I'm hearing commercials for seminars on house flipping...I guess people will never learn.

Deja Vu all over again. I realize that many don't learn the first time around but it is not like it was 60 years ago when we saw this last - it was 6 years ago. Amazing how many forget so easily.

I have already read this book once and didn't like the way it ended last time. Some, however, will read this same book and expect the ending to change - it doesn't.

Ah! That book, that book!

Buy now or be priced out forever!!

you must be a broker!!

Heard it from a broker ! Trend is to reward irresponsible behavour !!!!

Results of a " faux recovery"....amazes me how naive people can be............When Bernanke pinches off the $85 Billion a month IV, prices are going to drop like a rock...........

If QE wasn't the cause of the last drop, why do you automatically assume it will cause the next one?

QE isn't the cause of our very low interest rates alone, the entire world (even where they aren't buying bonds) has very low rates because there is no inflation. You will never see inflation (worldwide) greater than a few percent again because the supply/demand curve for information has changed in favor of the customer. It is very hard to raise prices when every news outlet has that info immediately and will tell it to customers. It is very hard to raise prices when a customer can shop in what has become an almost infinite number of places at the click of a mouse button.

You will see regionalized inflation for certain disposable items, and even there customers will adapt as they have increasing substitutions.

I'm not so sure I agree. When Bernanke mentioned he might reduce QE, stocks dropped like a rock. There are a few fixes in place now that give the impression of a economy in recovery. When reduced unemployment is matched by a reduction in entitlements (food stamps, welfare, housing) these props may be removed without crashing the economy. The economy is on life support, no real improvement. This house of cards will fall, as it did before.

Dude, a percent or even two isn't a rock.

We are in a new age of lower volatility, with a strong upward bias. I remember when Fed chairmen could speak and the markets fall in near double-digit percentages. Remember what irrational exuberance did?

Some day The QE will have to come to a end,along with allowing interest rates to return to normal. Right now is just talk from Bernanke. When they really start backing off on QE, you will see those double digit percentage drops again.

"Normal" doesn't exist, it changes from day to day.

"Normal" was annual double-digit stock market gains for over 60 years. Are you expecting us to go back to "normal" again? If so, shouldn't we be seeing those double-digit percentage gains?

QE of 85 billion a month will continue to devalue the dollar. Everyone was so happy when the S/P popped 1500 (new record area), but it would have to pop 1600 to make any difference due to devaluation. How much longer will QE continue to thin the dollar value. If QE is the answer, why have they limited it to just 85 billion a month? I'm sure they can print money faster than that. Why are they thinking about reducing it, when all it does is boosts the stock market? The government knows this is just a limited time fix before it does more damage than good. If this process worked, all people in poverty would just live on extra credit cards. This will only work for a short time until it collapses in on its self.

Once someone starts talking about "devaluation" I don't bother reading anything else they say.

They've already shown their prejudice to believe in ancient and outdated (and wrong) economic postulates that no longer have any bearing in the real world.

No inflation? When's the last time your bills for electricity, heating, phone, etc. went down? And I assume you haven't been inside a supermarket for five years.

If interest rates remain permanently "low," that will however also limit interest in lending. In the long term there has to be room for both the suppliers of capital and the lenders to make money off the transaction.

I'd agree that rates never *should* go extremely high again, but 1) a lot of participants in the market aren't rational, regardless of how much information they have available; and 2) even something historically modest like 4% prime would be a serious shock to a lot of borrowers.

Like, e.g., gasoline and food, you know, the necessities.

Not really inflation is going to make us

Thank you, Mr. President.

Thank you, Mr. President - - - for borrowing $6 Trillion over 4 years with nothing to show for it. Thank you for doing nothing about the unemployment rate (7.7% when took office and now 7.5% - basically unchanged after 4 years). Thank you for requiring a 70% increase in Food Stamp enrollment because you caused our economy to further decline and almost 50 million now need government help just to eat. Thank you for increasing the number on welfare (now 1 in 6) which is the highest percent in nearly 40 years. Thank you for damaging our economy so badly that so many have just given up looking for work and now we have the lowest labor participation rate since the early 80's. Thank you for hurting our economy so badly that even though you borrowed over $6 Trillion we STILL need to PRINT $85 Billion a MONTH just to keep us from falling deeper and into a depression. Yes, thanks for nothing.

Thank you president for creating a bigger mess for the next in line ... Kickin the can has now become a barrel ....3 more years to make ....

For what? Hes a scam artist that golfs and hangs out with rappers- He has no idea what is going on, Oh and he probably smokes crack too.

