The way things are looking now, don't think I'll buy until 2011-12, if at all. Maybe just rent for at least the next 5 years.
http://seekingalpha.com/article/137554-government-grossly-underestimates-fannie-and-freddie-s-capital-needs?ref=patrick.net
"As reported in “U.S. Mortgage Crisis to get MUCH worse in 2010-11”, the housing market is nowhere near a peak in foreclosures (with another new, all-time record just set in April)
By the time 2010 begins, the U.S. housing market will have fallen in aggregate, by an average of 40%, and will still be plummeting downwards due to massive over-supply and a continuing deluge of “short-sales” and foreclosure sales (see “A Revealing Look at U.S. Housing Propaganda”). "
"Is the U.S. government prepared to “buy up” more than $1 TRILLION of its own Treasuries (this year, alone), and pay the huge price of a collapse in the U.S. dollar (from “monetizing” all that debt)? If not, U.S. interest rates must soar much higher to attract tight-fisted foreign investors."
"To summarize, with insanely optimistic projections for home prices, employment, and interest rates guiding it, the Office of Management and Budget has grossly underestimated the capital requirements for Fannie Mae and Freddie Mac – and the only way to come up with the hundreds of billions needed by these bankrupt behemoths is to send “Helicopter” Ben back to his printing-press."
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Response by alpine292
about 17 years ago
Posts: 2771
Member since: Jun 2008
this article makes no sense. Fannie and Freddie can never run out of capital since they are the GOVERNMENT. They are not private anymore. The govt. NEVER runs out of money.
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Response by dwell
about 17 years ago
Posts: 2341
Member since: Jul 2008
Oh yeah, duh printing press!!
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Response by chunderboy
about 17 years ago
Posts: 83
Member since: May 2009
Its not that the gov't can't run out of money, it is just that if you keep printing it and issuing debt, the dollar won't be worth the paper it is printed on.
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Response by alpine292
about 17 years ago
Posts: 2771
Member since: Jun 2008
Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. ****But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.**** By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior).
--Ben Bernanke, November 2002
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Response by sledgehammer
about 17 years ago
Posts: 899
Member since: Mar 2009
I think i'll wait until the end 20012. Not that i'm superstitious about the 2012 prophecy but first i want to witness if the American Empire can be saved from this disastrous decline.
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Response by alpine292
about 17 years ago
Posts: 2771
Member since: Jun 2008
"the dollar won't be worth the paper it is printed on."
True, but think of the bright side: We will all be filthy rich. Look at Zimbabwae. They are the richest country in the world, as anyone there who can afford a loaf of bread is a trillionaire. Don't you want to have trillions of dollars?? Think about it, everyone here can be on the Forbes 400 list!
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Response by dwell
about 17 years ago
Posts: 2341
Member since: Jul 2008
20012
Sledge, you have a very long horizon ;)
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Response by sledgehammer
about 17 years ago
Posts: 899
Member since: Mar 2009
All right, i'll be honest, that 2012 prophecy GOT me thinking... :-)
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Response by sledgehammer
about 17 years ago
Posts: 899
Member since: Mar 2009
Just remember the Romans thought they were invincible. What they didn't realize though, was that their greatest danger was themselves. At the end, they auto destructed their own empire!
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Response by dwell
about 17 years ago
Posts: 2341
Member since: Jul 2008
Sledge,
I meant that you added like 18,000 years (20012) & dat's a long time. But, I know about 2012 & the way the world looks right now, ya gotta wonder. There might be something to it, so, I'm with ya.
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Response by dwell
about 17 years ago
Posts: 2341
Member since: Jul 2008
Sledge,
I'm with ya. All empires fall. Just wish it'd fall after I left the room.
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Response by sledgehammer
about 17 years ago
Posts: 899
Member since: Mar 2009
Dude! I have my passport in my back pocket all the time... :-)
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Response by ab_11218
about 17 years ago
Posts: 2017
Member since: May 2009
the problem is that when the foreclosures will not happen in the neighborhoods where you would be willing to live, what will you do? by 2012, the price can be the same, lower or higher. you have to decide for yourself what apartment/house you want and how much you are willing to pay. once you see that, proceed.
don't set the guidelines/dates based on some economist's thinking. if all the bright minds knew what happened with the market in advance, it would have never happened in the first place.
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Response by nyc10022
about 17 years ago
Posts: 9868
Member since: Aug 2008
"this article makes no sense. Fannie and Freddie can never run out of capital since they are the GOVERNMENT."
Its good that you don't let not knowing what you are talking about stop you from talking...
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Response by dwell
about 17 years ago
Posts: 2341
Member since: Jul 2008
good one, nyc10022!
ab_: "bright minds"? Are you kidding? For me, the bright minds are Roubini & his ilk & they're not too optimistic. Those "bright minds are what have screwed us over.
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Response by sledgehammer
about 17 years ago
Posts: 899
Member since: Mar 2009
Just noticed my typo mistake :)
20012=2012
Alpine, i think it's time for you to worry about the crack on the wall of your house in Jersey ... :)
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Response by w67thstreet
about 17 years ago
Posts: 9003
Member since: Dec 2008
good for you dwell... welcome to the dark side....
yes they can print all they want... but what if..just... we as the citizens decide that we won't pit renters vs. owners anymore than black tax payers and white taxpayers :) ... .then alpine/stevehjx/JM/LICC/w67/Julia/dwell and we can all meet up w/o the fear of knives being pulled out :)
I'm just saying the entire tax system, FDIC, fannie/freddie is geared towards home ownership.... doesn't make sense to me.... most regressive tax situation we have....
