"What motivates a future homeowner to pay 6%+ interest for an asset that is going down in price? It was an easy decision to pay subprime yields of that and then some when housing prices were accelerating at double-digit annual percentages; the benefit was obvious."
"Now however, with prices in negative territory, the risk/reward is tilted towards the renter."
- Bill Gross of PIMCO, January 2008
January 30, 2008
HousingPANIC Quote of the Day
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25 comments:
oh crap, says the bankers
What motivates anyone to invest in anything in USA?
Fed lowers interest rates on savings at will, devalues dollar regularly and rewards irresponsible buying habits with Cash rebates? Not to mention a balooning trade urplus with communist enemies AND the MOST corrrupt gang-of-thugs ever to control the power apparatus.
Why would anyone want to do business with the most corrupt nation on the planet run by the stupidist man (Bush II) ever hatched?
America SUCKS and the futute is bleak for Gen X and Y. Get ready for 90% taxes. Get ready for Hell.
Do yourself a favor and watch the following short historic video about a once-great and powerful city of Detroit and see what it has become thanks to liberalism and the wrong elements at the wheel. This is what (after) all of America will look like with Bush-Cheney at the wheel any longer. How do you like rap music? A new National Anthem put to rap?
Maybe Ben Franklin was RIGHT. The American symbol SHOULD BE a turkey, NOT an Eagle after all...
Watch and Weep. Sayonara, Amigos.
http://malcolmrant.blogspot.com/2008/01/detroit-before-and-after.html
Let's face it, some people are just stupid and believe a house is a good investment no matter what, others are egotistical and want to "own" so they can turn up their noses at renters, and a bunch of other reasons why dumbasses would "buy" today.
Some areas are appreciating -- basically the areas tha didn't experience a boom. But yes, for ~98% of neighborhoods, it's better to stay away from home ownership for now.
1.25 point rate cut in just 8 days. Wow, mine blowing!
Folks, I think we are all about to wake up to a real nightmare.
The great crash is upon us!
May God have mercy!
I just checked with my bank.
15 year fixed was 5.250% yesterday and has been for quite some time.
As soon as the Fed cut 50 basis points, the bank raised the 15 year rate from 5.250% to 5.375%.
The Fed cuts 125 basis points and 15 year fixed rates go UP?
this is why fed rate cuts won't help housing. who is going to borrow 500k at even 1% for an asset dropping 10% in value per year?
who will lend 500k at 10% for collateral dropping 10% a year in value? (without a large down payment atleast)
to paraphrase Mish: the Fed can provide liquity, but it can't force lenders to lend nor borrowers to borrow
"The Fed cuts 125 basis points and 15 year fixed rates go UP?"
This is what is known as the Bush-Cheney syndrome where up IS down and Left IS Right.
Those two creeps are like the man-behind-the-curtain in the 'Wizard of Oz'.
It won't work.
The economy is tanking, those in power are doing everyting wrong and their legacy will be one of Shame, Failure and Doom.
The middle class is marching into the showers for their 'special treatment'...
Work will make you Free...
Because idiots are still going around saying, "renting is just throwing money away," and "mortgate payments are tax deductible." The latter is especially infuriating, because they honestly seem to believe that they're deducting the entire mortgage payment that they send off each month.
The idiots will be useful though. I don't intend to buy until the idiots are arguing against buying a house. That's how I'll know that prices have hit bottom.
The Americano's dollar currency is as toasted as a snapper turtle skewered on a stick from head to ass all sizzling, juices dripping, fat popping over a bed of white hot charcoal grill.
Americano = Grilled Snapper Turtle
Heeeee... Haaaaa... Arrrrr...
The mentality of the average dweller Americano is just amazing, if not stupefying.
A Circuit City Sale Associate is able to buy a house.
A Shoe Sale Man is driving an Audi.
An uneducated, illiterate, ignorant Ford factory auto-assembly worker makes $40/hour.
The Iraqi has Weapon Of Mass Destruction.
