The Beginning Of The End
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Prepare For Tough Times If Your Job Has Anything To Do With Real Estate Or Mortgages

Housing Crash 2013If you have a job that involves building homes, buying homes, selling homes or that is in any way related to the mortgage industry, you might want to start searching for alternate employment.  Seriously.  Interest rates are starting to rise dramatically, and mortgage lenders such as Bank of America, Wells Fargo and JPMorgan Chase are all cutting thousands of mortgage-related jobs.  Last week, mortgage refinance activity plunged to the lowest level that we have seen since June 2009 and total mortgage activity dropped to the lowest level since October 2008.  Unfortunately, this is only the beginning.  Mortgage rates closely mirror the yield on 10 year U.S. Treasuries, the the yield on 10 year U.S. Treasuries has nearly doubled since early May.  But it is still only sitting at about 3 percent right now.  As I have written about previously, it has a ton of room to go up before it hits “normal” historical levels, and so do mortgage rates.  As I noted the other day, some analysts believe that the yield on 10 year U.S. Treasuries is going to hit 7 percent eventually.  If that happens, mortgage rates will be more than double what they are today.  And we have already seen the average rate on a 30 year fixed rate mortgage go from 3.35 percent in May to 4.57 percent last week.  If interest rates continue to rise we could be heading for a “housing Armageddon” that will make the last housing crash look like a Sunday picnic.

The mini-housing bubble that we have been enjoying for the last couple of years is coming to an abrupt end.  It doesn’t matter what the mainstream media is telling you about a “sustainable” housing recovery.  Just look at how the big mortgage lenders are behaving.  They know the gig is up.  According to Bloomberg, Bank of America has just announced that they will be eliminating 2,100 mortgage-related jobs…

Bank of America Corp., the second-largest U.S. lender, will eliminate about 2,100 jobs and shutter 16 mortgage offices as rising interest rates weaken loan demand, said two people with direct knowledge of the plans.

Would they be doing that if we were really heading into a “sustainable housing recovery”?

And Wells Fargo and JPMorgan Chase are also both eliminating thousands of mortgage-related jobs

Mortgage lenders are paring staff as higher interest rates discourage refinancing and cast doubt on how long the housing market rebound will last. Wells Fargo & Co., the biggest U.S. home lender, plans more than 2,300 job cuts, and JPMorgan Chase & Co. may dismiss 15,000.

Would they be doing this if they thought that brighter days were ahead?

Of course not.

In fact, Well Fargo just announced that it expects to make 30 percent fewer home loans this quarter because of rapidly rising interest rates.

It’s over folks.

The mini-housing bubble that the mainstream media has been hyping so much is over.

If your job has anything to do with real estate or mortgages, it is time to start thinking about a career change.

This is especially true if your job is related to refinancing mortgages.  All of the smart people have already refinanced.  As rates continue to rise rapidly, the only ones that will be refinancing are really stupid people.  According to Zero Hedge, mortgage refinance activity has already dropped by a whopping 70 percent since early May…

For the 16th of the last 18 weeks, mortgage refinance activity plunged (dropping 20% this week alone). Since early May, when the dreaded word “Taper” was first uttered, refis have collapsed over 70%. With mortgage servicers and providers large and small laying people off, it seems hard for even the most egregiously biased bull to still suggest that the housing recovery is sustainable.

And this rise in interest rates is just getting started.  The Federal Reserve has not even begun to “taper” yet.  Once that starts happening, the consequences could be quite dramatic

“In early 1994, when the U.S. recovery gained strength, the Fed started a tightening cycle and bond markets crashed not only in the U.S. but also around the world,” European Central Bank Executive Board member Joerg Asmussen said on Tuesday.

“If spillovers were large in 1994, we can expect them to be even larger today in an even more deeply interconnected world,” he added in the text of a speech for delivery in Brussels.

Of course when the Federal Reserve “tapers” their quantitative easing it won’t really be “tightening” as much as it will be slowing down the pace at which they are recklessly creating tens of billions of dollars out of thin air.  But the effect will be similar to what we saw back in 1994.

As interest rates rise, it will become much more expensive to buy a home and much more difficult to sell a home.  To give you an idea of how dramatically interest rates can affect housing affordability, I wanted to share some numbers from one of my previous articles

A year ago, the 30 year rate was sitting at 3.66 percent.  The monthly payment on a 30 year, $300,000 mortgage at that rate would be $1374.07.

If the 30 year rate rises to 8 percent, the monthly payment on a 30 year, $300,000 mortgage at that rate would be $2201.29.

Does 8 percent sound crazy to you?

It shouldn’t.  8 percent was considered to be normal back in the year 2000.

Are you starting to get the picture?

As interest rates go up, home prices will have to fall.  Otherwise, nobody will be able to afford them.

In the end, we could end up with tens of millions more homeowners that are substantially “underwater” on their mortgages.

So who is to blame?

The Federal Reserve of course.

They created this bubble by forcing interest rates down to record low levels.

At some point it was inevitable that interest rates would start reverting back to more “normal” levels, and that “adjustment” is going to be immensely painful for the U.S. economy.

