Is The Housing Market About To Crash? Housing CRISIS coming to the USA...
Between mid-2006 and early 2009, home prices dropped by 35% in the first nationwide decline since the Great Depression.
Home prices historically sat in a range of 3-4 X median incomes, jumping to 5.1 times in December 2005 before collapsing.
This ratio is now at 4.4 times, a level that was unprecedented prior to June 2004.
Over 2M people have already requested forbearance in April
Let me just explain briefly what happened prior to the 2008 crisis, because there's a lot of misinformation around this. The banks were basically gambling with the housing market, then packaging up your mortgage with thousands of others in a bundle called a CDO which stands for ‘Collateralized Debt Obligation’. Then they were using huge insurance companies like AIG to protect that gamble. However, the insurance companies thought there was no way the housing market would ever crash, so they didn't keep the money they needed in reserves in order to payout any claims.
The government then stepped in as well as regulators so that this would never happen again and that CDOs would never be created again...
But guess what happened in 2015…
CDOs came back, the latest name being thrown around is a BTO which stands for ‘Bespoke Tranche (traunch) Opportunity’
Last time around it was the shadow banking sector that caused the crisis, this time around it will be the shadow banking sector again.
It’s said that 5 of the top 10 mortgage lenders or 60% of all mortgages are not from Banks! They belong to the shadow banking sector.
Here comes the next problem, banks like JP Morgan are requesting a 700 score with a 20% deposit, so anyone that got a variable rate loan in the past few years who is looking to refinance over the coming months - good luck!
Because that adjustable rate will be about to boom, and since most families spend 100% of what they earn, this is going to push them into debt. And making the monthly payment at a time when people are losing their jobs is going to be a mortgage apocalypse.
Anyone who can't meet the 700 score, means less people are available to purchase houses. This will dramatically affect the supply and demand curve, turning the market from a seller's market to a buyers market and possibly even a finance based market to a cash buyers market, which means lower prices.
We also need to take into account the amount of inventory on hand for your area.
So we're probably going to see a drop-in available houses on the market because people are either concerned about listing and then not getting a sale or they’re concerned of would be buyers walking around their home and passing on the virus to their family.
Lack of supply will hold up prices for a while in those areas. But it’s just kicking the can down the road, eventually they will all crash. They will have to, that is the law of averages.
One of the biggest mistakes I think that the governments have made right now is they have allowed people not to pay their mortgage and loan payments, without needing to prove financial hardship. This is a huge mistake, because Human Nature being what it is, people will apply for the payment break because it's like free money even if they're not in financial hardship.
This in turn will leave banks running out of money due to forbearance, they simply don’t have the cash reserves.
One of the reasons that you've seen the major banks tightening the lending criteria, is because they know that they can't sell the mortgages on to investors because it's too high risk. So they have to increase the criteria in order to sell these loans on.
The next thing we need to factor in is inflation vs home prices. So even if we don't see the actual number i.e. the price of a house going down, it will still be going down as a result of inflation going up. I'm expecting at least 5% if not 10% inflation over the next year. Add this to quantitative easing also known as money printing, and we could even see house prices go up.
However it's not real, it's an illusion because there is simply more money in circulation.
The banks and their insurers will be the first to cause yet another housing crash. They moved away from the safe 20% deposit down, 700 score to the 3% down, below 550 scores where they can make a lot of profit and get insurance against these huge risks.
My prediction then is as follows: I think the market could correct by as much as 40% downwards in some areas and as little as 15% in others.
According to Redfin, house prices have already dropped by an average of $21,000 since mid March, this equates to 7% in just 1 month.
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I am not a financial advisor or attorney. These videos shall not be construed as tax, legal or financial advice and may be outdated or inaccurate; all decisions made as a result of viewing are yours alone.
All facts in this movie have been independently confirmed. Sources are documented at http://thrivemovement.com
History will repeat itself as long as these bankers and their corrupt politicians are in charge. Save yourself from the upcoming economic collapse of 2012. Please share this important knowledge with your family and take action.
MELTDOWN - The Men Who Crashed The World
The first of a four-part investigation into a world of greed and recklessness that led to financial collapse.
In the first episode of Meltdown, we hear about four men who brought down the global economy: a billionaire mortgage-seller who fooled millions; a high-rolling banker with a fatal weakness; a ferocious Wall Street predator; and the power behind the throne.
