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The big R

8025 Views 94 Replies 15 Participants Last post by  fishinfoolz
With both sides of the House and the President in agreement that the country needs a boost do you think the country is headed for recession. They are talking about it over here and blame it all on the sub prime loan fiasco.

I was also surprised to hear that your banks are selling shares to Middle East Countries/India/China and Tiawan(sp). They are doing this to keep their heads above water. I bet you would be upset if China took over some of your banks.
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Excerpts from My Blog. Gene Quinney The Real Estate Pundit. September 2006

Panic Not My Puget Sound Neighbors. Rejoice.

The resilience of the Pacific Northwest housing market is a much desired commodity among the panic stricken in other large metropolitan areas whose so called "housing bubble" has began to deflate, much to the joy of alarmists whose historic prophecies of doom and gloom echo in cyber space seeking shelter on computer screens of anti-growth and wealth be darned nay-sayers...But here's the simple truth. Some areas are realizing a decline, but NOT the down fall of civilization as we know it like some of the media have portrayed it. Mortgage interest rates for instance are and will remain historically low. Housing prices at their current level could take quite a hit and still remain a good investment historical speaking.

It's all relevant. A high price to you, may not be a high price to your neighbor. The cyber space grumblings are probably from folks who, for whatever reason, be it economic or emotional detachment (not wanting to pay what the market dictates because they THINK the prices are too high) have been priced out of the housing market so they hope for a market decline to bring prices down to what THEY "think" is a fair price or one that they can afford. Unfortunately we all might suffer if the doom and gloomers have it their way.

My advice to everyone is to remain calm. We around the Puget Sound region have no reason to be influenced by the declining markets in California or Arizona, or the East Coast or Mid West. Our local economy is strong. Unemployment is low and spirits should be high just like the prices. Just kidding...About that last part.

The long-feared housing bust has arrived. Nationally speaking, anyway. If history is any indication, King County may escape it, according to a Seattle Times analysis of single-family-home prices. It shows that appreciation rates have risen and fallen, sometimes precipitously. But not once since 1985 through recession years, interest-rate spikes, wars and employment downturns has the countywide median price of a single-family home fallen, although it's come close."

A federal study, which goes back further, reveals nine months of Seattle-area price declines in the early 1980s that were followed by quick recoveries.
"Seattle has never been a market that's prone to price drops," said economist Matthew Gardner of Gardner Johnson, a Seattle-based land-use-economics firm. "The way it works is, prices climb, plateau, stay there and then climb again. You might see an area where there was a short-term drop but not an across-the-board drop."

Gardner predicts Seattle-area home prices will soften but not sink.That's seconded by economist Dick Conway, co-author of the Puget Sound Economic Forecaster. He estimates that local appreciation will slow to 2 to 3 percent a year, roughly what it was in the mid-1990s and much different from the double-digit appreciation we've seen in recent years. But realistically, is there any reason Seattle's prices shouldn't take a dive if that's happening in other cities? San Diego home prices are already shaky, and the area may not have seen the worst. A market-risk index compiled by PMI Mortgage Insurance calculates that San Diego faces nearly a 60 percent chance that home prices will fall in the next two years â€" the highest for any U.S. city. Boston, Sacramento, Los Angeles, San Francisco and San Jose all have a 50 percent or greater chance of price dips, PMI says.

Then there's Seattle: about 11 percent. "When we see declines in prices, it's nearly always driven by a local economic shock first," said Mark Milner, PMI Mortgage's chief risk officer. "So what this index is basically answering is how vulnerable Seattle is to a local economic shock: not nearly as vulnerable as Southern California. "Seattle-area job growth is among the strongest in the country, Milner said, and the local unemployment rate is below its long-term average. Equally important, he said, is that Seattle's housing prices, while high, are still more affordable to local residents than prices in other coastal cities.

