Earlier quoted context omitted.
Going through mortgage application now, they grill the shit out of you on every little detail of your life now. They're aware of the last crash, and have done a lot to compensate.
On the other hand, I recently sold a house that received a lot of offers. Only one person actually had the down payment money. Everyone else's loans were approved, but most were people were coming with low cash and lower income than I would have expected. Some looked like irresponsible loans to me.
Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
121–130 of 134 posts
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#122So should I pull out on all my stocks and stuff everything into bonds then?
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#123Earlier quoted context omitted.
Bernanke was pitching them this idea. He suggested the Japanses government issues zero-coupon perpetual bonds and the BoJ buys them. Ha, ha, "bonds". As crazy as this sounds I think it makes sense - just admit honestly that the situation is fucked up, monetize, generate stagflation and eventual normalization.
It seems like I'm missing something basic. I would like to understand when the inflation happens and where it comes from. More money chasing fewer goods, sure, but if we already have too much of a money-equivalent, why aren't bondholders chasing goods with it already? And, clearly there isn't any inflation. It seems like demand should have increased when the government sold the bonds and spent the money.
Monetizing the debt overnight is like a dam braking.
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#124Earlier quoted context omitted.
It seems like I'm missing something basic. I would like to understand when the inflation happens and where it comes from. More money chasing fewer goods, sure, but if we already have too much of a money-equivalent, why aren't bondholders chasing goods with it already? And, clearly there isn't any inflation. It seems like demand should have increased when the government sold the bonds and spent the money.
You and everybody else. Japan's current situation seems to stump most economic models. I wonder if there's something about culture and having basic survival needs met. Most economic models assume effectively unlimited long-term demand: as productivity grows and people in existing sectors are thrown out of work, they will find new things to do, and the people who have reaped the financial rewards of productivity growt…
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#125So should I pull out on all my stocks and stuff everything into bonds then?
Stocks are pretty low risk if your investment time is long (>10 years)
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#126I'm a founder and have been getting spammed hard-core lately for small business loans. There are many companies offering 5-6 digit business loans and revolving lines of credit to basically anyone who can fog glass, and there are salespeople and spammers pushing them. I'd say I average 2-3 e-mails or cold calls per day. Feels like they're trying to stuff loans down my throat. I've spoken to other founders and small bu…
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#127Earlier quoted context omitted.
> "they will recover" If you invested in 1914 German stock market, it didn't recover until 2014.
Wasn't that more or less a societal collapse situation? I'm not sure that almost any investment vehicle is going to be reliable through two world wars.
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#128Earlier quoted context omitted.
It seems like I'm missing something basic. I would like to understand when the inflation happens and where it comes from. More money chasing fewer goods, sure, but if we already have too much of a money-equivalent, why aren't bondholders chasing goods with it already? And, clearly there isn't any inflation. It seems like demand should have increased when the government sold the bonds and spent the money.
But the government spent the money over decades. Monetizing the debt overnight is like a dam braking.
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#129Earlier quoted context omitted.
You and everybody else. Japan's current situation seems to stump most economic models. I wonder if there's something about culture and having basic survival needs met. Most economic models assume effectively unlimited long-term demand: as productivity grows and people in existing sectors are thrown out of work, they will find new things to do, and the people who have reaped the financial rewards of productivity growt…
I would be really grateful if you can let us know your thoughts that if interest rates go to zero, would the asset prices continue to increase to infinity?
This is pretty much the definition of hyperinflation, so there's a template for what happens here, but not in the developed world.
I suspect that a lot of the demand for Bitcoin is also driven by fear of this scenario. In the world above, the incentive for savers is to simply not play in the established financial world; they'll take their savings and put it in assets that are not rapidly going to zero. If only there were a transferrable currency that's deflationary by design and immune to manipulations of supply & interest rates...
Re: Risky Mortgage Bonds Are Back and Delinquencies Are Piling Up
#130Earlier quoted context omitted.
On the other hand, I recently sold a house that received a lot of offers. Only one person actually had the down payment money. Everyone else's loans were approved, but most were people were coming with low cash and lower income than I would have expected. Some looked like irresponsible loans to me.
When I was a whippersnapper 15% down was considered pretty low. These days you can get pre-approved with less than 10% down and no validation that your downpayment isn't a loan itself. Kinda crazy.