The crash of September 2008 brought the largest bankruptcies in world history, pushing more than 30 million people into unemployment and bringing many countries to the edge of insolvency. Wall Street turned back the clock to 1929.
But how did it all go so wrong?
Lack of government regulation; easy lending in the US housing market meant anyone could qualify for a home loan with no government regulations in place.
Also, London was competing with New York as the banking capital of the world. Gordon Brown, the British finance minister at the time, introduced 'light touch regulation' - giving bankers a free hand in the marketplace.
All this, and with key players making the wrong financial decisions, saw the world's biggest financial collapse.
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Live Trade Coaching
For many years, we’ve been told that finance is good and more finance is better. But it doesn’t seem everyone in the UK is sharing the benefits. On this program, we ask a very simple question – can a country suffer from a finance curse?
Host Ross Ashcroft is joined by City veteran David Buik and the man who coined the term Quantitative Easing, International Banking and Finance Professor Richard Werner.
Watch Renegade Inc. here: https://www.rt.com/shows/renegade-inc/
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If you are interested in this topic you can find more information out at the links below.
U.S. Recession Model at 100% Confirms Downturn Is Already ...www.bloomberg.com › us-economic-recession-tracker
Apr 8, 2020 - 0 50 100 % 2000 2010 2020 1992 2020 2001 Recession Great Recession. Source: Bloomberg Economics. The recession probability model ...
Why the Global Recession Could Last a Long Time - The New ...www.nytimes.com › economy › coronavirus-recession
Apr 1, 2020 - Fears are growing that the worldwide economic downturn could be ... The federal budget deficit will be nearly $4 trillion in 2020, the C.B.O. says ...
Economic Recession in 2020: What Steps Can You Take Now?www.oberlo.com › Blog
9 Apr, 2020 9 min read 2 comments. Economic Recession 2020. These are challenging times. The coronavirus, COVID-19, has quickly traveled around the ...
recession - Wikipediaen.wikipedia.org › wiki › _recession
Jump to global economic slowdown - The recession is considered to be the steepest economic downturn since the Great Depression. On 14 April 2020, the ...
Cause: -induced market ... Date: 20 February 2020 – present
Background · Causes · Financial crisis · Impact by country
On Thursday 20th November 2014 over 30 MPs took part in a debate in the House of Commons on money creation and society. This was the first time in 170 years, since the Bank Charter Act in 1844, that the topic has been fully debated.
Money creation affects almost every aspect of our lives, and is directly connected to almost all public policy, including public and private debt levels, house prices, and rising inequality, but it’s very poorly understood. A recent poll found that 7 out of 10 MPs believed that only the government can create money, when in fact 97% of money is created by banks as they make loans, as recently confirmed by the Bank of England
Michael Meacher MP:
"The banks have too much power and they have greatly abused it. First, they have been granted enormous privileges since they can create wealth simply by writing an accounting entry on a register. They decide who uses that wealth and for what purpose and they have used their power of credit creation hugely to favour property and consumption lending over business investment because the returns are higher and more secure. Thus the banks maximise their own interests but not the national interest. Secondly, if they fail to meet their liabilities, the banks are not penalised. Someone else pays up for them."
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Positive Money is a not-for-profit research and campaign group. They work to raise awareness of the connections between our current monetary and banking system and the serious social, economic and ecological problems that face the UK and the world today. In particular they focus on the role of banks in creating the nation's money supply through the accounting process they use when they make loans - an aspect of banking which is poorly understood. Positive Money believe these fundamental flaws are at the root of - or a major contributor to - problems of poverty, excessive debt, growing inequality and environmental degradation. For more information, please visit: http://www.positivemoney.org/
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Economics 101 -- "How the Economic Machine Works."
Created by Ray Dalio this simple but not simplistic and easy to follow 30 minute, animated video answers the question, "How does the economy really work?" Based on Dalio's practical template for understanding the economy, which he developed over the course of his career, the video breaks down economic concepts like credit, deficits and interest rates, allowing viewers to learn the basic driving forces behind the economy, how economic policies work and why economic cycles occur.
To learn more about Economic Principles visit: http://www.economicprinciples.org.
[Also Available In Chinese] 经济这台机器是怎样运行的: https://www.youtube.com/watch?v=-ZbeYejg9Pk
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