...meanwhile housing prices in some areas are reinstalling beyond 2006 levels juiced up by cheap interest rates. Buyers don’t care (at the moment) that housing prices have increased 10% per year, they only care about the monthly payment, thus prices have increased as interest rates decrease. If and when interest rates increase, those same inflated house prices will come down. Once again there will be numerous bag holders with a mortgage worth less than the current value of their home.
I was watching a video on youtube from July where Peter Shaff was debating four other "economists" on MSNBC. Shaff was adamant there was no way the Fed would be raising rates 2015 and the other panelists were mercilessly ridiculing him and calling him incompetent for such an assertion. Looks like, once again, he was probably right and everyone else was wrong. This doesn't bode well given Shaff's long term outlook.
DING DING DING DING!!!!!!!! We have a winner!! There IS NO relationship between what happens on Main Street and what happens on Wall Street and there hasn’t been any for a long time. Looking to some Wall Street slug for financial advice is like asking financial advice from the guy who just won the World Series of Poker - “Hey he’s a millionaire isn’t he?”