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Originally Posted by emilybh
We can thank the Federal Reserve for the declining purchasing power of the dollar it if the truth be told.
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The central bank has nothing to do with it.
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Originally Posted by Had2SaySumthin
The smart thing to do is buy as many homes as you can possibly afford. We've hit bottom, and we're poised to see sizable growth over the next 3 to 5 years.
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That would be wrong.
As I said 6 months ago, your housing market is in the gutter for the rest of the decade, and about a month ago, dozens of market analysts and economists finally agreed with me.
From: 10-01-2011, 12:04 PM
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Originally Posted by Mircea
Am I freaking awesome or what?
You can spin it anyway you want, but the numbers don't lie. All the numbers I've been playing with for the last several years all said the same thing, no recovery in the housing market until at least 2020.
Housing Prices Unlikely to Recover Before 2020, FICO Survey Finds
73% of bankers surveyed see elevated level of mortgage foreclosures for at least five years
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MINNEAPOLIS—September 30, 2011—FICO’s latest quarterly survey of bank risk professionals offered a decidedly pessimistic outlook, reversing the growing optimism seen in late 2010 and early 2011. The survey, conducted for FICO by the Professional Risk Managers’ International Association (PRMIA), shows that bankers expect delinquencies on consumer loans to rise, underwriting standards to become stricter, and the housing sector to continue struggling far into the future.
No recovery in sight for beleaguered housing sector
When asked if housing prices nationally would climb back to 2007 levels before the year 2020, 49 percent of respondents said no. By comparison, 21 percent said yes. And the negative sentiment extended beyond property values. Among bankers surveyed, 73 percent believed mortgage defaults would remain elevated for at least five more years. Furthermore, 46 percent of respondents expected mortgage delinquencies to increase over the next six months, and only 15 percent of respondents believed mortgage delinquencies will decline during that period.
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Housing Prices Unlikely to Recover Before 2020, FICO Survey Finds
Also:
CNBC Mobile Home
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Fannie Mae Seeks $5.1 Billion More From Taxpayers
Mortgage finance giant Fannie Mae said it would ask for an additional $5.1 billion from taxpayers as a weaker housing market causes continued losses on loans made prior to 2009.
The largest U.S. residential mortgage funds provider on Friday also reported a second-quarter net loss attributable to common shareholders of $5.2 billion, or 90 cents per share.
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Fannie Mae Seeks $5.1 Billion More From Taxpayers
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Originally Posted by hnsq
We haven't hit bottom with the housing market...nowhere near it.
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Not even close. It will get worse.
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Originally Posted by mhouse2001
We are in uncharted territory. To rely on history to determine the future is not wise.
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Okay, but you can learn from history.
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Originally Posted by emilybh
The problem is your investments in stocks are still denominated in dollars. If the dollar becomes worthless, so are your investments. That is why we need to END THE FED (LIKE YESTERDAY!)
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Your Dollars will not become worthless. And you want to replace the central bank with what, exactly? The same Congress that spent all of your Social Security Trust Fund and who buried you in debt?
Oh, that's brilliant. The central bank does exactly what every central bank in the world does, mostly fix your mistakes.
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Originally Posted by mhouse2001
You can't deny that the economy is designed to keep the poor in poverty and the rich wealthy.
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You most certainly can deny it, especially if you live in reality and are not tripping on Orange Barrel.
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Originally Posted by mhouse2001
There's no real mobility except in extreme cases and the "hard work" ethic might as well be considered a lie.
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Fair enough. There is mobility, but it has become very difficult of late. That has nothing to do with anything other than the world is changing (for the better).
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Originally Posted by mhouse2001
We have surrounded ourselves with the illusion of wealth but are poorer overall.
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Impressive.
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Originally Posted by mhouse2001
Today, two incomes are necessary and our savings rate is negative.
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No, two incomes are not necessary. It only appears that they are necessary, in order to live your illusory life-style. You live in a disposable society, even though it isn't necessary. Most of your wealth you squander and fritter away on disposable items that are totally unnecessary.
