166,000 new jobs doomers on the run
- Thread starter Topspin
- Start date
I'm laughing so hard right now. I don't know how Topper does it, but he one-ups himself every time.
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The Almighty
translation....
166,000 new jobs were reported this morning, the gloom and doomers on the run to be the first off that bandwagon.
reality...
166k new jobs is insignificant to the big picture right now...and that is continued pressure within the housing market due to ever increasing foreclosures and slow downs in many major markets within the US. Something that should continue to trend negative throughout 2008, putting further pressure on the Fed. The Fed will continue to pump cash into the market and understate inflation in the hopes of righting the ship of perception.
The economy as a whole is still strong, despite the problems within the financial sector. But we are far from out of the woods yet. Despite toppers one liners.
166,000 new jobs were reported this morning, the gloom and doomers on the run to be the first off that bandwagon.
reality...
166k new jobs is insignificant to the big picture right now...and that is continued pressure within the housing market due to ever increasing foreclosures and slow downs in many major markets within the US. Something that should continue to trend negative throughout 2008, putting further pressure on the Fed. The Fed will continue to pump cash into the market and understate inflation in the hopes of righting the ship of perception.
The economy as a whole is still strong, despite the problems within the financial sector. But we are far from out of the woods yet. Despite toppers one liners.
Generally speaking the market is very healthy if u look back like 50years trend. No this is not the golden era tech boom 90's but things are humming along.
The whole lending practice debacle causing all these foreclosures seems to be small enough that its being absorbed back without utter devastation that people predicted.
The whole lending practice debacle causing all these foreclosures seems to be small enough that its being absorbed back without utter devastation that people predicted.
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The Almighty
Chap.... the only reason... and I do mean only reason that the housing problems have not been as bad as predicted is due to the Fed pumping billions into the financial sector to stem the tide. The problem lies in whether or not they can continue to do so with all of the ARMS and interest only loans that will be resetting over the course of the next year.
If they continue to do so, the dollar will continue to decline in value and eventually it will come back and bite us in the ass. Which is why we were talking the other day about continuing to own gold.
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The Almighty
To be clear... I do not think we are going to fall into the severe recession some are predicting, but I do believe we will see a further decline in the dollar that will not likely reverse trend for the next year. The economy outside of the financial sector should stay strong enough to counter-balance most of the negative effects we will see from the financials.
Keep in mind one last thing.... almost all of the CDO debt held by banks and other financial institutions is sitting on their books without having been priced to market since early March. IF they start pricing that debt to market.... then you will see the decline in financials that everyone has been predicting.
Keep in mind one last thing.... almost all of the CDO debt held by banks and other financial institutions is sitting on their books without having been priced to market since early March. IF they start pricing that debt to market.... then you will see the decline in financials that everyone has been predicting.
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The Almighty
yes, those with good credit can still get good fixed rates, but for the most part the people with ARMS and interest onlys are the ones that couldn't qualify for a fixed to begin with because they bought more home than they could afford. Many of those ARMS and I-only loans were issued when the Fed Funds rate was below 3%. So unless the Fed dramatically lowers rates, those loans will reset higher.
By the way... the rates on mortgages are more of a function of credit availability and credit rating. Take a look at current rates....
Right now the national average on a 30 year fixed is 6.1% APR. For the 15 year fixed it is 5.85%. Both nice rates. But the 5 year arm on average.... 6.62%.... HIGHER than the 30 and 15.
I know.. why on earth would an individual buy more house then they can afford?
Thorn
Member
Because they've been conditioned, largely by the media, to want that and to believe that they are entitled to it. On the other hand, they've never been schooled in fiscal responsibility, which would be at odds with what they want. The credit industry has behaved with shocking irresponsibility; I couldn't believe that some of their practices were actually legal, but they are.
Many people were stupid enough to fall for the offers of easy credit, equity loans, interest-only mortgages, etc., without considering anything in the future. Sad, but it's their own fault.
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The Almighty
Because we are a nation of "keeping up with the jones". Too many people want to buy all the name brands, want the bigger homes and cars etc... for the "status". In times of low interest rates it is too damn tempting for many to resist borrowing more than they should. That coupled with unscrupulous activities by lenders led us into this mess.