patrick.net

Could you recommend a good psychologist in the Seattle area?

I don't know any in the Seattle area in particular. Honestly, psychiatrists and psychologists usually don't mingle with other doctors other than neurologists on occasion. Psychologists generally have either a PhD in counseling or a LCSW degree, btw. This is farther out from my area of expertise, but generally one would see a psychiatrist (MD) for diagnosis, medical (drug) therapy, and counseling on a more basic level. A psychologist would be more appropriate for non-pharmacologic therapies (counseling, that kind of thing).

In general, UW and Swedish both are great places for all-around medical care up in your area.

Isn't Fraiser Crane in Seattle???

NMA (not medical advice).

I thought someone said, “The coldest winter I ever spent was a summer in San Francisco.”

Perhaps your roommate was that someone.

That's unlikely, since the quote is from Mark Twain...

I heard that psychiatrists are great traders.

HARM

You're a more patient man than I. I'd have removed him -- actually did remove him -- long ago. I use the term Troll so sparingly I've only applied it to one poster ever here at Patrick.net. And he's earned that distinction repeatedly over the past year.

SQT

Great to see you back. Great thread.

@Randy H,

Well, he's officially on notice, we'll see...

@TR,
Then interest rates are going to explode. Bye bye 6.25, hello 8…

As a long abused saver, I would warmly WELCOME such interest rates with open arms (but not "ARMs").

So what do regular posters think a 'good' rate would be? From a strictly personal level, ridiculously high levels sounds good to me, as my large downpayment becomes even larger as housing prices crash from the high interest rate... but really high rates, say above 10%, is pretty indicitive of serious problems in the economy, right? 8% sounds high, but not high enough to be scary to the general population.

Interest rate is not the main problem. Loose lending is. In short, any financing product that requires the assumption of housing appreciation is a culprit.

Then interest rates are going to explode. Bye bye 6.25

You mean bye bye 5.25 ? I think we'll go below 5 before we see 6.25.

So what do regular posters think a ‘good’ rate would be?

It is a relative measurement. I'm surprised you think 8% is high. 8% was considered low in the 80's. Correct rate in my view is 2-3% above true inflation.

Ozman,

The reason I say 8 sounds high is it implies core inflation of about 5% (and real inflation of higher!). I'm assuming that high rates would be because of inflation, not just some whim of the the FED. High interest rates might drive down prices of houses, but it implies eating up savings through inflation, meaning more stringent inflation hedging would be required.

What's a respectible level of inflation? What happens to rates if we get deflation (unlikely as they really will print physical money to avoid that.)

What’s a respectible level of inflation?

Inflation is by definition hedonized to 2.0%. What do you mean by respectable? :)

Also, we're seeing 6.25 right now. That's what I'd been quoted on a 20% down 30 year Fixed with half a point. 6.325 for no points.

2% sounds fine, but how is it being measured? ISTR seeing mention of different rates in the UK, broken down by age group.

off-topic: mortgage points? I understand the what, but not the why; is it just a way to tie the interest rate to the downpayment size without forcing people to do math?

Also, we’re seeing 6.25 right now. That’s what I’d been quoted on a 20% down 30 year Fixed with half a point. 6.325 for no points.

SFBB,
You're talking about mortgage rates (FRM in fact), while ozman is talking about Fed rates. There seems to have been a miscommunication...

@ Peter P,

Everyone is looking for the unwinding of the yen carry trade but I'm not clear on what causes that other than an appreciation in the yen/usd rate. Why would that happen when the bank of Japan doesn't want it to happen? All of these central banks have printing presses so I can not figure out why they can not manipulate currencies indefinately.

The only lasting reason for sustainable yen appreciation as far as I can figure is that the interest rate differential narrows substantially.

Please correct me where I'm wrong on any of these points because I've been scratching my head on this for years.

Paul

Inflation is by definition hedonized to 2.0%. What do you mean by respectable?

Exactly. What inflation rate do you mean anyway? The Fed seems to like core CPI, which excludes energy and food, considered volatile in price. Let's not even get into the recent elimination of the publication of M3...

"Interest rate is not the main problem. Loose lending is. In short, any financing product that requires the assumption of housing appreciation is a culprit."

