was just thinking of this whole credit game and credit in general. Specifically how it relates to real estate. Ive thought of this because of my quest to obtain good credit. Im close to a point where ill be at no debt in my life. Then I ponder my future. Ill probably purchase a home. Back in debt! All my efforts to create good credit only to get myself in more debt?#%! Does this make sense? The idea of debt as slavery is old. Serfs were paralyzed by land owners in the beginnings of Europe. They worked their farms for long hours in order to pay off the land. The land owners set it up so that they could never own the land and would always be indebted to them. My question. If not for the idea of credit/mortgage wouldnt the actual cost of real estate go down? If there were no such thing as a 30yr mortgage wouldnt the costs of property HAVE to come down. Supply and demand, it would seem, would kick in. If no one could afford it ....lower price.... which came first the mortgage or the property value? bugman!
Yes, you're right. You've learned something that 99% of Americans will never grasp. If the Gov't hadn't created easy money for the banks to borrow, housing prices would have never climbed this high, and the current bubble in housing never would have inflated. Credit allows the price of items to rise...but not permanently. Credit bubbles always end in a bad way. When they burst, they cause the price of things like homes, cars, etc, to crash. Today's home buyers are going to learn a valuable lesson about credit and liquidity in the near future.
yeah, i agree too much.. ive always thought that the rise in real estate costs now is caused by the big money "players" moving their money from stocks to real estate... it would be interesting to see how now, that the stock market is going up(big money going back to stocks) real estate will go down... just a big f'ing money shift. but in regard to my initial post, is a 150,000 dollar house really worth that much?ie chicken(property value) or the egg(mortgage). P.s. the "big money players" could be not a few unscrupulous fellows but our population in toto. bugman!
Re: Re: OT Chicken before the egg? A house, like any other thing, is only worth as much as someone is willing to pay for it. In the case of our current housing situation, most mortgage borrowers don't look beyond the monthly payment , so they never grasp the true cost of the home. Their valuation concern ends when they learn that they can make the monthly payment, without regard for the total amount paid over the life of a loan. If you want to know the true value of a home, go to the forclosure sales and see what the cash buyers are paying. In my area, I can buy a $150,000 market value home for $95,000 cash. The extra $55,000 is fluff, created by the credit bubble. P.S. The stock market isn't improving. It's just a bear market rally. You have to look at money flow and the long term charts to see that the downtrend is still intact. If you've study charts, you can see the clearest head and shoulders formation in the S&P index. Bull markets don't start with charts like that. The S&P has to bottom in the 300 range before we are finished. Wall Street and CNBC are trying their hardest to tell us that the worst is over...but the corporate insiders reveal the truth. Stock sales by insiders are at all time highs right now. They know what's coming, and they are selling as fast as they can. If they thought the market was going up, they sure as heck wouldn't be unloading their stock at a record pace....
Re: Re: OT Chicken before the egg? too much, could you provide a site to check out the chart for "insider" sales/purchases/maneuvers? Re:/quote: Wall Street and CNBC are trying their hardest to tell us that the worst is over...but the corporate insiders reveal the truth. Stock sales by insiders are at all time highs right now. They know what's coming, and they are selling as fast as they can. If they thought the market was going up, they sure as heck wouldn't be unloading their stock at a record pace.... thanks bugman!
Re: Re: Re: OT Chicken before the egg? Are you saying the S&P 500 has to bottom in the 300 range before we are finished? If you are I respect you honesty and how you carry yourself on here. Even though many others do not from what I have seen. That is a quite a statement a 60-70% drop in the S&P 500 from this point. At least 99% of people would say thats crazy. CNBC is owned by General Electric of course they are trying to tell us the worst is over.
Re: Re: Re: OT Chicken before the egg? I subscribe to Bloomberg, and the information is there, but I cannot link to it since it's a subscription. You can find insider sales on Yahoo's individual stock pages. Here's a link to EBAY's stock sales. You can enter any stock in the box on top and review insider sales for that stock: http://biz.yahoo.com/t/e/ebay.html
Re: Re: Re: OT Chicken before the egg? I look at that stuff on yahoo almost every day. I got a good laugh out of that one though. I will see if I can find one simular. EBAY that is a good one.
