tag:blogger.com,1999:blog-18675105.post3799699681382441481..comments2023-12-30T10:06:37.450+00:00Comments on HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008: If interest rates hit 8%, will home prices go back to 2000 levels (or worse)?bloggerhttp://www.blogger.com/profile/06585266242070350399noreply@blogger.comBlogger41125tag:blogger.com,1999:blog-18675105.post-14724087837707935232007-06-11T23:18:00.000+01:002007-06-11T23:18:00.000+01:00Housing will never reach 2000 levels because the d...Housing will never reach 2000 levels because the dollar will never again see it's 2000 buying power.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-29551473689954623772007-06-11T18:26:00.000+01:002007-06-11T18:26:00.000+01:00"According to the Bureau of Labor Statistics, wage..."According to the Bureau of Labor Statistics, wage and salary costs "<BR/><BR/>Too funny! The same goons who fudge their computer models to tell us we have a 1% "core" CPI tell us we have nothing to worry about for wage inflation - and you believe them!<BR/><BR/>Where I live unemployment is about 3%, and that 3% consists mainly of lock-ups, the chronic lazy, or disabled. There is no unemployment among the regular population and "now hiring" signs and job fair announcements are everywhere. Under those conditions it is impossible for wages not to rise. Figure it out smart guy. <BR/><BR/>June 11, 2007 12:58 PM <BR/><BR/><BR/><BR/>You are assuming that employers will grant the wish of their employees with a "living wage". This is not the case. As cheap imports flood our market, and our addiction to buying these items it becomes a viscious cycle down. If inflation becomes a problem it means that fewer companies can survive as people will bunker down and not spend like drunken sailors. Even IF they give you a raise, inflation will always have a tendency to outpace any wage increase.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-60775446243214811582007-06-11T18:15:00.000+01:002007-06-11T18:15:00.000+01:00This reversion to the mean is going to be very ugl...This reversion to the mean is going to be very ugly. I'd hate to see the downside of this latest peak, but of course we all will ove the next 5 years.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-81637039480004619362007-06-11T14:44:00.000+01:002007-06-11T14:44:00.000+01:00Anonymous wants to know "where is this 10% inflati...Anonymous wants to know "where is this 10% inflation out there?"<BR/><BR/>If you weren't living in your Mom's basement playing Xbox games all day, you might have noticed the prices for cars, tools, groceries, gasoline, and just about everything else have gone up dramatically over the past four years.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-1847130264706439542007-06-11T13:58:00.000+01:002007-06-11T13:58:00.000+01:00"According to the Bureau of Labor Statistics, wage...<I>"According to the Bureau of Labor Statistics, wage and salary costs "</I><BR/><BR/>Too funny! The same goons who fudge their computer models to tell us we have a 1% "core" CPI tell us we have nothing to worry about for wage inflation - and you believe them!<BR/><BR/>Where I live unemployment is about 3%, and that 3% consists mainly of lock-ups, the chronic lazy, or disabled. There is no unemployment among the regular population and "now hiring" signs and job fair announcements are everywhere. Under those conditions it is impossible for wages not to rise. Figure it out smart guy.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-18377555924850641332007-06-11T13:03:00.000+01:002007-06-11T13:03:00.000+01:00Anonymous said... "As for inflation itself, where ...Anonymous said... <BR/>"As for inflation itself, where is this 10% inflation out there? Oh milk went up $1 a gallon. Gee wiz I buy 2 gallons of milk a month and I have to spend $2 more. Milk as a of my income is less than 1/100 of 1%. What matters to me is that my mortgage payment which is 25% of my income has NOT increased at all since last year and won't increase for the next 26 years (can you say that about your rent btw?). I pad $199 for a new cell phone last year, that same phone can be had for $19.99 on Verizon's web site today. My car insuarnce went up a whopping $15 from $781 to $796 for 12 months. Ouch a whole 1.92%."