John Paulson says to buy a house RIGHT NOW, do you agree?

[Alexandre]

Quote from achilles28:

Oil at 90$, Gold at $1200 and food up by 50% is no myth.

Even if the principle driver of money growth (commercial lending) is sidelined, massive quantitative easing via outright purchase/backstop of the private-debt market is possible and doable. That's what Paulson is betting on, I think. Otherwise, deflation takes hold, and bank balance sheets, consumers and Governments get absolutely crushed. In my opinion, there is no way out from the next Great Depression. It's either massive inflation via QE or massive deflation. Like you said, the markets won't allow endless deficit spending (which is deflationary). But, on the other hand, the Central Bankers of the world won't allow a massive deflationary depression, which necessitates unprecedented quantitative easing. Basically, a wholesale backstop of the financial markets and private debt markets. That's what I'm betting on and many others like Faber, Schiff and maybe Paulson. A deflationary crash means debts are magnified. The largest geared players in todays markets are Banks and Governments - quintessentially the same thing, as the FED is owned by commercial banks, and bankers openly run Capital Hill. Both Governments and Bankers face insolvency if a deflationary crash is allowed to take root. For Governments, revenues drop by half or more, effectively doubling the national debt and interest payments.! It's inflate or die for the guys with all the power. Then again, anything can happen. The powers-that-be could let it all go to sh*t now, in a deflationary blackhole. I say it's 70% chance they inflate it away, and 30% they don't. What's your take?

you're right, it's not in the interest of governments and banks to have deflation.

but we're in a global world and there is only a limited amount of QE you can have before you start alienating yourself from international investors. I think we're close this limited amount. Once you go beyond it, that's what could be termed the nuclear QE option where a Zimbabwe situation becomes possible.

I see 40% no inflation (only inflation in financial assets), 30% inflation (5%+ p.a.) and 30% deflation.

Before the European crisis and recent decisions to implement austerity measures, we were more like 60%, 30%, 10%.

 

[TGregg]

Quote from Alexandre:

I disagree. The debt doesn't go away. New debt is created to buy debt that would have defaulted but the obligation to pay remains and the debtor is not better off.

In a sense, the debtor is now even worse off. Instead of addressing the problem, he's created a temporary solution to one of the symptoms. His blood pressure and cholesterol is up, but he's on blood thinners and statins so it's a wash. Might as well stop off at the BK Drive Thru for another Triple Whopper with cheese and bacon.

 

[SomeYoungGuy]

Quote from ChrisDragonKni:

Yes I do agree with you that real estate has intrinsic value but what you cannot do is take it somewhere else if a government should decide to levy a wealth or land tax (or confiscate it all together). With gold these things are possible. Having said that I would prefer to invest in real estate than gold as precious metals have already risen so much in value.

There is risk in everything. If you fear the gov't taking your real estate, by taxation or eminent domain, by all means buy gold. Then you need to worry about your gold being stolen. Perhaps the thief will be the masked robber who ties you and your family up, perhaps the thief will be the gov't who outlaws private ownership as happened under Roosevelt.

 

[S2007S]

Quote from retaildaytrader:

I know that the business of residential real estate is a geographical thing. I also know there is some negotiation and strategy involved when buying a house and the many other variables.

So, with that said, John Paulson specifically stated that NOW is the time to buy a house. Do you agree or disagree with this?

http://www.reuters.com/article/idUSTRE6495JR20100510

"If you don't own a home today, now is the time to buy one," Paulson said, adding that people may want to consider buying a second house or helping relatives buy one.

Of course, its "ALWAYS" a good time to buy a house, no matter what the economy is doing no matter what real estate is doing they always yell that its a great time to buy a house or two. Last year I was looking at some places near me, wasn't looking to buy, just wanted to see what was going on in the market around my area, well fast forward a year later and I can tell you some of the houses I saw a year ago are still on the market today and not only that but some have been reduced as much 30-35% from last year.

They don't have a clue what they are talking about, prices aren't going up ANYTIME SOON, the only places you might see prices being bid up are in areas where prices have fallen 60-70% like in FL or CA, other areas will see housing prices flat to down over the next 5 years+ and when rates start to finally move back up it will put even more pressure on real estate prices going forward. Rates aren't staying at 0% forever and 30 year mortgage rates being driven artificially lower will start to spring upwards once again. There is no need to go out and buy a house now, if there is a second dip in this economy housing prices will dip much further and that will set off more programs to push people back into the market to buy just like the free $8000 being offered just recently. Prices have been stabilized and propped up with free stimulus and programs to keep people in their foreclosures, if it were not for that you might actually get a chance of buying a house for its true market value.

 

[dtan1e]

maybe Paulson has already bought lots of houses and hope that u will all go in and support his price !!

 

[atticus]

He bought >$500MM in residential housing and entitled land in Q1 2008. So let's assume he's underwater on the 2008 buys. Do you really think this $25MM bet on BZH is material?

This thread isn't worthy of chit-chat.

 

[Clubber Lang]

Quote from atticus:

He bought >$500MM in residential housing and entitled land in Q1 2008. So let's assume he's underwater on the 2008 buys. Do you really think this $25MM bet on BZH is material?

This thread isn't worthy of chit-chat.

LOL. Tell 'em what you really think RA.

 

[atticus]

Quote from Clubber Lang:

LOL. Tell 'em what you really think RA.

lol, well he's now into two threads due to a $25MM purchase by a $33B fund. Paulson's firm earns more from mgmt fees in two weeks than they spent on BZH.

I posted a thread about Paulson in 2/08 after talking to the REIT manager who invested for Paulson in the space. He's been talking up RE since his position went public in late-2008. How's that been working?

 

[jficquette]

Quote from retaildaytrader:

I know that the business of residential real estate is a geographical thing. I also know there is some negotiation and strategy involved when buying a house and the many other variables.

So, with that said, John Paulson specifically stated that NOW is the time to buy a house. Do you agree or disagree with this?

http://www.reuters.com/article/idUSTRE6495JR20100510

"If you don't own a home today, now is the time to buy one," Paulson said, adding that people may want to consider buying a second house or helping relatives buy one.

He must be long real estate.