Pent up demand

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106 Comments

    • Thu Mar 6th 07:48 AM | Rating: 0 0
      Commented on:
      A Solution to the Mortgage Mess?
      You make a good point special1person. My view is that when the Fed talks about "fighting inflation" they really just mean wage inflation. In that they have been spectacularly successful. They were quite content to have asset prices inflate as long as wages for the rank and file remained in check. The result was a huge cut in real wages.
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    • Wed Mar 5th 13:37 PM | Rating: 0 0
      Commented on:
      A Solution to the Mortgage Mess?
      We have a process to make this happen. It's called a real estate market.

      What the author proposes will happen if the govt. will just let nature take its course. Yes, there will be financial hardship for the imprudent, and chances are in a few years when real estate is repriced at a level that can be supported by incomes, people with savings who didn't bankrupt themselves buying a McMansion get to move up to nicer digs at an affordable price.

      The truth is, there is little that can be done to help the imprudent who bought over the last few years. Many of the so-called solutions proposed or implemented over the last few months (making forgiven principal in a short sale non-taxable, freezing rates) do no good when the borrower has little to no skin in the game. In fact, many will have an opposite affect: they are practically daring these people to default and walk away.
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    • Tue Mar 4th 09:11 AM | Rating: 0 0
      Commented on:
      Inflation? Sminflation!
      DougM, your points are well made, but I don't think any of them make a pure fiat system preferable to a currency backed by hard assets. Yes, there were boom-bust cycles and bank panics when we were on the gold standard. But how is that worse than the current state of affairs in which the banks in league with Congress and the other central banks are pushing us toward a much harder "correction"...
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    • Mon Mar 3rd 13:57 PM | Rating: 0 0
      Commented on:
      Time to Short Financial Stocks - Starting with BofA
      What a shoddy article. You talk as if BAC is a pure-play to short the housing fiasco. If the deal even goes through, they will be buying CFC at a big discount. There are plenty of more likely suspects in the financial sector. What's a matter, did bad old BAC raise your interest rate?
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    • Mon Mar 3rd 07:30 AM | Rating: 0 0
      Commented on:
      Inflation? Sminflation!
      This is analysis? There a dozen good reasons for "why gold?" that can be discovered via ten minutes of Googling. Yes, the money supply can increase under a gold standard, but it increases as a result of people mining the earth, not as a result of Bernanke or Paulson saying "now we will have a term auction facility for banks, dig in boys!".

      The statistics have been understating inflation for years: through hedonic adjustments; through the gaming of the housing component. They switched to owner's equivalent rent to keep the housing boom out of the inflation numbers. Now that housing is collapsing look for the statistics to revert back to the old methodology of housing price surveys. That will provide a nice smoke screen for the accelerating increase in the money supply.
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    • Fri Feb 29th 15:05 PM | Rating: 0 0
      Commented on:
      Inflation's Power: The Dollar in 25 Years
      I'm glad that others can be so sanguine about inflation. That doesn't change the fact that it is a stealth tax on wealth. The government has a great racket going while they can keep it up. They print the money and they can game the price indexes that measure how much excess money they are adding to the system.

      Yes, people who are invested in hard assets aren't going to take such a hit. But keep in mind that capital gains basis is not indexed, so even if you protect your wealth by investing in hard assets, the tax man is going to wet his beak when you convert them to cash.
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    • Fri Feb 29th 13:46 PM | Rating: 0 0
      Commented on:
      Inflation's Power: The Dollar in 25 Years
      Agreed that the Fed and Feds have no option but inflation due to the entitlement trap. Oh, the irony that programs ostensibly founded to prevent seniors from living on dog food in their old age are likely going to put a lot of people in just that position.
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    • Wed Feb 27th 10:04 AM | Rating: 0 0
      Commented on:
      Latest Case-Schiller Report Shows the Sky is Falling
      One of the criticisms of Case-Schiller is that it only follows the 30 major markets. So Arcadia, CA is lumped in with LA if it is included at all.