<BR/><BR/>This has nothing to do with the over inflated values of homes in many areas, you stupid moron! <BR/><BR/>June 11, 2007 1:15 AM <BR/><BR/>---------------------------------<BR/><BR/>You must have scored really low on your SATs. And hence why you rent. And hence why you care that milk is up $1. That post was not about housing you dumb fuck it was about general inflation.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-42891230353826651672007-06-11T12:39:00.000+01:002007-06-11T12:39:00.000+01:00back to 1995 prices!!!!back to 1995 prices!!!!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-18510145189065434862007-06-11T08:52:00.000+01:002007-06-11T08:52:00.000+01:00"interest rates will never hit 8%. The printing pr..."interest rates will never hit 8%. The printing press call the fed reserve will never let that happen. "<BR/><BR/>Rate have been way above 8% in the past and there is no reason they cannot surpass that again. The Fed is not going to keep rates down just to please homebuyers who bit off more than they could chew. And besides, the fed has little control over long term rates, something most people do not even realize.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-19236139312925290802007-06-11T03:57:00.000+01:002007-06-11T03:57:00.000+01:00iN MAUI YOU CAN RENT A MILLION $ HOME ALL DAY FOR ...iN MAUI YOU CAN RENT A MILLION $ HOME ALL DAY FOR 2,500 TO 3000. NO LIE. THE CHEAPEST HOUSES SELL FOR 600,000 WHICH CAN BE RENTED FOR 1700 TO 2000. JUST A BUNCH OF SHIT WORK JOBS. BUT YOUR IN MAUI.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-18360305876610921082007-06-11T02:15:00.000+01:002007-06-11T02:15:00.000+01:00"As for inflation itself, where is this 10% inflat..."As for inflation itself, where is this 10% inflation out there? Oh milk went up $1 a gallon. Gee wiz I buy 2 gallons of milk a month and I have to spend $2 more. Milk as a of my income is less than 1/100 of 1%. What matters to me is that my mortgage payment which is 25% of my income has NOT increased at all since last year and won't increase for the next 26 years (can you say that about your rent btw?). I pad $199 for a new cell phone last year, that same phone can be had for $19.99 on Verizon's web site today. My car insuarnce went up a whopping $15 from $781 to $796 for 12 months. Ouch a whole 1.92%."<BR/><BR/>This has nothing to do with the over inflated values of homes in many areas, you stupid moron!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-63658770174304938572007-06-11T00:20:00.000+01:002007-06-11T00:20:00.000+01:00Any wage inflation will only end up sending more j...Any wage inflation will only end up sending more jobs to Chindia. Most of the new at&t call centers are being set up in India now. They even train the peons there to speak with a Southern accent and choose English names. I wonder who will but their products when most Americans will end up out of work? Maybe they can sell their products to the peons in Africa and Asia who make $3/day.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-84494543860895288772007-06-10T23:28:00.001+01:002007-06-10T23:28:00.001+01:00interest rates will never hit 8%. The printing pr...interest rates will never hit 8%. The printing press call the fed reserve will never let that happen.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-61508099755093533042007-06-10T23:28:00.000+01:002007-06-10T23:28:00.000+01:00Rates go up, fewer people can qualify/afford a mor...Rates go up, fewer people can qualify/afford a mortgage, demand drops, prices drop due to excess supply chasing too few eligible buyers. Basic economics.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-40436760270479476552007-06-10T22:06:00.000+01:002007-06-10T22:06:00.000+01:00"We are already experiencing the beginning of an i..."We are already experiencing the beginning of an inflationary recession. This means depressed employment and wages while prices increase, especially if you factor in rising energy costs. "<BR/><BR/>Translation:<BR/><BR/>70's style stagflation with a twist.<BR/><BR/>The twist - no more cheap oil available to pull us out of this housing triggered Depression. <BR/><BR/>Full on bone crushing thud dead ahead.