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Goldfinger

Let's Create More ( House Price ) Inflation!

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http://www.bloomberg.com/apps/news?pid=206...&refer=home

Feb. 27 (Bloomberg) -- U.S. regulators for Fannie Mae and Freddie Mac removed limits on the companies' $1.5 trillion mortgage portfolios, bringing an end to a restriction that stifled their ability to provide financing for the housing market.

The caps, imposed in 2006 after the two largest mortgage finance companies uncovered $11.3 billion of accounting errors, will end on March 1, the Office of Federal Housing Enterprise Oversight said in a statement today. Ofheo kept in place a requirement for the companies to hold extra capital.

The US on its way to hyperinflation. Good stuff.

Happy days. So glad there are no restrictions to lending anymore. Soon at 0%.

Food/energy inflation? Ahh, no problem. Just ignore.

Edited by Goldfinger

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http://www.bloomberg.com/apps/news?pid=206...&refer=home

The US on its way to hyperinflation. Good stuff.

Happy days. So glad there are no restrictions to lending anymore. Soon at 0%.

Food/energy inflation? Ahh, no problem. Just ignore.

on the one hand its seems a sensible thing to do. ie use the US govt's credit rating as the 'lender' to reduce mortgage rates for the man in thestreet. but what they dont seem to want to face up to is the simple fact that there is already oversupply in the money supply and its needs to contract not expand.

cutting rates and providing cheap finance to GSEs and banks is not going to lead to cheap finance for the man in the street anymore. the banks have clocked on to the indebtedness problem its just the Fed (and US govt) which needs to wake up still. there is no more cheap money. if the yield curve steepens any more im going to start a bank myself.

let everyone go bust and hopefully they and their children will learn a very valuable lesson.

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IMO, this is another very serious inflation attempt. They might become more successful than they can imagine in their wildest dreams.

Good find GF,

I wonder how far official inflation will be allowed to grow before they realise that they can't revive the economy. 10% 20% 30%?

It could be some time as I reckong Bernanke is stuborn..... :ph34r:

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you believe they will try and create inflation on purpose?

Of course they are. The game is simple

1) Inflation + inflation = inflation

2) Inflation + deflation = inflation

3) Deflation + deflation = end of the world.

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Jim Sinclair’s Commentary

Today’s biggest huh?

Regulators lifted the caps on Fanny and Freddie so they can buy more mortgages. Fanny and Freddy are both the slowest train wreck in market history.

Both are loaded with failed derivatives which they have been trying to evaluate for more than 18 months. They are both losing big money and they have just gotten permission to get deeper and deeper into the OTC derivative and debt hole.

God help us all.

http://www.jsmineset.com/

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Most of yesterday's 'bad' news came from the U.S. property sector . But even there all the latest headlines were not depressing. It turns out that much of the United States is actually experiencing rising housing prices. Trouble is, it's not the part that people live in.

Leading the nation is West Virginia, believe it or not, where house prices went up 19% last year. Even so, the median house in the mountain state sold for only $116,000. Robert Shiller, who is an expert on housing price trends, says the "back country cities" just never got into the "bubble picture." They're still good buys.

Readers might want to consider a trade: sell California, buy West Virginia. We like West Virginia, and can imagine ourselves living happily there. But most people find it a bit backward and depressing. Here in London, prices are so high that $116,000 would barely buy a parking space. Even a tiny row house in London... with only two bedrooms... and barely 1,200 square feet of space... in a modest part of town, well away from the center, is on offer for $1.7 million. People here can't imagine being able to buy a whole house for $116,000. Then again, they've never been to West Virginia.

But in the rest of the nation, the housing picture is not so pretty.

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And the good news for the Bears.

"Foreclosures up 90% as mortgages reset," says a Bloomberg headline. The Case-Shiller Index revealed that the housing crisis is deepening. In the last quarter of '07, prices of existing single-family houses fell 5.4%... up from a decline of barely 1% in the first quarter. Year to year, prices fell 8.9% in the fourth quarter of '07... speeding up to 9.1% in the month of December.

California does everything to excess - even a housing decline. In the Golden State, house sales fell 29.8% in January (from the preceding year), with prices down 21.9%.

A government housing index, meanwhile, puts prices nationwide down at the steepest rate in 17 years.

"Housing in freefall until credit loosens," summarizes the International Herald Tribune .

Naturally, this puts consumers in a bad mood. Consumer confidence is at a five-year low... and headed down. Housing is the average man's major asset. When it goes down, he takes it hard.The other awful consequence is that the cost of owning the house goes up. As the house becomes more "valuable," typically the costs of property taxes, insurance and upkeep mount. Thus, the net value, or net service, an owner gets from his house actually goes down. He has the same roof over his head, but it costs him more.

That is the trouble with inflation - even inflation in the housing markets. Ceteris paribus, inflation reduces the real value of both assets and time. Most Americans no longer have much in the way of assets. The big, post-Reagan boom, 1982-2007, discouraged saving. If people had equity in their houses, they tended to spend it. And the real value of stocks has gone down over the last decade. That leaves the nation of capitalists dependent on its own labor. The average man in American has no capital to work with... he only has his hands and his brain, such as it is.

Edited by Bardon

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  • 293 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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