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Next stop: Recession (pg. 2)
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| 2tall |
heh, just got back into BA (Boeing)...
i'm far from a panic, but i just need to find a few hours to sit down and read some analysis/research/news |
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| ninetyninej |
| quote: | Originally posted by naeblis
^^ Agreed! Buy low sell high, if you didn't already sell out back when we were up 14% for the year, it is probably not advantageous to sell out now, only to buy higher later. I say it's just jittery investors. The reason housing prices have decreased now, is TOTALLY different than the reasons during the great depression. It's people reporting news and making things sound bigger than they actually are. Investors are just too jittery imo... |
Very true, but things are as bad as they are being portrayed. In fact everyone has been in denial and everything happening now should've happened nearly a year ago.
Now what we have is a true liquidity crisis, which means all these lenders that sell loans on the secondary market, packaged up as mortgage backed CDOs aren't able to sell them. (for good cause because they are toxic waste and are backed by loans that should not have been given out, and the CDOs aren't performing and foreclosures are rising incredibly fast)
This is main reason you see all those lenders on that imploded list that closed their doors and/or filed Chapter 11 BK. The bad news is that all those borrowers that maybe should not have been give loans to buy homes and/or refi, now need to refi out of adjustable loans that jumped up already or will within the next year. No lenders will let them refi because guidelines got wayyyyyy too tight and rates jumped up a stagering amount in the last month due to the fact that no one will buy the loans on the back end. So whats left is most people will have no choice but to foreclose or short sale their home because they can't afford the new soaring payment and all the lenders turned their backs on them. This will cause homes to drop another 20% in the next year or two.
We are in for a verrrry difficult couple years. And an economic depression (simply meaning that the looming recession lasts for 3 or more quarters) is possible despite the differences of the Great Depression. |
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| djGT |
| quote: | Originally posted by naeblis
^^ Agreed! Buy low sell high, if you didn't already sell out back when we were up 14% for the year, it is probably not advantageous to sell out now, only to buy higher later. I say it's just jittery investors. The reason housing prices have decreased now, is TOTALLY different than the reasons during the great depression. It's people reporting news and making things sound bigger than they actually are. Investors are just too jittery imo... |
Maybe the prices are decreasing because there's an affordability problem? Maybe the people that bought in the last few years shouldn't be given a loan in the first place, driving up all the prices? I could be wrong though.
http://blogs.ocregister.com/lansner/
O.C. MEDIAN PRICE $640,000 for all of July 2007
To put things in perspective, it wasn't too long ago that my girl's parents bought their house right next to South Coast Plaza for 300K in 2000 (before the bubbaly bubbaly boo). It's probably now "worth" over 700K. Yeah, their incomes have gone up that much. :eyes:
Anyone remember the last downturn in the early 90's to mid 90's? I don't, I was too busy with homework and stuff. But reading back, it looks oddly familiar to what's happening now, except this time, prepare for a steeper rollercoaster ride! :wtf: |
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| naeblis |
Not get nitpicky about verbage, but I don't necessarily characterize this downturn as a 'depression'. When people hear depression, they think of the abysmal conditions people were facing in the 30's. We don't even know if this is going to be a recession, yet alone a depression.
GDP is still up, see: http://www.bea.gov/national/nipaweb...r=2007&Freq=Qtr
As far as unemployment read: http://www.bls.gov/news.release/empsit.nr0.htm
Maybe the effects haven't hit? The market is notoriously over emotional at times, and so I guess I will wait and see how it plays out... I think it is far too early to be crying depression, or anything like that. |
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