<BR/><BR/>Got gold?Roccmanhttps://www.blogger.com/profile/13941353492023923157noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-65480314782260251142007-06-10T21:56:00.000+01:002007-06-10T21:56:00.000+01:00acidrock said:Wage inflation is heating up after s...acidrock said:<BR/>Wage inflation is heating up after several years of 5%-10% price inflation.<BR/><BR/>According to the Bureau of Labor Statistics, wage and salary costs have gone up a paltry .9% year over year versus, as you correctly pointed out, 10% + real inflation. What numbers are you looking at to lead you to the conclusion that real wages are heating up? <BR/><BR/>Given real inflation, real GDP is in contraction (see www.shadowstats.com). We are already experiencing the beginning of an inflationary recession. This means depressed employment and wages while prices increase, especially if you factor in rising energy costs. My conclusions have not changed. The coming economic environment will be good for those who bought a house at a good fixed rate and plan to live there for a looong time and can maintain employment. The market will also be good for those who have a large down thanks to wise investments and can buy as the RE market bottoms out. Rents should go up with everything else unless things get so bad that people in large numbers are living on the streets. <BR/>Not gloom and doom. Just looking at the numbers. The housing industry supported the U.S. economy to a large degree. That support is eroding quickly.RJhttps://www.blogger.com/profile/07307437595686083352noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-21444358108113591112007-06-10T21:47:00.000+01:002007-06-10T21:47:00.000+01:00"You forget how connected the system is. If price ...<I>"You forget how connected the system is. If price inflation were to get even a few points above the annointed 3% you would see a sharp rise in interest and mortgage rates."</I><BR/><BR/>Inflation is easily 5%-10% for food, energy, medical care, tuition, etc., and we all know what it's running in housing. The official government inflation index is a snow job.<BR/><BR/>Interest rates are low because China and Japan keep buying our Treasury paper. That keeps American consumers in a position to buy their exports. Happy-happy.<BR/><BR/><I>"I on the other hand, have 100% of my money in stocks. When inflation causes a loaf of bread to increase by 10%, that just increases corporate sales and profit by 10%."</I><BR/><BR/>You do realize that a 50% decline in share prices wipes out a 100% gain?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-1377602400197839022007-06-10T21:43:00.000+01:002007-06-10T21:43:00.000+01:00"I on the other hand, have 100% of my money in sto..."I on the other hand, have 100% of my money in stocks"<BR/><BR/>Hmmmmmmmmmmmmmmmmmmmmmmmmmm...<BR/><BR/>Every publically traded company tacitly assumes cheap oil will continue to be available to fuel widget making factories.<BR/><BR/>Peak oil occurred in 2005.<BR/><BR/>Cheap oil is a thing of the past.<BR/><BR/>Because oil is a fungible commodity demand destruction will not lower prices...rather bidding wars will price the poor out.<BR/><BR/>Therefore oil will continue to be more expensive and all publically traded stocks are currently very much over valued.<BR/><BR/>Expect a "correction" or whatever word you want to use that makes you sleep better at night.<BR/><BR/>Got gold?<BR/><BR/>Got Bunker?<BR/><BR/>CheersRoccmanhttps://www.blogger.com/profile/13941353492023923157noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-91618933071550129942007-06-10T21:18:00.000+01:002007-06-10T21:18:00.000+01:00acidrockgetofftheacid is 100% correct. If high inf...acidrockgetofftheacid is 100% correct. If high inflation is coming, owning debt and stocks is the way to go. <BR/><BR/>As for inflation itself, where is this 10% inflation out there? Oh milk went up $1 a gallon. Gee wiz I buy 2 gallons of milk a month and I have to spend $2 more. Milk as a of my income is less than 1/100 of 1%. What matters to me is that my mortgage payment which is 25% of my income has NOT increased at all since last year and won't increase for the next 26 years (can you say that about your rent btw?). I pad $199 for a new cell phone last year, that same phone can be had for $19.99 on Verizon's web site today. My car insuarnce went up a whopping $15 from $781 to $796 for 12 months. Ouch a whole 1.92%. <BR/><BR/>Get some perspective people.