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Non-Tech : Deflation -- Ignore unavailable to you. Want to Upgrade?

To: JF Quinnelly who wrote (263)	4/21/2004 3:47:10 AM
From: Maurice Winn	Read Replies (1) \| Respond to of 621

He can do 0.25% steps up and see how they go. Rates for mortgages have already risen a bit. My sister-in-law bought a house about a year ago with not a lot down but has a fixed 30 year mortgage at something under 6%. The cost was higher than a variable mortgage but 30 years is a long time [I think it was 30 years]. I wouldn't want to be the lender! That's not much of a return in my book. If the first 0.25% doesn't break the bank or the borrowers, then he can just go on squeezing up every few months until there is some squealing. He can maintain loud squealing, but avoid shrieking and leaping off parapets. I don't think he'll move rates up as fast as he brought them down. Down usually happens a lot faster than up. Gravity, panic, overload and other natural forces often result in very rapid, unimpeded collapse. It was very impressive that we got away with the Y2K bust without any dramatic, self-sustaining collapse [other than a market clearing, margin adjusting reordering]. Mqurice

To: JF Quinnelly who wrote (263)	4/21/2004 11:40:26 AM
From: Ilaine	Read Replies (1) \| Respond to of 621

How could you possibly know whether housing prices outside of LA/Southern California are in a bubble? In court, you couldn't testify to housing prices unless you were 1) a homeowner testifying about the value of your own home or one in your neighborhood; 2) a real estate agent testifying about the value of houses in the neighborhoods you sell; 3) an appraiser testifying about houses after looking at comparable sales of comparable houses. I realize that this is the Internet, so you aren't being held to the same standards, but it seems very odd to opine about something you know absolutely nothing about. Shouldn't you reserve your opinions to things you know at least a smidgeon about? I don't ask much. Just a smidgeon. I agree that interest rates are likely to go higher - not just because Greenspan said it, but because commodity prices are going higher, and mere reversion to the mean predicts it. Eventually, if not sooner.