Housing about to Blowup

Rates may rise faster than most think.
http://www.cnbc.com/id/100798203

Greenspan: Taper Now, Even If Economy Isn't Ready

Former Federal Reserve Chairman Alan Greenspan told CNBC on Friday that the central bank should taper its $85 billion a month bond buying even if the U.S. economy is not ready for it.

"The sooner we come to grips with this excessive level of assets on the balance sheet of the Federal Reserve?that everybody agrees is excessive?the better," he said in a "Squawk Box" interview. "There is a general presumption that we can wait indefinitely and make judgments on when we're going to move. I'm not sure the market will allow us to do that."


If the Fed moves too quickly in reining in its accommodative policies, he added, it could shock the market, which is already dealing with a very large element of uncertainty.


Greenspan said that he's not sure the markets will allow an easy exit.


"I think the issue is not only a question of when we taper down, but when do we turn," he explained, meaning actually decreasing the Fed's balance sheet, which stood at $3.357 trillion on June 5, compared with $3.342 trillion on May 29.

"The markets may not give us all the leeway we might like to do that," he observed, pointing out that tapering is still increasing the Fed's balance sheet.

The former Fed chairman said he's sure the central bank is formulating a "Plan B" for unexpected circumstances.


As far as the Fed's near-zero interest rate policy, he said it's helped stock prices, but the markets need to be prepared for a faster-than-expected rise in rates.
 
Tieloop said:
irvinehomeowner said:
Tieloop said:
I was not familiar with Johns Creek, so I Googled it.  Are  you referring to the one in Georgia?  I am not interested in the Georgia summers.  I have enough high heat and humidity living in Southeast Asia. 
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Yes... the one in Georgia.

I think you just made a baby panda cry... but I agree with you... weather is a major factor.
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I looked back to the link I found about John's Creek.  Now I get the panda joke.  :)
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Read these to get the jokes:http://www.talkirvine.com/index.php/topic,3853.0.htmlhttp://www.talkirvine.com/index.php/topic,3823.0.html
 
Hey, you guys can laugh about Johns Creek but Panda has found an area of opportunity unlike the folks who are a day late and a dollar short in Irvine. Imo, he's going to be the one laughing... all the way to the bank.

Rates.. glad I locked when I did. I hopped the last train to Refiville. Signing Party at my house Saturday.
 
There was news today that the job market was better then expected = more chance of Fed's QE Infinity (bond purchase) might slow down = Higher interest rate.
Mortgage rates are highly correlated to 10-year treasury.  Seems like with an improving economy, the rates will go higher from here unless something blows up and Fed continues on their QE Infinity money printing action.
 
Goriot said:
There was news today that the job market was better then expected = more chance of Fed's QE Infinity (bond purchase) might slow down = Higher interest rate.
Mortgage rates are highly correlated to 10-year treasury.  Seems like with an improving economy, the rates will go higher from here unless something blows up and Fed continues on their QE Infinity money printing action.
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Weird cuz the articles I read say that there is some job growth (175,000) but not enough to stop the Fed's buying and that's why the DJ is up. 
 
http://money.cnn.com/2013/06/07/investing/stocks-markets/index.html?iid=HP_LN

175,000 actual vs. 158,000 expectation.  Yes.  good job numbers but not great enough for IMMEDIATE tampering so it's neutral.  But based on 10-year treasury yield movement, which is up by 4% or 0.08% to 2.16% today from 2.08% yesterday, the market is pretty nervous about Fed easing the QE Infinity sooner rather then later because of slow but steady recovery in the economy.  We'll see how it goes in their next meeting in June 18th to 19th.  There is going to be so much more volatility due to uncertainties with Fed Manipulation/money printing and Abenomics or perhaps abemageddon.
 
Irvinecommuter said:
Goriot said:
There was news today that the job market was better then expected = more chance of Fed's QE Infinity (bond purchase) might slow down = Higher interest rate.
Mortgage rates are highly correlated to 10-year treasury.  Seems like with an improving economy, the rates will go higher from here unless something blows up and Fed continues on their QE Infinity money printing action.
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Weird cuz the articles I read say that there is some job growth (175,000) but not enough to stop the Fed's buying and that's why the DJ is up.
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Today's DJ gain is a minor relief that the number doesn't provide strong support for Fed to slow the QE3 anytime soon, yet it shows some improvement to economy. It's like the perfect number.

I read something about Fed might want to see "substantial signal" of job growth, which could mean +200000 jobs in four consecutive months. We are still not quite there, but the low rates dates are numbered for sure. For short term though, the interest rate should go lower for a bit, it jumped from 3.5% to 4.2% in just one month. That's overreacting for sure.
 
Job growth slightly higher, but last months jobs report was revised down.

Unemployment up even though higher jobs growth.

QE3 ending ready or not.

Oh, and rates are going higher.  Look at how steep the buy down points are.
 