I agree, you can have higher interest rates which makes the fed appear tight but if money supply is increasing substatially, that is still an easy money policy.

Everyone is looking for the unwinding of the yen carry trade but I’m not clear on what causes that other than an appreciation in the yen/usd rate.

What about the appreciation in the JPY/GBP rate? Don't you think the Yen-Sterling carry trade had been very lucrative, much more so than than Yen-Dollar pair?

I agree, you can have higher interest rates which makes the fed appear tight but if money supply is increasing substatially, that is still an easy money policy.

Exactly, a 10% mortgage with a 3% interest-only introductory rate over the next 10 years will not help the correction much.

We could have a whole blog on inflation. It is actually a myth. It takes the same amount of gold to buy a house as it did 100 or even a thousand years ago. Inflation is a tool of debtors/powerful to oppress the masses. By debtors I don't mean JBRs, I mean the big boys.

It's my theory, and I welcome it to be challenged.

"What about the appreciation in the JPY/GBP rate? Don’t you think the Yen-Sterling carry trade had been very lucrative, much more so than than Yen-Dollar pair?"

I'm sure it's very lucrative but my question still stands; what it is the catalyst for a signifigant sustainable end to these carry trades?

ou’re talking about mortgage rates (FRM in fact), while ozman is talking about Fed rates.

Thanks Skibum for the clarification.

SP,

If Chinese slow purchases of treasuries won't Japan step in as the buyer of last resort just like in 2003?

Paul

What’s a respectible level of inflation?

A level that will force people to invest their savings and not park it a Bank account :)

Gee let's lower interest rates some more, and adjust inflation upwards. Ozman, you're on the right path IMO. Let's also tax gold as a captial gain. (Bastards)

I might be a little biased :)

Paul said:
what it is the catalyst for a signifigant sustainable end to these carry trades?

- A Black Swan in the financial markets (maybe several HF's crashing)
- US Government default
- Oil price denomination changed to Euro
- Another war

What was the catalyst for the Russian debt crisis back in 1999?

Reflexivity can create its own catalyst and/or tipping point.

- A Black Swan in the financial markets (maybe several HF’s crashing)

Investors turn to USD in times of crises

- US Government default

Won't happen, the USA has the printing press

- Oil price denomination changed to Euro

How does this impact the carry trades?

- Another war

Investors turn to USD in times of crises

It seems that we have one 10+ sigma event every ten years or so (e.g. 1987, 1998). It is about time. :)

Maybe black swans ain't that special after all.

Ozman,

Good start, but you missed:
- major oil supply disruption (see "another war")
- Smoot-Hawley protectionist legislation against the Yen/Yuan
- avian super-flu or ebola variant that mutates into human-transmissable form
- asteroid/comet strike

Investors turn to USD in times of crises

In a black swan event, anything can happen. Perhaps a 10-sigma euphoric event (e.g. world peace) will bring down the market. :)

RE: asteroid/comet strike

I thought NASA will simply fly a pair of space shuttle, land them on the heavenly object, and blow it up right before it passes some critical point.

Malcolm said:
We could have a whole blog on inflation. It is actually a myth. It takes the same amount of gold to buy a house as it did 100 or even a thousand years ago. Inflation is a tool of debtors/powerful to oppress the masses. By debtors I don’t mean JBRs, I mean the big boys.

It’s my theory, and I welcome it to be challenged.

I agree with your theory.
However, low Inflation probably has a good purpose in society. It is an incentive to take risk and invest in new businesses which create new jobs etc..
Inflation nourishes meritocratic societies and probably helps in the transfer of wealth to lucky/successful Entrepreneurs.

Peter P,

How naive of you. You really think the government would risk sending Bruce Willis on a mission that dangerous?? Ben Affleck... maybe, but Bruce? No way.

Paul said
Investors turn to USD in times of crises

History is no guide of future reaction. It is dangerous to assume this.

History is no guide of future reaction. It is dangerous to assume this.

Yep, that is the most important lesson from History itself.

But again, I am a naive little boy. :)

1998 - Russian debt crisis -- LTCM debacle -- Greenie bailout

87 I get. What 10-Sigma are you referring to that happened in ‘98?

WHen did LCT happen ?

Sorry, I meant LTCM, anyways Peter clarified it :)