http://nostradoofus.com/2008/01/29/view-from-the-armchair/ armchair futurology and stuff. Sat, 26 Jun 2010 04:35:18 +0000 http://wordpress.org/?v=2.8.4 hourly 1 http://nostradoofus.com/2008/01/29/view-from-the-armchair/comment-page-1/#comment-10 arroyogrande Tue, 29 Jan 2008 07:15:00 +0000 /2008/01/29/view-from-the-armchair#comment-10 I agree...you can lead a horse to credit, but you can't make him drink. I'd be willing to bet that we are getting close to the "pushing on a string" phase, if we are not already there. Although I can't really imagine we would go into a deflationary period, that feeling isn't from an academic sense; it's just that I've never seen a period of sustained deflation, so the notion sounds strange. We will see...if we see deflation, we'll in theory have a chance to refinance our fixed rate mortgages into an even lower rate, and hang on hoping that wage deflation doesn't make the monthly payments impossible. If we get wage deflation, all bets are off, as all forms of real estate will crash into an economic crater the likes of which haven't been seen before...if house prices rose are currently too high vs. incomes, just think what the *nominal* house prices would be with deflated [more buying power] dollars. I agree…you can lead a horse to credit, but you can’t make him drink. I’d be willing to bet that we are getting close to the "pushing on a string" phase, if we are not already there. Although I can’t really imagine we would go into a deflationary period, that feeling isn’t from an academic sense; it’s just that I’ve never seen a period of sustained deflation, so the notion sounds strange. We will see…if we see deflation, we’ll in theory have a chance to refinance our fixed rate mortgages into an even lower rate, and hang on hoping that wage deflation doesn’t make the monthly payments impossible. If we get wage deflation, all bets are off, as all forms of real estate will crash into an economic crater the likes of which haven’t been seen before…if house prices rose are currently too high vs. incomes, just think what the *nominal* house prices would be with deflated [more buying power] dollars.

]]> http://nostradoofus.com/2008/01/29/view-from-the-armchair/comment-page-1/#comment-11 arroyogrande Tue, 29 Jan 2008 07:15:00 +0000 /2008/01/29/view-from-the-armchair#comment-11 Chris Dodd, the chairman of the Senate Banking Committee, is now "floating the idea" of creating a new "Home Ownership Preservation Corp." to buy troubled mortgages and place the borrowers in less costly, refinanced loans and that this proposal should get "serious consideration". In inflation adjusted dollars, we are already spending what it cost to bail out the savings and loan industry on just the "stimulus package". Putting the taxpayer at risk for a massive amount of bad loans in order to keep people in houses that they could not realistically afford by creating a "Home Ownership Preservation Corp." is just crazy. - arroyogrande Chris Dodd, the chairman of the Senate Banking Committee, is now "floating the idea" of creating a new "Home Ownership Preservation Corp." to buy troubled mortgages and place the borrowers in less costly, refinanced loans and that this proposal should get "serious consideration". In inflation adjusted dollars, we are already spending what it cost to bail out the savings and loan industry on just the "stimulus package". Putting the taxpayer at risk for a massive amount of bad loans in order to keep people in houses that they could not realistically afford by creating a "Home Ownership Preservation Corp." is just crazy. – arroyogrande

]]>