Tuesday, October 31, 2017

SO WHAT DO YOU THINK COULD BE DRIVING THE US HOUSING MARKET?





So what could be driving this?

Let's think about this.

House prices and selling houses in the USA (and UK) soared from 2000 to 2007, when Wall Street was flogging NINJA mortgages etc to hopeless losers who stood no chance of repaying their mortgages. The profits in fees from selling the mortgages in bonds and the derivaives based on those bonds outweighed the risks of those mortgages not being repaid (particularly if you knew that the Federal Reserve would bail you out).

Bomber Trump has expressed a strong desire to unleash Wall Street from the Frank-Dodd legislation which was designed to deter if not stop Wall Street from repeating that greed and fraud that led to the financial crisis of 2007/8.

Most people who buy houses require a mortgage from a bank.

So if people are selling and buying houses quickly and at record prices what can we deduce?

One simple answer would be that the banks are lending more and faster.

Which spells disaster...AGAIN!

Which is why Wall Street loves Trump.

On Thursday Trump is expected to pick a man for Chairman of the Federal Reserve who doesn't believe in Glass Steagall and believes in less not more regulation. And that man was flogged by Trump's Treasury Secretary, Skull & Bones Steve Mnuchin, who also doesn't believe in Glass Steagall.

So it is my guess that Wall Street is beginning to lend again like it did from 2000 to 2007.

And that is very, very troubling.



No comments: