apparently some fed watchers are hinting that bernanke might say something different to the original statement tomorrow. i stated in another thread last week that the market reaction to the statement was possibly not the reaction the fed wanted and the market misunderstood. the wall street journal covers more on this today. http://users1.wsj.com/lmda/do/check...17496360470949988.html?mod=home_whats_news_us
thanks for posting link - unfortunately i am not a subscriber...could you copy and paste into this thread please... thanks.
It's all horse shit. The fed is talking tough while it's planning when, not if, it will start cutting rates. If they kept rates high, let alone raised them, they'll guarantee a U.S. recession, led bu housing, but soon followed by everything else.
BuyLo, do you actually think cutting rates is going to save anything at this point? I think it might throw a little water on the fire, but I think it's already far too late to slowdown what is in motion.
At this point, I think the main factors affecting the housing market are outside the bounds of interest rates for the most part: PRICES inventory market fears overbuilding I'd say it's less about the lack of interested buyers and definitely more about quality of buyers. The tightening of lending standards isn't going to do much to alleviate the problems that these lenders caused themselves.
there is already too late IMO .. fed funds would have to be cut back to 1% to save housing ... this snowball has too much momentum .. also, if they cut ..they will be inviting more and more inflation as our dollar continues its death spiral .. --m
I don't see what choice they have. If they don't cut, and we have a serious slowdown, which is already happening, they will be blamed for not acting properly to stimulate the housing market and consumer spending. If they do cut, and it does little, at least they can say 'we used the one tool at our disposal' to try and stimulate the economy. The U.S. cannot avoid a recession if housing stays this bad (or worsens) and auto sales suck wind. It's not possible.
I'd say a big factor is that no matter how much they cut, unless the fucking homebuilders and sellers realize that a a loss is better than nothing they may be their own worst enemy for a long time. PRICE CUTS PRICE CUTS PRICE CUTS ARE needed. Places like Bakersfield, Las Vegas, Sacramento, Cape Coral, and some of these other mid-boom bubble centers are crazy because no one was stupid enough to live there until they realized they could buy houses there cheaper than their neighboring boomtowns like Los Angeles, (Las Vegas is an exception I guess), San Francisco, Naples(I guess, even though it turned into its own bubble), etc. These places are places you'd have to be nuts to want to live in for the most part anyway, let alone when their home prices are just as high as the places you moved from to have a better house cheaper....it's amazing that Sacramento probably isn't much cheaper than the Bay Area now...so HOW IN THE HELL ARE THEY EVER GOING TO SELL ALL THAT INVENTORY? I don't think they will...this is going to cripple the lending industry, building industry, and all the others in between. If being a realtor was competitive before...whoo boy. Cutting interest rates will only qualify slightly more people...but when you get big lenders like Countrywide who were (STUPIDLY) not even qualifying people using the fully indexed rate in the first place...if they start to do now, by their own admission, they'll qualify 60% less people!!! I think it's a death march that needs to happen and homebuilders and lenders and banks that backed the bubble-towns need to get hit with it first for being greedy pigs. Too bad the rest of us will have to pay for their exuberance...the government will probably have us paying for houses we were smart enough to NOT buy before long via taxes. Great.