April 30, 2008

HousingPANIC Stupid Question of the Day


In what year will Ben Bernanke's successor have to raise interest rates to 10%+, in a desperate attempt to repair the damage caused by the biggest wuss ever to hold the office?


49 comments:

Anonymous said...

Treasury eyes stronger powers for Fed

The Federal Reserve could use proposed new regulatory powers to try to stop credit and asset market excesses from reaching the point where they threaten economic stability, the US Treasury said on Tuesday.

David Nason, assistant secretary for financial institutions, said the Fed could even use its proposed “macro-prudential” authority to order banks, hedge funds and other entities to curtail strategies that put financial stability at risk.

http://ftalphaville.ft.com/blog/2008/04/30/12697/fed-eyes-stronger-powers/?source=rss

Anonymous said...

Fed needs tough chief in Paul Volcker mould

What got us into our financial pickle? Most academics are prisoners of the Efficient Market Hypothesis that assumes man acts rationally and efficiently in economic matters in ways that can be caught in elegant mathematical models. Ben Bernanke, chairman of the Federal Reserve, shares this view completely, and Alan Greenspan, his predecessor, when it suits him. In such a convenient world, there can be no bubbles and no crashes. A related belief is that sensible, disciplined control of money supply will drive away all ills, including the madness of crowds, and, therefore, a sensible central banker is all powerful.

Unfortunately, both concepts are complete illusions. First, we live in a behavioural jungle where markets can crash 23 per cent in a day without any defining event, price/earnings ratios in Japan can rise to 65 times and the value of land under the Emperor’s palace really can equal California’s. Second, central bankers do not always do the right thing, often because that would involve great career risk. Being slapped by a Senate subcommittee for saying “irrational exuberance” is bad enough. Taking away punch bowls and risking being seen as holding the pin when the bubble pops is even more dangerous stuff.

http://tinyurl.com/4uc2bl

Anonymous said...

Fannie Mae chief sees no mortgage recovery until 2010

reuters.com — "We are going to have a period where we move through the trough," Daniel Mudd, Fannie Mae's chief executive officer, told a meeting of business reporters

Anonymous said...

Never, its too late for that now. Next move will be to a new currency rather than try and save the dollar. Saving the dollar is not on their agenda. The sheeple will help put the dollar in the graveyard once the economic pain beomes severe enough. They will be very aggreeable to a NMU or new "world Currency". Our masters know this and are betting on this.

Afterthought said...

They are simply trying to drag the carcass of the economy past the November election; kind of like "Weekend at Bernie's"!

http://www.imdb.com/title/tt0098627/

Anonymous said...

Amero is the answer. A very soft Amero for sure.

America IS DEAD said...

Soon.

Bernanke will be known as the George W. Bush of the financial world.

A dimwit, clueless loser who helped wreck America and murdered the American Dream.

Bernanke has to go out along with Bushco. Send them both to their private hells.

Anonymous said...

2003

Joe said...

We will see this happen in 2009. However, it will be too late as the USD will be dead already.

This whole economy will crash in a heap this fall. You can Book that down.

Joe M.

happy homeowner in the stix said...

Any year after the election is a good bet. I'm thinkin' 2010.

If you have a mortgage or other debt, start setting aside some serious $. The last time that interest rates spiked up like that was in the 70's. My dad and mom scored pretty nicely with their mortgage lender. Since they were paying a low late '60's rate (I think it was around 6% when the mortgage rate was around 12%), the bank was losing serious money on their mortgage. They offered to let them pay it off ahead of schedule at a discount if they could come up with the cash to do it.

Don't think for a minute the banks won't do that again if the rates spike up.

mairca izda debol said...

Most academics are prisoners of the Efficient Market Hypothesis that assumes man acts rationally and efficiently in economic matters in ways that can be caught in elegant mathematical models.

The Efficient Market Theory is correct. Man does act rationally. When credit is loose, man will take advantage of it. When the laws are not being enforced, man will violate them to his advantage. When the bankers are allowed to loot and pillage the financial system without recource, they will do so. It is not the system that is flawed, but the regulators. Since we regulate the regulators, it is the citizens who are at fault.

Reality said...

One bubble after another is the natural result of the fiat money system. Over the past century, vast majority of the population have been brainwashed into believing that inflation means price inflation of ordinary consumer goods . . . whereas inflation should measure the total money supply. All the asset inflation (stocks, bonds and real estate) were not counted in the government inflation statistics. When those bubbles burst and the escapee money turn to commodities and consumer goods, it's way too late to find solutions to the inflation problem.

yu been skooled said...

