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Interesting,



So the government will bail out the Bear Sterns, but can do nothing to save the southern california home owners who is going to be seriously under water? What would happen if the FEDs cut rates until we hit 0%, and there is no more rates to cut. How would this event effect the real estate market? Is there any cause/effect relationship?



Panda.
 
[quote author="PANDA" date=1213674788]Interesting,



So the government will bail out the Bear Sterns, but can do nothing to save the southern california home owners who is going to be seriously under water? What would happen if the FEDs cut rates until we hit 0%, and there is no more rates to cut. How would this event effect the real estate market? Is there any cause/effect relationship?



Panda.</blockquote>


I guess we need some clarification.


The US government did not bail out Bear Stearns.

The Federal Reserve, a private corporation, buried Bear Stearns in order to save JP Morgan Chase and the rest of the banking establishment from a credit derivative meltdown.


What do you think the US government can do to save the Southern California home owners? And for the sake of laughs and giggles, let's say it has to be Constitutional. What do you think will happen if the Fed cuts the overnight rate to 0%? What do you think the effect would be?


Don't worry that someone is going to trash on your answer. They will, but so what? Who are they?


I do not think I can answer your questions without writing a book or two, so I think it will be up to you to provide your thoughts and the rest of us can weigh in.


One thing you may want to consider: The Federal Reserve is a private corporation owned by the largest banks in the US, (and only the US ... I do not give credence to international conspiracy theories), and must be owned by the largest banks by the nature of it's charter. Who do all you posters think the Federal reserve works for? The taxpayers? The citizens of the United States of America? Or maybe it's shareholders? Or?


Has anybody read Bernanke's thoughts on inflation and deflation? Or what he thinks caused the Great Depression? And how that influences his decisions? What actions has Bernanke taken and who have they benefitted? Did the Bear Stearns "bailout" benefit Bear Stearns? Did it benefit the American people? Have the auction facilities benefitted the American people? Lowering the overnight or discount window rate?


Sorry, I have alot more questions than answers, but my lectures, diatribes, and opinions do not seem to initiate discussion so maybe some questions will.
 
[quote author="PANDA" date=1213674788]Interesting,



So the government will bail out the Bear Sterns, but can do nothing to save the southern california home owners who is going to be seriously under water? What would happen if the FEDs cut rates until we hit 0%, and there is no more rates to cut. How would this event effect the real estate market? Is there any cause/effect relationship?



Panda.</blockquote>


The government didn't bail out Bear Stearns. The Fed did, and they're a private (not government-owned) entity. In fact, Congress is pretty pissed off at the Fed for doing it.



The Fed is quickly running out of balance sheet, and they soon won't be able to do much to help the banks.



<img src="http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/2008/05/13/select_fed_assets.png" alt="" />



Edit:



For some reason the picture isn't showing. Cut and paste, and remove the space at the end!



http://bp3.blogger.com/_pMscxxELHEg/SCnn8FVo_9I/AAAAAAAAB-Y/zDqlmohzm2U/s1600-h/FedsBalanceSheet.jpg

or

http://bigpicture.typepad.com/.shared/image.html?/photos/uncategorized/2008/05/13/select_fed_assets.png
 
[quote author="freedomCM" date=1213603948]

This is what I think too.



I am also invested in VCAIX. 5.5% equivalent yield is nothing to sneeze at.</blockquote>


Is this VCAIX liquid, like a mm account where you can withdraw your money at any time?
 
Awgee,



I guess what you are try to tell me is that U.S. government is not our friend and cares less about the U.S. citizens so do not expect a bail out from them. One thing i do know is that Bernanke will prefer inflation over deflation. He will do anything in his power to avoid the 1930 Great Depression. If FED cuts rates to 0%, inflation is going to be sky high and it will be out of Bernanke's control.
 
[quote author="PANDA" date=1213677747]Awgee,



I guess what you are try to tell me is that U.S. government is not our friend and cares less about the U.S. citizens so do not expect a bail out from them. One thing i do know is that Bernanke will prefer inflation over deflation. He will do anything in his power to avoid the 1930 Great Depression. If FED cuts rates to 0%, inflation is going to be sky high and it will be out of Bernanke's control.</blockquote>


Seriously, my questions were real questions. I was not trying to tell you anything with them. I was telling you something with statements.


What exactly can the US government do to bail out homeowners? The US gov is not the Federal Reserve nor does it control the Federal Reserve. Where would the US gov get the money to bail out homeowners and which would they help? Those in debt? Those who more than their house is worth?


Yeah, if the Fed cuts the overnight rate to 0%, every bank in the world would be lined up for free money. I know foreign banks can not borrow from the Fed, but they can borrow from US banks. Where would the Fed get the money to loan at 0%? Would Bernanke just print it? I think he would. He said he would. And that has been his solution to every problem he has faced thus far. How much different is 0% than 2%, effectively speaking? The JCB lowered their rate to 1/2% and literally every bank and hedge fund in the world went to Japan for money.
 