As we saw back in 2008 and 2009, when the housing industry suffers the entire economy suffers.

And the higher that interest rates go, the more suffering there will be.

So let us hope and pray that interest rates do not go any higher, but let us also start preparing for the very worst.

  • DownWithLibs

    Anyone else feel like they went to bed one night and woke up in an alternate reality?

    • markthetruth

      IF You Woke UP it’s REALITY BUDDY !!!

      the end…

      • Thomas

        id10T DB

    • SafetyViking

      Often, yes.

    • markthetruth

      Sound Familiar !!! The economy is Booming ?

      Europe could have another 25 million poor people by 2025 as the effects of austerity measures are felt across the continent, a leading poverty charity warned on Thursday.

      This would bring the total number of people living in poverty across Europe to 146 million, almost a third of the population and it could take up to 25 years to regain the living standards people enjoyed five years ago, according to Oxfam. The charity criticized austerity measures that European countries have adopted, saying they have failed to succeed in shrinking government debt and have instead

      the end…

      • Darin

        The end? If only……

    • Alasha

      yep, it called a nightmare… Sigh

      • Chris Lehman

        It’s called a Daymare: nightmares occur during sleep; daymares occur in waking life. Check your dictionary.

        • Thomas

          id10T

          • Chris Lehman

            Nope. Not an idiot. Check your dictionary.

    • GSOB

      Yes.

      It’s called a hangover.

    • sherry762

      my neighbour recently purchased a 2012 MINI Cooper Countryman only from working part-time off a pc. hop over to this web-site w­w­w.J­A­M­20.c­o­m

    • Masterlock2020

      LOL. If only I could go to bed and wake up in an alternate reality, one in which none of this was happening.

  • DownWithLibs

    The scary thing is, I keep hearing these real estate ads from my local radio station…people from the area are happily telling about their new home that bought from Such-&-Such Realtor – No money down, interest only, variable rate mortgage…isn’t this how we got into this fix in the first place?

    • cherylmeril

      No, we got into the mess because the banks wanted to resell loans on the derivatives market. It’s not the people’s fault, it’s the banks who want to resell the loan ASAP. This industry will likely rear its ugly head for a little while.

      • Paul Ishmanob

        It’s not the people’s fault? How does a bank selling your mortgage affect your ability to pay it back? People shouldnt borrow more than they can afford, even if the bank will lend it to them.

        • Gay Veteran

          let’s not mention the pure FRAUD the banksters engaged in

        • BowMtnSpirit

          Pull your head out, or quit trolling, whichever applies. If you really believe that, then how did you even come to be reading this article?

  • Cincinnati Dave

    I work for one of the banks mentioned in your article. I was in mortgages. I saw all of this coming, so several months ago I asked to get into another area of the bank and fortunately, for me,they granted by request. A lot of people are losing their jobs and there is really no prospects out there for anything else whereby the same kind of money could be made. I will make nothing near what I had been earning but am at the least grateful to be employed. This is all so sad to watch happen.

    • Tim

      You make a good point. These people are going to have a difficult time finding something that pays as much as they’re earning now.

      TPTB have created so much pain and suffering for the common folk.

    • MichaelfromTheEconomicCollapse

      Great move Cincinnati Dave. :)

      Michael

    • stymie

      It’s an opportunity.

    • 22yearsfrom03

      that’s where we are Cin, grateful for crumbs. no more wanting to climb that old rickety ladder to the top. just be grateful for any paycheck we can still get. all aboard the fast train to poverty. who run Bartertown? Obama run Bartertown….

  • Rodster

    All fiat based monetary system collapse. They always do and always will. It’s the nature of the Ponzi Scheme. And now for some GOOD news.

    For the first time in history the entire industrialized world is using the SAME monetary ponzi scheme. At least the NFL season has begun !

  • markthetruth

    I wrote the other day that both Banks are laying off thousands and the Ceo’s of the auto industry are say 2014 is going to be ruff for the same reason they were giving cars away with 0% down 0% interest for a 1 year . The 2 Top Industries to keep our economy running are going to BUST !

    And the Stock Market ? Is there anyone with any LOGIC that can explain the Valuation with companies that have no tangible products , and every company claims there making products for companies to Save Cost and increase Profits .
    Yea ! Get rid of the Human’s , Just like Wall street is doing, the IBM computer is smarter then the Human’s they Proved it on Jeopardy !!!

    So we Get to Sit Home and Watch TV of other people lives , and Tweet them ,Text, Hash TAG, Facebook, Facetime, Google Doogle, and make cell phone calls , APPS ALL While Playing A Video Game !!! ” WHO THE HECK HAS TIME TO WORK OR GO OUTSIDE ANYMORE. ” ALL THE KIDS ARE LOCKING THEMSELVES IN THE BEDROOMS !!!

    ” WE ARE BECOMING MARRIED TO ARE GADGETS ” and DESOCIALIZED to HUMANS.
    WE TALK TO THINGS NOW AND CONTROLLED BY BRAINWASHING !!!

    the end..

