FED Raises Rates another 1/4 % Housing bubble ....
 

Greenspan is one smart dude. I think he knows what he is doing when it come to rates. He also said in that article that the economy is on a steady footing. I thought I heard something about him leaving soon. I would start to get very worried then.

As far as Real Estate goes, I am beginning to start using the statement "what goes up MIGHT come down."

it is a crazy market.

That move pissed me off big time. I was going to do a large forex conversion today and my broker told me to wait until Monday to see if it will work in my favour. That move greenspan did would have cost me nearly $400. Damn!
WG

In terms of real estate, what goes up ALWAYS comes down, sooner or later. Real estate is very sensitive to how the economy goes.

"The market can stay irrational far longer than you or I can stay solvent"

Well he scared the piss out of the average investor causing the stock market to dip pretty hard again. Time to add to some key positions during this dip.

Good quote

I think we are gonna go down in July and wont start coming back till september rolls around


nas going to 2000 again and dow to 10K ??

my girlfreind and i just bought a house here in florida for $300,000, 2 years ago the guy paid for it $170,000.. This market will crash hard, this bubble will burst in the next 3-5 years.

Real estate in palm beach alone has jumped $100,000 in just one year!
I kick myself in the ass for not buying a home 2-5 years ago.

US -> CDN? the more Greenspan moves rates up the stronger the USD will get... wouldn't that benefit you?

Buy UST with both fists.

Greenspan himself has said "real estate is different........people have to live somewhere".

But, I agree the speculation is out of control. Major correction needed.

Happens most years during the Summer months. After 2Q earnings there is very little to drive the market until everybody is back at work.

Reichmann knows property meltdowns: 'It's time to sell'


"I think the euphoria out there and the expectations that it drives is just asking for trouble." said Mr. Reichmann


"There is too much enthusiasm. You know in the real estate game if you wait a little too long you get killed. I've been there, done that. I don't want to do it again. I want to get out at the right time."

the fact that bond prices actually went UP does not bode well for this economy. that ain't spose to happen.

Yes pretty typical. Volume will be real low things will be stale. Bad news in any form will drive the sheep to sell. This is my favorite time of year to buy buy buy.

I will look into it.

UST also pays a fat 5.79% dividend. :thumbsup

Ohh stop your whining!

You made that much money while you slept last night.

tobacco.. it dropped 10 bucks a share in like one day on the chart. Tell me why its a buy ?

Buy low, sell high? :)

I do like the dividend thats for sure. However I think the stock could still drop. Looks like a bit of risk there. Exactly a year ago today it was at $35.66.

I put it on my watch list.

Ya'll are correct to worry about a housing bubble

But this current market is not like any other in American's past. Much of the growth is fueled by illegal immigration and foreigners buying american real estate through fraudulent loans

Why is it that houses in dumps like south central LA are selling for 300,000? WHo is buying them? There is a list of illegals bidding for these shitholes and banks all too willing to accept questionable identification to secure the loan

So until Bush decides to close out borders and enforce immigration law... this boom will not end. It will continue until the social problems, high taxes, and corporate corruption of so many illegal aliens and foreigners catches up with us

Check this out:

IF Bush is able to push through his social security "privatization." There will be another housing boom following on the tails of the last one.

Understand, privatization is NOT personal ownership of social security accounts. It is an attempt to NATIONALIZE the New York Stock exchange. If the government is the largest shareholder than the government runs the stock market. The government can inflate the stock market with SS dollars and make lots of party donors very rich men. This isn't a democrat/ republican thing... it's all about the benjamins

Many babyboomers are saving for retirement and dumping their money into mutual funds. They are patiently waiting and hoping that their investments pay off while listening to "doom and gloom" predictions of a housing bubble. IF social security is "privatized," Then their portfolios will all skyrocket like they did during the internet tech bubble of the nineties. These boomers will feel invincible and will be willing to spend money on new homes etc.

So in my opinion, IF there is social security "privatization", there will continue to be rising housing prices

And don't listen to the people that say Bush's SS plan is dead - cuz it ain't even close - BUSH WILL cut some crazy deals with Democrats - there is too much money at stake

Your fucking kidding right.

front line banks are giving mortages to almost ANYONE at this point. why not? they don't hold the mortgage, rather they sell them off to Freddie Mac or Fannie Mae. THOSE two monsters could lead to economic catastrophe that could spread across the world. that's some seriously scary shit.

There are definitely too many people living in houses they have no equity in. And even more with property they don't live in, they don't have equity in, and bought only for speculation.

