Posted on 06/01/2015 9:08:14 AM PDT by tcrlaf
The reason why Zero Hedge has been steadfast over the past 6 years in its accusation that the Fed is making a mockery of, and destroying not only the very fabric of capital markets (something which Citigroup now openly admits almost every week) but the US economy itself (as Goldman most recently hinted last week when it lowered its long-term "potential GDP" growth of the US by 0.5% to 1.75%), is simple: all along we knew we have been right, and all the career economists, Wall Street weathermen-cum-strategists, and "straight to CNBC" book-talking pundits were wrong. Not to mention the Fed.
Indeed, the onus was not on us to prove how the Fed is wrong, but on the Fed - those smartest career academics in the room - to show it can grow the economy even as it has pushed global capital markets into a state of epic, bubble frenzy, with new all time highs a daily event across the globe, while the living standard of an ever increasing part of the world's middle-class deteriorates with every passing year. We merely point out the truth that the propaganda media was too compromised, too ashamed or to clueless to comprehend.
And now, 7 years after the start of the Fed's grand - and doomed - experiment, the flood of other "serious people", not finally admitting the "tinfoil, fringe blogs" were right all along, and the Fed was wrong, has finally been unleashed.
Here is Deutsche Bank admitting that not only the Fed is lying to the American people:
Truth be told, we think the Fed is obliged to talk up the economy because if they were brutally honest, the economy what vestiges of optimism remain in the domestic sectors could quickly evaporate.
(Excerpt) Read more at zerohedge.com ...
With the already existing debt and spending problems facing America's Democrat-run cities, a sudden 30% drop in home valuations, and the corresponding drop in tax valuations, would put them ALL over the edge.
How do you pay those wildly over-promised vote-buying Chicago Public Employee Pensions if housing values in Chicago suddenly dropped 30%?
Hell, the banks are still refusing to foreclose on homes that people haven't been paying on for years, because they don't want the losses to hit the books.
bookmark for later reading
“By Almost Every Measure Stocks Are Overvalued” Warns Goldman After Slamming Corporate Buybacks
How do you pay those wildly over-promised vote-buying Chicago Public Employee Pensions if housing values in Chicago suddenly dropped 30%?
Progtards would raise the tax rates to compensate for the estimated loss of revenue...
Socialism has to fail. Better now than later.
After Six Years of Obamanomics: Five Things You Need to Know
http://www.thegatewaypundit.com/2015/06/after-six-years-of-obamanomics-five-things-you-need-to-know/
The Federal Reserve is the foundation of progressive government and politics in the USA.
Socialism in the USA can not exist without the Fed.
Yes, there will be another housing crash. Timed to coincide with the next POTUS approximately 9th month in office, so it will all be blamed on him.................or her..............
“Hell, the banks are still refusing to foreclose on homes that people haven’t been paying on for years, because they don’t want the losses to hit the books”
Yep as long as the banks keep those properties on the books at the inflated values they can still say they are fully capitalized.
The one way you can keep yourself out of ALL potential upside to the market and ALL potentially profitable trading (whether long or short) or investing is to over-read Zerohedge and other bearish sites. I absolutely promise you. You *may* acquire what you think or what the author(s) think is some level of superior “truth” but it will almost NEVER make you any money.
Over-read these sites and you’ll become a hearty disbeliever of anything EVER going up in dollar-denomiated value and hence you will never participate is same.
The stock market is leptokurtotic, in favor of the upside. You don’t have to be in it all the time. But it is provably wrong to believe that it is headed to zero. And by the way, should you successfully bet that the market heads to zero...who will be around to pay off your bet?
quote “Truth be told, we think the Fed is obliged to talk up the economy because if they were brutally honest, the economy what vestiges of optimism remain in the domestic sectors could quickly evaporate”
Make no mistake. If a Republican is elected, the truth will THEN be told, and made to appear to be the newly Republicans fault.
Housing crash? It never recovered from the last one.
They have a two edged sword.
Talking up this non-growth economy with 94 million unemployed and then keeping near zero interest rates to lower national debt payments.
Meanwhile your savings bring no return and principle evaporates when you stop working.
Also 25% pays for 75%, what could possibly go wrong?
It’s not just the mortgages. Many of those original notes also had Lines of Credit secured by the former phantom valuation. If the first note is called, any second in excess of the original note is a full-on loss. So while a bank might be able to recoup something on a resale after foreclosure, anything owed on the LOC is a bath.
“Many of those original notes also had Lines of Credit secured by the former phantom valuation. If the first note is called, any second in excess of the original note is a full-on loss.”
Makes sense...
I know one guy with a first, second, AND a third totaling about $225K on a $130K house, that hasn’t made a payment in almost two years. And he brags about it.
Re; “Hell, the banks are still refusing to foreclose on homes that people haven’t been paying on for years, because they don’t want the losses to hit the books. “ Is this hyperbole or is it really true and how widespread might it be? Thoughts?
Asking because it is setting alarm bells jangling in my head and am thinking maybe past time to make my home a self-sufficient “homestead” type farm. :(
The gov’t just wants to get that appraisal in at the top of the market.
My mortgage payment just went up $50/month.
Here the problem is insurance. After Katrina, rates went thru the roof, or what was left of it.....................
The housing crash was nothing more than a bubble bursting. A correction, if you will. Overbuilding, and yes, questionable loans by banks. Not necessarily to customers with questionable credit, but to builders and construction companies and also to people speculating in the market. “Flipping” new construction etc.
I have an acquaintance who is a builder. Got stuck with a couple of houses. Told me that only way he could keep from going broke was to keep building. How many neighborhoods do you see where infrastructure was built and construction never started. There was no real demand for housing, just speculation. Many people made a lot of money during the bubble. Like any bubble. Those that got out in time are still doing great. Those that didn’t went bankrupt. And the banks got bailed out.
Treating your personal home like a commodity instead of a place to live was a huge part of the problem. If you are using your home as a place to live who the hell cares if you owe more than the market says it is?
Average home prices as a percentage of income are basically unaffordable. Low rates and long terms make the payments somewhat doable. Unless something happens to your particular situation. Sickness. Loss of job. But ultimately you are not “stuck” with anything. The bank is.
The “housing crisis” should have been allowed to be worked out by the market. It would have been corrected by now. Government intervention just prolonged it. And when a correction inevitably comes it is going to be a hell of a lot worse.
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