named Bank of the United States in New York.”
~~"Only Yesterday: An Informal History of the 1920’s" by Fredrick Lewis Allen
and IMHO, that's about a 30-35% correction in asking price for a (new) home in what once was the hottest 30-40 markets and for the overnight prime to readjust to something near 7% and sit there for a while. 30 year fixed maybe in the range of 8-8.5% to weed out the unaffordables and maybe even a serious curtailing of the ARM (only to top credit rated borrowers) as to steady returns in the banking industry.
Uh...NO!
Mortgage rates for 30 year-fixed are less than 6%...and no buyers are to be found. Inventory flooded.
No homes sold = no washers and dryers sold = no carpets being installed. Buy a clue, why don't you?
The drive-bys continued this during the Bush 2 campaigns. They DIDN'T do it before the elections of the Boy Wonder from Hope.
The media is amoral and doesn't care two beans if they talk the country into a recession with their scare tactics. The media is the lowest bottom scum in our nation, even below marxist academia, the vulture lawyers and the anti-war traitors.
Leni
TM, your instincts seem to parallel mine. The jig is up. Time to pay the fiddler.
I’d like to buy an ‘R’ please?
Hmmmmmmmm anyone seen our fiscally conservative president?
Oh wait there he is handing out $800 bills. I'm getting my Weimar Wheelbarrow ready.
LOL!
I don't have enough room on my 2 acres to grow my own wheat...guess I'll be stuck with taters and corn.
I'm gonna need my contractor's wheelbarrow to haul enough for a box of salt.
W had to bribe the Dems with pork to get the funds for our military...that's why for the most part.
Now that illegal immigration thing....had to be someone at Wally World corporate holding Jenna in the changing room somewhere as hostage to get the retail spike.
If .gov steps in to bail out the MBS bond insurers, they will destroy their AAA credit rating and long rates will go to 20+%.
They just won't risk it.
I think you are a bit wrong.
Lending standards have been rightfully tightened, so finding qualified borrowers is more difficult. RE prices need to fall further to qualify more people for existing housing stock at reasonable prices to average income. This will continue to happen, altho at uneven rates around the country. In my area, for example, 3 homes for sale for over 4 months just bloomed with sold signs last week. Not under contract, but sold, meaning the financing is completed.
Additionally, banks are very reluctant to lend now because many of them are upside-down on their reserve requirements. Credit availability/liquidity is being destroyed just as fast as the Fed creates it. This is the biggest hindrance in the mortgage industry with qualified buyers.
People who have no problems paying their mortgage and are “forced” to stay in their homes will be replacing washers, dryers, refrigerators, and carpets as these wear out. Since it costs darn near the cost of a new washer to fix one these days, people will buy new rather than repair if it’s more than a few years old. Replacement of necessary housing commodities doesn’t quit in a recession; it does slow down.
People are still spending as they are able to fix up their existing homes, knowing that when the market turns around, if they spend wisely they will not only enjoy the improvements for a while now but will get some value for the spending when they do eventually sell.
One of the businesses I own is a landscaping/garden center, and people are still landscaping because it will increase their “curb appeal”.
If only. Dow futures closed today (11:30am for the holiday) down 520 points, and the S&P futures down 4.8%. We will very likely exceed the post-9/11 Dow drop of 678 points tomorrow morning. How it closes is anybody's guess. Bernake will be waiting, 1.0% rate cut in hand, for the proper time to unleash it, at which point the markets should spike. What they do afterwards will be critical for our near future.
We will see sub-4% first. The 10yr note will go below 3.5% tomorrow.
I like Herman Cain. He is a nice man. But he is deluding himself if he chooses not to see how disastrously bad things are and will become. It is increasingly hard to see any outcome this year besides a 1932-style Hillary Clinton virtual dictatorship and a subsequent global depression. Bush = Hoover. Saul Alinsky’s wet dream comes true.
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