Talk about brain-dead zombie, blind-as-a-bat crapper. Maybe that is the reason why there is such word as "Trailer White Trash"...
As soon as the Fed cut 50 basis points, the bank raised the 15 year rate from 5.250% to 5.375%.
The Fed cuts 125 basis points and 15 year fixed rates go UP?
Mortgage rates are more attached to long-term bond yields than the fed key rate.
Yeah but you can't paint the walls as a renter.
Buying does have some advantages and no, I am not a real estate agent. (Notice I said, buying and not owning)
1. Nice Tax Write Off every year from the interest you pay of course. Can't write off that rent you pay!
2. The peace of mind that "If you can pay" your mortgage every month, you don't have to move. If you are a renter, you might have to deal with moving or relocating because of your landlord either kicking you out OR the sheriff kicking you out because your landlord was foreclosed on!
3. Even though it's the banks house until you pay it off, it will be YOURS after you pay it off. Renters are just paying some of the mortgage of someone else who will eventually own the home. Or renters
are paying someone to live in their already owned home generating income for them.
4. If you want to change or add your "touch" to the house, you can.
Unlike renting where you don't want to do any improvements or can't.
Maybe, a swimming pool!
5. Even though the housing market is dropping now, it will eventually turn. Might take 10 years, but it will.
6. You really on have 4 choices when it comes to living somewhere.
a) Rent
b) Buy
c) Live with someone
e) Homeless
7. You don't have to worry about not having pets. I have 2 dogs that I love, that landlords usually frown upon.
There are plenty of disadvantages also, but I thought I would buck the trend this time around.
Home is where the heart is and is not an investment to me. Hey, if the house increases in value, that's great, also. If it declines, it won't effect me either as I plan on living here for a long time.
But, my guess is that all this will be over in 5 years and I will be living in my house at least for that amount of time.
I am 37. Lived with Parents for 20.
I rented for 10 years and have purchased for 7. Honestly, I have been the most COMFORTABLE in purchasing.
see what it has become thanks to liberalism
Huh?
Conservatism has given us untaxed imported products and untaxed illegal immigrants. How are heavily taxed American workers and American companies in Detroit supposed to compete with this bullshit.
the motivation? "rent control." nobody knows the future; for all we know, rents will shoot up as REIT's take them over, etc...
based on what I've read from people on this list, we don't really care about a home but, instead a good investment.
the majority of 401k folks, for example, never even look at what's in there and don't change investment elections.
I did that and my 401k is down 1% and my coworkers is down %13;
So the answer to your question: we're active investers and the 6 percenters aren't. i.e. they're happy putting money in the meter.
and us renters will have to watch the market and figure out when the landlords will strike.
DOPES will not be happy bout this.
Think about it...Even when homes were gaining value each year if you were like most people and signed the line for that 30 Yr/5.5% Fixed...they eat you alive in interest. You were just another slave building for the Pharaoh. The mortgage system is broke...the sheeple have maxed out and the building is grinding to a halt on the Pyramids.
Prepare now for the corrupt GOP-backed MSM reports of how strong is the economy, repeating over and over again, until the sheeple believes it.
These GOP crooks, with the help of its MSM bootlickers (i.e., Chris Matthews, Tim Russert) applied the same strategy with the pathetic surge in Iraq, which after beating the same reports day and night (including from the idiot Keating-Five McCain) convinced all the dumb people that it really worked.
Watch their technique of repetition ad infinitum to convince the idiotic McCain seniors (why don't you die already?), greedy Giuliani Baby Boomers, brainless "security moms", and useless immigrants who just live to send money back to their zillion children in Mexico, instead of paying for the infrastructure they use.
Anyone see Cramer tonight? He's recommending buying houses, home builders, banks, retail stocks and auto stocks!
BOOYAH!
Is that the sound his viewers' portfolios make when they blow up?
Our economy was fine a few months ago.
