How are they gonna "manage" this? This country is already out of irresponsible buyers, are they going to have to make the standards even less to induce the responsible to step in and catch the falling knife?
That's right. The banks don't want to lend to irresponsible creditors and have them default AGAIN. And lowering rates won't turn the responsible into irresponsibles... they have their own financial pace and for the most part cannot be "stimulated" into doing more borrowing. When the market wakes up to this fact, it will realize the futility of this effort and swoon again. And as the Fed and Gummint try to force this "square peg into a round hole", there is likely to be a bout of high inflation and $USD destruction..
well first if we see inflation i doubt housing will come along for the ride this time. housing is way overbuilt in most areas. besides not to many people fall for the same scam twice.it will take a generation before housing is in fad again. prices could actually contract regardless of how much the gov. spends if the banks refuse to loan money.
We could quite easily solve this problem if the scientists would develop a pill that would allow increase our lifespan by about 30-40 years. Then we would have more time to pay off more debt, this would reinflate property prices and would save producers from having to increase wages. When the next credit crunch comes along, the scientists will have developed another pill that can give us another 30 years.....
99 percent of the people in the world are ignorant and stupid bernanke is included - nothing he ever says is right - why is that going to change now? Never ever listen to him - pretend he does not exist - and all the talk he does do, is part of propaganda anyway... to instill confidence so the market doesnt plummet all at once... it is so obvious All of you are so inlove with inflation....oh lets buy gold.. oooh wheel barrows full of money.... bunch of old farts living in the past... Get out of the herd mentality.... that is why we are here in the first place....Weve already had inflation.....they are trying to fight off deflation... only one of two things can happen 1/ we get more deflation 2/ it flatlines for ages and slowly we pick back up and get back to mild inflation after the deflationary period is over learn some economics - bernanke included... he is such a proud academic... knows nothing... but pretends he does and shouts the loudest...cos hes read ten thousand books he can parrot back to you - and noone really has a clue about economics really, even the mises and the keynesians... just a bunch of egoheads bashing heads together - like most other subjects the amount of money does not matter....it is simply a piece of paper that claims a certain amount of labour. The value of that labour never changes of any significant amount. inflation---deflation it doesnt really matter much.... why are we in crisis? Because people have overtraded... this happened with or without inflation - and now people have a negative attitude that is all... This exact point in time of the markets matches up to another point in time in the market. The difference? It was going up at the other time and people were optimistic. people undertrade back the other way with the herd deflation is just a massive correction - where all the money it stockpiled and not used... and assets changes hands to the people well equitised. Thus the money in circulation drops massively. it does not matter how much inflation there was in affecting the crisis. Its simply the difference between a hundred dollar bill and a ten dollar bill when both buy the same amount of labour dependant on the inflation. If we had ten dollar bills and we had the same over trading, we would have the same fricken crisis. People just don't understand economics. The top notch self proclaimed gurus do not understand it. I do. economics reflects human nature. Human nature is chaotic but has patterns that repeat under certain circumstances. The economy will always follow human spasticity to wherever it takes us. There will be more failures. More bad news. And more people will get scared and there will be more deflation. As all the stupid scared humans will run. Eventually the bad new will stop - some brave man will come to the fore, and say I am buying now, and its all back on - but there will be a big falatline before that.. take it easy - and forget about trading and go spend time with your family im not going to debate this point... go learn it yourself by reading and some serious thinking... im not a teacher but I know I am right - so go ahead and argue - but not with me as there are always people who cannot argue rationally that never goes anywhere But if you want to learn. Read adam smith. That is all you need to know. Read it a million times and think. finally - the only people who will truly understand this, are people who know how to defeat their own intellectual egoism. Otherwise ego will not allow you to accept your own misconceptions. Wisdom begins with humility. Until you find that - you are forever limited to a closed mind.
I think it's pretty obvious that lowering standards is off the table for good. Unfortunately, the only other option is the one I think we're going to be hearing a lot over the next couple of years; taxpayer subsidized backstops.
Well, if you think inflation is going to start kicking in over the next 6-9 months then I'd agree that housing would not take part. But, I still think we've got a couple of years of deflation ahead of us as the commercial real estate market catches up with not only what's already happened on the residential side, but what will happen over the next 12-18 months. If the mortgage rates stay low some of those facing option ARM resets might be spared, but I think a large number won't be so lucky. I also wonder how many are out there who are currently okay but have little to no margin for safety who are going to end up getting pushed over the edge due to property tax increases, paycuts or outright job loss.
Anyone has a detail knowledge of how the govt calculates inflation. I know they have changed it twice since 1980; always on their accounting favor.