[quote author="awgee" date=1213680500][quote author="PANDA" date=1213677747]Awgee,



I guess what you are try to tell me is that U.S. government is not our friend and cares less about the U.S. citizens so do not expect a bail out from them. One thing i do know is that Bernanke will prefer inflation over deflation. He will do anything in his power to avoid the 1930 Great Depression. If FED cuts rates to 0%, inflation is going to be sky high and it will be out of Bernanke's control.</blockquote>


Seriously, my questions were real questions. I was not trying to tell you anything with them. I was telling you something with statements.


What exactly can the US government do to bail out homeowners? The US gov is not the Federal Reserve nor does it control the Federal Reserve. Where would the US gov get the money to bail out homeowners and which would they help? Those in debt? Those who more than their house is worth?


Yeah, if the Fed cuts the overnight rate to 0%, every bank in the world would be lined up for free money. I know foreign banks can not borrow from the Fed, but they can borrow from US banks. Where would the Fed get the money to loan at 0%? Would Bernanke just print it? I think he would. He said he would. And that has been his solution to every problem he has faced thus far. How much different is 0% than 2%, effectively speaking? The JCB lowered their rate to 1/2% and literally every bank and hedge fund in the world went to Japan for money.</blockquote>


I am not arguing with you Awgee, I am agreeing with you that I don't think the government can do anything to bail the homeowners out. The scary part is that I don't think that the government can save us from this recession from happening. I think what is happening to the U.S. is similar to what happened to the Japan Real Estate Bust. Man, I think that lasted 15 dark years. I am not an expert in this area, but I believe that Japan had reserves so that their Yen would not crash, but U.S.'s situation is very different from Japan as we are in trillions in debt and very little reserves. Most of the U.S. dollars exist outside of this country.



Awgee, do you think there is a real chance that U.S. Dollar can crash? Euro will replacing the U.S. Dollar as the world currency, breaking a 100 year precedence? U.S. going back to the Gold Standard? I am not 100% sure on the answers myself. I do agree with you that Bernanke will continue to print money eventually making our dollars worthless. Soon we will see 2 U.S. dollars equaling 1 EURO. You see why I don't like the fact that I have 50% of my downpayment (in U.S. Dollars) in Country Wide Bank giving me a pathetic 3.75 APY?



Panda
 
[quote author="PANDA" date=1213682293]Awgee, do you think there is a real chance that U.S. Dollar can crash? Euro will replacing the U.S. Dollar as the world currency, breaking a 100 year precedence? U.S. going back to the Gold Standard? I am not 100% sure on the answers myself. I do agree with you that Bernanke will continue to print money eventually making our dollars worthless. Soon we will see 2 U.S. dollars equaling 1 EURO. You see why I don't like the fact that I have 50% of my downpayment (in U.S. Dollars) in Country Wide Bank giving me a pathetic 3.75 APY?



Panda</blockquote>


So why don't you just park your down payment fund in Euros? If you think the dollar is going to de-value significantly, no reason you can't just go out and convert your US dollars to a foreign currency...
 
[quote author="PANDA" date=1213682293][quote author="awgee" date=1213680500][quote author="PANDA" date=1213677747]Awgee,



I guess what you are try to tell me is that U.S. government is not our friend and cares less about the U.S. citizens so do not expect a bail out from them. One thing i do know is that Bernanke will prefer inflation over deflation. He will do anything in his power to avoid the 1930 Great Depression. If FED cuts rates to 0%, inflation is going to be sky high and it will be out of Bernanke's control.</blockquote>


Seriously, my questions were real questions. I was not trying to tell you anything with them. I was telling you something with statements.


What exactly can the US government do to bail out homeowners? The US gov is not the Federal Reserve nor does it control the Federal Reserve. Where would the US gov get the money to bail out homeowners and which would they help? Those in debt? Those who more than their house is worth?


Yeah, if the Fed cuts the overnight rate to 0%, every bank in the world would be lined up for free money. I know foreign banks can not borrow from the Fed, but they can borrow from US banks. Where would the Fed get the money to loan at 0%? Would Bernanke just print it? I think he would. He said he would. And that has been his solution to every problem he has faced thus far. How much different is 0% than 2%, effectively speaking? The JCB lowered their rate to 1/2% and literally every bank and hedge fund in the world went to Japan for money.</blockquote>


I am not arguing with you Awgee, I am agreeing with you that I don't think the government can do anything to bail the homeowners out. The scary part is that I don't think that the government can save us from this recession from happening. I think what is happening to the U.S. is similar to what happened to the Japan Real Estate Bust. Man, I think that lasted 15 dark years. I am not an expert in this area, but I believe that Japan had reserves so that their Yen would not crash, but U.S.'s situation is very different from Japan as we are in trillions in debt and very little reserves. Most of the U.S. dollars exist outside of this country.



Awgee, do you think there is a real chance that U.S. Dollar can crash? Euro will replacing the U.S. Dollar as the world currency, breaking a 100 year precedence? U.S. going back to the Gold Standard? I am not 100% sure on the answers myself. I do agree with you that Bernanke will continue to print money eventually making our dollars worthless. Soon we will see 2 U.S. dollars equaling 1 EURO. You see why I don't like the fact that I have 50% of my downpayment (in U.S. Dollars) in Country Wide Bank giving me a pathetic 3.75 APY?



