Why Housing Won’t Bounce With Lower Rates

By Dave Kranzler – Re-Blogged From Silver Phoenix

Our advice is to own as little exposure U.S. equity exposure as your career risk allows.” – Martin Tarlie, member of portfolio allocation at Grantham, Mayo, Van Otterloo investment management.

The following is an excerpt from the latest Short Seller’s Journal:

Economy is worse than policy makers admit publicly – Less than four months ago, the FOMC issued a policy statement that anticipated four rate hikes in 2019 with no mention of altering the balance sheet reduction program that was laid out at the beginning of the QT initiative. It seems incredible then that, after this past week’s FOMC meeting, that the Fed held interest rates unchanged, removed any expectation for any rate hikes in 2019, and stated that it might reduce its QT program if needed. After reducing its balance sheet less than 10%, the Fed left open the possibility of reversing course and increasing the size of the balance sheet – i.e. re-implementing “QE” money printing.

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Housing Bubble Is Popping Right Now

By Adam Taggart – Re-Blogged From Silver Phoenix

As we’ve been tracking here at PeakProsperity.com, the housing market is starting to look quite ill.

After the central bank-driven Grand Reflation following the Great Financial Crisis, home prices are now beginning to nose over from their new bubble-highs.

Has the Housing Bust 2.0 begun? If so, how bad could things get? And what steps should those looking to pick up values at much lower prices in the future be taking?

This week we talk with citizen journalist Ben Jones, property manager and publisher of TheHousingBubbleBlog — where he tracks the latest headlines and developments in the housing market.

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First Time Home Buyers Info

By Julia Schulte – Re-Blogged From 5280 Lend

Help for the Denver First-Time Home Buyer

[Though the author is based in Denver, the information is very elevant wherever you are located. -Bob]

If you are a first-time home buyer, you are no doubt experiencing a lot of doubt and stress about the process. Purchasing a home is a big financial commitment, and, most likely, the biggest you’ve ever faced. There’s a lot of information out there, and you want to make sure you get the best available deals and rates. What’s a good way to make sure you do that? Enlist a reliable and experienced resource. 5280lend will be your “Tour Guide!”

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How “Free Money” Helped Create Sizzling Housing And REIT Gains In Recent Years

By Dan Amerman – Re-Blogged From Silver Phoenix

Housing prices and the associated REIT returns have worked very differently in the United States since the recession of 2001. The increasing financialization of the real estate markets by Wall Street, and the aggressive and unconventional interventions by the Federal Reserve over that time, have combined in multiplicative fashion to produce new and volatile sources of housing profits and losses.

One such change has been the creation of an extremely powerful profit engine for housing, that most real estate investors have not been taking into account. Indeed, there is a strong mathematical case to be made that “yield curve spread compression” has supported and enabled the substantial majority of housing price gains for homeowners and investors on a national average basis since the beginning of 2014.

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Mortgage Applications Hit 4-Year Low as 30-Year Rate at 8-Year High

By Thomson Reuters – Re-Blogged From Newsmax

U.S. borrowers filed the fewest applications to buy a home and to refinance one in nearly four years last week as some 30-year mortgage rates increased to their highest levels in about 8-1/2 years, the Mortgage Bankers Association said on Wednesday.

The Washington-based industry group’s seasonally adjusted gauge on mortgage requests, which is seen as a proxy on future housing activity, fell 4.0 percent to 316.2 in the week ended Nov. 2. This was the weakest reading since December 2014, according to the Mortgage Bankers Association.

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Shiller: Housing Market Ready to Burst, Reminiscent of 2006 Bubble

Re-Blogged From Newsmax

Nobel Prize-winning Yale economist Robert Shiller warns that the weakening housing market is showing the same symptoms as it did just before the subprime housing bubble burst a decade ago.

The economist, who predicted the 2007-2008 crisis, recently told Yahoo Finance that current data reflects “a sign of weakness.”

“The housing market does have a momentum component and we’re seeing a clipping of momentum at this time,” said Shiller, the co-founder of the Case-Shiller Index, which tracks home prices around the nation.

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Rising Interest Rates Start Popping Bubbles

By John Rubino – Re-Blogged From Dollar Collapse

Towards the end of economic expansions, interest rates usually start to rise as strong loan demand bumps up against central bank tightening.

At first the effect on the broader economy is minimal, so consumers, companies and governments don’t let a slight uptick in financing costs interfere with their borrowing and spending. But eventually rising rates begin to bite and borrowers get skittish, throwing the leverage machine into reverse and producing an equities bear market and Main Street recession.

We are there. After a year of gradual increases, interest rates are finally high enough to start popping bubbles. Consider housing and autos:

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