home buyers brace yourselves.

Discussion in 'Economics' started by bgp, Feb 11, 2008.

  1. bgp


  2. There's more to it than just the housing market. The most important thing I got from that article:

    But for now, the outlook is gloomy here and abroad.

    Conversations with world leaders at the World Economic Forum in Davos, Switzerland, last month convinced Shiller that officials are more worried about the subprime fallout than they are letting on.

    "In face-to-face conversations, they were expressing a lot more doubts than you were seeing in the newspapers," Shiller said. "I think it's instinctive for many people to want to show confidence, but I heard a lot of worries."

    This, I think explains the current performance of equities. And how I mentioned in the Buffet thread that those with the most skin in the game and those in government cannot address the severity of this credit crisis without fear of causing more harm to the markets.

    It's no longer about the fundamentals. There's an 800 lb gorilla in the room and its about to start throwing random punches and no one wants to sound off an alarm because the resulting melee would upset the beast more.
  3. maxpi


    Does anybody ever just plot home prices? They fall for years, then they run up like mad, then they fall for years....... the bottom is years off, the downward spiral always starts when rates rise and credit standards are tightened.. currently we are in an unusual situation, rates are probably headed down [the fed lowered rates but the lenders have not yet] but standards are tightened but that is no reason to believe that the cycle won't continue. The prime borrower wanting to move up doesn't have a subprime buyer for his house so it's game over for awhile...
  4. Mvic


    Also wouldn't count on long bond rates moving down too much either, short end should move on the Fed cuts but the long end may even rise on $, debt, and economy weakness. Would you want to lend the US money for 30 years at 4.46%?