Credit Where Credit Is Due

Hey Polar!

The low interest rates have been a godsend to many, but they have an insidious nature! Home prices have become inflated to a dangerous degree in that low interest rates make them affordable despite the fact that prices are completely out of line. When the economy trys to heal, interest rates have to come up, and then the prices can no longer be sustained. New construction will cease to exist, therefore costing jobs, etc.

The second insidious part of the low interest rates are the retired who exist on interest income. Money market funds are a joke, as well as CD's. The less the elderly spend, the economy takes another hit, not to mention the implications it has on the elderly being able to survive without government assistance. It doesn't matter if they have been hard workers all their lives and planned ahead for retirement!! They have to go into principal to survive, therefore earn less interest, therefore spend more principal ... ... ...

Believe me, it's going to be an extremely long, self perpetuating problem!

Anon

Oh...okay!

Bear:

Okay my friend, here it is! It didn't even take that long, but it is only the beginning. Only the beginnings right now, but watch the new housing starts drop through the floor in the next six months. Housing can be added to our long list of crises!!!

http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2003/08/01/MN19585.DTL

Anon

Anon
Yes, the last bubble is about to burst.
We keep hearing about the economy recovering. I will believe it when I see it. Presently all I see is layoffs and more layoffs and hear about a jobless recovery. Until people can find work IMO there is no recovery.

AU1929:

Only a spinmeister for the Republican party would think things are getting better!

By the way, that is a really cool avatar ... I meant to tell you earlier.

Anon

Well, at least you acknowledge hearing about it. :wink:


You rang?

(Actually, I'd prefer to be a spinmeister for libertarianism, but people prefer to pidgeon hole me as a Republican, so what's a poor boy to do?)

Scrat
I also heard that Bush "earned " his MBA. I don't believe that either.

What would lead you to believe that he didn't?

Hmmm.... maybe this:

I don't see what his habits have to do with his completing his MBA. Homosexuals and blacks were probably something you didn't see at Harvard Business School then either...

MG

You might want to check this out prior to guessing
http://sa.hbs.edu/glsa/

That's great, I am glad to see that, but I would be willing to bet in 1973, when Bush was attending, that organization didn't exist.

Don't you understand, he's GEORGE BUSH. He couldn't have earned his MBA. Haven't you heard? He's stupid. Everyone says so; it must be true.

And now we learn that he used to chew tobacco! The scandal of it! Is it too late to recall him???

never too late.

Hello Everyone:

The "Housing and Refinance" boom is over folks, now watch what happens!!

http://www.nytimes.com/2003/08/05/business/05ECON.html?hp


Anon

Anon
The last nail may just have been put in the coffin lid.
Interest rates will begin to rise as soon as the government borrowing begins to pay for the Bush generated deficit.

Anon and AU - Your comments seem to suggest that a robust economy is not possible with interest rates above current levels, yet the boom economy of the Clinton years saw much higher rates than those we are likely to see in the next few years.

Dubya is indeed a man of many surprises.

Scrat:

Not at all! You do need to read my posts on the first page however ... they explain where I'm coming from! I earned my real estate license in 1972. I had my Brokers by 1975. I operated my own brokerage in Alameda from 1975 thru 1982. I had kept my brokers active thru 1996. My brother is in real estate, and my late mother was also very active, both investing and sales. I spent five years rehabbing distressed properties, houses, apartment buildings. We were very active, and very successful!

Bottom line, I've watched the swings and the market for thirty years. I feel like I have a certain validity in my observations.

There are numerous conditions under which to sell a property, and indeed, merchandise in general.

1. You have the best product on the market, everyone has money, and you don't have to worry about selling it. There are buyers bashing your door down, trying to throw money at you! It's a sellers market, and you don't give a poop, because you know it will sell full price, or better ... soon!! Sometimes, you even get more than you ask!!

2. It's an OK market, buyers are numerically even with sellers. Money is reasonable. The hottest (mostly location) properties are going to sell given a modest amount of time. Buyer and seller have to negotiate a little, and just about everybody wins!

3. The market sucks for "X" reason. There is no money. There is no financing. There are no jobs. The market sharks are out looking for killings. There is always someone who has the money who will be thrilled to buy as long as there is a good reason ... inordinately low price, extremely attractive financing, additional benefits, "creative financing".

These are all normal situations, and they go through cycles which are mostly predictable.

Then you have the aberrations ... this is when you can either get rich, or lose it all in an eyeblink!

This is one of them ... read my first post.

Anon