    • davidmpark

      Albert Einstein said, “I fear the day when technology will surpass our human interaction. The world will have a generation of idiots.”

      Wisdom here…

      • cherylmeril

        That day has surely arrived and passed!

    • Adrian

      Wall Street has figured out it needn’t even make money off of tangible goods anymore, but from split second transactions on derivatives, which pays huge dividends.

  • REEL ISSUES

    In 1986 I purchased a home with a rate of 12%. When rates fell I refied. No Problem

  • REEL ISSUES

    In 1986 I did not even know or care that we were in a recession I had more work and more work, but I was young then (25) and loved to work. Things are a little different now. (52)!

    • Rodster

      Back then it was called a recession because it was just that. Today a depression is referred to by the state run media a recession. That’s why it seems different today.

      • Hambone

        Our government and the Clinton News Network are telling us we are only at 1% inflation… no way that could translate to a recession/depression.

        Heck, if you just look at the price of I-phones, I think we’re witnessing economic deflation.

        Barry is amazing! Time to repeal the 22nd amendment.

        • davidmpark

          Repeal 22nd amendment!? I’d rather staple certain parts of myself to a mule!

        • M W

          Clinton did us a few dirties in his days as prez, but Raygun started the financialization of America.

        • Rodster

          Where I live ground turkey went from $4.29 lb to $5.29 overnight. Yeah 1% inflation, my _ _ _.

          • Ralfine

            Just found lentils for GBP 1.29 per kg.
            Lentils store better, and contain protein, too.
            And they are about the same consistency as ground meat.

            For a good delicious soup I get bones.

      • El Pollo de Oro

        An Obamabot city worker I know (who hasn’t been in the private sector in well over 20 years) recently said to me, “How can you say we’re in a depression? I don’t see any bread lines. We were in a recession in 2009, but the recession is over.” My response to Mr. Obamabot’s idiotic comments: “47 million Americans are on food stamps, food pantries are in heavy demand all over the BRA. You call that an economic recovery, I call it a depression.”

        • Rodster

          Exactly, there’s your bread line right there. At least back during the 30’s you had decent neighbors and churches helping those down on their luck.

    • mikeymike61

      when the EBT cards finally stop working and there is no money remaining from the federal government, I feel we will have a 2-3 week span of the bloodiest civil unrest our country has ever seen.

  • Cranky4u

    Alternative view – Perhaps $400000 homes at 8% will become the new norm in the US, it has in Australia. I am an Australian and in the mid 1990s, house prices sky rocketed and have stayed there. The average 3 bd home costs well over $400K and our currently super low interest rates are ~5.5%. Mortgage repayments in the order of $2k ~ $3k per month have been the norm for nearly twenty years now. Simply housing prices dont fall unless people sell. Yes we have had a stagnant market for nearlya decade whcih indicates most people are simply waiting for houses to return to the historical ratio of 4~6 time salary.

    • Tim

      “Mortgage repayments in the order of $2k ~ $3k per month have been the norm for nearly twenty years now.”

      Most Americans cannot afford that kind of house payment. The U.S. economy is producing mostly part-time, low-wage jobs. These jobs barely pay enough to put food on the table.

    • Jimbo

      Price to earnings ratios in Australia are amongst the highest in the world. Also Australia has a higher cost of living overall. property still sells here but first time buyers are buying apartments or houses on much smaller blocks some distance from cities and amenities.

      • Housingguy

        Yes, its very high in the cities in Canada too, similar situation to Austrialia, our cousin in the pacific….I find it hard to believe that the prices in the US will come down more, they are already down so much in many cities.

    • Ralfine

      The house prices were one of the reasons why I didn’t pursue the dream of emigrating to Australia further.

      I got me a nice little house with half acre garden for EU 50,000 cash half hour from the city centre of the capital city. And put in EU 100,000 to make it energy efficient. Got me a 20 year loan for that at 3%.

      People told me I’m crazy.

      I pay EU 350 per year for heating and hot water, and EU 50 per year for property tax. There is a housing shortage and outside is a queue of people wanting to buy my house…

    • mikeymike61

      cranky, what makes the houses so expensive? given law of supply and demand, cant new tract homes or modest homes be built so the price is not a killer, or do you have government intervention driving up the price?

  • RarefiedSnotress

    I’m looking to buy in cash. I’m self-employed. The good is looking even better. I’ve waited my turn while flubbers cut in line. Bring it on.

    • Gregge K Johnson

      Take your cash buy a ticket to Kuala Lumpur ,and buy a Certified US Treasury Bond for a 40% discount ,come back and buy ! LOOK it UP !

      • RarefiedSnotress

        lol.. Thank you for the creative suggestion, though I’ve never even traveled to Europe. I’m definitely not ready for Malaysia..lol

  • Tim

    I just caught a few minutes of the Kudlow Report on TV. Larry Kudlow was discussing the topic of this article with two guests. I didn’t see their names or titles, but these two guests are either shills for the big banks or they’re just plain stupid. One of them said that the rise in interest rates is not going to deter Americans from buying homes and that real estate values will continue to rise.

