The fiscal cliff

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It is not a problem, but is an indication that some sources are off loading dollars in exchange for hard assets. They see it coming and they are dodging it.
 
rufus said:
It is not a problem, but is an indication that some sources are off loading dollars in exchange for hard assets. They see it coming and they are dodging it.
Click to expand...

Don't you think it could be that they see a good deal and want to take advantage of it ?
Anytime someone buys something to make some money don't they first have to "off load dollars in exchange for hard assets" ?
The Canadian dollar has increased in value over the last 10 years because Canada cut it's federal government spending and lowered their debt. Also their making a lot off of oil exports.
If they thought the U.S. dollar would collapse then here wouldn't be where they would be buying investment property.
 
Dennis, in my opinion, the real estate bubble actually started in 1977 with the Community Re investment Act. Prior to this act, banks were very careful to whom and where they put mortgage money. After the passage of this act, if a bank denied a mortgage to someone, they could appeal to some community organization like ACORN and sue the bank. There was no winning this type of law suit.

I saw illegal aliens get to this country one week, and then own a home the next. No social security number, no job, no work history.

Banks were afraid. They lent to anyone breathing.

Well, banks are not in the business of losing money. Or at least they are not supposed to be. They promptly invented the adjustable rate mortgage and the balloon payment. That covered them in the case of law suit, but also protected their interest. But the other shoe would drop in 2008.

Mortgage interest rates were so low due the "pumping up the economy" by the treasury and the fed, that it was almost insane not to buy property. People bought eight or nine homes and rented them out just waiting for the price to go up. The feeling was that home prices would never go down.

Well it did. Those loans were package and re sold to investors all around the world. When it fell down, it took down people in China and Bahrain and just about everywhere.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act
 
rufus said:
Dennis, in my opinion, the real estate bubble actually started in 1977 with the Community Re investment Act. Prior to this act, banks were very careful to whom and where they put mortgage money. After the passage of this act, if a bank denied a mortgage to someone, they could appeal to some community organization like ACORN and sue the bank. There was no winning this type of law suit.

I saw illegal aliens get to this country one week, and then own a home the next. No social security number, no job, no work history.

Banks were afraid. They lent to anyone breathing.

Well, banks are not in the business of losing money. Or at least they are not supposed to be. They promptly invented the adjustable rate mortgage and the balloon payment. That covered them in the case of law suit, but also protected their interest. But the other shoe would drop in 2008.

Mortgage interest rates were so low due the "pumping up the economy" by the treasury and the fed, that it was almost insane not to buy property. People bought eight or nine homes and rented them out just waiting for the price to go up. The feeling was that home prices would never go down.

Well it did. Those loans were package and re sold to investors all around the world. When it fell down, it took down people in China and Bahrain and just about everywhere.

http://en.wikipedia.org/wiki/Community_Reinvestment_Act
Click to expand...

The housing bubble burst in 2006. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2012. That started the 2007 to 2009 recession in the U.S.
Now They want to lower the standards for getting a home loan again.
 
It took time for the system to fall down. My sister in law refinanced her home to help save those of her two kids. In the end, they all lost their homes. It was a very sad process. They hoped all along that the kids would find jobs. In the end, she even lost her job. Expecting the economy to heal itself is the drug of hope.
 

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