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Capitalism, The Fed and Economic Policy

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    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    The fed is walking a tight rope. They will either lead us into a soft inflation or successfully tame inflation. I think, if anything, the fact that inflation has been receding while still maintaining this kind of job growth is encouraging...albeit a bit strange.
    chinese-happy.jpg
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    mickeyratmickeyrat up my ass, like Chadwick was up his Posts: 35,999
    The fed is walking a tight rope. They will either lead us into a soft inflation or successfully tame inflation. I think, if anything, the fact that inflation has been receding while still maintaining this kind of job growth is encouraging...albeit a bit strange.
    Makes me wonder if they knew what the fuck they were talking about to begin with. Their claim has been what we've have been experiencing was impossible right?

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    static111static111 Posts: 4,889
    mickeyrat said:
    The fed is walking a tight rope. They will either lead us into a soft inflation or successfully tame inflation. I think, if anything, the fact that inflation has been receding while still maintaining this kind of job growth is encouraging...albeit a bit strange.
    Makes me wonder if they knew what the fuck they were talking about to begin with. Their claim has been what we've have been experiencing was impossible right?

    I believe the older I get that we are all just a bunch of kids playing dress up and the whole thing is guesswork.  If it works people take the credit, and if it doesn't the blame gets shifted.  I don't think anyone knows what the fuck they are talking about ever, but it is entertaining. And it is nice when your side of the no one knows what the fuck they are talking about brigade has a win.
    Scio me nihil scire

    There are no kings inside the gates of eden
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    tempo_n_groovetempo_n_groove Posts: 39,124
    static111 said:
    mrussel1 said:
    static111 said:
    Psh. starter homes 500,000 in Austin.  @ around 7% that seems like robbery.  Also the payments on that would be crazy for most people.  Looks like we are gonna keep renting. I'm glad things are getting better though.
    tempo_n_groove said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.

    This is a supply issue,  not an interest rate one.  The higher the interest rate,  the more inventory,  the lower the price.  But that's not going to happen until more homes are built (or apts).
    Yes I agree completely, however the higher interest rates do nothing for the long term cost.  This problem has been exacerbated by people from high rent areas selling their million dollar plus homes then moving here and buying several homes paying in cash and using the rest of the homes as rent generators.  As well you have investment firms buying up single family homes as revenue generators as well.  A big part of the issue is that there are homes, they are just being used as rental units.

    This doesn't seem like healthy economics.  Far be it from me to try to put limits on who can own how many homes and for what purposes, but when some people own 4 or more while driving up the perceived value of what is available to people that don't own one, that does not seem like a fair playing field.  Not to mention that there is the possibility that someone buys high and the market fails again.

    Being that this is the Capitalism, the Fed and Economic Policy, I think that this is still a relevant conversation.
    THIS^

    I've been screaming this for a while now.
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    chinese-happy.jpg
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    edited April 2023
    mickeyrat said:
    The fed is walking a tight rope. They will either lead us into a soft inflation or successfully tame inflation. I think, if anything, the fact that inflation has been receding while still maintaining this kind of job growth is encouraging...albeit a bit strange.
    Makes me wonder if they knew what the fuck they were talking about to begin with. Their claim has been what we've have been experiencing was impossible right?

    Who knows? To be fair, there was a once in a lifetime pandemic that completely altered the entire globe for a couple years or so. Can't be easy to know exactly how to handle all that came of that I guess...
    chinese-happy.jpg
  • Options
    nicknyr15nicknyr15 Posts: 7,873
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    Yes my favorite thing when I used to do mortgages were the phone calls asking why our mortgage rates aren’t down when the feds cut interest rates. 🙄🙄. Good times. 
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    nicknyr15 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    Yes my favorite thing when I used to do mortgages were the phone calls asking why our mortgage rates aren’t down when the feds cut interest rates. 🙄🙄. Good times. 
    It's all connected though even if not directly.


