the US will in good shape someday when wall street real estate bears some resemblance to RE in the rest of the country. (i like my accidental message in this post )
How about average people want a rate increase. Inflation is killing middle and lower income family. Price has been going up so much in the past year and yet income hasn't increase much. If the rate is cut, I am sure the price will increase more.
Yep. Baltimore?Washington Maryland market is one that woudl generally be considered almost liquid real estate, except that the prices jumped up like the dot coms in 2000. Now, prices are down 10%ish, more in some cases. People maxed out with first and second mortgages and then when the value dropped and they struggled to pay as interest rates increased, it was easier to just bail out by defaulting. It is their only out in some cases. can't sell and still have the mortgage paid off. Homes are on the market a long time now, months and months, because they are overpriced. People want what they could have charged for their house two years ago, but that's not reality now.
Even when a bank makes a repo on a house, they lose money. Not to mention when the market goes to hell, and the bank repos the house...who are they gonna sell the house to to recoup their money? equity in a house is theoretical/potential profit...you don't get any money unless you sell it... so not to mention lots of money spent in legal proceedings in a foreclosure....the bank will almost surely lose money as well due to the fact that the housing market in general is in the shitter right now-so no one is buying (relatively speaking).
not to mention that Greenie felt compelled to bullhorn the positives of ARMs, right before IRs bottomed. its the USD or Real Estate. cut rates & the USD takes it on the chin, raise rates to support Buck, & real estate gets worse. this blip is happening with high employment & low rates; lenders/warehousers are getting "margin calls" due to leverage... so then the borrower (lender holding loans) is in technical default, since they cant raise cash, 'cause there isnt much of a market for subprime & Alt-A loan ports. i kinda think its the leverage getting unwound more so than huge default/foreclosure losses - although, those could be right around the corner. and if it starts self-perpetuating, itll get ugly
Mauldin has some pretty sobering figures on resets - second article: http://www.frontlinethoughts.com/pdf/mwo080307.pdf These last weeks yields tanked but mortgage rates didn't to speak of. That's a dangerous disconnect I don't recall happening before. Maybe, as Mauldin says at the end of his article, the credit market turmoil will pass quickly - it better.
Looks like global depression will be averted. http://www.reuters.com/article/newsOne/idUSTRE49N1XX20081024 U.S. has plundered world wealth with dollar: China paper BEIJING (Reuters) - The United States has plundered global wealth by exploiting the dollar's dominance, and the world urgently needs other currencies to take its place, a leading Chinese state newspaper said on Friday. The front-page commentary in the overseas edition of the People's Daily said that Asian and European countries should banish the U.S. dollar from their direct trade relations for a start, relying only on their own currencies. Asians and Europeans are feverishly working to decouple the Crude/USD peg. When that happens, sell everything you have in the US and move to mexico. Without the peg and the ability to export the USD inflation, the US economy will spiral into a "mad max" world. most of their voters have more guns than brains. On another note, It looks like the insufferable, half witted, racist and perennial loser wanna-be-a-trader who moderates this forum deleted my original post. Do any of these moderators actually trade for a living? If not, why are they then allowed to moderate a traders forum? want to see a American traitor? It's anyone who votes for a republicon and their neocon master.