    • Rodster

      And the MSM still refers to Greece’s plight as an on going recession. ;)

      • El Pollo de Oro

        Rodster: The presstitutes also say that about Spain, where youth unemployment will probably reach 60%. I have friends and business associates in that country, and when over half the college-age youth can’t even find a part-time job washing dishes, that is no recession. It’s a DEPRESSION.

    • Hambone

      If we follow the lead of our elected officials we certainly wouldn’t slow down. A lack of money hasn’t altered their spending patterns one bit.

    • suelark

      Kudlow is an idiot and a shill for the $$ men. I remember getting ready for work on 9-11-2001 & watching Kudlow on the morning news program he had then. When the 1st plane hit my first thought was that it was horrible, 2nd plane hit I thought it was deliberate. But Kudlow? He said no way, it was just a coincidence. What a dope.

  • A D

    The Bibles specifically states what is going to happen, regardless of the fact you deny is a mute point. Everyone will stand before Jesus when they leave this earth, then it is too late.

    • Adrian

      Any event in human history could, in retrospect, be placed in a Biblical context. That’s not really helpful here.

      • Alasha

        smile

  • Kim

    Rent!

    • rentslave

      That doesn’t work,either.I tried it for the past 45 years.

    • Brian Bradley

      Double edged sword… you’re basically throwing money away when you rent.

      • Renter

        Depends what you do with your money and how much your actually paying for rent. I have a room mate so I can pay ~650mo for everything, im saving 25k+ a year :)

        • Brian Bradley

          Completely understand. A lot of it has to do with what part of the country you’re living in as well, and where your job is. I’m right outside New York City currently, so renting an apartment as compared to buying a house was a small small difference. I’m also married, so that’s my “roommate”. However, in your case, sounds like the best plan on action!

  • 2Gary2

    The U.S. suffers from particularly drastic income inequality. It is worse
    here than in Egypt,
    Tunisia, Yemen, the
    Ivory Coast, Pakistan, and Ethiopia. It’s a trend that began in the 1970s
    and has continued: Through the 2000s, the richest 20 percent of Americans saw
    their incomes grow by $2,550, while the bottom 20 percent just saw $1,330 in
    growth. The top 10 percent now has 15.9
    times the income of the bottom.

    Time to tax the rich hard and spread the wealth. Do it now!

    • condaggitt

      Gary:
      yes to a point….most people are rich because unlike you or me, we want a life outside of work they dont….its 24/7 and then they get neurotic and think if they take a couple of days/week off and see a sick or dying relative when they get back the sheriff will at their door and they have to file for bankruptcy….yes Ive known people like that .

      What needed is a bottoms up approach, we need a War on Ebonics first…get Americans even black people to read, write and speak English…so there would be no reason to import foreign H1B workers ever again.

      We need everyone to work at something to get assistance… we need to change the laws regarding work. Its OK to volunteer at a job that’s in your filed to keep a recent job at the top of your resume and still collect Unemployment, till someone offers you a paying job.

      We have too many millions of Idle people with decaying resumes which means lots will never get hired again at any meaningful job.j

      • 2Gary2

        I am in agreement with you, however, many people simply win the lucky sperm contest (born into wealth) and many rich do not work any harder than you or me they are simply lucky. I have seen that 50% of success is simple luck.

      • xander cross

        Notice how you said most Americans even black people to read. See, white people don’t consider black people as Americans. Typical racism here as usual. White men are the blame for the economic collapse because white men own the banks and the federal reserve. I don’t feel sorry for white men that collapse the economy.

        • Carlos Danger

          The race card is way over used. Get over it. Stop making excuses. Learn how to write with good grammar.

          Short list of successful blacks:

          Oprah
          Sean Combs
          Tiger Woods
          Bill Cosby
          Micheal Jordan
          Don King….

          • xander cross

            Learn to read before you comment. I talking about white men that caused the economic collapse. No one said nothing about racism. Please learn how to read before you speak.

          • Angel Peace

            “White men that caused the economic collapse.” That statement isn’t racist? You’re full of baloney, Xander.
            As for causing the economic collapse, it was done by a bunch of greedy, avaricous, immoral as*(holes who don’t care about anyone but themselves. Doesn’t matter what color they are, as*holes come in all stripes and colors. Fairly certain black men/women are working on wall street as well…

          • xander cross

            Yes, it matters that white men are destroying the economy because they created the very problem that you benefited from. White racist people like you always try to deflect blame because the world see how corrupt white men are. People like you are the problem.

          • xander cross

            You mean 89 percent white, 29 percent black. FBI stats trump fake stats from Fox News.

          • Nic

            and m. Jackson… oups ! was white. sorry.

            :-)

        • ChooHader

          Xander, white people don’t own the banks or the Federal Reserve. Trust me they do not consider themselves “white.” They consider “white people” to be GOYIM.

