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- Speculation, Swaps and the Price of Oil [view article]
- Financials: Down, Down, Down [view article]
- How Models Caused the Credit Crisis [view article]
- Wall Street Says 'Oops' [view article]
- U.S. Bank Dividend Yields Revisited [view article]
- CreditSights: Guardedly Optimistic About U.S. Loan Market [view article]
- Writedowns and Capital Raised by Financial Firms [view article]
- The Bursting of the Non-Bubble? [view article]
- Financials Buying Opportunity Close at Hand [view article]
- Everything Financial Rolls Over: Is a Bounce Likely? [view article]
- The Great Fed Rate Cutting Myth: Look Out Below [view article]
- Bank and Broker Default Risk [view article]
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- Transparency: Sometimes Even the I-Banks Like It
- Financials: Down, Down, Down
- How Models Caused the Credit Crisis
- Speculation, Swaps and the Price of Oil
- CreditSights: Guardedly Optimistic About U.S. Loan Market
- July 4th Market Notes: Financials, Europe, Oil
- Wall Street Says 'Oops'
- Wait, I Take That Back
- The Bursting of the Non-Bubble?
- Writedowns and Capital Raised by Financial Firms
- Full List of Articles »
Everything You Wanted To Know About This Week's Market (But Were Afraid To Look At Too Closely) [view article]
Well rounded commentary. Wish you could publish this weekly .. ;) ReplyEverything You Wanted To Know About This Week's Market (But Were Afraid To Look At Too Closely) [view article]
EXCELLENT article! ReplyEverything You Wanted To Know About This Week's Market (But Were Afraid To Look At Too Closely) [view article]
There seem to be other forces at work here.While I agree on much of what the author says,the institutions still cannot remain in cash for long regardless of what the economic trends tell them. This is a growing part of the investment community and it takes the bite out of speculators and individual investors ability to move markets based on sound fundamentals.Truth is,this market is probably 35% or more,overvalued ,if you use common sense ,instead of hyped thinking.I just can't find it in my heart to go long now. Reply
Everything You Wanted To Know About This Week's Market (But Were Afraid To Look At Too Closely) [view article]
Great article. I am glad to read that I am not the only person who believes that the US is entering a prolonged period of stagflation. The Fed governors say it will never happen along with the market pundits. They say that there is no inflation because housing prices are declining. They even claim that the US is experiencing deflation. LOL!! Accoring to the fake government numbers, gasoline prices actually declined in April even though April gasoline futures went from 3.26 to 3.49. The worst part is that the market seems to believe the government numbers. ReplyNAR's Lawrence Yun Continues to Mislead on Housing [view article]
The banks have no money and don't lend, how can the people buy? I predict the falling speed of the home price will accelerate in next 2 yrs ReplyNAR's Lawrence Yun Continues to Mislead on Housing [view article]
House price has a long way to fall, I would say it needs to drop another 70% or more from present level ReplyNAR's Lawrence Yun Continues to Mislead on Housing [view article]
I doubt if anyone is reading these comments any longer, but I have to add my final opinion. Many have added some great comments and references to some good articles and facts. I appreciate those inputs very much. I'm lucky to have a great house in an area that is still appreciating in value, yet I work 3000 miles away from that property here in Washington DC. I'm glad the property values are coming down here because I want to buy a second property. I have found many great deals on forclosures, and I can buy with 0% down and even have the bank pay for the closing costs, etc. This is a great time to buy, but we still have at least a year before there is any sense of a bottom to the market. It will be interesting to see if the prediction of the baby boomers movement will effect the market. ReplyCredit Default Swaps and Counterparty Risk: Beware What Lies Beneath [view article]
CDS are a big part of the derivatives bubble created by the Fed. If the bubble goes all at once, we are doomed. The Fed is now trying to deflate its own bubble (oddly by reinflating it). They caused it, they are trying to save it, WE will pay for it.TakeBackTheFed.com Reply
Credit Default Swaps and Counterparty Risk: Beware What Lies Beneath [view article]
One interesting aspect of this is that, in a normal insurance arrangement, the insurer does not have a right to assign its obligations to unrelated parties. In fact, the insured may pay a premium for the right to have insurance from an entity you trust or whose ratings meet your criteria. The policy is an asset and the insured may sell it. The CDS market seems to have turned the legal concept upside down in allowing the transfers of the obligations to unknown parties with unverifiable financial capacity. ReplyNAR's Lawrence Yun Continues to Mislead on Housing [view article]
Boomers and Boomer Babies are broke. Mortgage rates are still high and no one is lending more than 80% any more. House price to income ratios are far too high. Housing inventory is at record levels.Lower house prices are good. Yes, good. You don't think so? So, then you won't accept a free mansion if I offered you one? Idiot. Reply
NAR's Lawrence Yun Continues to Mislead on Housing [view article]
Awesome give and take. I agree with everyone! Heh heh.Let's ignore emotional arguments and patriotic justifications for the market doing this or that. Look at economics.