SoCal said:
Hey, you guys can laugh about Johns Creek but Panda has found an area of opportunity unlike the folks who are a day late and a dollar short in Irvine. Imo, he's going to be the one laughing... all the way to the bank.
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And when he makes all that money... he'll come back to Irvine. You can only take those hot/humid summers for so long.
 
Based on Bernake's past response, it is unlikely he will let the market crash because of interest rate increase.  People don't call him helicopter Ben for no reason.  In my opinion, the threat of hyperinflation from too much money printing is overblown.  Thanks to globalization, wages will remain stuck for the foreseeable future.  Thus, there will be no pricing pressure coming from the 99% of the population.  Since everyone else are printing money too, there will be little threat of US dollar flight.

With so much money circulating, and the fact that they are not going to wages, they ultimately ends up in hard assets like, gold, housing, commodities , agricultural lands, oils.......

All of these are conveniently excluded in the Fed's inflation calculation.  Thus, I don't see any reason for the Fed  to panic and stop their "QE infinity".  Where do you think the FCBs got their cash from?  Do you see factories owner giving their employees pay raise?  No.  They are  coming to Irvine turning into investment properties.

I am not an expert, but I wouldn't bet against the Fed.

 
darren said:
Based on Bernake's past response, it is unlikely he will let the market crash because of interest rate increase.  People don't call him helicopter Ben for no reason.  In my opinion, the threat of hyperinflation from too much money printing is overblown.  Thanks to globalization, wages will remain stuck for the foreseeable future.  Thus, there will be no pricing pressure coming from the 99% of the population.  Since everyone else are printing money too, there will be little threat of US dollar flight.

With so much money circulating, and the fact that they are not going to wages, they ultimately ends up in hard assets like, gold, housing, commodities , agricultural lands, oils.......

All of these are conveniently excluded in the Fed's inflation calculation.  Thus, I don't see any reason for the Fed  to panic and stop their "QE infinity".  Where do you think the FCBs got their cash from?  Do you see factories owner giving their employees pay raise?  No.  They are  coming to Irvine turning into investment properties.

I am not an expert, but I wouldn't bet against the Fed.
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The other part of the equation is how badly the rest of the world is doing.  The yield fell the last two days because both Europe and Asia showed lackluster growth.  That makes investors worried about where to put their money.  If QE does get eased, the money may pour out of the stock market and into the bond market again.
 
irvinehomeowner said:
And when he makes all that money... he'll come back to Irvine. You can only take those hot/humid summers for so long.
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"Back to"? Iho, he lived in Chicago before Atlanta, not Irvine. Atlanta is a smart move compared to Chicago where you get both humidity and snow. The Panda has traded up. Panda is a smart guy with a lot of valuable posts but you guys talk about him like he's some kind of laughing stock. That's too bad. I hope The Panda sticks around. Panda, I'm still reading!
 
He has in-laws in Irvine. His first love was Irvine... he'll come "back to" Irvine because you never forget your first.

Who says he is a laughing stock? If he's going to talk about JC like it's as good as Irvine... then we are allowed to mention it whenever anyone decides they want to live in Irvine or asks advice on where they should live.
 
SoCal said:
irvinehomeowner said:
And when he makes all that money... he'll come back to Irvine. You can only take those hot/humid summers for so long.
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"Back to"? Iho, he lived in Chicago before Atlanta, not Irvine. Atlanta is a smart move compared to Chicago where you get both humidity and snow. The Panda has traded up. Panda is a smart guy with a lot of valuable posts but you guys talk about him like he's some kind of laughing stock. That's too bad. I hope The Panda sticks around. Panda, I'm still reading!
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I don't think Panda is a laughing stock.  He made choices regarding where he lives and seems to have done very well for himself.  What I don't care for is the "you guys are idiots for living in Irvine" attitude. 
 
darren said:
Based on Bernake's past response, it is unlikely he will let the market crash because of interest rate increase.  People don't call him helicopter Ben for no reason.  In my opinion, the threat of hyperinflation from too much money printing is overblown.  Thanks to globalization, wages will remain stuck for the foreseeable future.  Thus, there will be no pricing pressure coming from the 99% of the population.  Since everyone else are printing money too, there will be little threat of US dollar flight.

With so much money circulating, and the fact that they are not going to wages, they ultimately ends up in hard assets like, gold, housing, commodities , agricultural lands, oils.......

All of these are conveniently excluded in the Fed's inflation calculation.  Thus, I don't see any reason for the Fed  to panic and stop their "QE infinity".  Where do you think the FCBs got their cash from?  Do you see factories owner giving their employees pay raise?  No.  They are  coming to Irvine turning into investment properties.

I am not an expert, but I wouldn't bet against the Fed.
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Chinese labor has gotten very expensive and is rising.  Here is an article that supports this.http://www.nytimes.com/2012/02/19/t...se-salaries-for-workers-by-up-to-25.html?_r=0

I've actually shut all my plants down and moved them back to Taiwan & Philippines due to labor costs.
 
our company is actually thinking about doing the same moving their plants back to taiwan...

btw what do u guys make?
 
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