HOUSE PRICES FALLING ! FORECLOSURES ! RETURN OF CRACK DENS

[AbdiWahab252]

Coming to a neighborhood near u.

The price of houses and foreclosures has increased in my neighborhood.

This is looking bad for everyone who got those shady Subprime Mortgages and can't pay them.

On the positive side, buyers will have a lot of choices.

I just would hate for the returns of Crack dens in abandoned homes !

[DerbiJiiF]

Federal Reserve cuts 0.5 on discount rates four days ago, and today major four banks barrowed 500 million each from Fed. In a normal circumtances if one bank do that , it signales it has financial troubles and its stock falls. There is plenty of liquid on the market, so there is no worries, and eventually market adjustments will follow. The only problem that might follow is a housing sector that has created 1.3 million jobs will be slashed to half.

Any construction worker in here? hmmmm sell your big truck before it is too late.


Derbi,

[Steeler [Crawler2]]

I'm buying in Thailand. Great weather, cheap real estate, hot chicks. Do you need more?

[AbdiWahab252]

MAD,

Hell no.

Were u living in the Boston area during the real estate crash of the late 1980s ? How bad was it ? How much did housing prices fall by ?

Its interesting because the market in Beantown has always been very high.

[Padishah]

The situation, and the Federal Reserve's actions remind me of Weimar Germany to a tee.

[Steeler [Crawler2]]

Weimer Germany??? Are you kidding??? The inflation rates in Weimer Germany were unbelievable!!! Weimar Germany was a state that had a new and immature political system................there are no comparisons whatsoever.

"MAD,

Hell no.

Were u living in the Boston area during the real estate crash of the late 1980s ? How bad was it ? How much did housing prices fall by ?

Its interesting because the market in Beantown has always been very high."

I was at University then in Vermont. I didn't really pay much attention to it, but my parents did profit from it by purchasing a house on the beach on Cape Cod. They bought it for 19,000 and it is now valued at over 250,000.

[Padishah]

Think of the events that LED to Weimar Germany's hyperinflationary nightmare.




Here's a sketch:

Germany's Reichsbank literally poured money into the German economy, starting in 1914 and then accelerating in earnest in 1919, both directly and by letting all true German street banks create money through lending and fractional-reserve banking. Just like America today.

The German government was run for the internationalist purposes of its Banker masters, leading to an inflationary economy, decreasing morality and so many other indicia of America today. So much money was created that the amount in foreign hands lent itself to international speculative short selling of the Mark. Just like America today.

Germany's tipping point came when a critical mass of the Mark enabled the foreign speculation. The speculative short selling, soon to begin with American dollars, marked the beginning of Germany's inexorable march into hyperinflation.

Between 1914 and 1919, the value of the German mark versus the American dollar fell from 4:1 to 8:1 (25 cents to about 12 cents), a decline of 50% in just five years.

Now, consider the fact that, between 2002 and 2006, also a span of just five years, the American dollar fell 50%, as well, during which time average American wages actually fell slightly in unadjusted dollars (thus, a halving of the American standard of living, but for the real estate bubble that enabled Americans to use home equity as a source of funds).

It was at just the point America finds herself today that Germany reached her economic tipping point: the Reichsbank opened the monetary floodgates (just as the Fed did within the past week) and the Mark began to spiral out of control into hyperinflation.

One year later, during 1920, the Mark was worth but 2 cents (50:1). In 1921, the Mark brought slightly more than one penny (100:1). In 1922, true hyperinflation set in and it took 1000 Marks to buy a single American dollar. In 1923, with the end in sight, the ratio quickly soared from 18,000:1 to 4 trillion Marks to 1 dollar!

[Grant]

Padishah,

Hitler ended the fiscal mess of the Weimar republic by creating a new currency based on the value of German labor and products, rather than the gold that backed the Republic's funds, which was tied up in reparations because of the first WW.

Real estate is a hedge against inflation and an excellent investment in an inflationary market. It is a bad investment only in a deflationary or falling market, or if you become unable to make the payments.

We sold two small houses at the top of the market and bought our current house in 1991. The price was 225 and we put 80 into remodeling it. After that the market collapsed and at one point the assessed value was down to 146. The price has been rising since about 2000, and, in spite of the market and a surplus of new housing in this area, is well above 600.

At this point virtually all that value is ours and forms a major portion of our retirement assets.