Hey Monkeys,
I thought the economy was heading into a worldwide depression, massive crash, soup lines...Hoovervilles....

FLASH: No recession, economy grows @ 0.6%:

http://biz.yahoo.com/ap/080430/economy.html?.v=4

Oh I know you'll say it's phony govt. stats, right??
F*ing idiots....

OK you can all go home now and shut down your silly website...

yu been skooled said...

FLASH: HPers get spanked again...

76,800 public sector jobs added, armageddon postponed...

In other news: HP website shuts down due to shame and brain implosion and lack of credibility....

http://tinyurl.com/54v7bm

Daphne64 said...

In my book Bernanke is not the main villain, Greenspan is. The economy was so hosed when Bernanke took over that his actions will make little difference in the medium run.

CREDIBILITY? said...

" yu been skooled said...
FLASH: HPers get spanked again...

76,800 public sector jobs added, armageddon postponed...

In other news: HP website shuts down due to shame and brain implosion and lack of credibility...."

CREDIBILITY? SHUT DOWN?

I DONT THINK SO, DELERIOUS...

Try On the Bushco scamdal-of-the-week freak show, aka:

Weapons of Mass Destruction
Al Queda = Iraq
Yellow Cake Uranium/Aluminum Tubes
Bear Stearns
Ben Bernanke
Alan Greedspan
Countrywide Mortgage/Mozillo
Dick Halliburton Cheney
Katrina
Donald Rumsfeld
Colin Powell
Condom Rice
WorthLESS dollar
Debtor to Creditor Nation in 8 short bubling uncoordinated years

USA = Laughing stock of the entire World. 76.8K new burger flippers/WaHOO.

0.6% growth = NO RECESSION?

Are you serious? F*ck You, Asshole.

bobby jones said...

interest rates nickel and dime us to death now since people now pay interest on many more things: school loans, mortgages, car loans, government purchases, credit cards, home equity loans, taxes, inflation taxes, etc...

honestly, it would be nice to know what the real interest rate (loss of purchasing power) has been over the years as more and more leeches started sucking away.

as an example, more and more folks are starting to realize that their "home equity" means higher taxes and, in the long run, they're losers! hahaha!

Anonymous said...

Maybe Bernanke can show that he is a man by raising the interest rate today to fight the inflation.

Anonymous said...

Lowering interest has done nothing on 30 year fixed mortgages. Maybe Bernanke need to think about that before bailing out his wall street buddies.

Edgar Alpo said...

2012, the next total eclipse of the sun, the summer olympics in London, a number of astronomical events, culminating with the end of the Maya calender on Sunday, December 23 and consequently, the end of the world as we know it.

Anonymous said...

After thought,

Lol, Weekend at BERNANKE's ahahahahahahahahhahahah

Happy Homedebtor said...

You're all financial geniuses, really.

- Bernanke and anyone who knows basics of economics knows that the fed funds rate doesn't directly impact long-term interest rates. "Overnight" means essentially that, not "10,957.5 days later". You all fail.

- The short-term/fed funds rate is for cash-flow purposes and dumping money into the system. The entire purpose of loosening up the cash is to get institutions to lend/get money flowing again. There are people right now with millions in net-worth, perfect credit, and crazy income - who can't buy a house without 20% down. It's insane right now.

- Progress is progress, it happens boys and girls. While "irrational exuberance" was omnipresent the last few years, the fact is that things change as time goes on. If you don't like this, it's because you're lazy, scared, or stupid.

Rather than panicking, why don't you be productive? My wife and I are shoring up our savings/investments, eating healthier (IE not eating out as much), and I'm finishing a cert in 1-2 weeks, and a Master's in 13. What are *you* doing to keep up/get ahead?

million said...

trick question, we don't have a central bank.

we have an extension of Wall Street guised as one but since it actively promotes inflation and moral hazard among its member institutions, i'd say we're fresh out of central banks.

Anonymous said...

OT, Could you change the poll to: "Do you have more than one passport?"
Or to "How many passports do you have:
0; 1; 2; 3; Bond James Bond"

Anonymous said...

Bernanke is trying to ignite another bubble to save the day. Oops, he ended up creating a commodity's bubble that's destroying the economy, not helping.

Anonymous said...

Bernanke has no choice. He's Greenspan's bag man. If he raised to 10%, we would have a depression without doubt. As things stand, we could have one anyway.

-Skid

yu been skooled said...

