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AP article on QE2.
Wednesday, November 3, 2010
Northern Virginia Bits Bucket 11/3/2010
Posted by Harriet at 6:00 AM
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19 comments:
Well it look like QE2 was exactly what the market expected and the move in stocks and bonds was pretty small.
They are buying ~$600B of treasuries by June 2011. This is roughly the same pace they bought during the original QE. The only difference was that the original QE lasted twice as long...
Well folks, it seems like its goodbye. I am sailing on the QE II.
I simply wrote a check to my checking account for $500 Billion Dollars and deposited it.
And then I turned around, went to the end of the line and and when it was my turn at the teller, I withdrew the same amount.
I'll never know why I waited so long to discover this easy way to riches.
Thanks Ben Bernanke. I needed that.
Off to the Caribbean in a man-kini for me!
tah-tah.
:)
Does anyone else think this whole topic is dead? Meaning economy, housing, dollar, stock market...
I think we are past the bottom.
Maybe, VA_Investor. Or, maybe everyone is a little dazed at the thought of Texas Native in a mankini...
Foreclosure Crisis: Stealth Stimulus for Defaulters.
http://blogs.wsj.com/developments/2010/11/01/foreclosure-crisis-stealth-stimulus-for-defaulters/
Freddie Mac reported a $2.5 billion net loss. Freddie Mac's REO inventory increased 20% from 62,178 at the end of Q2 to 74,897 at the end of Q3. And that is expected to increase sharply in Q4:
Foreclosure activity for non-performing loans also continued to increase during the third quarter as many of those loans transitioned to REO. The timing and volume of the company's future REO activities could be adversely affected by deficiencies in the foreclosure practices of the company's mortgage servicers, as well as related delays in the foreclosure process.
Mark Zandi says we have a year in housing decline left then it's nothing but up from there.
http://www.npr.org/blogs/money/2010/11/02/131017239/the-tuesday-podcast-the-end-of-the-housing-bust
VA-
I agree that at least most of the excitement is gone. I think the chance of a total economic collapse is really low at this point. The same is true with the housing market. Now most of us are arguing about whether prices will a up a few percent vs. a few percent lower. I think it is harder to get people excited about a small change in prices. Perhaps by the end of the winter if prices are down ~5% we may be able to drum up some interest again...
VA, absent other big problems, you may be right re the bottom. Me, I'm not contrarian, but I'm a bit concerned about how the 112th Congress will be able to muck things up.
To me there are 3 big variables on the table
1) Long term Interest Rates
2) Federal Spending Locally
3) Shadow Inventory and psychology.
if the GOP slams spending or does a shutdown? It will hurt real estate.
If rates rise,
If the banks release inventory
I thought i saw that the banks are still sitting on 4 million units.
wether they switch to short sales or foreclosure, the whole deal may get ugly still
If you bought in 99, you are fine, but, if you bought in 05, who knows,
We are basically arguing about a year spread, where is the danger point
contrarian-
The first article is from 2008. I have no idea why the second article is claiming they are going zero in 4 months, but I doubt it will happen. Either way we know that the fed is trying to get rates down so I am not sure what you are trying to convey.
housebuyer,
is it safe to assume the FED wants mortgage rates to stay near current levels?
tks!
"contrarian said...
short-term interest rates may go negative
first, as the deflationary depression accelerates early next year, but when long-term interest rates increase, housing prices will tank."
So now that Robert "the Great Depression II starts in 1993" Prechter has been thoroughly discredited, and Hal "I have the real stress tests" Turner is in prison, I guess you have turned to a new guru for guidance. Amazingly, this "soverign speculator" guy thinks a deflationary collapse is inevitable too! What are the odds!
Still, I wonder if this guy has a good long term track record, or perhaps he like Prechter and Turner suffer from pre-conceived ideas he got glug, glug, glugging from the fountain of doom. Lets check it out shall we?
__________________________________
Soverign Speculator predictions 12/13/2008:
"So here are some new predictions for the next 24 months:
Unemployment as reported will hit 12%. Real unemployment (U6 — see shadowstats) will be 25%, as in the ’30s.
GDP will fall at least 15% from peak 2007-2008 levels. GDP is a bogus stat (why are consumption and government expenditures included?), but I’ll defer to convention.
The Dow will have breached 3000, with a few 20% rallies along the way, a couple of which lasting a few months.
Home prices will continue to drop, and Case-Schiller will register a 40% decline from peak by the end of 2010."
http://sovereignspeculator.com/2008/12/13/so-where-are-we-now/
_________________________________
So lets see here, peak unemployment was at about 10% (18% shadow stats) so thats a FAIL. Also, by the end of 2010 Case Shiller should be down 25-28% so another FAIL there. GDP down "at least" 15%? Another swing and a whiff here, so 0-3 isnt too good!
My favorite though is his market prediction (dow will breach 3000 by 12/13/2010). Not only is this wrong, but it is wrong by such a magnitude that it is hard to fathom.
In any event, good luck with your new "guru" contrarian. Based on his long term track record (0-4), you will be just fine GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG, GLUG!
MM-
I would think that is what they want, although I am not as confident they are all powerful in dealing with long term rates. Interest rates went up a good amount while they were doing their original buying.
I would think they would try and step up their purchases if rates went over 5%, but I wouldn't bank on them keeping rates exactly at current levels (they could go higher or lower).
http://voices.washingtonpost.com/political-economy/2010/11/jp_morgan_chase_to_unfreeze_fo.html?hpid=moreheadlines
However, he said the bank risks the loss of millions of dollars for each month that foreclosures are delayed, so it hopes to begin refiling soon.
J.P. Morgan froze foreclosures in 40 states affecting about 127,000 loans.
Bank of America recently began restarting some foreclosures, and Ally Financial has been unfreezing foreclosures on a case-by-case basis as individual files are cleared.
( Yeah they want these restarted before all hell breaks loose )
pat,
Local numbers are far more important. Did you look at that FX Cty business report? I'm sure much of the region is similar.
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