Rising mortgage rates somehow is coupling with higher home sales nowadays, possibly as a result of declining home prices for the quarter ending in September. Seeing poor underwater homeowners, the sympathetic Freddie Mac again asks the government to forgive the debt. I can totally imagine Obama to be in headache, because on one hand, by lowering rates to allow refinance he has already pumped billions of dollars to U.S citizens, and on the other hand, this hole in which he's pumping money in just doesn't seem to have an end. I guess he finally realized it is endless so is currently switching his focus to job creation, which is definitely wiser. An ancient Chinese philosopher has once said, "fulfill the urgent needs; not save the poor." The wisdom lays in the fact that regardless how much you are giving to a street beggar, he won't stop begging because you gave him money, and by giving him money, you only make him want to beg more, which is an endless hole to fill in with your money.
Just out of curiosity, I ran an regression of GDP on housing, not adjusting for omitted variable bias or what not that you usually find in an Econometrics textbook from 1991 to 2009. I found that the beta is approximately 0.72, which scared the crap out of me. That is just saying that it is probably that 72% wealth is built in the housing properties in U.S. That's just too damn high.
No comments:
Post a Comment