FLASH:
"Credibility" flunks math test, thinks +0.6 is a negative number for two consecutive quarters...
Brain implodes after spaceship gives him an anal probe.....tin foil provided no protection.
Black helicopters exonerated.

mairca izda debol said...

Don't forget that it was Greengas who put us in this situation. Bernanke is only doing what most people would do. He will end up raising rates after the election.

yu been skooled said...

God I feel so bad for you Monkeys, the bad news just keep coming....

HP SPANKED, whipped and sent to bed with no supper....

FLASH: Ken Fisher, son (personally trained) of legendary trader Philip A. Fisher, says quote:

``This is just one more indication that maybe we're not in some terrible condition,'' said Kenneth Fisher, who oversees more than $47 billion as chairman of Fisher Investments Inc. in Woodside, California. ``We probably have a good period ahead as people get over their excessive fears.''

as markets show strong performance.

In other news: HP website shuts down after succumbing to "excessive fears" and readers get committed to asylum.

Anonymous said...

and for how many years was inflation in housing prices not inflation? by govt and land theives decree..................

Anonymous said...

Is the SEC waking up?

Alabama Mayor Took $156,000 in Bond Deals, SEC Says
http://bloomberg.com/apps/news?pid=20601087&sid=ap.R.kIt29.M&refer=home

lawrence yun said...

Today's .25% interest rate drop = $250 billion in inflation which will be given to large banks, hedge funds, and homedebtors. Homedebtors and the NAR would like to thank you Ben.

Tangelo Mozilo said...

Anon 7:01 said . . .
"Efficient Market Hypothesis assumes man acts rationally and efficiently in economic matters in ways that can be caught in elegant mathematical models."

---------------------------------

Not so! All EMH says is that securities markets factor in new finanacial information quickly and efficiently, so that is not possible to consistently outperform the market by using any information that the market already knows. It says nothing more, nothing less.

EMH does not foreclose the possibility of there occurring speculative bubbles. In fact, Burton Malkiel, one of the most outspoken defenders of EMH, devotes a large part of his book "A Random Walk Down Wall Street," to treatment of historic speculative bubbles. The saction is called "The Madness of Crowds."

There is nothing contradictory about an EMH adherent acknowleging that people and markets are frequently irrational. EMH has nothing to do with rationality; it has to do with efficiency.

Anonymous said...

Dow closes April with a gain of nearly 5%! Can I get a high-five?

Anonymous said...


There are people right now with millions in net-worth, perfect credit, and crazy income - who can't buy a house without 20% down. It's insane right now.


Do you have specific knowledge of people worth millions of dollars with 20% down who can't get a loan? I call BS. One of my coworkers with horrible credit just bought a house with zero down.

Anonymous said...

Volcker already stated that he believes higher rates are inevitable in the future. Greenspan even stated the same in a press release a while back.

Care to guess what happens to housing in bubble areas when mortgage rates are 10%?

Timmmberrrrrrrrr

Lady Di said...

I wish he would jack it up to 10% today. Reward some of the savers and prudent ones for once instead of the losers that can't live within their means.

mairca izda debol said...


Care to guess what happens to housing in bubble areas when mortgage rates are 10%?


I remember when they were 20% back in the early 1980's

Them thar was tough times

Yoski said...

" Since we regulate the regulators, it is the citizens who are at fault."
The citizens don't regulate squad. The special interest/lobbyists regulate everything.
Unless the citizens rise up it will stay this way indefinitely. Since the citizens are fat, lazy and stupid they get exactly what they deserve.

Yoski said...

"Treasury eyes stronger powers for Fed"
That's exactly what we need. Give the people that got us into this mess even more power. Instead we should be getting rid of the Fed.

Anonymous said...

HEY YU BEEN SKOOLED,

Try telling all that laughable info to Levitz, Wickes, GM, Pac Sun, Fleetwood, all other auto manufactures, State of California,
Florida, Nevada, Arizona, Colorado,
etc., Third World countries in food panic, thousands of unemployed reic., Bear Stearns, Countrywide, Indymac, Deutche Bank,
UBS, Credit Suisse, ABN Amro, Canada, Mexico, Japan, Europe!!!

I could go on and on but I will be too tired.

Hmmm I wonder why they cut rates and bailed everybody out for absolutely "NO REASON" as you would say. Those rebate checks are also meaningless to you so go ahead and mail your check back.

Yu been fooled you troll!!!!
Is your name Larry Kudlow?



ICEMAN

Anonymous said...

Rather than panicking, why don't you be productive? My wife and I are shoring up our savings/investments, eating healthier (IE not eating out as much), and I'm finishing a cert in 1-2 weeks, and a Master's in 13. What are *you* doing to keep up/get ahead.