King County's most volatile time occurred between 1989 and 1993. First came the boom years of 1989 and 1990. "Those were exceptional years for population and job growth," Conway said. Housing demand, propelled by a strong economy and buyer speculation, pushed prices up 45 percent in two years â€" a spike that hasn't been duplicated since. This is based on the Times analysis of home sales per square foot, a measure that allows for accurate cost comparisons regardless of house size. While sellers rejoiced, buyers took it in the pocketbook: The median-priced King County house, which cost $97,500 in 1988, fetched $145,000 two years later.
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What about those young families who sought the "American Dream" of home ownership... but because they lived in a high value area (like western WA) they could never afford the $450,000 it costs just to buy a 3 br 1 bath 1000 sf sh!thole within the Seattle city limits? Some of those 'deals' sounded like the ONLY way a young working couple could afford to buy their first house. Can you honesly blame them for tryin'?
I don't blame them one bit but the smart ones didn't buy in Seattle, they went south where they could get the same 3 br 1 bath 1000 sf sh!thole for $150,000 to $175,000.That is why Pierce and Thruston counties were appreciating at 15% to almost 25% while in the same period King was appreciating at around 10% You can buy a whole lotta fuel with the savings right there and commute. And the bonus is you don't have to live under the regime of Mayor Nickel and Dime. :D
If the early cut of 3/4 of one per cent cut in your interest rates in an emergency meeting of the Fed does not work then it will be seen as a desperate measure and the American economy is really in a terrible state.

This is what is being said over here.

I am sure when you woke up this morning this is not the news you expected to hear.

Remember the US economy is not just in the PNW.

I do hope things improve as I do not want the World to go into reccession as this will cost me more money to buy food which is my main worry. Also my ciggies would go up in price.
Here we go Webo.... Tup:

Fed slashes key rate to 3.5%
Citing weakening economic outlook, Federal Reserve makes biggest cut in nearly 24 years - three quarters of a point.
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By Paul R. La Monica, editor at large
January 22 2008: 9:52 AM EST

Although the Fed slashed interest rates by three-quarters of a point Tuesday, Wall Street fears Ben Bernanke & Co. have not acted quickly enough to forestall a recession.
More video
The Fed throws a life line
A global markets sell-off and fears of a recession prompt the Federal Reserve to cut two key interest rates.
Play video

NEW YORK ( -- The Federal Reserve slashed two key interest rates by three-quarters of a percentage point Tuesday following an unscheduled meeting, citing continued concerns about a weakening economy and turmoil in the financial markets.

The Fed lowered its federal funds rate, which impacts how much consumers pay on credit card debt, home equity lines of credit and auto loans, to 3.5 percent from 4.25 percent.

The Fed also lowered its discount rate, which is what it costs banks to borrow directly from the central bank, by three-quarters of a point, to 4 percent.

This was the biggest rate cut by the Fed since October 1984. And it was the first cut between regularly scheduled meetings since a half-point cut on the day the market reopened following the September 2001 terrorist attacks

"Broader financial market conditions have continued to deteriorate and credit has tightened further for some businesses and households. Moreover, incoming information indicates a deepening of the housing contraction as well as some softening in labor markets," the Fed said in a statement.
Read the Fed statement

Treasury Secretary Henry Paulson, speaking at the U.S. Chamber of Commerce in Washington Tuesday morning, said that he hoped the rate cut would restore some confidence in the financial markets and U.S. economy.

"I think it's very constructive and what I think it shows to this country and to the rest of the world [is] that our central bank is nimble and able to move quickly to respond to market conditions and that should be a confidence builder," he said.

Investors didn't appear to share this sentiment though. Stocks plunged at the open Tuesday morning, following two straight days of massive sell-offs abroad.

Wall Street had been betting that the central bank would need to initiate an emergency rate cut before its next scheduled meeting, which concludes on Jan. 30, in an attempt to help keep the economy from tipping into a recession.

Since September, the Fed has cut the fed funds rate to 4.25 percent from 5.25 percent. Investors have been clamoring for more, and bigger, rate cuts in the hopes that it will kick start a moribund economy and encourage businesses and consumers to spend.

And the Fed is still widely expected to cut rates again at its Jan. 30 meeting. According to futures listed on the Chicago Board of Trade, investors are pricing in a 92 percent chance that the Fed will lower the federal funds rate another half-point, to 3 percent, next week.
Paulson sees cooperation on stimulus plan

The Fed has also loaned $70 billion to banks through a series of three auctions since December to help mitigate the effects of the credit crunch on Wall Street. That appears to be working as the Fed said Tuesday that "strains in short-term funding markets have eased somewhat."

President Bush and Congress are also working on an economic stimulus package in order to help beleaguered consumers. Federal Reserve chairman Ben Bernanke endorsed this plan during a speech to the House Budget Committee last week and urged Congress to act "quickly."

But markets have plunged so far in 2008 despite this as investors continue to fret that the Fed may be doing too little too late to keep the economy from recession.