House prices are historically high versus income. So, unless someone can prove there is a new paradigm and not a bubble, prices must drop until they are in line with historical norms. Historically, median price is about 3 times median wage, meaning that the median price should return to about $140,000.
I would also argue that we are in severe housing crisis with massive oversupply and "buyers" without any savings. Low Fed funds rates are not showing up in mortgages; the low rates are in fact designed simply to restore profits to the banks (yield curve). Boomer Babies have no money to make downpayments. Prices are rocketing up while wages are stagnant.
Are there market segments and geographic locations which are "immune"? No doubt, but even the top end is getting slammed in some places. And the NAR chestnut about location, specifically someone mentioned Southern California, is a joke. Look at house prices in SoCal, Vegas, and Florida. Death spiral! And NYC? Sure, all the foreigners will save NY real estate. As Borat says, "Not!"
Frankly, house prices should be lower. It's better for everyone. Lower taxes, lower insurance, cheaper to buy. Who cares if you sell and move on? Your next home will be cheaper still.
Is there anyone dumb enough to suggest that free housing would be bad? Would you turn down Bill Gates if he offered you his house for free because houses SHOULD be expensive? Reply
NAR's Lawrence Yun Continues to Mislead on Housing [view article]
Specialperson,There will be intergenerational transfers of wealth that will help the millenials. Also don't forget immigration. It will make up a lot for the Boomers leaving the market.
As for your example concerning sellers outnumbering buyers in certain states, some of those states are simply seeing declining populations as people of all ages chase better economic opportunities elsewhere. Reply
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NAR's Lawrence Yun Continues to Mislead on Housing [view article]
by Boomers = 76 million American children born between 1945 and 1964.Generation Y = Millennials = 76 million
When the early baby boomers bought houses, the prices were dirt cheap.
Most Millennials can't afford to buy houses--BECAUSE THE PRICE OF HOUSING HAS INCREASED FASTER THAN WAGES.
Unless the prices come way, way down--THERE WILL BE NET *SELLING*, NOT BUYING GOING ON FOR THE NEXT 30 YEARS.
"In the next two decades, as millions of aging baby boomers put their homes on the market, they'll put downward pressure on prices...There are already more sellers than buyers in six states: Connecticut, New York (excluding Manhattan), North Dakota, Pennsylvania, West Virginia and Hawaii. The trend first hits areas with cold weather and traffic congestion, which tend to drive retirees away."
www.usatoday.com/money...
Reply
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NAR's Lawrence Yun Continues to Mislead on Housing [view article]
Why does everyone keep talking about a recovery? We just started the correction! And recovery from a correction? Lol...that makes no sense. ReplyNAR's Lawrence Yun Continues to Mislead on Housing [view article]
Obviously many of you have no solid information to make your predictions on. They just seem like a logical conclusion to you, and you put it in print. The reality is, from someone in the mortgage business for the past 16 years:After the subprime arm resets comes the option arms resets. From what I've found, this portfolio of loans is larger than the subprime portfolio was. As with the subprime arms, payments are going to adjust out of reach for many who are upside down, unable to sell and unable to refinance. Can you say FORECLOSURE?
After that comes the FNMA/FHLMC 30 year fixed interest only. This is the prime loan category that some brainiac said would have a melt down. As a mortgage professional, I think this will be the biggest melt down of all. This is an enormous portfolio of loans that are interest only for the first 10 years and then convert to a 20 year fixed mortgage. That will raise the payments 30-40%, even though the rate stays the same. These borrowers got in with 0 down and a 65 debt ratio. They definitely cannot afford the increase, and will not be able to refinance or sell. Can you spell FORECLOSURE?
Don't forget, everything is getting more expensive and pay checks aren't going up. That expense has to be absorbed somewhere. I already have customers who commute from the suburbs of Phoenix who are paying more for gas than for their mortgages (2 commuters in the household).
And, by the way, rates really don't have anywhere to go but up. For those of you who think that won't have a dramatic effect on prices, wake up. Reply