Investment Opportunity
The meltdown in the US housing market has caused financial ripples across the globe. The so-called “housing bubble” burst and the fallout is continuing. The bubble began several years ago when the US government (Read Democrats in Congress) passed a law encouraging banks to lend huge sums of money to buyers who had no job and no real prospect of paying back the money. The new lower credit rules were augmented by the FED's low interest rates. Many buyers borrowed money for homes on Adjustable Rate Mortgages, loans with monthly payments that rapidly would become too high for the borrowers.
The other major factor fueling the “housing bubble” was massive and uncontrolled immigration. In 10 years the US government allowed 20 million illegal immigrants to move into the US. Twenty million new residents need something like 10 million housing units. The illegals tended to occupy the lowest priced housing in lower class neighborhoods. They took over 10 million homes and apartments where that hard working Americans had been living. That left 20 million hard working Americans being forced to pay untenable amounts to buy (or rent) homes that they could not afford.
People tend to think of houses as a fixed commodity, but overall houses are just as subject to the economic laws of supply and demand as any other product. A house has a residual value based on the hours of labor, cubic feet of concrete, board feet of lumber, etc. But when the available homes suddenly have 20 million more people wanting homes than there are homes available the price people will pay for a home is driven up and up beyond its residual value.
With the government allowing massive and uncontrolled immigration and concurrently encouraging uncontrolled lending to unqualified home buyers the demand for homes far outstrips the number of available homes. The prices for homes went up far beyond any reasonable or rational price in several parts of the US. Banks that had made loans on these properties, often at 100% of the street bid, were in a massively risky position. Greedy lenders knew that it would crash, but each of them was trying to make a fortune and get out, leaving the financial mess for someone else. It wouldn't last forever. It never does.
By about 2005 several factors were coming together to end the housing bubble. First, the government was finally beginning to respond to citizen demands to finally get control on immigration. Some were being deported. A fence was being built on the southern border. And the oil fueled economy of Mexico was providing jobs at home. Instead of millions of new immigrants demanding millions more housing units every year, the number of immigrants in the US became more stable and even declined in some areas. New housing construction began catching up with the demand for housing space. Sellers had to compete with each other for buyers. People now has an option to buy a less expensive home down the street, and the massive shortage driven inflation in housing prices came to a screeching halt.
Suddenly there was more homes than occupants in areas that has a serious housing shortage just the year before. The massively over inflated prices no longer had buyers taking homes at any price asked. Banks and other lenders found themselves holding paper on houses that were actually worth a lot less than they had loaned on them. About the same time, the FED raised interest rates a few points. Payments on all the Adjustable Rate Mortgages doubled just about overnight. Hundreds of thousands of hard working Americans could not afford to make payments on a $500,000 home at 8% or 10% interest.
So the greedy bankers, or often the banking corporations that the now-wealthy managers had abandoned, were left holding a lot of worthless paper and abandoned over-priced homes. The financial fallout of greed and corruption by bankers and our government will continue for a while. Housing prices will continue to fall until they reach some actual basis related to the cost of construction. The government will try to bail out the remnants of the greedy lenders. The government will not help the millions of hard working Americans who lose their homes. Instead the government will focus on the illegal aliens and low life scum who should never have been able to compete for over priced housing in the first place.
For a wise investor this is an opportunity to buy. The oldest economic theory for making money in housing, or in stocks, is “Buy low and Sell high!” Most people invest high and sell low. Millions of home owners and real estate investors have lost their shirt by buying high and selling low. In a down turn there will be bank repo homes that are liquidated far below their residual value. The over sold condition will drive down prices below residual value for a short time. Now is a good time for investors to buy low in the real estate markets. It is also a time for investors to buy stocks. The financial crisis created by the colapse of greedy bankers has driven down stock prices to a lower than residual value position. A wise investor does not join the herd of losers sellng stocks at a loss. A wise investor starts buying when eveyrone else is selling. Its time to buy.
It is an ill wind that blows no good for anyone. A crash of markets can be profitable if you don't panic. You can make money while others are losing theirs. Buy their panic sales at cheap prices and grow rich.
The other major factor fueling the “housing bubble” was massive and uncontrolled immigration. In 10 years the US government allowed 20 million illegal immigrants to move into the US. Twenty million new residents need something like 10 million housing units. The illegals tended to occupy the lowest priced housing in lower class neighborhoods. They took over 10 million homes and apartments where that hard working Americans had been living. That left 20 million hard working Americans being forced to pay untenable amounts to buy (or rent) homes that they could not afford.