  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    chinese-happy.jpg
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    nicknyr15 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    Yes my favorite thing when I used to do mortgages were the phone calls asking why our mortgage rates aren’t down when the feds cut interest rates. 🙄🙄. Good times. 
    Yep. All the time. lol
    chinese-happy.jpg
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They are market driven,  but a clear correlation between the two.  
  • Options
    The JugglerThe Juggler Behind that bush over there. Posts: 47,359
    edited April 2023
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Post edited by The Juggler on
    chinese-happy.jpg
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
  • Options
    Halifax2TheMaxHalifax2TheMax Posts: 36,705
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    09/15/1998 & 09/16/1998, Mansfield, MA; 08/29/00 08/30/00, Mansfield, MA; 07/02/03, 07/03/03, Mansfield, MA; 09/28/04, 09/29/04, Boston, MA; 09/22/05, Halifax, NS; 05/24/06, 05/25/06, Boston, MA; 07/22/06, 07/23/06, Gorge, WA; 06/27/2008, Hartford; 06/28/08, 06/30/08, Mansfield; 08/18/2009, O2, London, UK; 10/30/09, 10/31/09, Philadelphia, PA; 05/15/10, Hartford, CT; 05/17/10, Boston, MA; 05/20/10, 05/21/10, NY, NY; 06/22/10, Dublin, IRE; 06/23/10, Northern Ireland; 09/03/11, 09/04/11, Alpine Valley, WI; 09/11/11, 09/12/11, Toronto, Ont; 09/14/11, Ottawa, Ont; 09/15/11, Hamilton, Ont; 07/02/2012, Prague, Czech Republic; 07/04/2012 & 07/05/2012, Berlin, Germany; 07/07/2012, Stockholm, Sweden; 09/30/2012, Missoula, MT; 07/16/2013, London, Ont; 07/19/2013, Chicago, IL; 10/15/2013 & 10/16/2013, Worcester, MA; 10/21/2013 & 10/22/2013, Philadelphia, PA; 10/25/2013, Hartford, CT; 11/29/2013, Portland, OR; 11/30/2013, Spokane, WA; 12/04/2013, Vancouver, BC; 12/06/2013, Seattle, WA; 10/03/2014, St. Louis. MO; 10/22/2014, Denver, CO; 10/26/2015, New York, NY; 04/23/2016, New Orleans, LA; 04/28/2016 & 04/29/2016, Philadelphia, PA; 05/01/2016 & 05/02/2016, New York, NY; 05/08/2016, Ottawa, Ont.; 05/10/2016 & 05/12/2016, Toronto, Ont.; 08/05/2016 & 08/07/2016, Boston, MA; 08/20/2016 & 08/22/2016, Chicago, IL; 07/01/2018, Prague, Czech Republic; 07/03/2018, Krakow, Poland; 07/05/2018, Berlin, Germany; 09/02/2018 & 09/04/2018, Boston, MA; 09/08/2022, Toronto, Ont; 09/11/2022, New York, NY; 09/14/2022, Camden, NJ; 09/02/2023, St. Paul, MN;

    Libtardaplorable©. And proud of it.

    Brilliantati©
  • Options
    nicknyr15nicknyr15 Posts: 7,873
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground. 
  • Options
    mrussel1mrussel1 Posts: 28,709
    edited April 2023
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Yes I do.  By that point,  the securities market for mortgages has collapsed. So a lot of the independent lenders were gone.  What they would do is package up loans and sell them in the market,  but they were full of loans that were non traditional and designed for high net worth individuals, instead being used to extend people's buying power.  These were tools like "stated income" , 3 year arms,  5 year arms,  etc. These securities began to default leading to foreclosure, which led to a glut of homes,  no one to buy them.  Then the arms came calling and there was no equity to refinance because home prices were collapsing.  And the income was insufficient was traditional loans,  leading to more defaults. It was a vicious cycle. 

