DaveHanson said:

<< Thanks for the thread, very interesting.

Especially since it's looking increasingly like long rates WILL increase a point or two before much longer, and probably stay somewhat higher, at least until we get this soaring deficit under control--which won't happen for awhile if GWB is re-elected (and might not even he's defeated.) >>

There probably won't be a rate increase until after the election. Bush will do everything in his power to make sure of that.

Afterwards is another story. If you own bonds or a bond fund, sell.

hi WSM.

I hope home prices fall so I can actually afford a freakin home here in LA.

Crazytree said:

<< hi WSM.

I hope home prices fall so I can actually afford a freakin home here in LA. >>

If home prices fall by 15% in LA but mortgage rates are above 8%, how will homeownership be any easier for you?? If anything it will be more difficult.

.

A 7% drop wouldn't be a big deal.. I could make half of that back by selling the house myself instead of using a realtor.. and no matter what.. if the price wasn't what I wanted.. I'd just stay where I am until it came back up.. high demand areas like southern california always come back .. they just don't make'em like this anymore

Another point: The article does not take into consider the economy well being. Fed will raise rates only if economy is doing good.If economy is doing good, stocks are doing good.If stocks are doing good, people will have easy money (made from stcoks) and ready for huge downpayments. My viewpoint is only focuses bay area where stock prices matter a lot.In the boom days, people wrote checks for whole home price.

bozango123 said:

<< Fed will raise rates only if economy is doing good.If economy is doing good, stocks are doing good. >>

1. No. IMO, the Fed will raise rates after the presidential election. In all likelihood in an attempt to stabilize the crumbling dollar. Regardless of how the economy is going. Even my grandson understands that his kiddie savings account doesn't pay enough interest to make up for his lost purchasing power.

2. The economy can be doing well and stocks can be in the tidy bowl. All at the same time. It's happened before.

unknownshopper said:

<< Even my grandson understands that his kiddie savings account doesn't pay enough interest to make up for his lost purchasing power >>

Has he shopped at WalMart recently ? Or the local supermarkets where you can get 6 boxes of Raisin Bran for $10. Thats the same price as 20 years ago.

$6 boxes for $10!?!? At Wal-Mart? You've got to be kidding me.

Even their cheap, bagged cereal is at least $2.50.

(and this is in poor Mississippi)

Steven V.