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Response by dwell
about 17 years ago
Posts: 2341
Member since: Jul 2008
so, w67, if that apt you like goes to $1mm now, would you buy it now?
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Response by w67thstreet
about 17 years ago
Posts: 9003
Member since: Dec 2008
dwell.... hmmmm.... catch the falling knife situation.... literally could pay all cash at that point? Nice to never have a mortgage but I really want to see where RE taxes and Obama (tax re-sets) come in b/f making the biggest hard asset purchase in my short life.....
There is also a part of me.... that thinkz a $1MM war chest can totally take advantage of a distress sale of a CPW C6/C7 or even C8 at 50% off if the Board requires 50% down or more.... .in this market, a buyer like myself w/ a doc in the family and $1MM in cash is a RARE bird and I'm not dropping my pants for any old hoochie.... she's gotta have it all :)
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Response by dwell
about 17 years ago
Posts: 2341
Member since: Jul 2008
Exactly how I feel, W67. Have a good hair cut. Is it a $6 depression haircut or a $125 "back to normal" haircut?
this article makes no sense. Fannie and Freddie can never run out of capital since they are the GOVERNMENT. They are not private anymore. The govt. NEVER runs out of money.
Oh yeah, duh printing press!!
Its not that the gov't can't run out of money, it is just that if you keep printing it and issuing debt, the dollar won't be worth the paper it is printed on.
Like gold, U.S. dollars have value only to the extent that they are strictly limited in supply. ****But the U.S. government has a technology, called a printing press (or, today, its electronic equivalent), that allows it to produce as many U.S. dollars as it wishes at essentially no cost.**** By increasing the number of U.S. dollars in circulation, or even by credibly threatening to do so, the U.S. government can also reduce the value of a dollar in terms of goods and services, which is equivalent to raising the prices in dollars of those goods and services. We conclude that, under a paper-money system, a determined government can always generate higher spending and hence positive inflation.
Of course, the U.S. government is not going to print money and distribute it willy-nilly (although as we will see later, there are practical policies that approximate this behavior).
--Ben Bernanke, November 2002
I think i'll wait until the end 20012. Not that i'm superstitious about the 2012 prophecy but first i want to witness if the American Empire can be saved from this disastrous decline.
"the dollar won't be worth the paper it is printed on."
True, but think of the bright side: We will all be filthy rich. Look at Zimbabwae. They are the richest country in the world, as anyone there who can afford a loaf of bread is a trillionaire. Don't you want to have trillions of dollars?? Think about it, everyone here can be on the Forbes 400 list!
20012
Sledge, you have a very long horizon ;)
All right, i'll be honest, that 2012 prophecy GOT me thinking... :-)
Just remember the Romans thought they were invincible. What they didn't realize though, was that their greatest danger was themselves. At the end, they auto destructed their own empire!
Sledge,
I meant that you added like 18,000 years (20012) & dat's a long time. But, I know about 2012 & the way the world looks right now, ya gotta wonder. There might be something to it, so, I'm with ya.
Sledge,
I'm with ya. All empires fall. Just wish it'd fall after I left the room.
Dude! I have my passport in my back pocket all the time... :-)
the problem is that when the foreclosures will not happen in the neighborhoods where you would be willing to live, what will you do? by 2012, the price can be the same, lower or higher. you have to decide for yourself what apartment/house you want and how much you are willing to pay. once you see that, proceed.
don't set the guidelines/dates based on some economist's thinking. if all the bright minds knew what happened with the market in advance, it would have never happened in the first place.
"this article makes no sense. Fannie and Freddie can never run out of capital since they are the GOVERNMENT."
Its good that you don't let not knowing what you are talking about stop you from talking...
good one, nyc10022!
ab_: "bright minds"? Are you kidding? For me, the bright minds are Roubini & his ilk & they're not too optimistic. Those "bright minds are what have screwed us over.
Just noticed my typo mistake :)
20012=2012
Alpine, i think it's time for you to worry about the crack on the wall of your house in Jersey ... :)
good for you dwell... welcome to the dark side....
yes they can print all they want... but what if..just... we as the citizens decide that we won't pit renters vs. owners anymore than black tax payers and white taxpayers :) ... .then alpine/stevehjx/JM/LICC/w67/Julia/dwell and we can all meet up w/o the fear of knives being pulled out :)
I'm just saying the entire tax system, FDIC, fannie/freddie is geared towards home ownership.... doesn't make sense to me.... most regressive tax situation we have....
so, w67, if that apt you like goes to $1mm now, would you buy it now?
dwell.... hmmmm.... catch the falling knife situation.... literally could pay all cash at that point? Nice to never have a mortgage but I really want to see where RE taxes and Obama (tax re-sets) come in b/f making the biggest hard asset purchase in my short life.....
There is also a part of me.... that thinkz a $1MM war chest can totally take advantage of a distress sale of a CPW C6/C7 or even C8 at 50% off if the Board requires 50% down or more.... .in this market, a buyer like myself w/ a doc in the family and $1MM in cash is a RARE bird and I'm not dropping my pants for any old hoochie.... she's gotta have it all :)
Exactly how I feel, W67. Have a good hair cut. Is it a $6 depression haircut or a $125 "back to normal" haircut?