    So by 2011, you were left with traditional banks that can back their loans with their deposits.  That's the traditional method and more conservative.  I'd be curious to know from anyone in the business if those non traditional loans are still being used widely.  I would hope not. 
  • Options
    Halifax2TheMaxHalifax2TheMax Posts: 36,705
    nicknyr15 said:
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground. 
    But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo  and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
    09/15/1998 & 09/16/1998, Mansfield, MA; 08/29/00 08/30/00, Mansfield, MA; 07/02/03, 07/03/03, Mansfield, MA; 09/28/04, 09/29/04, Boston, MA; 09/22/05, Halifax, NS; 05/24/06, 05/25/06, Boston, MA; 07/22/06, 07/23/06, Gorge, WA; 06/27/2008, Hartford; 06/28/08, 06/30/08, Mansfield; 08/18/2009, O2, London, UK; 10/30/09, 10/31/09, Philadelphia, PA; 05/15/10, Hartford, CT; 05/17/10, Boston, MA; 05/20/10, 05/21/10, NY, NY; 06/22/10, Dublin, IRE; 06/23/10, Northern Ireland; 09/03/11, 09/04/11, Alpine Valley, WI; 09/11/11, 09/12/11, Toronto, Ont; 09/14/11, Ottawa, Ont; 09/15/11, Hamilton, Ont; 07/02/2012, Prague, Czech Republic; 07/04/2012 & 07/05/2012, Berlin, Germany; 07/07/2012, Stockholm, Sweden; 09/30/2012, Missoula, MT; 07/16/2013, London, Ont; 07/19/2013, Chicago, IL; 10/15/2013 & 10/16/2013, Worcester, MA; 10/21/2013 & 10/22/2013, Philadelphia, PA; 10/25/2013, Hartford, CT; 11/29/2013, Portland, OR; 11/30/2013, Spokane, WA; 12/04/2013, Vancouver, BC; 12/06/2013, Seattle, WA; 10/03/2014, St. Louis. MO; 10/22/2014, Denver, CO; 10/26/2015, New York, NY; 04/23/2016, New Orleans, LA; 04/28/2016 & 04/29/2016, Philadelphia, PA; 05/01/2016 & 05/02/2016, New York, NY; 05/08/2016, Ottawa, Ont.; 05/10/2016 & 05/12/2016, Toronto, Ont.; 08/05/2016 & 08/07/2016, Boston, MA; 08/20/2016 & 08/22/2016, Chicago, IL; 07/01/2018, Prague, Czech Republic; 07/03/2018, Krakow, Poland; 07/05/2018, Berlin, Germany; 09/02/2018 & 09/04/2018, Boston, MA; 09/08/2022, Toronto, Ont; 09/11/2022, New York, NY; 09/14/2022, Camden, NJ; 09/02/2023, St. Paul, MN;

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  • Options
    mrussel1mrussel1 Posts: 28,709
    nicknyr15 said:
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground. 
    But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo  and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
    You're right, but everyone was implicated in the disaster, certainly not just banks.  Realtors convinced buyers that they needed more house and that equity would only rise.  Brokers pitched these non-traditional loans.  Securities managers bundled them.  Investors bought them.  Everyone made bad decisions.  
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Yes I do.  By that point,  the securities market for mortgages has collapsed. So a lot of the independent lenders were gone.  What they would do is package up loans and sell them in the market,  but they were full of loans that were non traditional and designed for high net worth individuals, instead being used to extend people's buying power.  These were tools like "stated income" , 3 year arms,  5 year arms,  etc. These securities began to default leading to foreclosure, which led to a glut of homes,  no one to buy them.  Then the arms came calling and there was no equity to refinance because home prices were collapsing.  And the income was insufficient was traditional loans,  leading to more defaults. It was a vicious cycle. 

    So by 2011, you were left with traditional banks that can back their loans with their deposits.  That's the traditional method and more conservative.  I'd be curious to know from anyone in the business if those non traditional loans are still being used widely.  I would hope not. 
    I know it very well.  If I had known you could short the houses at the time I would have, the Big Short taught me a lot.
  • Options
    nicknyr15nicknyr15 Posts: 7,873
    nicknyr15 said:
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground. 
    But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo  and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
    Oh I know all
    about it. I was doing mortgages during that time. Seen it go from ZERO DOC to excellent borrowers unable to get a loan. Greed absolutely took over. The shittier the loan, the more we got paid. 
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    mrussel1 said:
    nicknyr15 said:
     alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground. 
    But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo  and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
    You're right, but everyone was implicated in the disaster, certainly not just banks.  Realtors convinced buyers that they needed more house and that equity would only rise.  Brokers pitched these non-traditional loans.  Securities managers bundled them.  Investors bought them.  Everyone made bad decisions.  
    I love telling this story.