The DOW has been teasing 10K on and off for a while. what will be interesting to see if it signifcantly breaks that mark, if it will trigger some large trading voulme, and what the result will be. If volume spikes, it could mean a big swing, one way or another (large program trading can go a "buy" if it reads an "opportunity" with the dip, of "sell" if it reads "get out while you still can").

which is what caused the crash of 87.

Yup, all these interest rate hikes will really suck for the housing market :Oh crap

WG you are lucky it is only 400$ imagine 4k. that would really suck major ass.

Do some DD.

The stock got hammered after Q1 numbers were down. The only reason the numbers missed is because wholesalers ordered more product in that last part of Q4 (2004) in order to avoid a federal tax increase.

After the next report the stock should rebound. Q1 was an aberration.

And what happened to RE after that?

i'm very bearish on the housing market in the medium term. it can probably hold off for a couple years. since there isn't real-time ticker tapes of housing prices, a national collapse due to panic isn't likely. but it's certain that some regions of the u.s. will see horrendous losses in home values. there are areas of the s.f. bay area where home prices could be HALVED and they would still be overpriced (only my opinion). much of the cali re boom has been speculative in nature, and not tied to fundamentals.

Lots have people have borrowed money against these inflated valuations. I think we will see lots of foreclosures.

Too many idiots trading unsecured debt (credit cards) for secured debt (homes).

no kidding. cash-out refis have been the fundamental engine behind the recent economic 'recovery'. now those people will all be so far underwater that they'll probably just walk away. but if consumer spending takes a serious nose dive and liquidity dries up, you could see deflation which is far worse than inflation.

or stagflation.

I thinkwe are going to ahve a banking crisis when all the no money down folks just walk away from their negative equity. banks sell and the selling begets selling.. it could be very very ugly

you're assuming the banks are holding those mortgages. they don't. Fannie Mae and Freddie Mac hold most mortgages. they repackage all the interest and principle payments people send them into bonds - bonds that are held by many retirement / pension portfolios. not to mention, there's some sort of agreement that the u.s. treasury will bail these two out of they get into trouble. they hold almost 2 trillion dollars in debt - not to mention the many many trillions of off book derivatives they wouldn't be able to service either. it would sink our economy - and the global economy.

I read recently that foreclosures have gone way up lately. could have been a blip, but maybe not. Foreclosures tend to be a lagging indicator (it takes time for a foreclosure to happen after the guy gets into financial trouble, hence the lag) of serious economic trouble.

Hmmm I am gonna look up stats on this I think that while youa re right ther are many many banks whos ass is on the line

http://www.homeownershipalliance.com...eownership.php



Who are the major investors in mortgages in the United States?

In 1999, commercial banks and thrifts provided about 27 percent of the total investment in mortgages. Fannie Mae and Freddie Mac accounted for 17 and 16 percent of mortgages respectively. The rest of the investment came from life insurance companies, pension funds, credit unions, foreign investors and other sources, including private individuals.

hmm. good link, but i bet that number has grown significantly. nevertheless, those "companies" are known as government sponsored enterprises (GSEs). that means they are backed up by the federal gov't. this enables them to borrow on the cheap to buy mortgages. they can borrow cheap, because their debt is backed up by the treasury. both of them have been in deep shit recently, and i bet you the true damage is only known to a few deep insiders. if the public knew how fucked they were, people might panic. 2 trillion dollar between them is huge when our total GDP is - what - 10 - 11 trilion?

Yup I have been watching them on and off for the last year or so..

I made a few bucks in Fannie when it took a big dup on panic selling whenthere was some rumors of problems.

http://chart.finance.yahoo.com/c/1y/f/fre


bought at 62 sold at 65 in like 10 days was not too chabby


never went back to it.. and now I am glad i did not :)

ever read the book 'Infectious Greed'? if you want to know the true, dirty details about derivatives schemes and the trillions of dollars behind them, you should read that. if you 'get it', it will scare you death. there's so many 'bets' out there being placed by these huge behemoths on interest rates, and it's mostly all off book. Buffett called derivates the 'weapons of mass destruction' of the ecomomy (or something like that).

i would not touch real estate right now,,,its no different than the stock market bubble.

All the sheep just follow.

Lars, did you ever give any thought to maybe buying the Freddie Mac intermediate term bonds that rose from junk status to investment grade during this same period? Not only would you have made more on the face of the bonds but you'd still be making interest on them today :)