Montana Jones

It's the economy...

He:

you know the big media outlets. ABC, NBC, FOX, CBS, and so on. You know those guys.

Me:

Yeah.

He:

Well, they have successfully predicted 40 of the last two recessions.

He:

The mortgage crisis is not dying off, it is only going to get worse. You know all those international investors that bought the subprime mortgages, well, they are going to start suing. They were sold unsecured loans as though they were secure loans. They are going to sue the middle men banks to get their money back. These banks are going to get screwed from defaulted home loans on one side and get screwed by lawsuits from international investors on the other. There are some banks that will not exist anymore in a year.

He:

Keep an eye on the real estate markets this year. Around June things will start shaking out and it might be a good time to buy that house you want.

Me:

I have been watching. I was doing a search last night in fact. I am starting to see the cracks in the ice. Six months ago I was seeing the $600,000 houses drop price to $500,000.

He:

Big woopty.

Me:

Yeah, not very useful. But just now in the past couple weeks I have started seeing the $250,000 house drop to $200,000. There are even a handful for less than $200,000 come onto the market. We might just see the starter houses become affordable again this year.

He:

That is what we need. Get those $250,000 houses back down to $175,000 and people might be able to afford to live here again.

He:

I can't believe how short peoples memories are. I still remember what happened right after Vietnam. The economy was in the shitter. LBJ spent all our money in Vietnam and there was nothing left for ourselves. The same thing is happening in Iraq.

Me:

Only more so.

He:

Yeah, more so. George is throwing money away in spades. Do you remember what happened back in the 70s? Back in 1978 and 1979?

Me:

Not much economically. The word stagflation comes to mind.

He:

In 1979 the interest rate was 16%. No one could borrow any money without these incredible fees on it. The government had to do it, they had to charge these huge interest rates to try to make back some of the money that was thrown away in Vietnam.

He:

I'm starting to change my mind about switching banks?

Me:

Oh?

He:

The big question right now is which banks are going to still be here in a year. Ever wonder how Glacier Bank got so big so fast? I bet they were dealing in those shady loans. If so, they are going to take it hard too. So I want to wait and figure out who is going to buy out whom and which banks will be left standing in a year.

Labels: affordable, bank, conversation, economy, mortgage, real estate, recession

Posted by: Montana Jones / 9:07 AM