When Wildfires Beyond Expectations Overlays the Realities of QE Played Out
Posted by Finance blog on Tuesday, April 23, 2013
Not everything in this post is written tightly strung together. A few thoughts for the moment:
QE, quantitative easing.
Remember a few years ago, when hurricanes went through the southern part of the U.S., and people with house owner insurance policies, had their policies fail to pay out? What guarantees that the same sort of thing won't happen again, if wildfires come blowing through the land in the 10s of thousands of square miles at a time, and far more destructive than what anyone could have predicted? And, insurance, HOI, do not pay back?
Exacerbating the situation, in some aspects, might be, the pace of which houses have been getting rebuilt, and the trend continues. After the Colorado wildfire last summer of 2012, it took almost half the year afterward, to have one house rebuilt.
With the factors that contribute to global warming, holes in the ozone layer, and climatic conditions that have elements in them that are negative due to the evil things people do, wildfires, a natural occurrence, can very easily become fueled by these. Memories of some of the wildfires in the Midwest, especially Colorado, that started 'stomping' around last year, hundreds of feet in the air, melting fire trucks from a quarter mile off, it can be said, that mathematical economic models and formulas is not something that you would want to solely rely on, on a practical, prudent common-sensical level.
In the thematic background of what is being explained here, is yes, aspects of the housing market might be coming back, or have come back, or might come back, but, will it be fast enough for everything to crystallize into a dreamy playout, especially if wildfires hit harder than they did last year, and house insurance does not do the dance that the TV commercials say they will?
Where does QE come in at, how is it connected to what is being talked about here?
Some economists feel QE1, QE2, 3, have reason to be reviewed for what their levels of effectiveness are, whereas the feeling of the first two have failed in some way. A recent wave of QE, is an arrangement that is supposed to last until 2015.
People are already wary and voicing scrutiny on how low mortgage rates are now, as we speak; it is the tradition, that if rates go too absurdly low, even though low mortgage rates is something to be happy about, extremely low rates is considered by some as indicative of being joke-like respective of the economy. So we keep going and going in terms of rates getting lower, and we are not even half way through 2013, what is the status going to be the time 2015 arrives? Caveat, if the QE program scheduled to run until 2015 stays the same-?-.
Mortgage rates on an average priced residential property, FHA as instance, have dropped from the low to mid 4% range this time last year, to almost 3%, for fixed 30 year loans. At that kind of pace, the prospect of rates dropping all the way to 0%, looks like it could be logical on elementary level math. What if rates do that before 2015? What happens next?-- interest rates below 0%? Will lenders have to pay house owners to get them to refinance? That is the hypothetical scenario of what might be in store as a down-side, a ridiculous concoction.
Additional references being made to:
'Bond and mortgage rate correlations'
'Bond and QE correlations'
Mortgage-backed securities, MBS
'guarantees' of housing market levels and values coming back on a predicted schedule, and prepayment risk
U.S. bond purchases by foreign banks, when they, the foreign banks, too have changes on their agenda, and possibly challenges
Links to articles that might be of interest:
NICB Warns of Fraud in Aftermath of Hurricane Sandy
Fed Is Firing Blanks With QE: Whalen
Published April 23, 2013, about 4 hours ago
How to Avoid Common Scams During Storm Recovery
QE, quantitative easing.
Remember a few years ago, when hurricanes went through the southern part of the U.S., and people with house owner insurance policies, had their policies fail to pay out? What guarantees that the same sort of thing won't happen again, if wildfires come blowing through the land in the 10s of thousands of square miles at a time, and far more destructive than what anyone could have predicted? And, insurance, HOI, do not pay back?
Exacerbating the situation, in some aspects, might be, the pace of which houses have been getting rebuilt, and the trend continues. After the Colorado wildfire last summer of 2012, it took almost half the year afterward, to have one house rebuilt.
With the factors that contribute to global warming, holes in the ozone layer, and climatic conditions that have elements in them that are negative due to the evil things people do, wildfires, a natural occurrence, can very easily become fueled by these. Memories of some of the wildfires in the Midwest, especially Colorado, that started 'stomping' around last year, hundreds of feet in the air, melting fire trucks from a quarter mile off, it can be said, that mathematical economic models and formulas is not something that you would want to solely rely on, on a practical, prudent common-sensical level.
In the thematic background of what is being explained here, is yes, aspects of the housing market might be coming back, or have come back, or might come back, but, will it be fast enough for everything to crystallize into a dreamy playout, especially if wildfires hit harder than they did last year, and house insurance does not do the dance that the TV commercials say they will?
Where does QE come in at, how is it connected to what is being talked about here?
Some economists feel QE1, QE2, 3, have reason to be reviewed for what their levels of effectiveness are, whereas the feeling of the first two have failed in some way. A recent wave of QE, is an arrangement that is supposed to last until 2015.
People are already wary and voicing scrutiny on how low mortgage rates are now, as we speak; it is the tradition, that if rates go too absurdly low, even though low mortgage rates is something to be happy about, extremely low rates is considered by some as indicative of being joke-like respective of the economy. So we keep going and going in terms of rates getting lower, and we are not even half way through 2013, what is the status going to be the time 2015 arrives? Caveat, if the QE program scheduled to run until 2015 stays the same-?-.
Mortgage rates on an average priced residential property, FHA as instance, have dropped from the low to mid 4% range this time last year, to almost 3%, for fixed 30 year loans. At that kind of pace, the prospect of rates dropping all the way to 0%, looks like it could be logical on elementary level math. What if rates do that before 2015? What happens next?-- interest rates below 0%? Will lenders have to pay house owners to get them to refinance? That is the hypothetical scenario of what might be in store as a down-side, a ridiculous concoction.
Additional references being made to:
'Bond and mortgage rate correlations'
'Bond and QE correlations'
Mortgage-backed securities, MBS
'guarantees' of housing market levels and values coming back on a predicted schedule, and prepayment risk
U.S. bond purchases by foreign banks, when they, the foreign banks, too have changes on their agenda, and possibly challenges
Links to articles that might be of interest:
NICB Warns of Fraud in Aftermath of Hurricane Sandy
Fed Is Firing Blanks With QE: Whalen
Published April 23, 2013, about 4 hours ago
How to Avoid Common Scams During Storm Recovery
Tags: qe insurance fraud scam wildfire mbs