    Arizona, 2008.  Looking for a house to rent as I just hit town ready to start a project.  While looking for houses to rent I came across one that was nice and big but a little overpriced on the ask.  Talking to the guy and at this time you would usually get half your note payment, not the whole thing, boy have times changed...

    Anywho I start talking to him and he says he has 3 other houses, I'm impressed.  I ask what he does for a living?  He tells me he drives a forklift for fucking Costco...  Dude makes $15 an hr and has 4 houses.  I knew we were screwed when I heard that.  

    It seemed that this was happening everywhere.

    Went to a new development and wanted to rent.  Guy was some goombah from NY, talked a slick game and was full of shit.  He asked why I would want to throw away all that equity in rent and not buy?  My answer?  Because everything I've read says prices will be falling.

    His slick reply?  "Nah man, I keep reading it's going up."  

    yeah, sure dude...

    I waked out of there.
  • Options
    nicknyr15nicknyr15 Posts: 7,873
    mrussel1 said:
    nicknyr15 said:
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground. 
    But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo  and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
    You're right, but everyone was implicated in the disaster, certainly not just banks.  Realtors convinced buyers that they needed more house and that equity would only rise.  Brokers pitched these non-traditional loans.  Securities managers bundled them.  Investors bought them.  Everyone made bad decisions.  
    Absolutely! I’d call for appraisals and they asked me “what value do you need to make the loan work”? Totally backwards 
  • Options
    mrussel1mrussel1 Posts: 28,709
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    mrussel1 said:
    Could be in that 2% range by end of the year if this continues...




    Doesn't help that the interest rates will still be really damn high...
    It's not high.  I would argue that it's been too low too long.  
    I actually agree on that but when prices of things skyrocketed and don't seem to be coming down that's a problem.

    Average house on Long Island is just stupid...
    But the prices of things are coming down though. That's what the chart is referencing. Still too high, but coming down none the less. 

    Home values on the other hand...
    Gas, sure, houses and cars?  Ain't seen nothin...  I've been wanting a new car for a while but I can't with these damn prices.  It's absurd.
    Home prices aren't really about inflation. 

    Car prices actually went down...so did bacon!
    https://www.cnbc.com/2023/04/12/heres-the-inflation-breakdown-for-march-2023-in-one-chart.html




    Houses are about inflation when the price stays but the interest rate doubles.

    I don't know why NY hasn't got the memo on the price drops yet for the cars?  I'll be sure to let you know when I actually see that happen.


    Well for new homes, yeah, as they're dependent on building supplies and stuff. 

    The fed does not raise or cut mortgage rates. Mortgage rates are indirectly tied to the 10 year treasury note. Generally, mortgage rates are down about .75% in the last 6 months despite the fed raising key rates multiple times in that same timeframe. 
    New homes? Shit, all home , Holmes.

    The mortgage rates are in connection to the fed rates though.  The Fed raised interest rates and gosh darn it, the mortgage rates went up too.
    Yes because the fed funds rate controls the rate at which banks borrow from each other.  So if that goes up,  banks must raise consumer interest rates,  unless they are suddenly into charity lending. 

    Despite the fed raising key rates, what, 3 or 4 times recently, mortgage rates have fallen over the last 6 months.

    I would bet we see rates back to mid 5's by the Fall....and housing prices continuing to rise. This would all be without any rate cuts by the fed. 




    They actually lowered rates because buying came to a standstill.  They had to do something.  It's still not good enough though.
     The fed hasn't lowered rates since early on in the pandemic. They increased rates 5 times during the timeframe in the chart above. 

