Gold down %10,Oil down %10,US Dollar is bouncing...The Fed is DONE lowering

General Real Estate Investing
21

Roger,

I don’t get ANY of my economic data from the WEB sites YOU suggest.
I simply remembered that nit wit NAR economist being fired for consistantly making the same predictions YOU make. I GOOGLED his name for my post so OTHERS here could read it, and THAT is how that site came up. The fact that the news of his FIRING was on that site doesn’t mean a thing. The FACT is, he was so out of touch with reallity that the NAR had NO CHOICE but to let the dope go. I can give you 100 other sites that carried the EXACT same story word for word.

Here’s a source that EVEN YOU can’t argue with ROGER…

www.amazon.com/Are-Missing-Real-Estate-Boom/dp/0385514344

It’s FORMER NAR ECONOMIST, David Lereah’s, 2005 Book!!! Read why Dave thinks Real Estate will continue to appreciate right through the end of the DECADE and the BOOM won’t BUST!!! :shocked
THE BEST part is… The book was written in 2005!! THE VERY PEAK OF THE MARKET!!!

G e n i u s a t W o r k !!!

In case anyone needs to be told…If you did THE EXACT OPPOSITE of what this DOPE suggests in his book, you would have walked away from this bust without a scratch!!! If you FOLLOWED his advice, YOU ARE NOW SCREWED!!

Oh…and last I checked BANKS AROUND THE WORLD ARE FAILING. Ever hear of NORTHERN ROCK, or how about German banks Sachsen LB or IKB Deutsche Industrrie Bank ?? They all bought the farm because of their exposure to U.S. mortgage backed securities. Go to the FDIC’s web site and you can read the list of OVER 30 AMERICAN BANKS THAT HAVE FAILED in the last 12 months!

The FED has pumped over a TRILLION DOLLARS into the banking system BECAUSE of this REAL ESTATE DISASTER in the LAST 6 MONTHS. We have a Goverment that is so SCARED of our current RECESSION that they’ve decided to throw the baby out with the bath water and give everyone and their brother BORROWED MONEY REFUNDS!!

Property manager points out a great overview on why things are as bad as they are and you ADMIT it will get worse, but I’m wrong when I say it???

Keep going with your 5% theory Roger. I agree with you, IT’S ALL SPECULATION…I enjoy reading your posts.

My all time FAVORITE ROGER quote…“Now, on the surface, this appears bad.”

The CEO of Bear Stearns said the EXACT SAME THING 2 weeks ago,
so your in good company!

Roger, Your a very smart guy. I read your posts because you bring something to these forums. I sure as heck don’t have all the answers. We’ll see how things go. Either way, I’m sure you’ll be making money. Meanwhile we can continue our debates about the economy. I don’t take any of this personally and hope you don’t. It doesn’t even matter who ends up being right. If we have profitable businesses we both win!!

Thanks :biggrin

22
Right now you cannot order a large self propelled crop sprayer from John Deere as they are busy filling a large order from Russia.

Not a bad company, (DE), to have invested in this past year:

Double your money within about 365 days.

Back on China…Reading Jim Rogers two books, Hot Commodities and Bull in China, is a good headstart on unraveling this story.

Anybody who travels the world by motorcycle and then by car to REALLY know which markets are progressing…has got my vote.

These pictoral pages, (6 pages), show a country that is seriously on the move:

http://www.chinadaily.com.cn/photo/bizchina.html

I used to work on a ship that hauls iron ore pellets from minining operations on the north shores of Lake Superior to the steel industry ports of the Lower Great Lakes. Back in 2005, China was snatching up a defunct mining operation up there.

Cleveland-Cliffs, (CLF), is a publicly traded company that represents the demand for this iron ore commodity from the region:

From January of 2005, a 500% return on your money.

When you start comparing growth rates of US public companies vs. Chinese public companies…the contrast is pretty eye opening.

Straddled with debt, (both the US economy as a whole and it’s bloated consumers), this directly correlates to the wild swings we’ve had for the DJIA this year:

http://www.cnbc.com/id/23170058

It’s like Ben Stiller’s polygraph chart in Meet The Parents.

-Mike

23

I simply remembered that nit wit NAR economist being fired for consistantly making the same predictions YOU make.

Well, I didn’t take it personally until above. The NAR economist in question was an absolute loon, and yes, it’s very offensive to be included with his crazy predictions, especially since I, unless I’ve managed to sleep through some of my posts, haven’t really made any predictions other than “let’s wait and see.” Do I believe that it’s going to be anywhere near as bad as you claim? No, but it COULD happen. That’s not a predication, merely a statement of opinion.

Oh…and last I checked BANKS AROUND THE WORLD ARE FAILING

Banks around the world are ALWAYS failing. Do you honestly believe that no bank ever failed before this mess? Have more lenders closed their doors than normal? If you include the subprime lenders, then yes. Has it been major news? Only for a bit. Again, didn’t say that they weren’t. Just said that if it’s not worth reporting, then I question how bad it will affect.

Property manager points out a great overview on why things are as bad as they are and you ADMIT it will get worse, but I’m wrong when I say it??? First, I believe that I said that it could get worse (but I’ve slept since then) and second, it’s not a matter of right or wrong. It’s speculation. It this point, you can’t be right or wrong anyway.

