Comments on: Tucson Foreclosures and The Subprime Buyers http://www.tucsonazrealestateblog.com/tucson-real-estate-market/tucson-foreclosures-and-the-subprime-buyers/ & What it is like living in Tucson Thu, 09 Feb 2012 01:34:28 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: bobby joehttp://www.tucsonazrealestateblog.com/tucson-real-estate-market/tucson-foreclosures-and-the-subprime-buyers/comment-page-1/#comment-639 bobby joe Wed, 16 May 2007 16:40:42 +0000 http://www.barbaralasky.com/tucson-real-estate-blog/tucson-real-estate-market/tucson-foreclosures-and-the-subprime-buyers/#comment-639 The point is that they are up. The toxic mortgages sold to the class of 2005 and 2006 haven't reset yet. That train wreck will unfold over the next two years. Look at this graph: http://bp2.blogger.com/_OjftCEBUcYQ/Rg_pWDJZi-I/AAAAAAAAAYc/ZUV-Ea1drv8/s1600-h/credit_suisse_reset_sced_edit.PNG What does that data suggest to you? I know what it means, and as much as I would like to look at it with rose glasses... I can't. It's not different here... it never is. We are a BIG city now Dave... we are not immune to BIG city problems that can be traced through national trends. Heck, Phoenix is only an hour point five away... the poster child of the bubble they are. 55K+ homes on the market and rising. How long can people hold on before they absolutely have to ditch the home? How will they ditch the home if no one is buying? Foreclose or Drastically reduce the price? Ben Bernake has the answer to those questions and he is pinned on the ropes between two Mayweather's. He can raise the interest rate and attempt to head off the supply shock, or he can lower the interest rate to help create a demand pull. In either scenario he has to take the Macro economy into account; the dollar, bonds, inflation and the myriad of other economic factors. An interest rate increase to stave off inflation would sink the housing market. The only thing going for the Housing market right now is a large inventory to choose from and a low interest rate. An interest rate decrease would send inflation to the moon. The dollar is weak right now and a further devaluation will turn Walmart into a high end retailer. What has the FED done this year? Nothing, which is bad for several reasons. One, they can't make a move because of the negative implications in either direction due to; cause and effect. If they act one way it will have a negative effect in the other direction. Two, a neutral move suggests that the FED isn't ready to sink the ship in either direction. They want one end to sink first, so they can counter the sinking portion with ballast to keep the whole economy afloat a while longer. The FED has been warning of increased inflation for the last two quarters. Retail sales just took a massive hit to earnings and the price of gas is high again. We'll see which direction the FED goes, but the ship is sinking and they have have to make a move sooner or later. The point is that they are up. The toxic mortgages sold to the class of 2005 and 2006 haven’t reset yet. That train wreck will unfold over the next two years.

Look at this graph:
http://bp2.blogger.com/_OjftCEBUcYQ/Rg_pWDJZi-I/AAAAAAAAAYc/ZUV-Ea1drv8/s1600-h/credit_suisse_reset_sced_edit.PNG

What does that data suggest to you? I know what it means, and as much as I would like to look at it with rose glasses… I can’t. It’s not different here… it never is. We are a BIG city now Dave… we are not immune to BIG city problems that can be traced through national trends. Heck, Phoenix is only an hour point five away… the poster child of the bubble they are. 55K+ homes on the market and rising.

How long can people hold on before they absolutely have to ditch the home? How will they ditch the home if no one is buying? Foreclose or Drastically reduce the price? Ben Bernake has the answer to those questions and he is pinned on the ropes between two Mayweather’s.

He can raise the interest rate and attempt to head off the supply shock, or he can lower the interest rate to help create a demand pull. In either scenario he has to take the Macro economy into account; the dollar, bonds, inflation and the myriad of other economic factors.

An interest rate increase to stave off inflation would sink the housing market. The only thing going for the Housing market right now is a large inventory to choose from and a low interest rate. An interest rate decrease would send inflation to the moon. The dollar is weak right now and a further devaluation will turn Walmart into a high end retailer.

What has the FED done this year? Nothing, which is bad for several reasons. One, they can’t make a move because of the negative implications in either direction due to; cause and effect. If they act one way it will have a negative effect in the other direction. Two, a neutral move suggests that the FED isn’t ready to sink the ship in either direction. They want one end to sink first, so they can counter the sinking portion with ballast to keep the whole economy afloat a while longer.

The FED has been warning of increased inflation for the last two quarters. Retail sales just took a massive hit to earnings and the price of gas is high again. We’ll see which direction the FED goes, but the ship is sinking and they have have to make a move sooner or later.

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