Posted on 10/16/2015 9:30:26 AM PDT by blam
Tyler Durden
10/15/2015
The economic numbers released yesterday can best be described with a reference to wheels falling off the bus. And it wasn’t just retail sales and PPI in the U.S. but numbers from around the world, including China. So, of course, when I woke up this morning the obvious first question to ask was, how much are equities up? It remains a reality for trading that the biggest news overnight wasn’t the Bank of Korea rate decision nor the continued deterioration of East West relations but an article written by Jon Hilsenrath in the WSJ on the rapidly diminishing likelihood of a Fed hike in 2015.
Fed Funds futures have been consistently ahead of economists and Fed speak in doubting a rate hike. Comments by Richmond Fed’s Lacker yesterday that he doesn’t know if the Fed will raise rates in October didn’t even merit a rolling of the eyes. Futures are pricing in a 4% chance for October rather than zero, just to be polite. Governors Brainard and Tarullo joining the “conditions don’t merit a rate rise at this time” camp sounded positively statesmanlike.
(snip)
(Excerpt) Read more at zerohedge.com ...
...meanwhile housing prices in some areas are reinstalling beyond 2006 levels juiced up by cheap interest rates. Buyers don’t care (at the moment) that housing prices have increased 10% per year, they only care about the monthly payment, thus prices have increased as interest rates decrease. If and when interest rates increase, those same inflated house prices will come down. Once again there will be numerous bag holders with a mortgage worth less than the current value of their home.
True, then again I am considering refinancing from 4 1/2%, it might save me a lot.
I was watching a video on youtube from July where Peter Shaff was debating four other "economists" on MSNBC. Shaff was adamant there was no way the Fed would be raising rates 2015 and the other panelists were mercilessly ridiculing him and calling him incompetent for such an assertion. Looks like, once again, he was probably right and everyone else was wrong. This doesn't bode well given Shaff's long term outlook.
True, then again I am considering refinancing from 4 1/2%, it might save me a lot.
Absolutely noting wrong with that. The danger is for those who have maxed out their mortgage payment to get into a house, where an increase in the interest rate may make the value of the house go down. Now if they have to sell, it would be at a loss.
The Fed is never going to raise interest rates, not in the foreseeable future. If rates go up, it will be externally forced on the markets.
Actually, that is Peter Schiff.....
"Own For $0 Money Down!"
"It took nearly a decade, but "owning" a house for zero money down has finally come back."
Hummm, I did a google search before posting to make sure I spelled it right. After doing it again I see about 3/4 of the links spell it Shaff and the rest Schiff. Since Wiki spells it your way I think you are right but that's weird.
Renting a house from the government is what you’re doing. The Feds have effectively nationalized the mortgage industry.
If I understand it correctly, about 75% of the time, the bank originates the mortgage and then sells it to Fannie/Freddie and receives an ongoing consideration for servicing the loan.
So when you stop paying who are you defaulting to? The bank or the government?
DING DING DING DING!!!!!!!! We have a winner!! There IS NO relationship between what happens on Main Street and what happens on Wall Street and there hasn’t been any for a long time. Looking to some Wall Street slug for financial advice is like asking financial advice from the guy who just won the World Series of Poker - “Hey he’s a millionaire isn’t he?”
I thought you were joking. Can’t believe some development is offering a no money down option to buy. Just goes to show we learn nothing from history.
Mine would be about $230K on a house assessed at $800K+.
Then you're in great shape.
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