The only complaint that I have with the way you present this is that a) you pick and choose the facts that support your theory and not only dismiss, but plain scoff at those that don’t, and b) you have a strong tedency to do the same with another that you feel doesn’t agree with you. That’s really the only thing that I’m trying to get across at this point.

Case in point, My all time FAVORITE ROGER quote…“Now, on the surface, this appears bad.”
That’s a line taken out of context. Now, if that quote was about the current market/economic situation, I’d say that I was an idiot, but it wasn’t. Yet, you put it out there to do what exactly?

Raj

24

“Now on the surface, this appears bad.” That quote was about YOUR Bank changing the duration of your loans from 30 YEARS to 12 and 8 years, or MORE than HALF the original term!!!

Roger, with your quote in mind…here’s my quote… “I REST MY CASE”

That’s far worse than “on the surface” Roger… Those banks are scared sh*tless if they’re calling loans on you that have been “paying like clock work for 5 years.” You made my entire point with that statement. I guess those banks just WANTED to GIVE BACK the THOUSANDS and THOUSANDS of dollars in INTEREST they would have earned over the coarse of a 30 year loan when compared to an 8 or 12 year loan??? I don’t think so. They’re getting KILLED in this market. THAT’S the reason for those changes. It’s BAD… and THAT statement CLEARLY shows it’s spread to your corner of the world!!! By hey, banks fail everyday right?? Who cares??? I guess YOU care now.

Let’s just agree to disagree.

25

Hey, first, the only thing that we’re disagreeing on is the possible severity of the whole situation. I don’t hardly consider that a disagreement in the first place. Your zeal for it just makes it seem so.

Second, that posts was concerning Doublewides segment in my market, which have been in the dumps for 2-3 years now. Investor loans have completely dried up, and until recently, as a homeowner, you either had to have stellar credit (which rarely happens with DWs), FHA financing, or some form of owner financing to get in.

And yes, many banks in this area are currently scared “sh*tless” about DW loans, some more than others. The point of the post wasn’t to show how bad things were (it’s been that way for that segment) it was to show HOW you can profit from the situation IF it does get that bad in RE, which you are predicting.

The REASON that this bank redone my loans were that they were on 5 year calls, they had every right to, and they don’t want to hold the paper on DW loans anymore. Not a problem really, as the market IS coming back quickly via FHA financing and if I choose I can simply refi with another lender at this point.

I don’t know why you keep wanting to turn this into a me against you argument. It’s not. I believe that we both agree that it’s not going to be pretty, just disagree on how bad it’ll actually get.

Heck, I even mentioned what bothers me more than your D&G quotes of failing large banks IS the possiblity of smaller banks going under. The big banks, should that falter will be propped up either through Gov’t funding or buyouts. Smaller banks, on the other hand won’t be so kind.

Peace, man. Peace.

Raj

26

This is my kind of thread. It makes me glad I visited this website today.
The Secretary of the Treasury during the Great Depression, Andrew Mellon, had a strategy known as Liquidationism. He maintained that the panic and collapse should work itself out, and that the government should not intervene. His adherence to this philosophy stemmed from his memory of a similar event following the Civil War, when a serious depression seemed to work itself out within a year, apparently due to the mechanisms of the free market.
John Maynard Keynes disagreed. He maintained that the way out of the depression was not to let the entire financial infrastructure of the United States stagnate, but to stimulate a strong level and a high velocity of business activity to bring recovery through active investment.
Capital is like any other commodity. When it is put to work intelligently, we all prosper. When it is squandered or used for useless or undesirable means, no one prospers.
I would compare Ben Bernanke to a man playing chess or executing a strategy for war. By manipulating what he can, he is trying to turn an unmanageable situation into a manageable situation. This is not Federal Reserve panic. This is The Federal Reserve answering market panic with hard handed measures to prevent more panic. Only the history books will tell if his was a story of failure or success; but I admire his dogged perseverance in the face of adversity.
If loosening monetary policy does stimulate inflation, then we would have increases in the housing market which would be commensurate with the increase in the cost of food, oil and other retail goods. The answer would be simple: raise interest rates and fix inflation. We are simply not in a worldwide (or nationwide) state of inflation until most durable assets, especially real estate, appreciate. I have stated for a long time that inflation is coming. My belief about this stems from the standpoint that supply of commodities will not meet the demand of China, India, Russia or Brazil as they adopt free markets and embrace capitalism. They will need more oil, more building materials, more industrial complexes, and when they have these things, they will promote more consumer demand within their own countries.
The risk of inflation absolutely looms large, but we need to work through the liquidity freeze first. I would argue that the fall of Bear Stearns had as much, if not more, to do with panic than it did with defaults on mortgage notes. Their market float sinks almost 50% in a week, and they can‘t borrow money to stay the course until the panic subsides. The main problem is not rampant mortgage default, the main problem is that borrowers may decide not to pay, lenders may decide not to lend, and no one wants to invest in a business with such an uncertain horizon. Its time for some good old fashioned personal accountability. Borrowers need to belly up to the table and pay their loans, and banks need to belly up to the table and share some of the risk.
No matter how low interest rates go, and no matter how much money banks have, this may not necessarily mean that this money will be used for the benefit of our economy. Japan proved this over the course of the last approximately 15 years with interest rates set between 0%-1%. I believe that the financial gimmickry that took place between big business and government in Japan has not been mirrored by our country until now.