          • xander cross

            White people do control the federal reserve. You get that type of thinking from white supremacist sites. So therefore, you’re a white supremacist

      • Gay Veteran

        we need to break up the Big Banks and destroy the Federal Reserve, all parasites

  • James

    Michael,

    Excellent post, very good analysis of how the housing bubble will bring about the next crisis. Jesse Colombo argues that it will start in the Nordic countries. Should be interesting.

  • davidmpark

    A friend of mine who does professional gold prospecting on an amateur’s scale said that he’s going to retire soon from Property Assessing (and Home Depot) and just live out on the Gold Prospector Club’s claims year round. He’s already commissioned me to build him several pieces of equipment as soon as possible: tractor with attachments, dry washer, vibrating wet filtration washer, etc.

    He said that he’s not going to afford his home’s taxes and upkeep after retirement anyway. So he’s going to live off the land and prospect for gold and magnetite to live out his retirement years. It’s kind of how people in Zimbabwe live now; except he’ll have several thousands of dollars worth of equipment, a few firearms, and a nice camper/trailer system I’m building for him.

    Probably how most folks will end up – nomads; trying to scrape a living on what they can find. He’s going to find gold, silver, and topaz deposits in flood areas and mine leftovers; most of the not-so-fortunate will probably be looking for cans and bottles to recycle.

    And yet, they voted for this outcome time and again…

    • SafetyViking

      Yep…I definitely see a Grapes of Wrath scenario for a LOT of people on the horizon….

      • 22yearsfrom03

        but this time around its going to get very ugly. folks were sane then….

        • SafetyViking

          Good point. Things WILL turn nasty when the self-entitlement kids start howling…

    • Joe

      100% accurate, except for the voting part. The party in power means nothing – they are all in the same club but use strong words and radical policies to divide you among yourselves. It wouldn’t matter if the other team had the ball right now. It would be the same result.

  • Trailer park Investor

    Buy a camper move to the moutains near a stream, hunt/fish and grow your own food and good luck.
    The game is over…

    • Michelle

      we bought an old farmhouse with a creek on 10 acres for cash (no mtns. here sorry)…….it can be done if you are willing to put some sweat into it. Some folks thought we were nuts and going backwards instead of moving up into a nicer newer home. Nah tired of paying JP Morgan every month. Now my money is mine, I cash it and go.

  • Eddie

    And I keep hearing these so called housing experts say that rates are still dramatically low on a historical basis so everything should be fine and the recovery will continue. Not. First of all these pinheads lose any credibility when they refer to this as a recovery in any true sense of the definition, and secondly,these are not the yesterdays of the long gone yesteryears past when the broader economic conditions were much different. An example, and just one of the many..we have for the first time in 100 years reached a point where 10% of earners took home half of the nation’s household income in 2012. In this case, I would say we have about a 10% recovery going. (first comment from a long time reader)

  • 2Gary2

    all good points Michael!

  • Oldphartbsa

    Wait until rates are back where they were in the 80’s…21% mortgage anyone?

    • Hoody

      looking forward to it, means CD’s should be @12%-15%

      • ChooHader

        By that time gold should be about $5-10k and silver several hundred dollars. For rates to be that high it would essential mean people are selling fixed income investments (bonds) like they are trying to get rid of a diseased hot potato (the dollar will be a piece of junk) Otherwise people would want to collect the 5,6,7,8,9,10,11,12,13,14,15,21% interest and not fear losing a crapload of principle.

  • Ralfine

    Well, get a small, robust, house you can afford. It should be able to survive local calamities like flooding, storm, tornado, snow. And make sure you have enough money left to pay the property tax regularly. It pays for itself by surviving two hurricanes and protecting all possessions inside.

    Get a geological assessment of your site, and build a solid foundation, if possible and feasible with a cool basement for storage.

    Get on google to check out those medieval central european farm houses for ideas.

    As a prepper don’t think “fancy” or “cheap to build”. Think “long lasting”, “cheap to operate”, “reliable”.

    And put in some fiberoptic networks to connect the rooms and other buildings on the site. More difficult to intercept.

  • appraiser

    Not worried. Looks like plenty of foreclosures to keep me busy.

  • JustanOguy

    In our neck of the woods… Real Estate agents and mortgage lenders are struggling because there’s hardly anything to buy.

    When there is something decent to buy at a fair price, there are multiple offers and more often then not the cash buyer wins.

    • mikeymike61

      where to you be?

  • MAL3313

    Ya but the credit counseling and bankruptcy firms are gearing up to hire big time. There should also be a big market for repo men.

  • SafetyViking

    Glad I was able to pay cash for my home. Things will continue to get even worse for people; not just with mortgages but with anything tied to interest rates: car loans, credit cards, employment, etc…

  • xander cross

    It’s amazing that all of you white people pretend to blame everyone else except white men. White men are to blame because he created this collapse.

    • Pablo

      You have no clue the race of the posters making comments. It is your ignorance that just adds to the problem.

      • xander cross

        Yes I do. You’re white and white people like you and Michael benefit from the very economic collapse that you all created.

