Tuesday, 12/17, Market WrapUp (Circuitous Reasoning)

Financial Sense Online ^ | 12/17/2002 | James J. Puplava

[rohry]

Study: Mortgage Refinancing Fueling U.S. Grow

Tuesday, December 17, 2002

NEW YORK — A record wave of mortgage refinancing since 2000 has put money in consumers' pockets and fueled one-fifth of all U.S. economic growth since 2000, a report released Tuesday said.

[rohry]

Market WrapUp is delivered...

[dalereed]

When the forclosures start it's going to generate into a landslide.

[Mr. Jeeves]

This is one of the main reasons why business has been reluctant to spend new money on additional plants and equipment when one out of four factories in this country is not being used.

What an interesting factoid. Bet you'll never hear that on CNBC.

[SauronOfMordor]

When the forclosures start it's going to generate into a landslide.

It's going to be interesting. As more middle-class people go 6+ months unemployed, they will find it harder to meet mortgage payments. The first ones to get out will be able to get prices exceeding their outstanding mortgages, but the later ones won't. With too many houses on the market, the banks will have to sell for whatever they can get -- renting it out until the market improves only works if you have somebody competent on top of things to make sure that the tenants dont trash the place.

[RightWhale]

one out of four factories in this country is not being used.

Plenty of idle production capacity, but equally important is that the number of actual factory jobs in the country has declined markedly in the past few decades. Thinking in terms of national security, this cannot be a good thing.

[RightWhale]

The economy is dependent on consumer spending.

This must be the new economics. It used to be that production and wages drove the economy. Production, not consumption. Wages, not borrowed money. The goal of wealth has been replaced by affluence. If a family is affluent they have massive expenditures matched with massive income. Wealth doesn't work that way at all. The day family revenues fall and the payments on the luxomobiles and huge palace house become a burden, affluence is over, and there is still no wealth. Our wealth has been traded for cars and house payments. Cars wear out and rust away; houses need maintenance and are taxed. It's all affluence. Where has the wealth gone?

[arete]

Ever hear of intergenerational 100 year mortgages? Japan uses/used them when their real estate bubble burst. They work just like government debt -- your kids get to pay for everything.

Richard W.

[B4Ranch]

We are basing our prosperity on even higher mountains of debt. To give you the size of that debt since 1998 the U.S. credit system has generated $9.7 trillion of debt taking our outstanding debt to $30.4 trillion.

How can we be financially secure when our government (we the people) owe $30.4 trillion? We need to get rid of the Federal Reserve and their way of thinking. Any month that I wasn't able to completely pay off my credit cards I was uncomfortable.

[B4Ranch]

Study: Mortgage Refinancing Fueling U.S. Grow

This didn't put money in our pockets. It reduced our indvidual debt to the mortgage companies.

[dalereed]

I won't live like that!

I have a house worth $675k, a condo worth $195k, $50k in the bank and don't owe anyone anything.

[dalereed]

"Any month that I wasn't able to completely pay off my credit cards I was uncomfortable."

I've never used a CC unless I had the money in the bank to pay whatever I charged. I've never considered a CC a lending device, only a convienence.

[B4Ranch]

I have a house across the street from me that rents in the neighborhood of $1400 a month. It has been vacant for the past five months. I don't know if it is payed off or if the owner is still paying to a mortgage company. To me it looks like a $250,000 piece of property that is not producing any income at all, only costs, ie. taxes and maintenance.

[B4Ranch]

Stock Market Crashes Are Predictable; Major Decline Is Coming in 2003 and 2004, Says UCLA Physicist

[B4Ranch]

When I was younger with both kids at home, occasionaly I didn't have that luxury.

[steveegg]

Speaking of debt...

Conseco files Chapter 11, 3rd largest BK after Enron and Worldcom

[imawit]

By the way, what happened to all of the traders that used to give pix on this thread ?

Also by the way, Paid in Full are up again. December is still looking like the best month of the year for refi and existing home fi as it historically is bar nothing. Straight and up to the minute dope from the cashiering at the banks. Payoff quotes are still at record levels too.

Next year can be a whole different story though.

[SauronOfMordor]

This didn't put money in our pockets. It reduced our indvidual debt to the mortgage companies.

It did in mine. The lower interest rate enabled me to change my mortgage from a 30-year to a 10-year, after increasing my monthly payments a tad. The mortgage should be paid off next year.

[SauronOfMordor]

When I was younger with both kids at home, occasionaly I didn't have that luxury.

I have three kids at home. I have a policy of "no debt", and adjust my standard of living to be within my income (very low currently, with the state of the IT consulting field). I drive a 10-year-old car, but I'm debt-free except for mortgage (and I'm working on that too).

[Tauzero]

"The mortgage should be paid off next year."

Bravo!