California man losing nine homes in mortgage mess
Shawn Forgaard, a 37-year-old software company project manager, bought one home for his family to live in and nine more as investments. He stands to lose all the investment houses in the mortgage meltdown but says he has come away wiser from the experience.
"Everyone stumbles. I'm not going to hide or run or live in denial, or with regrets," Forgaard told Reuters in an interview. "On the surface it looks like total devastation but it's just the opposite. I'm confident our lives will be much, much richer as a result."
That's exactly what we're told over and over again about our Goldilocks Economy.
Forgaard said that some good has come out of the experience and that his family is optimistic. He is relieved that he no longer has to deal with 10 homes at once and now will pursue a lifelong dream of starting his own business.
You know there is something seriously wrong with the currency when losing nine homes triggers relief. Easy come, easy go apparently.
Stag,
ReplyDeleteImport prices for April were up 15% yoy. Excluding petroleum, import prices were only up 6% yoy.
I think interest rates are about to get even more negative.
There is hope though, excessive negativity is very bullish according to CNBC.
Stag,
ReplyDeletehttp://www.marketwatch.com/news/story/looming-commodity-markets-crisis/story.aspx?guid=%7B9DD4369A%2D14EC%2D4FC6%2DA991%2D9B3AECD74D4A%7D
This article echoes my thoughts. Negative real interest rates & excess money searching for returns.
I have a hard time believing that global demand for commodities surged exactly when the fed started cutting interest rates like mad. But hey, I'm a skeptic.
Global demand for real returns imo.
MAB,
ReplyDeleteFrom your link.
Unlike traditional speculators, this new participation is marked by little or no leverage, a distinctly "long-only" bias, and long holding periods.
This tells me that there is a LOT of money sloshing around out there, it smells smoke, and is looking for the fire exit (safety). Unleveraged long-term buy and hold can't be good for long-term inflation and/or inflation expectations.
Further, that's exactly how I chose to leverage myself in 2004 when I bought gold and silver (too bad I don't still have it).
I think interest rates are about to get even more negative.
I agree. Here's the odd part. Inflation expectations (TIPS compared to non-TIPS) are holding fairly steady today. Real yields spiked higher instead.
If I had to guess (and I could very well be wrong), real yields on TIPS are dead cat bouncing. It wouldn't be the first time.
I'm fine with that. I only lose in the short-term when real yields rise. I'm far better off long-term. Further, there's a limit to just how high real yields can rise. Otherwise, TIPS would someday become a serious prosperity generating machine unto its own. I don't see that happening. And lastly, I think the 0% real yield I-Bond story is intact. The market just needs time to think that through.
We'll see how kind the future will be to those in nominal treasuries though. Ask those in Zimbabwe what the downside risk is to real yields on non-inflation protected currency investments.
Of course, real yields could also be rising because deflation is setting in. I'm being serious. Deflation is like Monty Python.
Nobody expects deflated expectations! Amongst its weaponry are such diverse elements as: fear, surprise, ruthless efficiency...
It certainly needs fear and surprise. No central bank would tolerate it without that.