        • Angel Peace

          No, you don’t Xander, you bigoted, prejudiced, assinine illiterate. Some of us aren’t white. You are the reason why racial tensions are stirred…

          • xander cross

            Yes, you’re white and illiterate as well. Please read before you comment

          • Angel Peace

            Well, I’m of mixed race, Xander, not 100% white, as you erroneously thought. Your omniscient powers are off, it is time for you to take off your tinfoil hate and climb out of your mom’s basement. While you are at it, you might as well try and remove your thumb out of your lower orifice as it is impairing your ability to think clearly.
            Good Luck and try not to kill any brain cells when you attempt to extract your thumb…

          • xander cross

            Typical racist talk from white people. Funny how racist white people love to race mix and still claim to be racist by saying that they trying to breed the black race out. Many of you here think like that. By the way, you’re not mixed, you’re white.

          • Guest

            So what does that make your dear president then ? Black? White? Nice try junior.

          • xander cross

            He is white.

          • Guest

            Wrong again! He’s mullatto

          • xander cross

            Wow, you said mullatto. Interesting you say that since white men basically invented rape especially creating mullatto children with my ancestors against their will. White people are truly sick and your comment proves it.

          • Guest

            Since you are so talented with using Google…look it up for yourself. Boy black people are so stupid (***sarc).

          • xander cross

            Didn’t use good, I have books on the subject unlike you. But then again, since did white people read about anything related to true history? White men are so stupid and insane.

    • Rebecca in TN

      It’s time for everyone get off the race issue. We are all of one race – the HUMAN race. The good Lord created all of us in His image and we are all equal in the eyes of God. You are probably correct that the white skin color majority caused a lot of the problems, but lets not blame the skin color let’s blame the sin of greed. Just like there is a lot of violent gang related crime committed by black and brown skin colored people, but let’s not blame the skin color lets blame the criminals.
      The media is trying very hard to fuel race wars but we need to fight against it. It doesn’t matter whether you are black/brown/olive/white, we are all equal and need to work together to solve the problems.

      • xander cross

        Yeah right. White people hate every other person of color and you call on your white Jesus to protect you and kill e everyone else? The white people that created the economic collapse now want to play the victim card.

    • Guest

      What’s amazing you dolt is that you continue to blame everyone else for your own personal misery. Just go look in a mirror and you’ll see the problem. Oh, and before I forget…it’s medication time! Ding…ding…ding.

      • xander cross

        Misery? You white people caused this economy to collapse and now you have the nerve to complain about the very problem that you white people make?

        • Carlos Danger

          Blacks were in complete control of Detroit.

          • xander cross

            Stop lying. The governor of Michigan controls Detroit which happens to be a white man. Typical racist from a white man. White people get more food stamps and other goodies than black people.

          • Carlos Danger

            Detroit’s mayor, Coleman Young is BLACK. The majority of leaders are BLACK and CORRUPT! the population is 83.2% BLACK.

            76 percent of African-American children are born to unmarried mothers.
            Let me guess. It’s the racist white mans fault.

          • xander cross

            Michigan governor is white and takes money from cities and give it to corporations. 89 percent of white people are born out of wedlock and 69 percent of white marriages end in divorce. 89 percent of crimes are committed by white people and yes, that is an FBI stat.

          • Carlos Danger

            “89 percent of white people are born out of wedlock”

            LOL, it’s 27% white. 74% black. Google it.

        • ChooHader

          Take a look at all the “black” countries. They’re all real nice right? You would like to live there wouldn’t you? LMAO

          • xander cross

            Tell that to all of the white men that go their for vacations and making deals with African leaders. White men sure like to go there and live there taking diamond and other minerals from rich Africa.

  • Tipsovr

    I found it kind of ironic that while reading this article the top advertisement on both sides of it was from “Amerisave” for mortgage refi’s. When this balloon pops it is going to hurt.

  • Stefan

    Really!!!! So let us hope and pray that interest rates do not go any higher, ~ Say that when you get older and are wondering if there will ever be a safe bond again. Something to assist with getting through the remainder of this life, not in grand style, but some kind of acceptability. My wife and I do not and will not collect SS because we view it as morally wrong. There are many of us in the older crowd who have been taken out to the woodshed and beaten mercilessly. Good to know you are taking a few whacks at us too. Interest rates need to rise. Yes it will suck for a couple of years, but then, money can get allocated correctly again. Will concede, that is a bit hopeful.

    • Hoody

      You bet, I can’t wait much longer for Ben to fade away…………….

      I remember those rates too, my “low income” loan was “7%” in 80 as a E-6 that I was lucky to even get.

      I wish I had the cash available than to get those CD rates , at least now I could maintain my low/slow living standard with that, this 1% is insane on savings, WF and BB&T and ST pay an incredible .50 on a “5 yr CD” lolol are u kiddin me.

      Sooo hell yeah get the rates UP, I lived poor through those “high inflation” times too……….

  • Rebecca in TN

    I will continue to say it. We need mass financial non-compliance to end the cycle of slavery that we are all in.

    • Queen Mennon

      they take the money before you receive a dime. now you can do this with mortgages, loans, disinvestment, etc.

