Yeah, the housing market has been nukcing futs. But there are major differences between now and the mid-late 2000's. The quality of mortgage credit is much better than it was then, and substantial portion of purchases have been all-cash. So I do not think it will be the housing market that leads the credit-collapse this time. …
Yeah, the housing market has been nukcing futs. But there are major differences between now and the mid-late 2000's. The quality of mortgage credit is much better than it was then, and substantial portion of purchases have been all-cash. So I do not think it will be the housing market that leads the credit-collapse this time. It will be other, over-leveraged portions of the economy -- businesses with a lot of debt that they can't service at higher rates and so on. Then of course there's the 30 trillion pound elephant in the room...
Depends on which mortgages. In 2008 the trigger was residential real estate. This time commercial real estate is the unhealthy sector.
But you are right that we are not likely to see wave after wave of residential mortgage defaults.
Unfortunately, the financial markets have been floating on magic monopoly money courtesy of the Fed for so long that even a modest decline in housing will burst the asset bubbles that are Wall Street today.
Yeah, the housing market has been nukcing futs. But there are major differences between now and the mid-late 2000's. The quality of mortgage credit is much better than it was then, and substantial portion of purchases have been all-cash. So I do not think it will be the housing market that leads the credit-collapse this time. It will be other, over-leveraged portions of the economy -- businesses with a lot of debt that they can't service at higher rates and so on. Then of course there's the 30 trillion pound elephant in the room...
Depends on which mortgages. In 2008 the trigger was residential real estate. This time commercial real estate is the unhealthy sector.
But you are right that we are not likely to see wave after wave of residential mortgage defaults.
Unfortunately, the financial markets have been floating on magic monopoly money courtesy of the Fed for so long that even a modest decline in housing will burst the asset bubbles that are Wall Street today.