My opinion is that single folks are better off renting. But once you settle down, begin accumulating "stuff" and the responsibility of a family, the stability and investment opportunities of home ownership become desireable.

Keeping in mind that it took us nearly ten years to turn a profit I would certainly not get involved in any "creative" financing or variable interest rates.
We were able to lock in a fixed 5.25 % several years ago and are now doing OK.

Of course, we do not have religious concerns over ribca and have only had to worry about getting a good deal. The deductibility of the interest has been useful. We use a credit line to the equity rather than credit cards, so are also able to write that interest off. If you are careful to keep the amount low or paid off, it does help keep you ahead.

Someone said in another post that "usury" was old English for "interest". This is not exactly true. "Usury" means excessive or unlawful interest and comes from the same root as "usurp", which means to "take and hold by force or without right". While admitting that "interest" does include a lender's profit, the concept also compenstes for inflation and deflation to create a more constant value for money, the buying power of which does change even from day to day. So interest is not the problem that usury is, and they should NOT be equated.

[AbdiWahab252]

Grant,

5.25 % thats good.

I got 2 loans out at 4.8% and 5.0%.

The whole riiba thing to me is not an issue. I am opposed to usury not interest.

[Steeler [Crawler2]]

"Germany's Reichsbank literally poured money into the German economy, starting in 1914 and then accelerating in earnest in 1919, both directly and by letting all true German street banks create money through lending and fractional-reserve banking. Just like America today."

Not just like America today. America today has FAR MORE real reserves that are not constrained. Also, Many countries have their economies teathered to America's and are holding American currency reserves for security. They will do anything to prevent massive devaluation of the dollar, as it would destroy their economies...........China, India, the EU...........can not afford that to happen.

"The German government was run for the internationalist purposes of its Banker masters, leading to an inflationary economy, decreasing morality and so many other indicia of America today. So much money was created that the amount in foreign hands lent itself to international speculative short selling of the Mark. Just like America today. "

The German government was never run for "Internationalist purposes for their Banking Masters." This is nonsense. OBVIOUSLY international banking has a major impact on any economy (as if there were some alternative) but Germany made it's foerign policy decisions based on a series of perceived threats, and it is the war that buried the German economy and nothing else.

"Germany's tipping point came when a critical mass of the Mark enabled the foreign speculation. The speculative short selling, soon to begin with American dollars, marked the beginning of Germany's inexorable march into hyperinflation."

You don't have foreign speculation on an unstable currency. Nobody buys currency that is losing value and this is not what happened in Germany. The huge reperations bills were causing the massive imbalance in the German economy that devalued the Mark. Not speculation.

"Between 1914 and 1919, the value of the German mark versus the American dollar fell from 4:1 to 8:1 (25 cents to about 12 cents), a decline of 50% in just five years."

That was tied to the war. The French Franc fell the same, as did the British pound.

"Now, consider the fact that, between 2002 and 2006, also a span of just five years, the American dollar fell 50%, as well, during which time average American wages actually fell slightly in unadjusted dollars (thus, a halving of the American standard of living, but for the real estate bubble that enabled Americans to use home equity as a source of funds)."

The dollar has fallen about 25%, not 50%, against international currencies. Believe me, since I live overseas, I am very aware of the dollar and its loss of value. However, that depreciation was driven by the market and is due directly to the trade imbalances we see right now. The loss of value for the dollar was tied absolutely to the imbalance in trade and nothing else.

"It was at just the point America finds herself today that Germany reached her economic tipping point: the Reichsbank opened the monetary floodgates (just as the Fed did within the past week) and the Mark began to spiral out of control into hyperinflation."

Interesting that this week the dollar gained in value against most major currencies (including against the Thai Baht). That's because the Fed did not "open the flood gates" which is hyperbole in the extreme.

"One year later, during 1920, the Mark was worth but 2 cents (50:1). In 1921, the Mark brought slightly more than one penny (100:1). In 1922, true hyperinflation set in and it took 1000 Marks to buy a single American dollar. In 1923, with the end in sight, the ratio quickly soared from 18,000:1 to 4 trillion Marks to 1 dollar!"

Sounds like the Somali Schilling of today. Look, a total economic collapse isn't going to happen, so relax. You are not going to be out on the street tomorrow. The problem is really, at its root, the trade imbalance. And once that is dealt with, the dollar will stabilize. The world is not coming to an end.

[Megatron]

Interesting debate. And to think, these idiots want MAC banned.