Obama fo yo Mama

You're welcome.......(sucker) haha

yours truly ........obama

Another housing scam in the making...Scam appraisals, scam mortgages, scam buyers make prices go up. Oh and overseas buyers with cash will make more renters by the end of the decade- dont get too excited.

Please cite your sources that prove all this is a big scam.

2006 proved it was scam... Getting fooled for the second time ?

You know this, do you?

If things have stabilized, then it is time to get government out of the way. Quit holding interest rates down so they can level off where they should be. Lowering them is one of the reasons prices were artificially inflated, helping cause the collapse and how bad that collapse was. Had government not gotten involved in the housing market in the first place, we would not be in the situation we are at in the first place.

Interest rates did not cause the crash, banks making enormous loans with no proof of income did that. Crooked appraisers saying tiny houses in the ghetto were worth 500K did that. Interest only and ARM loans did that.

Artificially lowering the rates was not THE reason, but it was ONE of the reasons for the collapse and how hard the collapse was. And NO it was not appraisers. The only ones who set the price for a house is the buyer and seller. If a buyer isn't willing to pay, the price will not go up. People WANTED to buy, so they were willing to pay. There was often multiple bidding offers on homes.

And banks gave loan because of appraisers lying about value. I work in real estate have seen ridiculous sales prices from 2007 and 2008 that never were anything close to real values. There was a lot of fraud. Buyers trusted the people helping them, the agents, the mortgage brokers and the appraisers, and they got swindled and talked into higher houses.

If people are willing to pay that amount, doesn't that make the appraisal correct? I am sick of hearing blame pointed at everybody but the people themselves. They said, yes I will buy a house for this value. The buyers determine the value not appraisers.

No. The appraisals were done so that another crook could get the loan and then walk away from it with hundreds of thousands of dollars in their pocket.

It is not that simple when banks are approving loans for far more than a person can actually afford to pay,when they hid the fees and costs in the small print (which they cannot do now)
Many buyers who never had a home and were desperate to get one would believe what mortgage brokers and realtors told them. The market was manipulated by those who were profiting off it and people were caught in the wave. Those of us who chose not to buy in that market because it was an obvious bubble could only shake our heads as we watched it happen...

Your entire post is an excuse for the people who CHOOSE to sign on the line. They go to reputable banks, and get turned down, so what do they do? They go and find some place that will say yes so they can buy. There is nobody to blame but the PEOPLE themselves.

But personal responsibility is not big with people these days.

Who are these reputable banks? Is there a list somewhere? I sure don't know many with clean hands during all of this.

They are all over. But when any business sees the customers going down the street to a competitor, they must change to compete. Heck we even hear the crying today, banks have gone back to the stricter lending standards and people are complaining because it is to hard to get a loan. And if there was a place down the street giving easier loans, the people would go there again.

When will you put that personal responsibility onto the people deliberately destroying the market for profit? Where is the responsibility on the banks that were not requiring pay stubs to prove income?

It is not an excuse, it is just how it worked. Reputable banks were NOT turning people away, that is the whole point. Everyone was trying to cash in and doing so by whatever crooked means they could use to lure in hopeful buyers.

AMEN!!!!!!!!!!!!!

So because people were too stupid to know better we should not blame them but blame others? Good plan.

You blame the people who were causing deliberate harm for profit, the ones who knew exactly what they were doing and kept doing it. .

Remm,

But people weren't really willing to pay those amounts, now were they? Hence all the people in over their head and walking away from their homes. It's one thing to *say* you will pay X price, it's another to actually do it.

I guess the ending goes like this: Don't trust a real estate agent or broker or appraiser. Always use a real estate lawyer and oh yes if you cannot afford at least 20% down you should not be allowed to buy a home.

Rates weren't lowered until after the crash was well underway. Granted, they weren't especially high---at the start of the bubble Greenspan lowered the rates to deal with the recession after the dotcom bust and 9/11, and raised them gradually to about 5%.

It really started in the 90's by clinton as a tool to prevent a recession, was lowered more by bush to try and prevent the collapse, and has been kept low by Obama. It is A reason for the bubble while not the SOLE reason.

If we're going to look at it over that long a period it becomes part of the background condition. It's a necessary condition for having a bubble, but the alternative of keeping rates high at those points in the past would have been worse.

Clinton and Obama caused that

False, that happened during Bush's eight years.

No, stupid people who bought (or tried to buy) too big of a home caused it. No one has responsibility to babysit adult home buyers. Banks offer products, no one is forced to use that product (the 30-year fixed mortgage never went away) to buy a house. End of story, take responsibility for your actions.