Rates cut.
As expected the Fed just cut interest rates to try to stem problems in the US housing market:
Faced with a widening mortgage crisis, the Federal Reserve Tuesday cut a key interest rate for the third time in three months.“Incoming information suggests that economic growth is slowing, reflecting the intensification of the housing correction and some softening in business and consumer spending. Moreover, strains in financial markets have increased in recent weeks. Today’s action, combined with the policy actions taken earlier, should help promote moderate growth over time,” the central bank said in a statement released with the announcement.
Story on MSNBC.
Many analysts believe the current quarter and the early part of next year will represent the period of maximum danger for a possible recession.“I think a full-blown recession can be avoided but just barely,†said David Jones, chief economist at DMJ Advisors. He predicted that the Fed will follow up with three more rate cuts at its first three meetings of 2008.
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December 11th, 2007 at 2:10 pm
I wonder how the US government is going to pay for the housing bail out, if the USD is not completely trashed. It would require some serious tax hike to make any difference in the market.
December 11th, 2007 at 6:53 pm
December 11th, 2007 at 7:13 pm
I would say to try to stem problems from the US housing market, i.e. this is (another) attempt to bail out Wall Street, not housing.
Housing is toast and believe you me everyone knows it, including Bernanke. There is simply too damn much supply of housing in the US and nothing, but nothing, is going to stop prices from returning to traditional multiples of rents and incomes, and probably lower for some time.
December 12th, 2007 at 6:22 am
Four years of a floundering economy under the democrats and they’ll re-elect some Bush hillbilly.
December 12th, 2007 at 7:59 am
December 12th, 2007 at 10:23 am
Nope. Wall street was just the casino, moving money from one pocket to the other, and skimming off its take. It did get caught holding a few chips itself, but the big losers are the holders of MBS, CDO, ABCP, and other trash spread from China to Norway.
December 12th, 2007 at 12:30 pm
Hmmmmm politicians? where do the live? in homes where other people lives.Why do we live in homes?because homes are basic necessity for all of us.So what is the priority for all of us include government is?to fix the problem related to homes that will be countinue for rest of life “mind it compulsory”.
O.T.
Official stats were released its available online plus some bonus links about what’s happening in buying sides.
“The housing market continues to be strong,” says REBGV president Brian Naphtali. “November figures show strong growth compared to last year, are basically on par with figures from 2005, and are 16 per cent higher than the same period in 2004. REBGV
HPI
HPG
while staying in the family home to save cash and becoming a homeowner are definitively linked, it’s only true until about age 25. Those who stay at home after age 25 are less likely to become a homeownerLate exit from family nest may delay home purchase: StatsCan
British Columbians are making compromises and relying on financial help from families, but are still getting into the province’s still escalating property markets, says a national real estate firm.First-time buyers getting help from boomers
December 12th, 2007 at 12:46 pm
That doesn’t explain the writedowns. A lot of the stuff was shuffled off the balance sheet with no caveats and yes in this case the debtholder is screwed and the bank is clean. Some of the loans had loss contingencies (assumedly to give the banks a wider spread) and these are the ones the banks are having to deal with.
December 12th, 2007 at 12:52 pm
You did read the part about “boomerang kids”, right? All those 20-something renters/owners with jobs will never move back in with the parents if their jobs disappear, of course!
December 12th, 2007 at 2:53 pm
December 12th, 2007 at 3:30 pm
http://www.reuters.com/article.....0620071211
December 12th, 2007 at 5:11 pm
The source of your links are your industry’s spoon fed to the lazy media, bogus and manipulated stats.
You low lives know, this time of the year is a great time to pump out to the media your manufactured bs.
form the article, ie:
,” Century 21 Canada president Don Lawby said in a news release.”
and :
“Century 21 Canada released results today from a survey of its brokers on first-time buying “
Who u gona quote next?
tqn, reality check, newsflash, and
Aaron and Rob, or have I already mentioned them?
December 12th, 2007 at 6:25 pm
Drachen……
Drachen,
I got that link which you did not find u can register with e-mail and follow the link from you mail box cbre.com
A recent report on global market rents
for November 2007 shows:
1.London(westend)England
2.Bollywood,Bombay,India
3.London(city)England
8.New Delhi,India
10.Hong Kong
34.Calgary
35.Toronto
Global 50 Index
fastest Growing(Ranked by 12-month%increase in occupation cost in local currency and measure)
1.Singapore
2.Moscow,Russia
3.Bollywood,Bombay India
6.Banglore,India
9.Edmonton,Canada
10.London,West,England
12.New Delhi,India
35.Calgary sub,Canada
December 12th, 2007 at 7:34 pm
Basically an international banking collapse..so much for the experts!
http://preview.tinyurl.com/d8q6j
December 12th, 2007 at 7:40 pm
And Housing Bubble Solution Isn’t Much of a Solution
More unbelievalbe stuffGreenspan: How the credit crisis happened, he missed first week of economics 099
Fast forward , the devil made me do it: and the Russians helped the devil
Tick Tock, Tick Tock
December 13th, 2007 at 12:02 am
Rile them up some more!
Sincerely, wg2c.
December 13th, 2007 at 8:06 am
Tue, Dec 4, 07 at 08:56 PM
For those who have taken a $50 - 70k shavecut on their house price, I would suggest don’t panic. The IMF did a pretty exhaustive study of housing bubbles and their collapses and concluded that price declines seldom exceed 30%. On a 500K home, that would only be 150k. Not much money in an economy that’s on fire.
this is a comment in the Edmonton Journal on their housing problems
December 13th, 2007 at 10:55 am
Yes that would be absolutely accurate.
I’ve seen this pointed out before and I think it’s missing the forest for the trees. Yes, it’s historically accurate to say that over the last 4 corrections prices have fallen an average of 28% but in each of those corrections the fall has mirrored the gain. So our run up was twice as big doesn’t that imply that the fall will be twice as big? This was brought up on another blog recently so I’ll use the same analogy here as I did there.
If you drop four medium sized rocks off a peir and compare the splashes, then get a fifth rock, twice the size of any of the others and prepare to drop it off the pier the same kind of analytical thinking would lead you to believe that the splash will be of average size compared with the first four.
Historical analysis is great but it has to be applied in a relative manner.
December 13th, 2007 at 12:26 pm
Considering that Calgary and Edmonton took a bigger haircut than that in the 80’s (as did Vancouver of course), I think they should pay more attention to their own back yard.
And it’s not like we have “seldom” seen a global runup in housing like the one which is now deflating - we never have. So perhaps we may also see a bust that has never been seen before?