Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
INVESTING IN HIGH RISK TECH STOCKS - ALL OR NOTHING - 16th May 21
Is Stock Market Selling Madness About Over? - 16th May 21
Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
Budgies Birds of Paradise Indoor Grape Vine Singing, Chirping and Flying Parakeets Fun 3D VR180 UK - 16th May 21
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? - 16th May 21
Inflation Going Stag - 16th May 21
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Farewell Indymac, What's Next? Say Hello to the 1970s Inflation Rate (Part2) 

Interest-Rates / Inflation Jul 13, 2008 - 02:59 PM GMT

By: Mike_Stathis

Interest-Rates Best Financial Markets Analysis ArticleThose of you who are familiar with my previous publications know my real estate forecasts remain unchanged since first published in 2006. To reiterate, I'm expecting an average decline from peak prices of 30% (best case scenario) to 35% (worst case scenario), sending home values back to pre-1999 levels. Within the next three years, mortgage rates should approach 8% and take off thereafter. Soon, we will see a 1970s type inflationary period. This will bode well for owners of real estate rental units.


We have already duplicated a portion of the ‘70s, with record gold and oil prices while inflation is mounting. Most likely, the Fed will try to delay raising rates past the 5.0% range until after 2011. By the end of 2011, most of the ARMs and Alt-As will have reset. Thereafter, I am expecting rates to take off. They'll have to. By that time, inflation is likely to be so high that even Washington 's number games won't be able to hide the truth any longer. Then again, we should never count out Washington 's ability to deceive those who they have been elected to serve.

US Mortgage Monthly Resets

Source: Credit Suisse

My forecasts are contingent on many variables. The largest and most uncertain of these variables is Bernanke. As we know from the past, he has not always acted in a manner that one would expect. But one thing you can be assured of - when I make forecasts, I'm very meticulous in testing all scenarios. And unlike other analysts and economists, I do not modify my forecasts every month or quarter based on newly reported economic data. Why don't I do this? Because most of this data is usually noise. Understanding the macro trends is what really matters. The big picture doesn't change based upon daily, weekly, monthly or even quarterly data. So when you see knee-jerk reactions from analysts and economists based on transient changes in data, you should question whether they really know what's going on or whether they're just shifting the picture for their own agendas. If forecasts change every month, how can they be taken seriously? I'm talking about forecasting, not broadcasting.

Foreclosure Avalanche

In 2007, government figures show 1.5 million foreclosures were initiated. No one knows yet how many actually closed because of pre-foreclosures other potential transactions. For 2008, consensus estimates expect 2.5 million foreclosures. Since August 2007, the Federal Housing Administration (FHA) has restructured loans for 250,000 homeowners enabling them to remain in their homes. As of July 2007, HOPE NOW Alliance has done the same for 1.7 million homeowners. And now it is helping 200,000 homeowners stay in their homes every month.

Without this assistance, there could be up to 6 million foreclosures in less than two years since the commencement of the real estate meltdown. When I published my forecasts in 2006, I estimated between 8 to 10 million foreclosures would occur by 2014. A few months later I raised this estimate to 15 million by 2016 prior to releasing the real estate book. I usually use the conservative side of my forecasts. And it appears as if this will turn out to be somewhat conservative. Back when I released these books, many thought I was a nut to make what were viewed as ridiculously high estimates. It's funny how sentiment can change in such a short time.

The Small Banks Will Fail

In the coming months, I expect to see several bank failures. Not Citigroup or Bank of America . The “Big 5” won't fail because the Fed would never permit it. You know the Fed – the entity that's owned and operated by the “Big 5.” It will be the small local and medium regional banks that fail (however, while not one of the “Big 5” it appears likely that Washington Mutual will be bought by TPG over the next two years). By the time the washout is finished we could see several hundred take a fall. If we include those destined for the auction block, I can almost guarantee you there will be hundreds of failures. Apparently, the FDIC understands these possibilities. As of March 26, 2008 the agency increased its staff by an additional 60% in anticipation of many more bank failures. “We want to make sure that we're prepared,” said Jon Bovenzi, the FDIC's chief operating officer.

After so much denial and deceit by Washington and the media, at some point you need wonder why this isn't the kind of news that dominates the airwaves. You know, news you can actually use to your benefit. Let me solve this mystery. The job of the media establishment is not to warn consumers of anything that has not yet happened, especially during a crisis. They feel that it will only create a self-fulfilling prophecy. And you better believe Washington communicates with the heads of each television network to ensure they don't let the cat out of the bag. Instead, their theme is denial. That is why it's rare for investors to be warned in advance from anyone in the media.

When the smaller banks fail, the “Big 5” will snatch them up at pennies on the dollar compliments of Bernanke's printing presses. Maybe now you can see why every nation wants to get as far away from the dollar as possible. They understand the worst is yet to come. Bernanke's “Big 5” banking bailout is only ensuring the dollar crisis will continue. However, no nation will be able to completely escape the effects of the falling dollar since it remains the universal currency. It is deeply embedded within global commerce and has extensive reach throughout the global financial system.

And of course, you must have the dollar to buy oil. But this could change. In fact, Iran has already tried to convince OPEC members to follow its lead in demanding Euro payments for oil on its newly created oil exchange (I previously discussed this global dependence on the dollar in the article “The Big Secret about Peak Oil and the U.S. Military”). In the meantime, most nations continue to hedge the weak dollar by increasing gold reserves. As for the Middle East , they have their hedge against a weak dollar – oil.

By Mike Stathis

http://www.apexvc.com

Copyright © 2008. All Rights Reserved. Mike Stathis.

Mike Stathis is the Managing Principal of Apex Venture Advisors , a business and investment intelligence firm serving the needs of venture firms, corporations and hedge funds on a variety of projects. Mike's work in the private markets includes valuation analysis, deal structuring, and business strategy. In the public markets he has assisted hedge funds with investment strategy, valuation analysis, market forecasting, risk management, and distressed securities analysis. Prior to Apex Advisors, Mike worked at UBS and Bear Stearns, focusing on asset management and merchant banking.

The accuracy of his predictions and insights detailed in the 2006 release of America's Financial Apocalypse and Cashing in on the Real Estate Bubble have positioned him as one of America's most insightful and creative financial minds. These books serve as proof that he remains well ahead of the curve, as he continues to position his clients with a unique competitive advantage. His first book, The Startup Company Bible for Entrepreneurs has become required reading for high-tech entrepreneurs, and is used in several business schools as a required text for completion of the MBA program.

Restrictions Against Reproduction: No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without the prior written permission of the copyright owner and the Publisher. These articles and commentaries cannot be reposted or used in any publications for which there is any revenue generated directly or indirectly. These articles cannot be used to enhance the viewer appeal of any website, including any ad revenue on the website, other than those sites for which specific written permission has been granted. Any such violations are unlawful and violators will be prosecuted in accordance with these laws.

Requests to the Publisher for permission or further information should be sent to info@apexva.com

Books Published
America's Financial Apocalypse: How to Profit from the Next Great Depression . Condensed Ed. Copyright © 2007.
Cashing in on the Real Estate Bubble . Copyright © 2006.
America's Financial Apocalypse: How to Profit from the Next Great Depression . Copyright © 2006.
The Startup Company Bible for Entrepreneurs: The Complete Guide to Building Successful Companies and Raising Venture Capital . Copyright © 2004 and 2005.

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

Mike Stathis Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in