Re: Re: Re: Re: OT Chicken before the egg? Yes, that's what I'm saying. It's really a matter of when it happens, not if it happens. The stock market is nothing more than human emotion (greed, fear, etc). You can watch those emotions play out on a daily, monthly and yearly basis. Greed causes the bubbles, and fear and desperation causes the bottoms. We are currently in the process of finding our way to the bottom, but we have a long way to go. Every bubble (like the one that was built from 1987 until 2000) will eventually have an adverse and more extreme reaction when it bursts. Looking at a chart of the S&P, the logical conclusion to the recent bubble is a bottom in the 200-400 range. That number represents a capitulation by long-term holders, who will eventually give up in disgust and walk away. Bear markets have many extreme bear rallies...we've just seen one over the past few months. The funny thing about bear rallies is that they have to be more convincing each time, in order to suck in a new and more intelligent group of investors who finally think the bottom has been reached. During the Great Depression, the fools lost their money in 1929, the smart guys lost it in 1930, the really smart guys lost it in 1931, and the geniuses lost it in 1932 (1932 was when the market finally crashed, not 1929, as is the popular myth). We're seeing a repeat of that today in our markets. You'll know the true market bottom when you see it. It will be obvious because there will simply be no one willing to step up and buy stocks at any price above the underlying company's true book value. The S&P 500's combined book value lies in the 200-400 range.
Re: Re: Re: OT Chicken before the e I don't think the intrest rates will go up. Everybody bought houses in this low intrest rate craze. I don't see any goverment with the balls to send this whole country to poverty. If they do, they will never get re-elected period. They dig a big hole this time. Rates will stay this low if not lower. Acccept the fact that Japan has 0% intrest for the last decade. Look at Tokyo real estate boom. Same thing will happen here when intrest rates hit the bottom. But we are far from bottom, right now. Greenspan got elected for another 4 years, they say he is going to resing in 2 tho. I know what I am talking
Re: Re: Re: Re: OT Chicken before the e Interest rates will go well below zero in the US. This incredible feat will be accomplished when the Federal Reserve begins "taxing" savings account deposits, thus giving us a negative interest rate on savings. Japan will begin doing it next April when they issue their new, trackable currency, and the US will probably follow later in 2004, or 2005 at the latest.. Here's an interesting and long read about the process. It's from the Dallas Federal Reserve website. http://www.dallasfed.org/htm/research/hot/bd0503.html
Re: Re: Re: Re: Re: OT Chicken before the egg? Do a max chart on the DJI on any finance page you will see the 1920's and 30's
quote: too much" If you want to know the true value of a home, go to the forclosure sales and see what the cash buyers are paying. In my area, I can buy a $150,000 market value home for $95,000 cash. The extra $55,000 is fluff, created by the credit bubble" is it not true that the price of $95,000 exists because the resale value.....YES therefore the foreclosure purchase price is influenced by the resale/fake/mortgage idea? all im saying is that it seems real estate is way overpriced (in the NE at least) forcing us into overpaying and being slaves to the mortgage..... too much, thanks for the link regarding the interest rate, it was interesting.... bugman!
Re: Re: Re: Re: Re: OT Chicken befo Good article too much, They are pointing out the obvious fact that everyone knows; but afraid to say it on tv. There is also another thing tho, people are moving to united states from all everywhere, 2.5 million immigrants each year, and their first need is housing. Don't be suprised if real estate market benifits from low intrests and expands it's caps. Meaning real estate might not go down at all.
Re: Re: Re: Re: Re: OT Chicken befo 2.5 million is what were told. That number is a joke. Much higher!
Re: Re: Re: Re: Re: Re: OT Chicken befo I've done a lot of thinking about that subject... (mostly because I just started shorting the housing stocks this past week) I agree that immigrants are pouring into the US, but I don't think it will help housing too much. Immigrants are generally lower paid when they first get here, and they cannot afford much in the way of housing. Ten years from now, I see it being a boom to housing, but not right now. The incomes are just not there to support a mid-range mortgage payment. Also, the layoff of skilled workers in the US is really starting to put a strain on the housing market. Forclosures just set a new high this past month. 30+ day late payers are sitting at 5.3% of all mortgages. I recently read a great artilce on immigration. It said that the Govt's plan was to flood the US with immigrants to help build a new base for Social Security, so the baby boomers wouldn't bankrupt the system. On the downside, it said that the low wage earning power of new immigrants would probably not contribute enough money into the system to offset their drain on it. In any case, the immigration situation will play a large role in whatever happens with the economy over the next decade. We sure are living in interesting times.
