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Reality Check 2

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  • Paul Krugman Declares Personal Bankruptcy [View instapost]
    It appears this may just be a widely re-posted satire article, and not really news at all, when I first read it the debt to assets ratio looked wrong.
    Mar 8, 2013. 10:53 AM | Likes Like |Link to Comment
  • What Earnings Reports Are Telling Us [View article]
    Some of the most ignorant clap-trap opinions I have every heard.
    Jul 29, 2010. 10:52 AM | Likes Like |Link to Comment
  • 30-Year Fixed Mortgage Rate Chart [View article]
    Mortgage interest rates are only one variable which affects increases and decreases housing prices.

    Historically most other factors, except family income, were stable. Beginning 15 years ago those other variables started changing.

    Number of Buyers willing and able to buy houses vs Number of Sellers willing and able to sell at prices buyers are willing and able to pay push prices up or down. Supply and demand is the simple name for this.

    Interest rates ( and resulting monthly mortgage payments ) are one factor which affects the number of buyers willing and able to buy at any given price.

    Other factors include lenders' willingness to loan money to any given buyer. Historically that has included an evaluation by the potential lender's of the buyer's ability to pay back a mortgage. It also included evaluating the potential buyers historic pattern of re-paying debt.

    Over the last few years the number of buyers, and the demand, included a large percentage of buyers who historically would have never been offered a mortgage, let alone a no down payment mortgage.

    Known in the industry as No Income No Job no Assets (NINJA) Mortgages. These were banks and mortgages brokers making these loans and then re-selling them to investors as Triple A rated investments.

    Investors no longer trust Mortgage Brokers or Banks or Rating agencies - Wonder Why?

    Even if investors trusted banks, 20% - 30%, of potential home buyers will no longer qualify - even with 4% to 5% Mortgage interest rates - so housing demand by willing and able buyers will continue to be down by 20% to 30%, minimum, which means continued sharp drops in the price of homes will continue over the next months and likely years.

    Dec 14, 2008. 10:59 PM | Likes Like |Link to Comment