  • ian

    Prepare for hard times????? Like the economic collapse that was supposed to happen by fall this year? as predicted by this website time and time again.

    Here’s a prediction. A conservative wins the election for the white house in 2016 and this site disappears and all of a sudden the economy is better and the conservative corporate henchman can do no wrong, Mark my words.

    • Angel Peace

      You are not paying attention, Ian. The housing market was artificially PROPPED UP and now the mechanism to do so is being taken away. Do you not get it? True bottom for the housing crash was not reached, a false sense of security put in place with printing of more FIAT money and LOW interest rates. Now that the Fed is going to slow down/stop printing money, interest rates rise and the true bottom of the bursting housing bubble will be seen. More underwater morgages, more people in foreclosure, more people UNEMPLOYED. Nothing good about this…

      • xander cross

        You’re not paying attention because you refuse to read and you just making excuses to try to reason why the economy has not collapse yet. You’re the ones that was saying the collapse is immediate and will happen in 2012, 2011, and 2010. I told you, white men will not let the economy collapse at all because they created the very system that you benefit from. Please learn how to read.

        • Angel Peace

          Everything is the White Man’s Fault? Really? Funny, people like you have no problem reaping the fruits of a system, but when the system crashes you blame everyone but yourself. Please slink away and allow adults to converse. It’s past your bedtime isn’t it?

          • xander cross

            Please go back to school because its evident that you’re not reading my posts at all. White people like you steal from others and then claim that you’re innocent. White people benefit from food stamps and people like you like being on it since white women are on food stamps more than black men and black women.

    • xander cross

      I agree with you Ian. I bet that is exactly is going to happen. A conservative (rand Paul) wins and makes the economy worse and of course no one here would dare question Ron and rand Paul and yes, rand Paul did say that he would go to war to protect Israel.

  • SafetyViking

    Title was too long…

    I think the first 4 words sum it up for all…

  • Gregge K Johnson

    The reason banks are not giving mortgages is Not only because of interest rates. The banks are sitting on over 14 million properties . Creating a shortage always doubles or triples the Banks investments ( mortgages ) . Why risk the money for a lousy 3 or 4 percent ? When you can manipulate the housing market and double the money ,besides the banks are Renting ,they can still make their interest payments to the FEDS. Over 60% of the properties purchased in our area are bought by foreigners, with US Treasury Bonds ,sold to other countries .

  • iceman

    I used to work for WF processing mortgages. The week that the rates went up, I was out of work, not one extra week of work. Worse job I ever had! Lousy pay and crappy back stabbing coworkers. If the place burned to the ground, I couldn`t care less!

  • JJ

    Get ready for 20% interest rates like we had back in 1981-82.

    • Hoody

      looking forward to it, means CD’s should be @12%-15%

    • Ed

      “Government” can’t afford to pay those high interest rates. That’s why they will stay low.

  • A Dodgy Bloke

    Something that was left out of this article that I think people should know. Any reader of Zero Hedge or has been paying attention to the real estate market knows the banks had tons of shadow inventory that never saw the light of day. Much of this inventory was sold to Hedge Funds who rented these homes out. Over the last few months the Hedge Funds have started unloading these houses, knowing that rising interest rates was going to kill the housing market. Anybody banking on their value coming back is going to be sadly disappointed. Anybody with cash will get some killer deals by this time next year.

  • apocalyptic2013

    Yeah! Change to the apocalyptic market. It’s doing really great!

  • Bruce

    On a more personal note: I have known for many years what is inevitably coming. I have prepped signifcantly even though still not enough. I got completely out of debt. I struggled hard but paid my house off. I truly have zero debt. I have most of what can be done to prepare done. The only thing I was missing and really needed and wanted was a mate to share it with and to take care of. I FOUND HER and on October the 14th Lisa moves from Mass to here with me. Prayers answered and dreams realized. I truly hope all on this site will be as prepared and ready as I have become. Bless you all, Carry on.
    Bruce

    • mikeymike61

      just be careful, after all your hard work it would be a shame to have it go down the drain because of a woman. So many are full of treachery and deceit, just be careful. Good luck

  • 2Gary2

    “The Democrats will likely be held responsible.”

    And they should be. In 2008 they had control of Congress and public
    outrage on their side. What did they do? The largest congressional
    beneficiaries of Wall Street bribes campaign contributions wrote
    “new regulations” for the financial industry that all but guaranteed the
    TBTF banks could continue business as usual.

    Our newly elected president appointed a lawyer who’s firm had
    financial corporations as clients as head of the (in)justice department,
    then he selected a treasury secretary who’s actions at the New York
    concerning AIG were probably criminal. Finally he reappointed a fed
    chairman who’s policies of ZIRP on bonds have destroyed the savings of
    millions, enriched the big banks and created more market bubbles.

    Obama has received millions of dollars of bribes campaign
    contributions from the likes of Goldman Sachs, JP Morgan, Citi Group, GE
    financial and Morgan Stanley. He is bought and paid for.

    • kathy k

      Go Gary good comment

    • SmallerGovNow

      Gary, are you off of your meds? i agree with you for once…

    • Jim Davis

      Is this the same Gary2 that used to post here???

