Large housing slump! Let the good times roll!

[MRT144]

Plato, tell me about Alt-A and Option ARM resets due to reset in 2009-2011

[CrONoS]

Is there any risk of inflation with the slashes of Interest Rates?

And, why would you want to lower the interest rates if the crisis is maybe because we have too low saving rates and too much consummation?

[chequita guevara]

Originally posted by Vanguard
Debt is a fungible, it affects the entire economy. Money is money, whether it is used to maintain health care or increase war spending. Of course, increased spending on the war undoubtedly affect certain sectors of the economy more than others. But that money is still owed by everyone (theoretically anyway).

This isn't quite right. Debt which is used to build productivity is different from debt that isn't. Debt to build a company id different from debt to go on vacation. Eventually, the company should start making you some money back. All the vacation leaves with with are memories and diseases.

[Vanguard]

Sure, it is certainly worthwhile to go into debt when there is a clear economic gain. And, yeah, transferring consumption from future taxpayers to current taxpayers has no overall benefit and, in theory, almost certainly decreases economic efficiency.

I suppose that the counter-argument would be that the war debt benefits everyone because it makes us safer and more secure in the future. Allow me to laugh at this argument pre-emptively. Thank you.

Back on the subject of whether collapsing housing prices makes them a good buy in an inflationary economy------ well, it's hard to say. However it is important to remember why the Fed is inflating. Mostly it is because we have a housing slump.

And why do we have a housing slump? Because most people think that housing is over-priced. And if housing is over-priced then why do you want to buy it?

[Kidlicious]

Originally posted by chegitz guevara


This isn't quite right. Debt which is used to build productivity is different from debt that isn't. Debt to build a company id different from debt to go on vacation. Eventually, the company should start making you some money back. All the vacation leaves with with are memories and diseases.

The first kind is the worst kind though.

[DanS]

Home prices are in a rather impressive freefall at the moment. In November -- the last month available -- houses in San Diego lost 3.4% of their value, by far the largest 1-month drop in the index (kept since 1987). Houses in the Washington D.C. area lost 1.7% of their value, also a record.

[Patroklos]

I think I will buy at -20%

[pchang]

offer at

-20% now.

[Patroklos]

Of course the original price of the house still matters at -20%

Where I am I are looking at -10% where I don't care to live, and -5% where I do.

[Zkribbler]

Originally posted by CrONoS
Is there any risk of inflation with the slashes of Interest Rates?

Yes.

And, why would you want to lower the interest rates if the crisis is maybe because we have too low saving rates and too much consummation?

Because people are losing their houses during an election year. The incumbants want to shore up the situation. To hell with inflation; to hell with the savings rate; to hell with the national debt; to hell with all the long-terms problems. All that counts is getting re-elected.

[pchang]

What I meant was

Find a house you want and offer them asking - 20%. Maybe they will bite. If not, wait and come back later if it still hasn't sold.