Doggie wanna biscuit?....okay, I'll play "fetch!" ...going over to Hound Dog shortly. Thanks!

Brian,

Glad to see another "money geek" letting the dogs out, or is that bringing them back in? 

Call me crazy (and you frequently do), but what you say seems to mean interest rates staying about the same which means a 1% predicted increase in housing sales (which NAR predicts for my market) may be correct.

I await your word LOL

I did not comment on Bloodhound because I had nothing intelligent enough to add :-)  But I read it!

means a 1% predicted increase in housing sales

Not necessarily.  I do know that a 1-1.5% drop in rates will have a positive effect on prices.   I think the rate cuts are most likely coming.  This economy is not bullet-prrof and nominal GDP is slowing.

On the other hand (Harry Truman always wanted a "one-handed economist")...  The golbal savings glut Bernanke refers to frequently (made up of the Asian countries, petrodollar recipients, and multi-national corporations with cash suprlus) are keeping long-term rate under control.  If the lower oil rpices move through the economy via consumer spending, nominal GDP won't decline and petrodollar recipients will lose some of their surplus...that's econospeak for higher rates.

If the American consumer uses the extra $50/month (from lower oil prices) to pay down debts. lower rates are imminent 

I'm liking the idea of people paying down debts (you may not agree) but is $50 enough to make a difference? If it is, do a post I can hand out!

I'm liking the idea of people paying down debts (you may not agree)

No, I agree.  I may be a drug dealer but I want to make sure they keep coming back, Carole.  There are too many"hopped-up debt heads" running around right now.  (I know. debt heads...go ahead and use it)

$50 enough to make a difference?

Sure it is.  That's $600/year.  Remember that $50 is after tax money.  if the average American family earns $50K/year, that's like a 1% raise. 

LOL 'debt heads' is definitely a keeper! 

That's $600/year.  I just thought you'd have to have individuals up at 2% to make a difference. This is good!

I will be blogging about "Debt Heads" (23 year old kids running around the country flipping homes) and their Dead Head parents, (who ran around the country when they were 23) this weekend, Carole

I await your words......

rate cuts will be coming....  by Late April and throughout August... my prediction.....  but after that, they will go up. They can't stay low forever and there is more to lower rates. It happened too many times in the last 3 years. Raising the benchmark needs an adjustment. Besides... there are way too many factors not talked about. Sure, unemployment is down.....but wages need to be higher to compensate for home values and the cost of living. This is the main problem. And possibly some rewards for saving or putting money back into the gov't. If we don't act now, we could be doomed in the near future.... a downward spiral. Again, just my opinion. 

Sure, there have been ups and downs since I have been in the business since 1992... but as you can see, taxes are increasing.... income hasn't risen enough to keep up, even though minimum wage has gone up. People need to work 2 to 3 jobs in some cases. There needs to be better and cheaper health care and child care to off set a lot of this. Again, my .02 

BRIAN -

Better be careful going out on a limb with bold predictions...people might think you are opinionated.

Does this fall in line with the theory a prolonged inverted yield curve leads to recession...requiring cuts.

I continue to hear analysts say "Bernanke doesn't need to do a thing - the market will do it for him".
Yet each month we see a revision on the previous growth findings and as you note slowing nominal GDP.

Bring on the cuts...we'll make the equity lines more attractive and reposition more consumer debt.

Better be careful going out on a limb with bold predictions

Check out my other blog; I call for a 100bp rise in rates; always hedging.  Just kidding. 

The inverted yield curve theory holds true but bernanke explains it off with his global savings glut theory.  The Fed DOES watch the nominal GDP/Fe Funds ratio, Bri.  It's starting to unfold.

but wages need to be higher to compensate for home values and the cost of living.

Jeff, that should be the case but I think lower rates will buoy up prices regardles of the affordability factor.  Sean Purcell wrote a great post about this two weeks ago.  Check it out.

Brian... sure, prices will still rise....  and I will read this article....  but it is keeping many consumers from buying, especially first time homebuyers now... it's harder for them, because the only equity that they can build up is their savings.

hey...on another note.... I have been writing about Nova in some blogs, but haven't seen you around...  Cards vs Nova today at noon baby....