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Discussion in 'Political Issues' started by Ruble Noon, Apr 5, 2012.
Bargains coming up for those who saved.
Several years ago, a bank friend shared that there are laws on the books that prolong our housing market misery.
Basically, banks (or other entities) who have foreclosed on homes do not have to take a negative hit to their balance sheets unless and until they actually sell those foreclosed properties. Thus, as the article referenced above states, there is a "shadow inventory" of foreclosed homes just waiting for a green light of some kind to be dumped onto the housing market.
Bottom line?: Do not be expecting any kind of pricing improvement until all of the shadow inventory has been sold. And even after those homes are sold, there will likely be buyer expectations of lower prices for quite a while.
So, do not be suckered by anyone who tells you that a housing recovery is "just around the corner."
It is a good time to get a deal and looks like it could get even better for those buying. I just bought my first home at around 50% of build cost.
Principle reduction is a horrible idea. The buyer decided the home was worth it when they bought it, just because it dropped the tax payers shouldn't have to foot the bill. I am all for more lax refinance rules so those that have taken a hit to their credit can refinance to a lower payment with the lower rates these days. If we at going to pay for principle reductions are we going to start paying for those that lost money in their 401k's in the stock market? Govt bail outs have to stop or thus country is going to need a bail out.
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The funny thing is that most of big media is selling the story that the worst is over and that we are in a slow recovery.
Many here also have been lulled into believing this nonsense.
Yes, those of us that have always lived below our means, saved and prepared are going to be ok. Those that did not are in for a huge surprise and a huge downgrade in the way they go about their daily lives.
People don't realize that banks were sitting on a ton of foreclosed homes waiting on the ruling about the whole MERS debackle, which halted foreclosures of many homes.
This is absolutely not true. Bank examiners and CPA's will insist on write-downs to the bank's balance sheet.
They can also accomplish this by increasing loss reserves as an alternative.
"That is why the banks are holding the cash rather than lending it. They need the cash as a buffer to their write-downs of bad mortgages and their foreclosures. The banks need for liquidity is why lending is so tight today." (url citation above"
and I didn't have to hear all that from a friend...
The graph showing unemployment checks are running would be a good parable.
Did someone say that the economy is improving and that unemployment is going down?
Oh, that must have been NBC, CBS, ABC, MSNBC, CNN, never mind.
Statistically pure numbers I think so. They only count those on unemployment. When your unemployment benefits run out in a year you are no longer counted as unemployed.
Instant decrease ---> made easy!
Yep, at this rate no one will have a job but we will have 2% unemployment.
Not a problem wen all we have to do is borrow more money from China. After all, we won't have to pay it back.
Just another good reason to Vote out the Obamanation so he can't do another bailout! Let the market correct it's self!!!
Even if you take unemployment numbers out of it:
The S&P has returned over 11% YTD. The Dow 7% YTD and the Nasdaq is on tear and has returned 18.25% YTD...
Businesses are making money and building their balance sheets. Investment has started again.
Isn't that capitalism and the free market at work?
That is a recovery on my book.
No. That is the FED propping up the market.
Do the math and add the increase in market capitalization across just the 3 markets I mentioned. Then add to that the increase in equity derived from profits on the balance sheets across America. The fed is not moving all those numbers.
The bump from QE is long gone.
The gloom and doom crowd is always looking at the glass half empty, But the economy is recovering.
You may choose to say woe is me, or you may invest and make some money.
That's why we were downgraded again I guess, It's a recovery!
We were downgraded before the recovery began. There is already talk of a potential upgrade. At least get your timeline right.
And you said "again" I believe only S&P downgraded the USA and they did it only once. There may have been another smaller rating agency that followed, but none come to mind.
That's exactly what it is, amazing what printed money can do.
The movement in the market is not from QE.
The strength in the market now is coming from the FRB commitment to keep rates at virtually 0% for the near future.
The net effect of that is businesses' debt service is reduced and predictable. The other impact is that investment is directed back into the capital markets rather than savings. Savings, as in bank savings, is actually dis-savings in an economic sense. it takes money out of the the capital markets (investment).
Money is flowing back into the capital markets now. And, businesses as a whole are more profitable. The issue is, companies have not hired additional employees yet to support their businesses.
Again, you can blame the gov and say woe is me, or invest. Totally your choice.