Comments on: Harmonize this http://www.greaterfool.ca/2009/08/10/harmonize-this/ Book and Weblog - Authored by Garth Turner Wed, 08 Feb 2012 19:37:53 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: TJ http://www.greaterfool.ca/2009/08/10/harmonize-this/comment-page-3/#comment-38735 TJ Thu, 13 Aug 2009 20:30:05 +0000 http://www.greaterfool.ca/?p=3148#comment-38735 Karen Weaver, global head of Deutsche Bank's securitization research division -- responsible for analyzing credit default swaps, collateralized mortgage obligations, and other exotic Wall Street products -- said last week that 48% of U.S. mortgage owners will end up owing more than their home is worth by 2011. The figure may have left many Americans wondering how this could be possible. But consider that 27% of U.S. homeowners with a mortgage are already "underwater." And according to Deutsche Bank, home prices may fall another 14% before hitting a bottom. The obvious takeaway of falling home prices and being underwater is what it does for defaults. But there's a bigger implication, which is that when we look at the economy over the past decade or two, it's been very much a consumer economy. What has been driving the consumer hasn't been gains in incomes. What has been driving them is easy credit and rising home values. And the fact that their home price was rising and they could borrow against that through home equity lines or loans or refinancing, it augurs for a very different economy going forward if people don't have that option. <a href="http://tinyurl.com/r6t83k" rel="nofollow">More</a> Karen Weaver, global head of Deutsche Bank’s securitization research division — responsible for analyzing credit default swaps, collateralized mortgage obligations, and other exotic Wall Street products — said last week that 48% of U.S. mortgage owners will end up owing more than their home is worth by 2011.

The figure may have left many Americans wondering how this could be possible. But consider that 27% of U.S. homeowners with a mortgage are already “underwater.” And according to Deutsche Bank, home prices may fall another 14% before hitting a bottom.

The obvious takeaway of falling home prices and being underwater is what it does for defaults. But there’s a bigger implication, which is that when we look at the economy over the past decade or two, it’s been very much a consumer economy.

What has been driving the consumer hasn’t been gains in incomes. What has been driving them is easy credit and rising home values. And the fact that their home price was rising and they could borrow against that through home equity lines or loans or refinancing, it augurs for a very different economy going forward if people don’t have that option.

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]]> By: Alan Pater http://www.greaterfool.ca/2009/08/10/harmonize-this/comment-page-3/#comment-38617 Alan Pater Wed, 12 Aug 2009 23:39:36 +0000 http://www.greaterfool.ca/?p=3148#comment-38617 #111 gold bugger. Oh yes, I do vote. And I do read economics. Hate grammar. You know, there are plenty of countries in the world where taxes and social services are minimal. Why don't you emigrate and help make my vote count? #111 gold bugger.

Oh yes, I do vote. And I do read economics. Hate grammar.

You know, there are plenty of countries in the world where taxes and social services are minimal. Why don’t you emigrate and help make my vote count?

]]> By: steven rowlandson http://www.greaterfool.ca/2009/08/10/harmonize-this/comment-page-3/#comment-38542 steven rowlandson Wed, 12 Aug 2009 13:02:08 +0000 http://www.greaterfool.ca/?p=3148#comment-38542 Garth if I were King I would fix the problem quickly. Then again Canada as you all know it would be over. I believe in paying debts off and being tight with spending money and I like to keep things simple and straight forward. I stand where the profits are. Since I like to save money I would do so untill revenues from savings could replace taxation. I envision a 20 to 30 year regime of frugality before an end to taxation. Political correctness and the new world order in canada would be over with. Steven Garth if I were King I would fix the problem quickly.
Then again Canada as you all know it would be over.
I believe in paying debts off and being tight with spending money and I like to keep things simple and straight forward. I stand where the profits are.
Since I like to save money I would do so untill revenues from savings could replace taxation. I envision a 20 to 30 year regime of frugality before an end to taxation.

Political correctness and the new world order in canada would be over with.

Steven

]]> By: Tony http://www.greaterfool.ca/2009/08/10/harmonize-this/comment-page-3/#comment-38512 Tony Wed, 12 Aug 2009 04:18:21 +0000 http://www.greaterfool.ca/?p=3148#comment-38512 Interest rates will likely fall not rise in the years to come. Deflation is the most likely outcome not inflation. The US stock markets appear to have put in a top last Friday and should fall for the next several years. Insider trading is on the sell side by a factor of about 27 to 1. This will strengthen the US dollar and bond prices will rise sharply both in America and here. Long term bonds should return a healthy profit over the next 6 months. The US recovery in the last 6 months of this year is a pipe dream and won't happen until at least 2012. Negative growth will occur for the next several years. Interest rates will likely fall not rise in the years to come. Deflation is the most likely outcome not inflation. The US stock markets appear to have put in a top last Friday and should fall for the next several years. Insider trading is on the sell side by a factor of about 27 to 1. This will strengthen the US dollar and bond prices will rise sharply both in America and here. Long term bonds should return a healthy profit over the next 6 months. The US recovery in the last 6 months of this year is a pipe dream and won’t happen until at least 2012. Negative growth will occur for the next several years.

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