Removal of Band-Aids to Reveal Deeper Housing Wounds?
With worries about the deficit intensifying, the government is eager to start withdrawing some of its support programs. The first step could happen as early as next month, when the Federal Reserve has said it will end its trillion-dollar program to buy up mortgage securities. That program has driven mortgage interest rates to lows not…
BHO Export what to who? We keep trying to devalue the dollar so we can export and China and the rest of the world are trying to do the same. The government is not raising interest rates because it would have to pay higher return on its own debt. Lets just keep the printing presses going so we can help the people who can not add hold on to their homes. I thought you needed some common sense to be a homebuyer in this country. Lower the stantards increase the stupidity!
They can keep “aiding” the market, HOBOKEN, but it’s a drop in the bucket to what is getting devalued. You can’t stop a massive Ponzi debt scheme from collapsing once it reaches it’s mathematical limit. Can’t borrow our way to prosperity. Have to produce real goods that we can export.
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Why would the USA government stop providing help to the housing market? They do own a huge amount of MBS’s… I think they would be crazy to stop the aid to housing..
“missing the overall picture in terms of this nation’s overall stability”
What kind of stability we talkin? Economic? Ha! This is a global economic depression. You’ll see.
There’s already a Chinese bubble. That’s why their government has raised rates, to cool the insanity. Home price:income ratios there are bananas!
wasder – It is certain whether THIS or THAT. It is known whether THIS or THAT. “We” are certain which one it is.
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If the EURO weakens than US properties will go down.. USA interest rates should go down as well.. Crazy as it seems that is the scenario I see playing out..
Treasuries will once again find alot of money flowing into them.. I see a double bottom being made in treasuries at one pt and the rise of interest rates to start then..
Whether that is a fast process or a slow one depends on USA fiscal policy…I can also see the pound getting into trouble before we do.. These currency problems could be the start of another downward spiral in the market.. Maybe all this can be avoided.. If it is than the US market is a good place to be..
…another thing to consider for the near future;
A Chinese Bubble.
BHO–it says “Yet it is uncertain whether the government can really pull back without sending housing markets into another tailspin.” You said, “it is certain” which means it is certain that the market will not tailspin. What you meant to say is “damn straight its uncertain. In fact I’d say its certain that the market will crash without government props” and then Mayday and all your normal witticisms…
Team Bear has many good points but they are missing the overall picture in terms of this nation’s overall stability.
Like it or not, the US will continue to dominate global economics for the near future if only because of the enormous exhaust fumes left over from the 20th century, the strength of the US military and the mess the rest of the world is in as far as their economies are concerned.
This means that the US dollar will continue to hold it’s own against either a “basket” of global currencies or gold as the reserve currency of choice.
IF
The President can get it together and start implementing sensible jobs growth strategies like leaving the Bush tax cuts in place and even cutting taxes further and realizing that jobs growth comes from small business growth not big brother government.
IF
The President can cease and desist on this ridiculous policy of spending more in 20 months than Bush (who spent alot himself) spent in 96 months.
IF
The President can deftly handle the growing Iranian crisis which can have a severe effect on oil prices.
Then
the housing market can continue to seek it’s own level
and begin to stabilize without a massive collapse.
I put it at 60-40 in favor of stability.
40-60 if the President continues the spending lunacy.
Can’t inflation be a benefit to existing home owners, particularly those with fixed rate mortgages? They have fixed (below inflation) interest charges and will be paying off principal with inflated dollars.