Re: Re: Re: Re: Re: Re: OT Chicken befo I think Bush got what he wanted by lowering the interest rates (even though it is actually Greespan announcing the rate slashing). He managed to keep the economy afloat.....some would argue artificially afloat. The lowering of interest rates has had a HUGE positive impact on the economy thus far. Especially with all the refinance'rs who take cash out and spend it, the more frivolous the spender, the better for the economy. This can't keep up though.....among one top concern is the threat of the US dollar being devalued against foreign currency because of our low rates. Eventually, rates will go up, and the cookie will start crumble, particularly for those who ref'd with cash out and those who try to sell their homes in this period where we are likely to see deflationary home values against a rising interest rate. BUT, real estate is cyclyical, and most that plan to hold on to their homes for the long-run, should not be affected during this eventual period. If their homes experience a decline in value, the low interest rate they obtained in prior years should balance out against the home value decline. Eventually, the market will swing back around, and values will rise again. Those that should be most concerned are the refinancers with cash out and those that plan/are forced to sell their homes and can't ride out the real estate trend. I don't think rates will go up until BUSH is re-elected (assuming he get re-elected). TOO scary for him to have to face re-election in an economic windfall that could follow rising interest rates. BTW....TOO MUCH, why am I not surprised you short stocks?
Re: Re: Re: Re: Re: Re: Re: OT Chicken befo Good post. "If" Bush gets re-elected? You act like it's a possibility that he won't. Don't get me wrong, I don't like the guy, but I cannot see him losing. Of course, 16 months is a long time in politics. Still, there's a lot of money out there that wants him to get another 4 years. It's all a moot point, anyway. The President doesn't control the economy...he just tries to look like he does. Not suprised that I short stocks? Why? I go where the easy money is. Why fight the obvious? This has been a fun rally, but now it's time to short again and reap the rewards of an ovarvalued market. If you want to have some fun at my expense, you can track my portfolio: 33% cash (75% of it is in Euros, 25% in US$) 67% short the market, in the following stocks: -TOL(10%), CTX(5%), EBAY(20%), INTC(20%), IACI(20%), GM(10%), QLGC(15%). All of those positions were opened this past week, so I'm pretty-much even right now. P.S. I hold a very agressive portfolio, and I do not suggest that anyone follow my lead. You could lose a lot of money.
Re: Re: Re: Re: Re: Re: Re: OT Chicken befo As far as Bush getting re-elected, he might not. His image is too associated with 911/war/terrorism. People might just want to forget about this whole disaster and elect a president who doesn't remind them of one of the worse times of our nation's life. We'll see how people feel late next year. As far as stocks go, I too go where I think the easy money is. I posted about BRCM (to the moon as my sig. on 4/17/2003). The stock sold between 15.33 - 16.70 on 4/17/03....it is now at $25.86. http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&threadid=45746&highlight=brcm MIR I also posted on my sig on 4/21/03, trade between 1.94 - 2.27 on 4/21/03, now at 2.83 http://consumers.creditnet.com/straighttalk/board/showthread.php?s=&threadid=45894&highlight=mir I have recently cashed out on both of these stocks. I'm just on the opposite side of the coin as you, I invest in undervalued stocks when I believe there is about to be an upswing in stocks overall. Right now, I don't plan on investing for awhile, as I don't think conditions are favorable for stocks. I snickered at your short position in light of recent posts, that seem to carry a rather dreary outlook for us cnetters. However, I am sure you are a very astute investor and I wish you luck in your current shorts, may those companies fail miserably( I'll be there on the back end to reinvest in them when they are undervalued))
Re: Re: Re: Re: Re: Re: Re: OT Chic Stock market is nothing but gambling, where big fish eats small fish day in and out. Why would anyone gamble with their future? I am too coservative to go into stock market. Hell I don't even gamble when I go to Vegas.