    If you are talking about mortgage rates-- they dipped during this same timeframe largely due to the bond market. The bond market is basically trying to anticipate what's going to happen long term. Either a recession or successfully taming inflation without substantial job losses will spell good news for mortgage rates because that's an indication that the fed will eventually cut rates down the road in either of those scenarios. Future increases are baked in too. Watch what happens the next time Powell announces a rate increase. If it's the anticipated .25% again, I bet mortgage rates will like decrease slightly. My company is anticipating them to go down this summer. But who the hell knows?!





    Yes Mortgage rates, they went down when the buying stopped.  That is an interesting chart with he Tnotes and mortgages.  I'll have to follow that one too.

    Mortgage rates will have to go down if they want the average person to own a home.
    Banks don't want people to buy homes. Their objective is to lend money at a better NPV vs the next best alternative.  They won't lend if the spread between the discount rate and the market rate is too low. They will do something else with the money.  So the fed rate is critical to the calculation.  When the fed raises the rate,  it's explicitly done to slow lending. 
    Do you remember in oh, 2009-2011 when banks weren't letting people buy houses and unless you had a 900 credit score couldn't get a loan?

    Banks know how to make money for sure.
    Yes I do.  By that point,  the securities market for mortgages has collapsed. So a lot of the independent lenders were gone.  What they would do is package up loans and sell them in the market,  but they were full of loans that were non traditional and designed for high net worth individuals, instead being used to extend people's buying power.  These were tools like "stated income" , 3 year arms,  5 year arms,  etc. These securities began to default leading to foreclosure, which led to a glut of homes,  no one to buy them.  Then the arms came calling and there was no equity to refinance because home prices were collapsing.  And the income was insufficient was traditional loans,  leading to more defaults. It was a vicious cycle. 

    So by 2011, you were left with traditional banks that can back their loans with their deposits.  That's the traditional method and more conservative.  I'd be curious to know from anyone in the business if those non traditional loans are still being used widely.  I would hope not. 
    I know it very well.  If I had known you could short the houses at the time I would have, the Big Short taught me a lot.
    It was a tumultuous time.  I was fairly senior at a very large bank at the time, one that you all know very, very well.  At the time, we were primarily a credit card lender and were just starting to buy regional banks in order to use deposits to securitize the credit cards.  Our mortgage footprint was immaterial.  But because the Asset Backed Securities (ABS) market for mortgages collapsed, the ABS market that we used to securitize credit card loans collapsed as well.  At the time, my wife worked there too and I really thought this bank was in danger of collapsing.  If you can't underwrite new credit cards, then your charge off rate just skyrockets because you don't have new, good loans to offset the bad ones.  So I made my exit.  Fast forward to today, they managed their way through it and are a top ten bank with almost 500 billion in assets.  I was there for 14 years and it was great for me personally and professionally, but I'm glad I left.  My wife ended up leaving within a few years as well. 
  • Options
    tempo_n_groovetempo_n_groove Posts: 39,124
    nicknyr15 said:
    mrussel1 said:
    nicknyr15 said:

    Do you remember the sub-prime mortgage crisis? Oh, from 2007-2010?
    We went from giving people loans who gave us just a name to not giving anyone loans. What a shit show that was. No middle ground. 
    But not for “just because.” The market collapsed, partly due to banks bundling tons of shitty loans into a shittier commodity for Wall Street. Wells Fargo  and many others were paying bonuses for originators to write loans regardless of credit worthiness. Greed took over. Shit doesn’t happen in a vacuum and memories are short. I was refinancing and it was fucking crazy what they were offering me for the top end of the amount. CRAZY. Made me think if I ever wanted to disappear to a low cost of living country……..
    You're right, but everyone was implicated in the disaster, certainly not just banks.  Realtors convinced buyers that they needed more house and that equity would only rise.  Brokers pitched these non-traditional loans.  Securities managers bundled them.  Investors bought them.  Everyone made bad decisions.  
    Absolutely! I’d call for appraisals and they asked me “what value do you need to make the loan work”? Totally backwards 
    Nick this isn't an uncommon story.  I know of brokers not bothering with 10K profits to go after the bigger ones.  My cousin was one writing loans at the time and wouldn't do any of the stupid ones that everyone was pushing. People thought he was NUTS for not writing them up.  

    Free money is what they called it.
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