Housing bubble; Stocks bubble, Corporate debt bubble, Margin debt bubble, Crypto bubble, What could go wrong? 1929, 1987, 2000, 2008 never had it this good.The housing bubble crash of 2008/2009 was one of the biggest financial disasters in American history. Around 6 million homes have been foreclosed on by lenders as millions of American families watched their hopes for achieving the American Dream going up in smoke. Since early 2008, more 60 million U.S. homes have lost a total of 5 trillion dollars in value. 340,000 home mortgages resetting on top of 5+ million homes that are more than 25% underwater. The potential for default on those 5+ million homes is enormous. If I owe $300,000 on a home that is now worth $225,000, even if I could sell my home I have to come up with an additional $80,000+ (closing costs, lawyers, transfer taxes and principle) to get out from under the train wreck. One can rebuild one's credit in 3 years. It is cheaper in most cases to walk away from the existing loans, or ask the bank to forgive the difference. What nobody mentions is the looming crisis in commercial real estate. 80% of commercial loans are resetting in 2011. Given that rental rates in many areas are depressed, the income produced from such properties and coupled by high vacancy rates are making it impossible for owners to refinance. In many cases, they, too, have negative equity. Add to the mix the fact that the Fed is now monetizing debt since no one wants to buy US treasuries, and the bankruptcy of nation states and individual US states, I don't see any way to avoid a collapse of the current system. Anecdotally, I am a commercial real estate broker. All of my clients who want to sell are either in serious financial trouble or underwater. The future looks grim. Even before the pandemic pushed the housing market into overdrive, the price of the average American home was on a rocket ride, rising more than 50% between 2012 and 2019. This was the third biggest housing market boom in American history. Then came the pandemic, which was marked by a buying frenzy and a selling freeze, which created a supply-demand mismatch that caused the price boom to go into warp speed. The average price of American homes is now the highest it's ever been .It is even higher than the peak of the housing market bubble of 2006 before it collapsed 60% and bottomed out in 2012. 340,000 home mortgages resetting on top of 5+ million homes that are more than 25% underwater. The potential for default on those 5+ million homes is enormous. If I owe $300,000 on a home that is now worth $225,000, even if I could sell my home I have to come up with an additional $80,000+ (closing costs, lawyers, transfer taxes and principle) to get out from under the train wreck. One can rebuild one's credit in 3 years. It is cheaper in most cases to walk away from the existing loans, or ask the bank to forgive the difference. What the media do not mention is the looming crisis in commercial real estate. 80% of commercial loans are resetting in 2021. Given that rental rates in many areas are depressed, the income produced from such properties and coupled by high vacancy rates are making it impossible for owners to refinance. In many cases, they too, have negative equity. Add to the mix the fact that the Fed is now monetizing debt since no one wants to buy US treasuries, and the bankruptcy of nation states and individual US states, I don't see any way to avoid a collapse of the current system. The future looks grim. The Fed and other central banks will 'eventually' be forced to raise interest rates but that happens only once The US Dollar Index DXY falls below 70. And guess what they'll do...hike rates minimally while printing 10's of trillions to buy up more Mortgage-Backed Security, US Government plus Corporate debt and directly monetize stock indexes. If anyone thinks that will cause the Dollar to sell off; think again because all that printed currency will be parked on a Forever balance sheet where not a single Dollar will be sold to create inflation. When the Fed starts hiking Wall St will cheer them for 'saving' the Dollar while receiving Trillions of dollars in Corporate and stock index loot. Every single Banana Republic has gone this route; America will be no different. Meanwhile look which direction US Dollar Index DXY is going as a result of their faux tightening jawboning. More room to print. The FED is basically hiding all the inflation in the housing market. Things don't "crash" back to pre-inflated prices. Can you imagine waking up in Zimbabwe and having your neighbor tell you people are suddenly selling loafs of bread that cost $10,000 yesterday for pennies again? There’s no doubt that currency debasement is causing the housing bubble and the “everything” bubble.They’ve shown no signs of tightening up. However, with inflation this rampant, they may be forced to raise rates and tighten unless they want full on hyperinflation. It’s also possible they could lose control of the yield curve and interest rates, including mortgage rates, could rise due to loss of confidence in the dollar. If mortgage rates rise significantly, the housing bubble will burst in dramatic fashion. Housing will be worth cents on the dollar in the upcoming hyperinflation. Folks from New York, Southern California or any urban metro are spending gobbs of money to get out of those places, crowding the local buyers out. Can't get out fast enough.. It's a feeding frenzy, but different from 2006. I survived that bubble too. Locals are sitting on their hands, or selling and renting until the madness ends. Inbound people are spending 20% over contract price, banks lending on contract price. The buyer who paid 250k on a 200k house is getting soaked in this bubble, not the banks so much. They are only in it on a 160k loan value. That house will have to fall 90k or 36% before the bank gets in trouble. These buyers got funny money when they sold their Rambling ranch in Greenwich for 2 million and bought a relative castle in the south for 250k, what's a 50k loss ? Funny money when they made it, funny money when they lost it. Markets never go away, they just move around. There is just as much opportunity in a bursting bubble as there is in the run up. And given the cash stockpiles that most banks are sitting on (not including all the Private Equity Funds Hedgies and Special Purpose Acquisition Company SPACs), all distressed properties will be readily absorbed and puked back up at enormous profits to fear of missing out (FOMO) buyers after a few months or years. OR, the bubble does finally pop because the dollar collapses under its own hubris, the fallout cannot be contained (this time) and we're fkng Mad Max Bartertown in no time. It is going to blow. It's only a matter of time. Many of those who try to stay in until the last minute will get murdered. Same as it ever was. 2008 wasn't the real thing either. It was just a tiny quickening that they bailed out, so they could re-ramp up the biggest bubble ever. Houses will be next to nothing eventually and real assets like gold will pick up a house easily. We will hyperinflate also, but that would only make your house worth a trillion for a minute. Then a half an ounce of gold will probably buy it. There won't even be loans. Some people were picking up houses in the 80s for the price of crap used cars. That won't even compare. Loans for houses aren't really an asset anyway, they are a liability. The only way you should want to keep a house now is if you got a good deal on it long ago and it's where you want to be. I hope I am completely isolated forever by then because then I won't have to hear morons talk about how they could never believe that any of it ever happened. Anybody buying now is crazy. You can tell by how people think it's never going to end that it's going to end.
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