There was an interesting business news segment about a month ago....where an analyst laid out the biggest issue. There are way too many people buying homes still...without any down payment. If the interest rates are ever moved....even half-a-point...it’ll create a tidal wave that only requires six months before recession kicks in, and another banking crisis.
After watching that, I’m pretty convinced that this ‘recovery’ period that we think is in progress right now....is mostly fake.
"The strong housing data is taken as proof that the economy has turned around and that a recovery is under way. Cooler heads may simply see how government policies have channeled money into real estate in order to reflate a bubble that has been collapsing for the last five years. Although the money is entering the market through slightly different paths than it did in 2005 and 2006, its effects on housing, and the broader economy, are the same as they were before the bubble burst. When the inevitable happens again, the ensuing damage will be eerily familiar."
If everything is cool, why did the markets exhibit panic yesterday?
It’s not the interest rate move that will do it. Most mortgate owners can absorb a percent or two move as long as they still have a job. It’s the offshoring of our jobs. Refusal to do anything about China’s undermining of our industries.