European debt crisis 'manageable,' says Paulson HF manager urges Americans to buy houses

[jtabeb]

Thought this was a joke, and then I read it. (It's not supposed to be anyway).

Seriously? Buy houses hmmm? What, are we going to have hyper-inflation soon? That's the only way this comment makes sense.
(Didn't this guy make money by BETTING AGAINST HOUSING?!?!)

http://www.marketwatch.com/story/eur...0?pagenumber=2

European debt crisis 'manageable,' says Paulson

Hedge fund manager urges Americans to buy houses


"My advice to all Americans -- if you don't own a home today now's the time to buy one," Paulson said. "If you already own one, now's the time to buy another one. If you already own two, it's time to help your children buy a home."
A solid housing market should "cement" stronger-than-expected economic growth, Paulson said, forecasting GDP to expand 4% to 5% in 2011.
This should also help the stock market, he argued. The Standard & Poor's 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,160, +48.85, +4.40%) has rallied strongly, but it's still 41% below its peak. In contrast, the U.S. economy is likely to recoup its previous levels of activity and companies have cut costs. That should fuel bigger corporate profits, Paulson explained.

[hayekvindicated]

Re: European debt crisis 'manageable,' says Paulson HF manager urges Americans to buy houses

Thought this was a joke, and then I read it. (It's not supposed to be anyway).

Seriously? Buy houses hmmm? What, are we going to have hyper-inflation soon? That's the only way this comment makes sense.
(Didn't this guy make money by BETTING AGAINST HOUSING?!?!)

http://www.marketwatch.com/story/eur...0?pagenumber=2

European debt crisis 'manageable,' says Paulson

Hedge fund manager urges Americans to buy houses


"My advice to all Americans -- if you don't own a home today now's the time to buy one," Paulson said. "If you already own one, now's the time to buy another one. If you already own two, it's time to help your children buy a home."
A solid housing market should "cement" stronger-than-expected economic growth, Paulson said, forecasting GDP to expand 4% to 5% in 2011.
This should also help the stock market, he argued. The Standard & Poor's 500 Index /quotes/comstock/21z!i1:in\x (SPX 1,160, +48.85, +4.40%) has rallied strongly, but it's still 41% below its peak. In contrast, the U.S. economy is likely to recoup its previous levels of activity and companies have cut costs. That should fuel bigger corporate profits, Paulson explained.

I don't know about Americans, but if I was German I'd definitely be getting myself a fixed rate mortgage pronto.

[Ben]

Re: European debt crisis 'manageable,' says Paulson HF manager urges Americans to buy houses

The banks are not stupid. I think in the UK at least, fixed rate mortgages have a significantly higher interest rate than tracking - they are rightly worried about rate rises. Since you can only fix for ~2 years, it's not obviously worth it.

[Chris]

Re: European debt crisis 'manageable,' says Paulson HF manager urges Americans to buy houses

The banks are not stupid. I think in the UK at least, fixed rate mortgages have a significantly higher interest rate than tracking - they are rightly worried about rate rises. Since you can only fix for ~2 years, it's not obviously worth it.

fixed are at 5-6%. Right now that looks dumb. In 4-5 years? hmmmmm...

[sunskyfan]

Re: European debt crisis 'manageable,' says Paulson HF manager urges Americans to buy houses

It wasn't that Queen Marie Antoinette was dumb that lead her to say the phrase "Qu'ils mangent de labrioche" or "Let them eat cake" it was because she was isolated and ignorant.

[pescamaaan]

Re: European debt crisis 'manageable,' says Paulson HF manager urges Americans to buy houses

fixed are at 5-6%. Right now that looks dumb. In 4-5 years? hmmmmm...

If rates rise, housing prices should drop, it's an inverse relationship. i think i'd rather pay a low principal and with a high interest rate than lock in a high principal at a low rate.

now if somehow the relationship changes in due to some weird scenario of hyperinflation and high rates, my strategy is f*'d. however, if housing prices are low due to high rates i walk in, pay cash, and get into a house at a much lower basis.