July 6, 2014

Mid-Year Predictions

What are your housing bubble predictions at mid-year? Six months ago, “Dow tops out at around 17,000 (+.- 500)…we’re already there. Could go down to 12,000-14,000 by the end of 2014. Recession begins in Q3-Q4 of 2014, and will be announced in 2015. Housing prices continue their very slow, gradual decent. Prices don’t start seriously declining until ~2017.”

One said, “More and more people will wake up to the fact that a high flying stock market is doing nothing for them, and grumblings from the serfs get louder as they realize the PTB are screwing them six days to Sunday, and there are no jobs or extended UE bennies. Something wicked this way comes, something ‘nobody saw coming.’”

One had this, “YoY declines in real estate this year. There was value to be found in certain markets late 2012 and early 2013, but as witnessed by recent reports, the smart investors are out. It was amazing how much of the market this year was all cash purchases and investors. And yes, mortgage rates are going up. Poof.”

One year ago. “I think the most fundamental question is whether the Fed can run out of money for QE. I say it can’t…but opinions differ and I’m no expert on the Fed. If you say ‘they can’t print money, they can only loan money against collateral,’ what stops them from valuing Beanie Babies at 1T each for the purposes of collateral? If they can run out of money and do, or shut it off for any reason, we get the depression that we started into in 2008. If they can’t run out of money and choose to keep the spigot open then they slowly wring every bit of real value from the dollar to maintain the charade and then at that future time we have to restart our money system from scratch.”

And this, “My prediction is FASB rule 134 stays suspended. No Mark-to-Market means trillion of dollars of MBS and CDO are still rated the same as US Treasuries. Makes sense since the FED balance sheet is stuffed with them. It has been widely reported Ben Bernanke will exit soon. Selecting a new FED chairman is like getting a new Pope for Wall St.. I hope it’s a woman this time.”

And finally, “Inventory is going to the moon! And beyond! Meanwhile, home sales will slow down significantly. Because of things like job growth and income growth. Neither of which have been breaking records of late.”

Bits Bucket for July 6, 2014

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