Still, others think the Fed needs to proceed cautiously, especially since it's fair to argue that aggressive rate cuts during 2001 may be the reason why banks are in the subprime mortgage mess they are in now.

To that end, William Poole, president of the Federal Reserve Bank of St. Louis, voted against a rate cut. According to the Fed's statement, Poole did "not believe that current conditions justified policy action before the regularly scheduled meeting next week."
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No such thing as predatory lending IMHO. Just a few genrations of the "ME" generation with little to no self control and the desire to have what everyone else has at any price. They operate like river boat gamblers in this pursuit. It s a basic human instinct and now laws or rules will ever stop it.
King you may be surprised but I agree with your last statement. Folks do want the best of everything just because their neighbour has it. They forget to notice that their neighbour has a better job than them and can afford to spend more without it affecting their lifestyle.
It's hitting people at every level of the economy. The president of Washington Mutual got his yearly bonus cut to $912k. See, everyone is suffering.
fish vacuum said:
It's hitting people at every level of the economy. The president of Washington Mutual got his yearly bonus cut to $912k. See, everyone is suffering.
Only in america ... screw your investors with a 70plus % drop in the stock performance yet still claim a nice big bonus for performance Tdown: Those executives should be fired today.
Oh come on. The poor guy's been beat down to less than a million bucks for his bonus. I'm sure he's tightening his belt just like anyone else. Maybe he'll have to buy a smaller yacht than previously planned. And with the price of fuel, he may have to limit trips in his private jet. Sad. wink:
What I find interesting in this discussion is Webo's position. He thinks that the banks have been predatory and taken advatage of the little guy just trying to own a home. He thinks GW had a big hand in this screw job. Then on another thread he cheers on the housing slump because he hopes to pick up a steal on a rental property or two. Then he cannot wait until the intrest rates drop so he can partner with those very evil corportations the banks that are praying on little people for a refinance and most likely some equity out so he can snap up a bargain on a house that the predatory bank kicked the little guy out of. He is all for tax increase which make sense because he wants to see the govt. take everyones money to bail the little guy out so he does not have to feel guitly for taking advatage of someone when they are down. But he will act like a greedy robber baron and profit from someone elses misfortune. Seems to me that a real liberal would offer to transfer his wealth to the little guy and help him stay in his home rather than partner with the big evil corporate bank and stick a shiv in the little guy. What about the "we" culture Webo ? what about the evil corporations seems to be a bit two faced eh!
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WTF? What the hell are you babblin' on about NOW king? What I said was that BOTH the consumer AND the unscrupulous mortgage brokers share blame in the sub-prime debacle. My position wouldn't be such a mystery to you if you could actually comprehend what you read. Foreclosures and lower FIXED interest rates are going to create some opportunities for investors. I got NO problem with benefiting from that. If you had actually understood my post... you'd have seen where I said I thought that the mortgage mess WASN'T the primary cause of this looming recession. Neocon, Milton Friedman, supply-side, trickle-down, make nothing, import everything, run up HUGE deficits, destroy the middle-class economic policies were.

You're just mad about the gay thread... ain'tcha? :D :D
Webo said:
the primary cause of this looming recession....destroy the middle-class economic policies

Specifically what economic policies are you referring to?
Webo has no idea what policies he is refering to. He heard that some where and like a good little parrot he repeats it. Webo what is factual and typical of the left is the hypocrisy . You bash greedy corps on one hand and conspire with them on the other when it is to your benefit and you can line your pocket. If you were the true socialist you claim to be you would never take advantage of a system where the little guy gets crushed for profit. Which is what you are crowing about doing. So you are a hypocrite or you do not really believe all the socialst shiat you push. Which one of the 3 faces of Webo should we believe?
I see you've been out huffin' manure in the back 40 again queen. :D :D

So I'm a hypocritcal socialist now huh? WTF? What a freakin' dipsh!t! You get more bizarre and clueless with each passing day. You're just pissed that you were exposed as Mr. Widestance in the gay thread. clown: :D

Birch - In simplest terms... I'm talking about the Lassiz Faire, total 'free-market' approach to economics. "Trickle-down" policies that benefit the mega-wealthy and multi-national corporations... in the hopes that all of that wealth will make it's way down to the average American through more and higher-paying jobs and cheaper goods. It hasn't happened like that though. Outsourcing of living-wage jobs, complete destruction of the manufacturing sector in this country and the use of cheap foreign labor have taken a heavy toll on the American middle class. Not to mention the economic hardships caused by HUGE deficits and National debt. We used to be the biggest CREDITOR nation in the world and now we are the largest DEBTOR nation! We import just about everything and export next to nothing. Our economy is based on moving money around... NOT CREATING our own wealth.

