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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Skeeter Bug who wrote (104574)	8/22/2009 8:07:14 AM
From: Real Man	Read Replies (1) \| Respond to of 110194

No, but we lever up the trillion we printed. With that much liquidity it is likely the globe will recover. As long as Fed keeps rates at 0, banks can lever up and bring longer term rates down.

To: Skeeter Bug who wrote (104574)	8/24/2009 12:03:07 PM
From: John Vosilla	Read Replies (1) \| Respond to of 110194

I trust what I do in this kind of environment more than playing anything related to the stock market casino. Home prices did quite well in the rising rate environment of the 1970s and the gold/commodity bulls got decimated when things turned but prices kept rising for much of the 1980's. Got to remember if cost of living double and interest rates go up to 10% you will have a corresponding rise in rents, incomes and costs to construct a home. If you bought property during this current period and locked in low fixed rate you are going to be sitting in the cat bird seat.. Distressed RE investing especially isn't what the so called experts tell you it is painted with a broad brush by so many novices. It is quite simple if you know how to do it but some hard work and expertise is required to find a house with more instant equity you can monetize if you choose than many people make in a year at their job or waiting for their big stock market payoff that might never come. You really think when we buy a house today for $35k that is worth easy $65k fixed up and rents for $700 if we choose to hold and that would require about $110k to build today even if the land was free we are really concerned with much else but do we sell for a nice profit or put into the long term portfolio with some low fixed rate leverage as the best inflation hedge on the planet? Remember this is a business YOU control and you are not at the back and call of Goldman Sachs. It was great for me for a very long time till things went crazy in 2004 and all the dumb money created great risk and my only game plan as a conservative investor who understands RE cycles too was sell what I had left and get out of the acquisitions game completely. I hated that most of all cause the chase and hunting for deals was my life and suddenly it was gone. Now some played the game longer (believed in those demographic trends by the chambers of commerce and realtors) and cashed out at incredible prices a year or two longer, but most stayed around too long and leveraged into bigger projects and went under. Most of the risk is out of the equation now (except certain improved commercial and vacant land that I wouldn't touch at almost any price) and I am very happy to be one of the survivors.