-------------------------

It shows you're young because when you're caught in the trappings of life, it'll be nice to see the level of energy you'll have left to perfect yourself.

Don't forget NOT to have kids because they sure suck the energy right out of you and put you in the poorhouse.

Anonymous said...

- The short-term/fed funds rate is for cash-flow purposes and dumping money into the system. The entire purpose of loosening up the cash is to get institutions to lend/get money flowing again. There are people right now with millions in net-worth, perfect credit, and crazy income - who can't buy a house without 20% down. It's insane right now.


Hey shit for brains all this money the fed is printing and giving away isn't being loned to anyone. Its flushing horshit worthless paper out of the system while destroying the doller and what is left of our economy. Hey maybe Ben can print 750 trillion to buy all those worthless dirivatives. Go to school fool.

Stuck in So Pa said...

" mairca izda debol said...

Care to guess what happens to housing in bubble areas when mortgage rates are 10%?


I remember when they were 20% back in the early 1980's

Them thar was tough times"
============================
God, I remember that. Put 10000 in a cd in 1978 at 17.9% for ten years, which dropped to 10% for years 11-15. $90000, sweet! It was supposed to go on accruing interest at a minimum of 10%/year as long as you left it in, but the bank bailed and basically told depositors "no can do" anymore, too expensive. If you all sue us to keep your 10% rate forever (even though we promised to do so in a signed contract,) we go under and you get NADA!

It was great while it lasted.

Anonymous said...

FEBRUARY,2009. AFTER THE NEW PRESIDENT IS SWORN IN.

THE FED WILL RAISE INTEREST RATES!!

GREENSPAN SAID IN HIS RECENT BOOK THAT WE WILL SEE DOUBLE DIGIT INTEREST RATES IN THE NEAR FUTURE.

WATCH HOW FAST BERNANKE TURNS INTO A PAUL VOELKER NEXT YEAR.

housingfallout said...

Saving Bears Stearns was Bernanke biggest mistake. Financial institutions feel safe enough to take their stash of cash and speculate in commodities when they should be preparing for further writedowns.

There is no shortage of commodities. The huge rise in prices is due to speculation. Financial Institutions will reap billions from the higher prices main street pays. This is how main street will bail out wall street. Bernanke knows this.

Anonymous said...

"Don't forget NOT to have kids because they sure suck the energy right out of you and put you in the poorhouse."

Poorhouse? I don't know what you're talking about. You aren't living paycheck to paycheck of your own accord, are you? Because I pay a mortgage, support a family of 4 on just my income, save for my girls' college, and save 25% of what I gross. I do not see the poorhouse on the horizon.

No energy, with kids, to go to school? Bullshit. I'm working on my bachelor's, finally. I have two girls, ages 3 and 1. I get 4-6 hours of sleep a night and work 50-60 hours a week.

I'm 38 years old. Thanks for calling the OP and people like me young! (You lazy fuck)

Reality said...

Happy Homedebtor,

"There are people right now with millions in net-worth, perfect credit, and crazy income - who can't buy a house without 20% down. It's insane right now."

What's so crazy about that? I have nearly a million in net-worth, perfect credit, and top 5% income, yet I'm not buying a house, and I wouldn't lend money to someone like myself to buy a house without that person putting 20% down just in case I need to foreclose on him down the road! Networth, credit history and income level have little to do with the propensity of a person to walk away from a mortgage debt when he or she is upside down. In case you did not know, even Donald Trump's various ventures have filed bankruptcies or forced the creditors to settle for less than originally agreed terms on numerous occasions!

In fact, a person with wealth is a greater flight risk. On top of that, if you have money, why aren't you putting forth down payment? If you want to speculate with my money, you'd better pay up the rate I want; that should be well into double-digits for someone who wants to buy a million+ house with little money down. Heck, I may want to charge several points for loan origination just to cover the potential price decline in the next 3 months.

It's elemental common sense. The lender should have enough borrower equity tied to the house from the very beginning of the loan, so that foreclosure can be a credible threat. Banks are in the business of collecting interests, not collecting empty houses whenever the borrower "puts" the house to them. A put option on a residential house in the current market would have to carry a very very high premium. BTW, appraisers should be required to underwrite that put option, perhaps with a strike price 10% below their own appraisal. What the heck does it mean a house is worth a million if the appraiser himself is not willing to buy it for $900k?!

Anonymous said...

yu been skooled, got nothing better to do since you lost your realtor job or something?