Registered: Dec 2003
01-02-05 12:50 PM
Quote from larrybf:
unlike stocks..............there are no margin calls with mortgages.....so as long as people pay their "monthly nut", they may be poorer...........BUT there should be little drastic financial turmoil based upon this one factor.
well when we keep losing middle class jobs and the standard of living keeps incrementally declining, eventually the defaults will snow ball and this will collapse pricing. people will quit trying to make payments on a house they are considerably upside down on. when asian debt holders realize they are holding the bag and they start dumping this debt, rates will have nowhere to go except up. at that point, these McMansions will return to a "fair" value. consumer debt is at chronic levels...there will be no soft landing. the fed has painted themselves into a corner and now they lie each time they raise rates. they are not trying to curb growth....they are trying to delay the inevitable. all fiat money systems eventually reveal themselves as ponzi schemes.... just a matter of when, not if. the winner is the federal reserve banks who know what they are doing and have already bought up assets with their worthless greenbacks.