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-37987202004848429392007-06-10T20:41:00.000+01:002007-06-10T20:41:00.000+01:00Acidrock,You forget how connected the system is. ...Acidrock,<BR/><BR/>You forget how connected the system is. If price inflation were to get even a few points above the annointed 3% you would see a sharp rise in interest and mortgage rates.<BR/><BR/>Combine that with the fact that this bubble formed based on the assumption that long term rates were not only permanently low, but would go even lower and those who bought their house in the last couple of years could see their house at the same price 10 years from now....possibly longer.<BR/><BR/>I on the other hand, have 100% of my money in stocks. When inflation causes a loaf of bread to increase by 10%, that just increases corporate sales and profit by 10%. High inflation noticably increases the value stocks over time, if not in real terms, certainly in nominal. <BR/><BR/>Plus I'm diversified 50% plus overseas where growth will way outpace the US's anemic growth. You , on the other hand, have all your eggs in one basket.<BR/><BR/>So who's really holding all the risk?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-80283833090393961162007-06-10T20:24:00.000+01:002007-06-10T20:24:00.000+01:00Screw gold buy lead!Screw gold buy lead!burn baby burnhttps://www.blogger.com/profile/01305528692068486872noreply@blogger.comtag:blogger.com,1999:blog-18675105.post-14676704442262716202007-06-10T20:15:00.000+01:002007-06-10T20:15:00.000+01:00What if they fly past 11%? Happened before.What if they fly past 11%? Happened before.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-79346802452795364642007-06-10T19:55:00.000+01:002007-06-10T19:55:00.000+01:00I tend to agree with the blue trend line that is p...I tend to agree with the blue trend line that is pictured. Maybe it could be a little higher, but no higher than the 150% mark. Should be interesting to watch prices return to that level over the next 18 months!Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-37716882836642492592007-06-10T19:53:00.000+01:002007-06-10T19:53:00.000+01:00Rising wages and higher interest rates would cause...<I>Rising wages and higher interest rates would cause the price/rent ratio to fall back to historical affordability. </I><BR/><BR/>Rents increase with inflation because real investors don't like negative cash flow on their rental properties. The notion that rents are going down, as some regularly opine here, is just ignorant. Sure, everybody has heard a story about renting a $1 million house for $2500 a month - like that happens every five minutes. <BR/><BR/>At 10%, inflation should double wages and prices in about seven years. Prices on many common necessities have doubled since 2001, but wages are lagging. I think wages are about to catch up with a vengence. <BR/><BR/>There is a time-honored solution to the mess the Fed has created, and it's called inflation. When everybody, except renting HPers sitting on a mattress stuffed with cash, needs inflation to solve their problems, who do you suppose might be on the right side of that argument?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-601922919478915592007-06-10T19:44:00.001+01:002007-06-10T19:44:00.001+01:00>> I've seen a couple of videos discussing how the...>> I've seen a couple of videos discussing how the Federal Reserve should be abolished. I'm curious what lending would be like if there were no Fed to regulate the economy.<BR/><BR/>Gee, let's start with actual competition between banks. Every time I see that Lending Tree commercial that says "When banks compete, you win.." (or something like that), I have to laugh. The Fed completely controls how every bank loans money, what the interest rates are, etc. The Fed doesn't want any competition - or if you believe the conspiracy folks, it's the Fed's private owners who don't want the competition.<BR/><BR/>Ever notice when either the US nation-builds, or some shit-hole country self-creates/gets-created, the first thing "they" do is setup a central banking system to financially enslave the population?Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-18675105.post-57074815336522611592007-06-10T19:44:00.000+01:002007-06-10T19:44:00.000+01:00got goldgot goldAnonymousnoreply@blogger.com