We're a nation where the majority of folks are barely getting by. I'd like to see a return to the prosperity we enjoyed in the 1950's... where the "American Dream" was being realized by the MAJORITY of folks... not the minority.

I firmly believe in the conservative principle that you should be able to reap the rewards of your own hard work... and NOT have it taken away by government. BUT... I also believe that government has a responsibility to ensure a level playing field for all Americans who want to work hard and get ahead... and this is done through responsible regulation.

Reagan was a big fan of Friedman's economic philosophies and I believe that the problems we're seeing today began back in his Administration. Clinton was just as guilty and helped it right along with NAFTA, CAFTA and the WTO as well.

I've said it before... and I'll say it again. With you being in the mortgage business... doesn't it make sense to want to see MORE Americans in a financial position to be able to buy a house? Who gets to collect the commission check from sellin' 'em the mortgage? You do! You'll be makin' more money... and ain't that what it's REALLY all about?

I just don't understand people who, because of some bizarre adherence to a particular political ideology... support policies that are DETRIMENTAL to their own financial well-being? conf:
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A little too close to home Webo?


" We're a nation where the majority of folks are barely getting by."

That has to be the stupidest thing you have ever said. I will indulge your idiocy and ask by what measure?

"I'd like to see a return to the prosperity we enjoyed in the 1950's... where the "American Dream" was being realized by the MAJORITY of folks... not the minority."

They probably could Webo with a little common sense. Back then the avg. home was less the 1200 SF, One car, only about half the people had TV. Eating out at restaurants was rare, packaged foods were not the norm,No dishwashers automatic washers and people only had a couple of changes of clothes and consumer debt did not exhist but savings accounts did.

Yep its all the gubmints fault and the GOP let the people down and the corporations have raped them no one has a choice.

Don't suck so hard on the bong Webo it's making you dizzy.
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I don't know why I even bother... :roll:

What the hey though:

Look up the unemployment, median income and inflation statistics for the last 25 years king... it'll show ya how many MORE "just barely makin' it" Americans there are NOW... than then.

Once more too... NOWHERE did I blame it ALL on the government and it's economic policies. Absolutely individuals and families have to take some responsibility as well. My point is that the government-favored economic climate created here over the last 25 years has made it increasingly difficult for the RESPONSIBLE, hard-working folks to get ahead.
Apparently you don't bother you just ramble clown:

I will make that real easy for you Webo because it is clear you are emoting not thinking. Take food staples alone and compare the cost of food to the avg wages in the 50's to today.

Ask anyone Alive in the 50's which time they would prefer to live in economically Webo because either you were not even a thought in your parents mind or you were still crapping yellow. Now light up and turn on fnatasy Island again.
"Barely getting by" by todays standards means having at least one car, a television, a home, air conditioning and never going hungry. I can see how it's a struggle. :?

People back in the fifty's were just tougher. They didn't need food every day, or T.V's to keep themselves entertained, or central heating, or good quality clothing. Heck, I remember my mother wringing clothes dry by hand because we couldn't afford a dryer. But hell, times were good man! I'm sure in the 50's people were way better off than the 60's and way way better off than now... conf: wink: :mrgreen:
I suppose they never tried to better their life and the live of their kids because life was so good to begin with.
Webo watches too much Leave it to Beaver and thinks he is Ward!
Webo watches too much Leave it to Beaver and thinks he is Ward!
Hey... at least it's a beaver that I'm bein' hard on! :D :D

I dunno about bein' better off than in the 60's? Drugs and free love man! Hard to beat! :D

My point is still being lost... conf:

I'm not comparing tit for tat things that folks had in the 50's to today. What I'm saying is that the economic policies and resulting prosperity we had here in America post WWII... led to the biggest increase in the number of American citizens becoming "middle-class" (Home ownership, cars, vacations etc.) instead of working poor in the HISTORY of this country.

Using TODAY'S standards of what "middle-class" is considered to be... I'd like to see that same INCREASE... not DECREASE in the number people attaining and maintaining that status as we did in the 50's. Tup:

"Reaganomics" just ain't gettin' it done! Tdown:

If it TRULY were... WHY would the economy now be the number one thing on voter's mind's this election cycle... JUST like it was in 1992?
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