Look at it now.
http://www.salina-ks.gov/images/SFD/HouseFire.jpg
Dubya Shrub + Penis Shooter = "Little Boy" + "Fat Man"
This nation and its Americano citizen is as toasted as a snapper turtle skewered on a stick from head to ass all sizzling, juices dripping, fat popping over a bed of white hot charcoal grill.
Americano = Grilled Snapper Turtle
Heeeee... Haaaaa... Arrrrr...
So, tell me, does the average Americano take it enough in the butt yet by the forceful penetration of "Little Boy" + "Fat Man", or do you want more "Enter The Dragon" ?
Americano = Being Entered By The Dragon up the Kazook
Heeeee... Haaaaa... Arrrrr...
And all of you retards, ass-head that voted and worshipped for SHRUB over the last 8 years, guess what, the chicken are coming home to roost on your head-ass. Are you sorry yet ? Do you feel ashamed and stupid about your shallow thinking, narrow-minded love and swoon for DUBYA ? Do you, do you, do you ???
Ben has gone from hesitant to all out mad-man! The 'Power's That Be' have made it quite clear to him last week who IS in charge!
His masters have spoken! Ben's life is on the line now I would think...
The long bond rates reflect inflation expectations. The Fed and US goobermint cannot control the world's investors. They will simply invest elsewhere.
The only viable solution is to send US Treasury checks directly to the working class. I think we will be seeing another round of checks coming late in the year after the first ones are spent repaying debt. Why not just send a $10,000 check to every worker making under $250K?
Andrew Hac said...
Dubya Shrub + Penis Shooter = "Little Boy" + "Fat Man"
This nation and its Americano citizen is as toasted as a snapper turtle skewered on a stick from head to ass all sizzling, juices dripping, fat popping over a bed of white hot charcoal grill.
Americano = Grilled Snapper Turtle
Heeeee... Haaaaa... Arrrrr...
So, tell me, does the average Americano take it enough in the butt yet by the forceful penetration of "Little Boy" + "Fat Man", or do you want more "Enter The Dragon" ?
Americano = Being Entered By The Dragon up the Kazook
Heeeee... Haaaaa... Arrrrr...
----------------------------------
Is this guy retarded or just illiterate?
Fun question for those homedebtors with ARMed mortgages:
Hear that ticking sound in your garage? Yep, that ticking sound eminating from that invisible car bomb owned by the First National Bank of Al Qaeda. It will detonate when your interest rate climbs up like a jet plane on steroids.
Whoever invented the ARMed Mortgage and other crazy mortgages is a person worse than Osama bin Laden, as the ARM is in the aggregate a weapon of mass foreclosure. Due to the destructive effects of mass foreclosure, the ARM is a WMD. Not, THAT is a threat to national security from within, set off by a financial terrorist. The real Osama bin Laden couldn't do a better job of terrorizing America even if he had a nuke and owned an airline.
By inventing the ARMed Mortgage and letting it proliferate he set the timers on MILLIONS of car bombs parked in the garages waiting to detonate when the home debtor can't re-fi or sell. And the teaser is when the home debtor is evicted and homeless the home still stands even as the vultures pick over his worldly posessions put out on the lawn. And neighbors get the fallout from each detonating mortgage as THEIR values drop.
In Chicago, I see zillions of for sale signs by new developments with the prices that NEVER budge down yet sit empty as the builder tries to sell them. HINT: $185,000 is UNAFFORDABLE! And that's the "cheap" stuff! The "system" ran out of plastic surgeons to be the first time homebuyers. Without first time homebuyers, the Ponzi Scheme collapses like an overpriced house of cards hit by a paper airplane.
How we got in this mess is simple. Incomes have not hardly gone up is at all while price rise was fuelled by increasingly creative - and explosive - mortgage products causing more and more people to resort to these ticking time bomb mortgages to get in the market while responsible people are priced out of the market. Now, the hilarious part is these banks and Wall Street along with the mortgage companies are getting the fallout from their own WMD. Good for them. When investors start jumping out the windows as their ivory tower burns before collapsing, they'll deserve it.
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