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I'm thinking it is time to sell


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2013 Apr 7, 1:43pm   8,396 views  20 comments

by indigenous   ➕follow (1)   💰tip   ignore  

Between the inevitable rise in interest rates and the baby boomers aging and the next generation not having any money.

And with out sound too much like a prepper So Cal could get ugly.

Thoughts?

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1   Ceffer   2013 Apr 7, 1:50pm  

Without actually being able to predict the future, I would say yes. The low interest house of cards is due to expire.

2   oaky   2013 Apr 7, 3:06pm  

I can help you

3   Goran_K   2013 Apr 7, 3:32pm  

Are you selling because you think CA is going to go into a localized depression?

4   indigenous   2013 Apr 7, 3:37pm  

Goran

I think the market for real estate is going to go down nation wide. actually the whole economy is going to have some cataclysmic events. IMO that is.

If things get bad So Cal is going to be one of the worst places to be.

5   AD   2013 Apr 7, 3:48pm  

That depends on supply. Have to look at new residential construction data along with population or demographic trends. One interesting facet is the amount of student debt being taken on by today's college students. That will or may impact say 10 years from now their housing choices.

Another factor is affordability which in many ways can be expressed as price to rent ratio (see: http://www.calculatedriskblog.com/2013/03/real-house-prices-price-to-rent-ratio.html). If it becomes a landlord market with lower than average price-to-rent ratios, then it may be more advantageous to buy a home (if other conditions exist such as neutral to positive job growth, gasoline price stability, etc).

What do you all think, and that includes you too Patrick K ?

6   indigenous   2013 Apr 8, 12:08am  

Adarmiento

I just think your perspective is too narrow.

The problem is that 200 billion a year goes to debt service at 1.5% interest. When that goes to the 5% historic norm that 200 billion is going to be 700 billion plus. At that point something has to give big time.

The Austrians indicate that there is a bubble with bonds. Most bubbles are created by the wonderful gubment programs such as treasury bonds, student loans, healthcare. The dot com was not a government bubble but the housing bubble was as was the crash of 29.

All of this is self correcting if it is allowed to run it's course but the gubment has been meddling so look out...

7   AD   2013 Apr 8, 2:35am  

Indigenous, are you referring to the $200,000,000 in interest payments for the approximately $17,000,000,000,000 in US federal government debt ?

But by the time it reaches 5%, the 'benefits' of inflation may have lowered the inflation-adjusted value of the debt and of the interest payments. So $700,000,000 in the future may be only $500,000,000 in today's dollars.

8   indigenous   2013 Apr 8, 2:39am  

I don't think so

9   Done   2013 Apr 8, 2:55am  

A real chest game.

10   indigenous   2013 Apr 8, 3:04am  

i wog

I know you think you are right but what you state is patently not true. And certainly muddies the waters for anyone trying to figure out the future.

11   edvard2   2013 Apr 8, 3:05am  

Sell what? I assume your house. But even so, do you like your home? Can you afford the payments? Do you have sufficient retirement savings? If you sold, what would you do then? Rent? But in any regard, at least to me if you enjoy your house it makes no sense to sell just because you are guesstimating that things 'might' go sour someday. Of course they will. They always do, and have done so since the start of time.

12   indigenous   2013 Apr 8, 3:09am  

S Face

Not sure I completely agree but thanks for the real answer.

13   Done   2013 Apr 8, 4:32am  

robertoaribas says

is dangerous to predict or invest based on such a prediction...

I count the odds, int. rates although being important are not the only factor. Prices going up, inventory setting up to come on the market and a very ignorant majority on both sides of the coin sellers and buyers. 95% of the that market have low to no skill set of any kind. I stack the odds and go with what has the highest probability and it's not home prices going down.

14   Bigsby   2013 Apr 8, 4:36am  

robertoaribas says

2. Europe, though not nearly as aggessive as the US or Japan has 10%+ unemployment,

In fairness, the UK rate is 7.8% and Germany, the economic powerhouse of Europe, is at 5.4%.

15   mell   2013 Apr 8, 4:44am  

Bigsby says

robertoaribas says

2. Europe, though not nearly as aggessive as the US or Japan has 10%+ unemployment,

In fairness, the UK rate is 7.8% and Germany, the economic powerhouse of Europe, is at 5.4%.

Not only that. In Germany you are counted as unemployed as long as you cannot make enough to break poverty level wheres in the US you are counted as employed even if you cannot pay for any of the grossly inflated shit you need for a living today. In that respect the US unemployment rate is more like 3x Germany's - bullish ;)

16   Done   2013 Apr 8, 4:49am  

Graybox says

2.6 30yr. FRM (wkly avg.)

Really serves no more purpose to me then reaffirming that the fed. has a manipulating potential to be reckoned with. Initially I'm going with the idea maybe some added bps. in int. rates will be absorbed, time will only tell how much and then given back due to no other choice.

17   lostand confused   2013 Apr 8, 4:57am  

mell says

US you are counted as employed even if you cannot pay for any of the grossly
inflated shit you need for a living today

That and if you can't find a job and so stop looking-you are now not counted as unemployed. Like last month-496,000 folks rolled off the "unemployed" category- but not because they found jobs!

18   indigenous   2013 Apr 8, 1:51pm  

I wandered into this forum because the owner of this website was on Chris Martenson.

I have tried to reconcile what most of you have said with my own thinking. But I can't. You appear to ignore the posts by the host about Gold's price increase and bubbles.

I will say that you have been good for me to check my own thinking and references. Which I have done and have concluded that you are basically bay area Keynesians and are not understandable on my frequency.

19   Bellingham Bill   2013 Apr 8, 3:47pm  

indigenous says

bay area Keynesians

LOL. You say it like it's a bad thing.

"Keynesian" has just become another thought-terminating cliche among the right, to go with all the others.

http://research.stlouisfed.org/fred2/graph/?g=hlf

blue is mortgage rates, red is total systemic debt / GDP (right axis)

the higher the red line goes, the lower the blue line will go

20   indigenous   2013 Apr 8, 9:54pm  

But many of you scoff at at a connection between interest rates an Fed spending or that interest rates are going to go up at all.

I listened to Paul Krugman yesterday stating that Japan was going to launch a new round of Quantitative Easing paraphrasing this time it is going to work. Hmm after 20 yr more of the same is going to work? Obama and Bush and their Stimulus has not fared any better in other words similarly to FDR.

Yes I'm saying it because it is a bad thing. If nothing else when the interest rate returns to historic norms the debt service is going to go to half of the revenue per year.

Your graph indicates that debt is growing and a lower interest rate, ok?

At 44:50 Krugman utters his Nobel winning wisdom:

http://abcnews.go.com/watch/this-week/SH559082/VDKA0_0w0mshff/this-week-0407-the-white-house-on-north-korean-threats

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