patrick.net
An Antidote to Corporate Media
1,363,881 comments by 15,735 users - stereotomy online now
« First « Previous Comments 12 - 13 of 13 Search these comments
@Troy.
Wow, that's big chart and tiny graph. I need bigger monitor. :)
Yes. This economy after 2008 so far has been driven by bullshit.
You said "never underestimate the power of bullshit" in the other thread, and I do agree with it. Add "too big to fail" and "too spoiled to get real" on top of it too. Someone may call recovery is recovery whatever bullshit is there. Some place like DC area looks like everything went back to pre 2008 era. You know full of gangs in starbucks etc. yeah, these people is trying their best to cut some costs... by skipping a dessert or something.
But I can not be sure about recovery yet. Because to me, our ecomony looks just like BP oil spill. They add a cap on it and said it's under control. But those problems that cause the spill haven't been fixed, and it is spilling all over at this very moment... just like our national debt.
Ok, let's leave it right there, think it is ok for a while.
But what worries me is this. What do we have in economy to lead next decade?
@ECCB
What I asked was your reasoning, not a solid evidence. So I heard you. The part I have a doubt is "pay attention" part. This country is largely driven by capital hill, wall street and sillicon valley. Don't know about sillicon valley though, other two places are never good at paying attention. So, we will see what's gonna happen. :)
EastCoastBubbleBoy
@
2010 Jul 11, 11:03am
By "pay attention" I am referring to my expectation that the mainstream media will start up with stories about "where we are now" (economically speaking) as the anniversary of the Lehman / Bear Sterns / panic of 2008 approaches.
Once the news cycle focus back on the economy, everyone will be talking about where things really are, good, bad or otherwise.
« First « Previous Comments 12 - 13 of 13 Search these comments
Are housing prices and interest rates related? I am getting conflicting answers:Â
Here is a quote from Shiller's book, Irrational Exuberance, "Obviously, there is no hope of explaining home prices in the United States solely in terms of building costs, population, or interest rates."Â
Here is one reason Patrick offers why it is a terrible time to buy: "Because it's a terrible time to buy when interest rates are low, like now. Realtors just lie without shame about this fundamental fact. House prices fall as interest rates rise, because a fixed monthly payment covers a smaller mortgage at a higher interest rate."Â
Using Shiller's data set from 1890 until the end of 2007, I calculate the correlation of house prices and long term interest rates to be 0.20, which does not seem too strong. Even if the correlation were strong, this would tell us nothing about the direction of causation (i.e. do high house prices cause high interest rates or do high interest rates cause high house prices?). Note the correlation is not negative as Patrick suggests.   Â
Can anyone accurately predict interest rates? I think you can make a fortune in the bond market if you can forecast interest rates. Maybe those of us who have not made money speculating in the bond market should ignore the current level and forecasts of interest rates when considering real estate investments.
#housing