If you're going to spend $5.95 buying Cholorx Brand Orange-scented Kitchen Wipes With Aloe and Anti-Bacterial Agent every week, then you're throwing away money, because you could buy 3 cloths for $0.99 and use them for several years.
That is a mere one example out of more than 100 examples I could give where you literally throw away your money.
And then you have the unmitigated gall to whine and cry that you have no money. You have more than enough money, you just don't know how to use it to your advantage.
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Originally Posted by Randomstudent
Investing in the stock market more? Are you joking.
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I rarely do stocks, but I told someone to buy Chiquita when it was $0.03/share.
It closed yesterday at $8.91/share.
Just think, if you bought $1,000 worth of shares you'd have $297,000 right now.
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Originally Posted by hnsq
House sizes have increased.
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Uh, no.
An increase would be like 1,400 sq ft to 1,700 sq ft.
We're talking about McMansions that have nearly doubled and tripled in size. 15 years ago my father bought a brand new home and it's 2,400 sq ft. The McMansions in the next subdivision over are 4,100 sq ft. That's really outrageous. What a waste of resources.
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Originally Posted by hnsq
The average number of cars per household has increased.
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1974 I believe was the year that 51% of households had two cars. The "two car family" was a big deal, almost as big a deal as having your own private phone line instead of sharing a party-line.
4-5 cars is "normal" now, but is it necessary? No, absolutely not. I ride the bus through McMansionville and there's a family of 3 with 5 cars. And the kid isn't even 16 yet. His and her SUVs and his and her sports cars and then the "family car."
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Originally Posted by emilybh
All you need to look at is the change in the purchasing power of the dollar which is what this site shows over time to see that I'm right.
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You're wrong, and without the Federal Reserve, you wouldn't be on the internet. You wouldn't have cell-phones either.
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Originally Posted by hnsq
I am not contesting the fact that the establishment of the FED and removing the gold standard was a poor economic choice.
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You can't have credit cards or credit and the gold standard.
The reason you have credit cards and you can buy a home with 0%-20% down and buy a car with nothing down and pay for it for 72 months is because you have fractional reserve banking. On the gold standard, your money supply can grow if and only if the value of gold rises or you acquire more gold.
Very little credit, and what credit exists comes with an exorbitantly high interest rate.
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Originally Posted by stan4
That's fine. It's the worst drop because the american middle class has been living in a fake wonderland of riches WAY above their means. Many of them still are. They have an effed up idea of what is a want and what is a need.
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That is the precisely the case.
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Originally Posted by hnsq
Your last line is complete bulls**t. Many people CAN afford to buy that 900 sqft home, but they want to live in the 3000 sqft house in the suburbs instead, and they go deep into debt to do it.
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That is correct.
What were once luxuries are now "necessary vices" so cry the Jones'.
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Originally Posted by emilybh
People buying foreclosures are taking advantage of others misfortunes that happened as a result of the banksters taking advantage via the blessings of the Federal Government ie Bill Clinton and Barney Frank... and all of that was CAUSED by the Federal Reserve artificially trying to manage the market.
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Not really. People weren't buying homes and then being foreclosed 6 months later. People were buying homes, and then after 5-10 years they were using the equity to get "credit card debt consolidation" loans, ie a 2nd Mortgage and some even a 3rd Mortgage.
A default on the 3rd Mortgage is the same as defaulting on the 1st Mortgage.
Quote:
Originally Posted by emilybh
Take the Federal Reserve and the Federal Government out of the equation, and the interest rates and housing prices would settle where they are supposed to be by Free Market forces and the market would THRIVE like it did 100 years ago before they established the Federal Reserve.
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Not necessarily. Even when the Prime Rate was 13% back in the late 1970s and early 1980s, banks were still offering mortgages in the 4% to 6% range.
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Originally Posted by BigJon3475
You haven't even seen real inflation yet. You've seen cost inflation rise due to a number of different reasons but real inflation isn't one of them.
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That is absolutely right.