      That recent number about an increase just shows the uselessness of the NAR's median number. The median jumps around based on the mix of homes sold in a given period. So if only the high-end is moving, then woo hoo, we're all rich.
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    • Wed Feb 27th 09:59 AM | Rating: 0 0
      Commented on:
      Just Another Credit Crunch?
      One has to love the newspeak: "central banks have injected billions"; in the old days we would say that they're running the printing presses full bore. Oh, right, the bankers have to present "collateral" for these injections. But we've redefined collateral to mean anything up to and including shiny rocks found on a recent trip to the shore.
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    • Tue Feb 26th 15:01 PM | Rating: 0 0
      Commented on:
      Latest Case-Schiller Report Shows the Sky is Falling
      Schiller is the only one to properly account for sales mix. The numbers that the realtors like to kick around are no better than noise because they reflect the median of an ever-changing basket. The "don't worry be happy" bulls also like to play stupid games with month over month numbers in a cyclical business. Look at the year-over-year numbers. It's not a pretty picture. We're going to see former realtors selling apples in the street if this keeps up.
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    • Mon Feb 25th 13:03 PM | Rating: 0 0
      Commented on:
      Injecting Accountability into the Credit Crisis
      "Nationwide moratorium on spec homes"? Shall we address you as Der Fuhrer as well? More liberal fascism. Golly Mister, I'm filled with patriotic ardor for the chance to sacrifice my financial future to preserve the value of your home. I'll remember that we're all in this together when I'm still stuck living in a rental 10 years from now. So a 40-50 year loan at 9% will make a home affordable for me? No thanks. Isn't that better known as "indentured servitude"?

      This article is full of yet more bandaids. You want a solution? Mark it to market. That is the cure for what ails the financial system. There are going to be failures a-plenty, but no sane investor is going to risk his capital with a bank until we've excavated the banker's backyards to find out where all the bodies are buried.

      If you are an owner in a formerly hot market, much of your home's value is completely imaginary. Yes, it makes you sad. But that is reality. Get over it.
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    • Mon Feb 25th 10:07 AM | Rating: 0 0
      Commented on:
      Housing Bailout: Crony Capitalism Comes to America?
      Still waiting for a liberal economist to explain to me how a federal bailout to prop up the cost of housing is good for the working class. And waiting...
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    • Mon Feb 25th 08:58 AM | Rating: 0 0
      Commented on:
      Proposals for a Depreciating Housing Environment
      Banks are not foreclosing on people who make the payments. If the value of the collateral deteriorates that is just part of the risk of being a banker. And Mike B., holders of mortgages are not happy if the nominal value of the asset goes up through (unanticipated) inflation. They want a real yield on their investment. Federal Reserve funny money is not a real yield.

      Hell, brokerbila, I like your plan. But why not cut out the middlemen? Just have the Feds buy up all the troubled properties, and then they can allow citizens to live in them rent free. We all pay taxes, right? I'm sure we can figure out an equitable way to assign party members, I mean citizens, to housing units.
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    • Wed Feb 20th 15:55 PM | Rating: 0 0
      Commented on:
      Another Discouraging Inflation Report
      "Inflation is always and everywhere a monetary phenomenon." Who said that again?

      I just hope they put Greenspan's face on the hundred when they issue the "strong" US dollar at 1,000:1 for today's greenbacks.
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    • Thu Feb 14th 08:39 AM | Rating: 0 0
      Commented on:
      A Housing Bubble Within a Bubble
      Disclaimer: I am a family man (previous owner) who is renting right now.

      I am sick-to-death of the hearing the "losing equity" argument. I rent a large apartment for $2600/mo in a place where the carry on a similar size single family would be $4000/mo plus. Oh yeah, prices are falling. What the heck am I missing out on by renting? Let's see, $1400/mo in carrying cost and a nice chunk of negative appreciation.

      My landlord is practically begging me to buy the 3-family house I rent in. "Great income" he says. Aw, thanks, but the reality is he's a smart money guy who missed the top and is smart enough to know that you don't get wealthy by holding assets that decline in value.

      I agree 1000% with the admonition against distant suburbs. Expensive gas is going to kill those places.

      Housing is not "cheap" in the heartland. It just stayed more sane than the coasts. I live on the east coast but grew up out there. When I go back to visit, I see lots and lots and lots of "dream homes" built by boomers. I hope the quality wasn't too bad; I look forward to retiring to one of those babies at a nice discount to what Mr. and Mrs. Boomer paid to build it.
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