Now let me make a prediction.
None of this will happen. Not one person in 1,000 that reads this Ticker will do it, and not one of the 50 that do take this step will enlist their neighbors to do it too.
Because you have to actually get off your ass and go to Sam's Club to buy the safe. You have to spend 15 minutes to drill the holes and anchor it. You have to spend the 10 minutes every Friday to get the money. You have to live within your means. You have to spend the time to educate your neighbors.
You will not grow balls that clank.
You will instead sit back and whine about $4, then $5, then $6 gasoline. You will continue to whine when your job is lost just as you did when your last job was eliminated and sent overseas. You will whine when your credit card interest rate goes up and when, as the bond market sells off, mortgage rates skyrocket. 10 years from now you will whine when Medicare is dramatically cut back. 20 years from now you will whine some more when your 401k is shredded and Social Security is magically "redone" to either tax the hell out of your benefit checks or worse, simply repudiated.
You can stop it, but you have to stop it now. 1, 2, 5, 10, 20 years from now the damage will be done and we will be living with the consequences - as will our children and grandchildren.
America is a bunch of softies and we are going to get creamed as a consequence.
Don't read the Asian papers.
They "get it" and they're going to tattoo us. In fact, they've been running articles for the last two days that strongly suggest that they intend to******us standing up without a reach-around for our pleasure.
They don't need us - we need them. We need $2 billion of foreign money each and every day to keep our government running. Those nations are tired of the games and the chatter level is going up dramatically about their intent to give us a very painful economic lesson.
Its YOUR fault when - not if - it happens.
Enjoy this "rally"; when markets trade against fundamentals it does not last, so you have to ask yourself, since we're a credit-driven economy - where do consumers get the ability to take on more debt, say much less buy a house, when we're back to needing 20% down in most markets - which is where we should have been all along?
Think this is over do you? Better not read this:
"Just got off the phone with three of my top contacts at three of the nations leading mortgage lenders/banks. These programs are not selling at all. The volumes are very low. Banks are highly disappointed. The difference between a standard Fannie/Freddie (Agency) is roughly 75 to 100bps depending on the lender. Agency 30-yr fixed are roughly 6.25% with no points and Agency Jumbos are roughly 7 to 7.25%. Mortgage rates have gone up about .375% in the past few days.
For refi's, nobody wants out of their 5/1 ARM, ALT-A interest only or Pay Option ARM into a 30-yr fixed at 7.25% where their payments increase substantially. Also, in over 50% of cases appraisal are not coming in at value. For example, the loan application is taken with an estimate of $600k and the loan is an 80% loan-to-value (LTV). When appraisal comes in, the value is actually $500k making the loan a 100% LTV and there are no programs available. This is happening on a vast amount the $417k conforming loans as well.
For the purchase money folk, rates are also too high for current property values. Plus, a down payment required is 10%+. Debt to income ratios have tightened, further reducing buying power. A household wanting to take advantage of a $700k Agency loan at 7.25% must earn about $175k per year at current rates. And that only buys a $770k home, which is low to moderate in most areas in CA. Surely not the first-pick neighborhood of some earning $175k per year. That same person could have purchase a $1.5 million home with little to no down payment nine short months ago."
Any questions? Ignore this at your considerable peril - California is an absolutely enormous part of our national economy and if people can't afford to get their housing act together there, the economy will NOT recover.
Oh, and get your butt over to Sam's.
If you care about this country.
Prove to me that America still has what made this a great nation.
I dare you.
Where We Are, Where We're Heading (2013) - The annual 2013 Ticker
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