Dallas, Haven't We Been Here Before?
The intrepid Danielle DiMartino makes it worth the sign up time at the DallasNews site. Here's a few bits of the Q&A she did today. "Over half of the new mortgages originated in the second half of 2004 were ARMs with lock-ups of less than three years. You'll have a LOT of inventory flooding the market in a matter of years. I wouldn't want to be one of the people coming in behind these sellers as those with 5 and 7 year locks rush for the exits all at once."
"So-called 'investors' are buying up properties in McKinney and doing cash-outs simultaneously with the original closings, all based on fraudulent appraisals, yes, this kind of stuff even goes on in non-bubbly Dallas, the damage all of these criminals are inflicting on communities is abhorrent...the same fraud that's going on on a national level is taking place here..Local foreclosures are three-quarters of the way to their 1989 record. Inventories have been north of 6 months for a long time, we are definitely in a buyer's market and the credit standards are even worse today than what they were in the years leading up to the S&L crisis."
"When the wheel stops spinning, we're going to be sitting on a massive mountain of debt..debt loads could easily bring deflation on in a slowing environment and the Fed knows it, that's why they would tell you, strictly off the record, that they HAVE to keep raising rates so that they have the needed ammo when the time comes to fight deflation."