Booms, Busts, and Recoveries Message Board

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Strategies & Market Trends : Booms, Busts, and Recoveries

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To: tradermike_1999 who started this subject	9/7/2001 9:04:47 AM
From: Ramsey Su	Read Replies (2) of 74559

Unemployment up. Real estate is going to crash. No soft landing. what matters is not what unemployment as REPORTED today but what it ACTUALLY is today. With all the layoff announcements, is there any chance that unemployment rate will be going down? Secondly, the self employment sector is going to get murdered. I went to a restaurant last night for dinner. There were 2 tables filled for the two hours that we were there, including ours. Small business failures are going to hit the roof. What is that going to do to real estate? Well, we know the answer. What can the Fed do? Dropping another 50 points would put us at the low of the early 90s of 3%. It remains to be seen whether short term rates can further influence long term rates. However, lets just assume mortgage rates will drop. At 7%, a borrower's monthly payment is $6.63 per thousand of mortgage. At 6%, it is $6. For those who are employed, a refinance would provide a nice dinner or two per $100,000 loan. For the unemployed, the lower rate (assuming they have equity to refinance), a reduction of $100 or $200 is not going to be enough make a difference. It is going to be ugly. Ramsey

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