Panda</blockquote>



I did not think you were arguing with me, but feel free to argue with me. I was just trying to be clear that my questions were real questions.
<p>

I think the government can bail out homedebtors. The government can give them money. And you seem to have a good grasp on what the consequences of that action are. What most people do not realize is that if the government does anything to help homedebtors, it will in effect be giving them money or loaning them money, even if the manner in which it is done is convoluted and disguised. And it will have the same effect. The only thing that can be created out of thin air is fiat currency, and inflation is an inevitable result.
<p>

If you look at a chart of the dollar over that last two years, you will see the dollar <strong>IS</strong> crashing and there is no reasonable reason to think it will stop anytime soon.
<p>

I do not think the Euro will replace the USD as the world reserve currency for any length of time. I think the EURO is in the same situation as the USD. Per my previous post, I do not think the US will go back to a gold standard. At some point, the Federal Reserve will come up with some cockamamy peg to fool the US public into thinking that the dollar is pegged to gold, and I think they will be successful at fooling the US public with their psuedo peg. But a real gold standard? Not a chance in ____.
<p>

The dollar is worth less ... and less ... and less. The devaluation of the dollar is not an event, but rather a process. Why measure one's wealth in terms of dollars?
 
Spartans unite!



Nice analysis NSR.



I 85% agree with Awgee.



Panda has his head in the sand. Nothing is going to have 10% returns and be risk free. It doesn't work that way.



I went out an played cards last night. I played a pot where I had around 90% equity to win with one card to come. My buddy got a 3/41 shot to come in and I lost. He paid somewhere around 3:4 to get there. Even though I lost the pot, I still won there. Do you see why?



I'll give you the answer. My buddy overpaid 10:1 for the privlidge to run me down. That's called taking the worst of it.
 
IPO,



For the past several years I've had a good chunk of Panda's Irvine Down Payment Fund in Foreign Currencies. I have noticed that in the past 3-4 years, my foreign currency funds have out performed my Savings Link account with Country Wide Bank by a wide margin.



You are right, I don't have the balls to convert all of my USD holdings into EUROS. There is that 1% chance that Graph is right that the U.S. economy will be fully recovered by 2010. As Graph says it best, "Don't bet against the U.S. Economy."
 
[quote author="no_vaseline" date=1213689512]Spartans unite!



Nice analysis NSR.



I 85% agree with Awgee.



Panda has his head in the sand. Nothing is going to have 10% returns and be risk free. It doesn't work that way.



I went out an played cards last night. I played a pot where I had around 90% equity to win with one card to come. My buddy got a 3/41 shot to come in and I lost. He paid somewhere around 3:4 to get there. Even though I lost the pot, I still won there. Do you see why?



I'll give you the answer. My buddy overpaid 10:1 for the privlidge to run me down. That's called taking the worst of it.</blockquote>


No_Vas, please post your hand!



Like you're saying. with no risk there's no rewards. And there's no free money anywhere.



Also, with great Powers comes great responsibilities...not sure what this has to do with anything...
 
Social game at a private residence .25-.50 $25 deep w/anytime rebuys. It's six handed all night, and fairly straight up and down. Nobody is really out of line. I am up to around $45 when the following hand breaks out.



Villian limps UTG. I limp the SB with 99. The bb checks.



(pot 1.50)



Flop 2 9 6 rainbow.



I check, BB checks, Villain bets 1.25. He's been pretty snug all night, but I've played with him a lot, and I figure he has air. I call. BB calls.



(pot 5.25)



Turn offsuit Q.



I bet 3.75. BB folds. Villian instacalls.



River 10d.



(pot 12.50).



Villian perks up. I'm not sure I like that or not. I check. Villian bets $3.75 and I instacall. He shows KJo for the nuts.



The only way he fades the 10:1 worst of it on the turn is if I've got 35 behind and he can somehow get me to stack off at the end. Other that that, the call with the gutterball was horrible. I think he thought I was taking a shot back at him on the turn and he decided to call with an overcard and a gutterball and snap off the turn bluff. Problem is, I don't bluff very often and he knows it.



I played 20/40 E/O (half Stud 8/b, half Omaha 8/b) at Hollywood Park for about six hours on Saturday. It was a little scary becuase I'd never played that big before. Scary for about ten minutes. It was a really, really, really juicy game. Filled with players who are apparently alergic to money.
 
[quote author="IrvineRealtor" date=1213703579]we need a poker <strong>night</strong>...</blockquote>


You tell me... does this guy ^^ sound like he knows what he's doing? Me, i can calculate odds on a single deck pretty easily (thats not a big issue), but P.L.A.Y.I.N.G a game? Now I suck badly....



But i'll donate to the cause for fun.



-bix
 
I'm playing at Full Tilt right now........and listening to my ipod because Mrs. No_ has the washer, dryer, and dishwasher all running at the same time.



"And you don't know me and you don't like me.........

Say you care less how you feel.......

But who are you to sit and Judge me.......

And walk the streets of Bakersfield?"
 
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