This new(actually it's one big bubble) housing bubble will end with interest rates at 0, whereas the last one ended with interest rates at 6%. How will the fed fight it this time?
Housing boom my ass. A shortage manufactured by bankrupt lenders who were backstopped by tax payers and the FED- they dribbled out a little inventory rather than flood the market. They are still sitting on a million homes.
The "boom" stops this fall when our medicated and unconscious minions wake up and have to pay thousands in new taxes for Obamacare this fall and next year.
Well, prediction is a tricky game. The Austrians eschew it and I don't blame them. (I'm only an Austrian wanna-be) I guess we'll find out this fall whether cheap money trumps (no pun intended) a tax squeeze. Grab some popcorn.
Agreed, Capn Miike and Brian. The likes of JC Penny and Walmart are already feeling the middle class loss of purchasing power. There is no housing boom.
I agree with Wenzel on most of his postings, especially IP, but his premise is just plain wrong on housing.
Well, there is this: I was just reading Lew Rockwell's excellent review of David Stockman's new book. Stockman says that during the original housing boom, the rest of the employment picture sucked. So I think (guess) that you could get a simultaneous housing boom and economic stagflation. Just like now, the MIC is doin' fine (when you include DHS), but the rest of us are dyin' economically.
Income supports housing prices. The original boom used NINJA loans, no doc loans, and > 100% LTV loans, etc. to make up for lack of income. That's all gone now. Even FHA will be more expensive this summer when PMI and down payment requirements are made more expensive.
The necessary conditions for a bubble are no longer present.
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This new(actually it's one big bubble) housing bubble will end with interest rates at 0, whereas the last one ended with interest rates at 6%. How will the fed fight it this time?
ReplyDeleteHousing boom my ass. A shortage manufactured by bankrupt lenders who were backstopped by tax payers and the FED- they dribbled out a little inventory rather than flood the market. They are still sitting on a million homes.
ReplyDeleteThe "boom" stops this fall when our medicated and unconscious minions wake up and have to pay thousands in new taxes for Obamacare this fall and next year.
Well, prediction is a tricky game. The Austrians eschew it and I don't blame them. (I'm only an Austrian wanna-be)
DeleteI guess we'll find out this fall whether cheap money trumps (no pun intended) a tax squeeze. Grab some popcorn.
Agreed, Capn Miike and Brian. The likes of JC Penny and Walmart are already feeling the middle class loss of purchasing power. There is no housing boom.
DeleteI agree with Wenzel on most of his postings, especially IP, but his premise is just plain wrong on housing.
Well, there is this: I was just reading Lew Rockwell's excellent review of David Stockman's new book.
DeleteStockman says that during the original housing boom, the rest of the employment picture sucked.
So I think (guess) that you could get a simultaneous housing boom and economic stagflation.
Just like now, the MIC is doin' fine (when you include DHS), but the rest of us are dyin' economically.
Income supports housing prices. The original boom used NINJA loans, no doc loans, and > 100% LTV loans, etc. to make up for lack of income. That's all gone now. Even FHA will be more expensive this summer when PMI and down payment requirements are made more expensive.
DeleteThe necessary conditions for a bubble are no longer present.
And away we go.
ReplyDelete