  • El Pollo de Oro

    A question I’ve often heard from Democraps and Republi-Cons (also known as the Gambinos and the Bonnannos) is, “Why do you hate the Federal Reserve so much? Why does Ron Paul want to audit the Fed?” For one thing, the Fed created a gigantic bubble with low interest rates that had the effect of artificially inflating property values. Low interest rates have not only been terrible for self-employed people with IRAs, they’ve also had the effect of creating a ton of underwater mortgages. The problem started under the “leadership” of George Dumb-Ya Bush and continued under Barack “Goldman Sachs” Obama and his pal Ben Bernanke (or as Gerald Celente calls him, Osama Bin Bernanke…..ha!).

    Peter Schiff is right: you can’t have a healthy economy when interest rates are near zero. It discourages saving.

    • El Pollo de Oro

      “After 9/11, they lowered interest rates to 46-year lows. That’s what created the housing bubble and all of the other bubbles that went along with it. Then, when they started raising interest rates later in the
      2000s in 2005, 2006, you started seeing the housing bubble bursting. And now,
      the only thing that’s keeping this so-called recovery alive is the trillions of dollars—that’s right, trillions—that the Federal Reserve is dumping into the system and the near-zero interest rates. When interest rates go up, the economy goes down.”—Gerald Celente

  • Circling the Drain

    My wife and I are keeping our fingers crossed that things won’t fall apart ’til next summer, when we hopefully SELL! SELL! SELL!

  • Rodster

    It looks like War maybe back on the table as Assad wants Israel to turn over it’s Nukes and he demanded that the US needs to stop backing the Syrian Rebels. I don’t see this playing out well.

    • Adrian

      Seems reasonable to me.

  • Ralfine

    It’s bad.
    Someone found out that the death rate in England’s hospitals is even higher than in the US.

  • Kent Harris

    Wealth and security is just an illusion. Tomorrow you wake up and Wall Street is gone along with all your money and in turn we have a world which has declared war on itself. America has become an impostor and the light it proclaimed is now a dark fog for which nothing shines. Remember we are but a few short months from the Blood Moons. Take heed and remember our Lord’s words ‘I am with you always, to the very end of the age.’

    • GSOB

      Take heed to superstition

  • patience 1957

    whats the big deal? if rates go up it just creates yet another refi boom when they come back down. as weve already seen. they dont go in one direction for more than a couple years…

  • patience 1957

    i remember 1994 but i also remember 1998. rates go up, rates go down. just be smart with your money.

  • El Pollo de Oro

    Four words: audit……the….stinking……Fed.

    • John Doe

      Three words: Screw the Fed. Bitcoin is the future of the monetary system.

  • Sammy’s Hammy

    So let us hope and pray that interest rates do not go any higher? Mikee, Mikee, Mikee…I don’t hope and pray for this. If interest rates go up, housing prices will fall to where they should be! Where I live, housing is an absolute rip off . Also, people cannot make any money (interest) on their savings or their retirement accounts in this ZIRP enviroment. I say you are wrong on this one, Mikee. This artificially maniuplated BS is ruining our country.

  • Adrian

    American capitalism is a corrupt system that has reached its terminal phase. It not only uses up workers and spits them out, extracting only wealth from everything, but it’s also destroying the planet. Who could defend a system that enriches a tiny few while impoverishing the many? You saw the recent news reports that show the richest 1% have reached 1920s era levels of unbridled wealth, while the bottom 99% has gotten nothing. The top 0.01% has seen a 33% increase in their wealth. That’s what American capitalism has morphed into. We’re becoming Argentina…a 3rd world country with our embarrassing income inequality.

  • xander cross

    Because white people like you need to stop destroying the economy.

  • DB200

    Interesting article but what is the problem if you fixed your interest for 30 years and are not planning to sell? On the other hand, my savings would love to see a 7% interest rate soon.

  • Tobias Smith

    saw 1 sheet of 1/2″ 4×8 sheetrock at 8.98/sheet. what a joke

  • Ralfine

    If I were in the construction industry I’d try to sell solid foundations. Foundations that survive the next flood and the next storm.

    People can get a foundation now and put a caravan on top. And when they haqve saved some more money they use bricks or reinforced concrete to build a small house on top. One that survives the weather for the next hundred years.

    Include underfloor heating, that keeps the walls free for cabinets, reducing necessary floor space; a proper roof that shades the windows in summer, but let’s in the sun in winter.
    It is very unlikely that energy prices will fall in future.

    Therefore any measure that will save energy use in the lifetime of the house will be a good investment.

    You can also safely assume that building materials will not become cheaper in the foreseeable future.
    Can you safely assume that people will be happy with lower wages or lower dividends in future?
    I guess not.

    So there is never a better time to build an energy efficient home than now.

    And you will find that any time spent with your family, maintaining and improving your home, is time and money well spent.

    Much better than working overtime and buying gold.

    Because when you are sick, and injured and old, there is nothing better than family to care about you.

    Any company will dump you at a drop of a hat.

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