People tend to think of houses as a fixed commodity, but overall houses are just as subject to the economic laws of supply and demand as any other product. A house has a residual value based on the hours of labor, cubic feet of concrete, board feet of lumber, etc. But when the available homes suddenly have 20 million more people wanting homes than there are homes available the price people will pay for a home is driven up and up beyond its residual value.
With the government allowing massive and uncontrolled immigration and concurrently encouraging uncontrolled lending to unqualified home buyers the demand for homes far outstrips the number of available homes. The prices for homes went up far beyond any reasonable or rational price in several parts of the US. Banks that had made loans on these properties, often at 100% of the street bid, were in a massively risky position. Greedy lenders knew that it would crash, but each of them was trying to make a fortune and get out, leaving the financial mess for someone else. It wouldn't last forever. It never does.
By about 2005 several factors were coming together to end the housing bubble. First, the government was finally beginning to respond to citizen demands to finally get control on immigration. Some were being deported. A fence was being built on the southern border. And the oil fueled economy of Mexico was providing jobs at home. Instead of millions of new immigrants demanding millions more housing units every year, the number of immigrants in the US became more stable and even declined in some areas. New housing construction began catching up with the demand for housing space. Sellers had to compete with each other for buyers. People now has an option to buy a less expensive home down the street, and the massive shortage driven inflation in housing prices came to a screeching halt.
Suddenly there was more homes than occupants in areas that has a serious housing shortage just the year before. The massively over inflated prices no longer had buyers taking homes at any price asked. Banks and other lenders found themselves holding paper on houses that were actually worth a lot less than they had loaned on them. About the same time, the FED raised interest rates a few points. Payments on all the Adjustable Rate Mortgages doubled just about overnight. Hundreds of thousands of hard working Americans could not afford to make payments on a $500,000 home at 8% or 10% interest.
So the greedy bankers, or often the banking corporations that the now-wealthy managers had abandoned, were left holding a lot of worthless paper and abandoned over-priced homes. The financial fallout of greed and corruption by bankers and our government will continue for a while. Housing prices will continue to fall until they reach some actual basis related to the cost of construction. The government will try to bail out the remnants of the greedy lenders. The government will not help the millions of hard working Americans who lose their homes. Instead the government will focus on the illegal aliens and low life scum who should never have been able to compete for over priced housing in the first place.
For a wise investor this is an opportunity to buy. The oldest economic theory for making money in housing, or in stocks, is “Buy low and Sell high!” Most people invest high and sell low. Millions of home owners and real estate investors have lost their shirt by buying high and selling low. In a down turn there will be bank repo homes that are liquidated far below their residual value. The over sold condition will drive down prices below residual value for a short time. Now is a good time for investors to buy low in the real estate markets. It is also a time for investors to buy stocks. The financial crisis created by the colapse of greedy bankers has driven down stock prices to a lower than residual value position. A wise investor does not join the herd of losers sellng stocks at a loss. A wise investor starts buying when eveyrone else is selling. Its time to buy.
It is an ill wind that blows no good for anyone. A crash of markets can be profitable if you don't panic. You can make money while others are losing theirs. Buy their panic sales at cheap prices and grow rich.
Labels: illegal aliens, Immigration, Investments
posted by Bob | Monday, September 15, 2008
3 Comments:
Greetings, Comrades.
Welcome to the newly formed USSA, the United Socialist States of America. Congradulations. This morning, we all co-signed on the loan to pay for our own enslavement. By any realistic accounting methods, we DOUBLED the national debt today. And what did it get us? After the largest transfer of wealth the world has ever dreamed of, the dow still finished down for the week.
We had a decent run. At least ostensibly, the Constitution held out for 221 years, and 1 day. But it's all over. The government created by that document is now a wholly owned subsidiary of the banking system. And the worst thing is, by what currently passes for "law," that ownership is entirely legal.
Meet the new boss, same as the old boss. But the new boss isn't even theoretically constrained by the Constitution.
I no longer recognize the words patriotism, law, or treason, in connection with the United States. None is applicable to the relationship of a man to a for-profit corporation.
Note to anonymous;
The huge and rapidly increasing national debt is likely to hasten the day when the US Government collapses under its own bureaucratic mass. When that day happens, and several prominent radio talk hosts have already talked about a coming revolution, the US will probably be restructured in several economically viable divisions. Men will have an opportunity to recapture our states and our nations. In the mean time, make hay while the sun shines.
Countries that can't pay their bills have a tendency to get wars and revolutions thrown at them. What else do the big lenders to gov't have for collateral?
Post a Comment
<< Home