The Coming Boom
What do you guys think? Looks like a Motley Fool writer may be trolling the boards.
"The new boom will be driven by three things: A rebound in housing construction, the rise in domestic energy production, and the end of consumer debt deleveraging."
http://www.fool.com/investing/genera...ming-boom.aspx
The housing market needs further clearing...it's flooded and prices are still "too damn high."
I do like that household debt is declining (marginally). This has more to do with hard-learned lessons of the recent past and better personal finance decisions at the individual and family levels. I do not argue that lower household debt is genuinely healthy for the economy but I do not foresee any booms being spurred from it. Plus if housing construction continues to "rebound" the financing must come from somewhere. More than likely this will mean more household debt.
The term Economic "boom" itself does not denote healthy and sustainable growth in the economy. Rather it describes one half of the business cycle, which is an all around detrimental creation.
And the bust will certainly follow.Originally Posted by Jordan
How do you see housing construction rebound ? Banks will not be lending anymore in the next few years than they have in the last few, I imagine . Unemployment should start rising in Jan. .......
OMISSION: Artificial Scarcity from REO inventory held off the market to artificially boosting prices
As many as 90 percent of REOs are withheld from sale, according to estimates recently provided to AOL Real Estate by two analytics firms. It's a testament to lenders' fears that flooding the market with foreclosed homes could wreak havoc on their balance sheets and present a danger to the housing market as a whole.
SourceAnd why wouldn't banks do this? They're being paid by the Fed to park their reserves, and have all the stay power in the world, and no incentive to do anything but sit on it all in an attempt to create, inflate, and milk, a new artificial bubble. The falling prices that would normally have come about naturally, and would have created real opportunities and incentives for millions, is being artificially propped up--to keep the bubble illusions, including all ARTIFICIAL WEALTH, alive.The Great Housing Swindle: Shadow REO Artificially Boosting Prices
Earnings reports from JPMorgan Chase and Wells Fargo have highlighted the improving housing market, and this has boosted their stock price.
And there are growing indications that this is all based on a convenient fiction around artificially reduced supply. A little-noticed item at AOL Real Estate, based on the same industry data banks and analysts use to tout a recovery, introduce us to the scam in “shadow REO”...
One of the main reasons for the alleged recovery in housing prices comes from this constraint on supply. With fewer and fewer homes on the market, the bidding for what’s left available goes higher. Prices rise and distressed sales fall (because the distressed sales are kept off the market). There are other factors, but shadow REO of up to 85-90% is a huge one that doesn’t play into most analyses.
We appear to have banks keeping inventory off the market deliberately to gouge prices upward and give the impression of recovery. And so far it’s actually working.
MEANWHILE -- San Bernadino County has those who are enriched by Shadow REO scam very worried. Developers love eminent domain when it forces a cheap sale price onto one of its many victims, and all for the purpose of increasing real estate values through development. They justify this to the state by all the "economic activity" (and increase revenues to the state) that will result. They're not so keen on the idea of eminent domain, however, when their own real estate is targeted for that very same reason.
Note that last incredibly disingenuous quote. Mortgage values adjust to deflated property values, which allows over-valued real estate to finally adjust, and somehow that gets equated to a loss of SAVINGS(?!) for bank depositors? And a correction in real estate values is supposed to adversely affect those who are saving for a home HOW, exactly?REAL ESTATE: Industry event explores eminent domain
San Bernardino County has created a joint powers authority to explore a proposal to hire a private venture to wrest privately-held mortgages out of investment pools, so homeowners who owe more on their property than it’s worth can refinance or modify their loans.
....
“If they do this, there’d be a $35 million gain” for the San Bernardino County Joint Powers Authority, Herrera said, commenting: “It’s the first time that we’ve heard that the government agency, partnering with Mortgage Resolution Partners, would receive a financial benefit.”
....
Inland economist John Husing said he believes the concept needs to be vetted.
He’s intrigued by the ferocity of the attack from lenders on Wall Street over a strategy based on lowering the loan-to-value ratio on the mortgages. “It makes me wonder if they really want to see the numbers come down,” Husing said.
Dorfman on Wednesday warned that a government-led takeover would trigger a backlash from investors around the world who have bought trillions of dollars worth of privately-backed mortgages.
“The losers are tens of millions of American families and workers who deposit money in local banks or global banks, who have 401(k)’s in retirement plans or are saving for a down payment to acquire homes,” he said.
Maybe , it is just me , but I am thinking all this "boom" stuff is the biggist bunch of hokey crap I have ever heard......
It's not just you. What I see is some people are booming and a lot more people are busting.
They get one quarter of one percent to leave money parked with the Federal Reserve. If they issue a mortgage they can get over three percent. Which would be a better return and incentive for what to do with their money?And why wouldn't banks do this? They're being paid by the Fed to park their reserves, and have all the stay power in the world, and no incentive to do anything but sit on it all in an attempt to create, inflate, and milk, a new artificial bubble. The falling prices that would normally have come about naturally, and would have created real opportunities
Freedom is a state of mind. Nobody can take that from you unless you let them.
but but but but... that's the way it's supposed to work!
I can't tell you how often I hear that retort... like I wrote the other day I think we're never going to see a boom like the 90s ever again. They're going to have to reform the currency before we get there...
Proud member of the Silver Liberation Army
This is three threads by the same person purporting the same nonsense within a week.
http://www.ronpaulforums.com/showthr...-Economic-Boom
http://www.ronpaulforums.com/showthr...e-Looks-Bright
And this makes three.
These thoughts and false indicators have been adequately refuted each time. I appreciate the alternative perspective and time it took to present but now is not the time to be cheer-leading for the status quo.
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