2014 Predictions.

2013 Year in Review

Predictions for 2014

Podcast Summary

0:00-3:40 Introduction

3:40-10:30 Discussion of GDP and quantitative easing (QE); scarcity in the economy- jobs, wages, doctors, home sales and increases in real estate and stock market prices; intervention and manipulation of markets by the Fed; papering over the structural scarcity of the economy; limits of QE; predictions for 2014: decline in home sales, stock market correction and preparation of the citizens for “sacrifice” with respect to their pensions, taxes, lowered expectations and bail ins.

10:30-16:30 discussion of interest rates and the real estate market; how QE helps the banks; prediction for higher interest rates in 2014; mortgage applications; historically low rates yet historically low labor participation rate; mortgage underwriting guidelines; unsustainability of rising home prices; government benefits as “income” for purposes of getting a mortgage.

16:30-18:25 housing inventory shortage; home builder activity based on low demand; the housing market should be reflective of the health of the economy not the driver of it.

18:25-24:50 What will Janet Yellen and the Fed do if interest rates rise in 2014?; moving away from QE; prediction for 2014: attempt to cease QE and a change to other creative intervention financing (infrastructure bonds, bail ins, forced pension contributions into US Treasuries?) that requires citizen sacrifice/contribution that will be more destructive to the economy.

24:50-30 the direction of housing prices in 2014 and mortgage interest rates, migration of gold to the east; why the inability to print money to improve the economy and by raising prices on scarce items; more intervention; why the taper was not a taper at all as the Fed is reinvesting its prior purchases.

30:00- the impact of mortgage interest rates on the housing market and new mortgage products to try to increase demand; prediction for 2014: why home prices can not rise absent an improvement in the economy and the job market; rising interest rates and higher prices will also limit home sales.

36:00-38:50 -discussion of the potential of forced treasury purchases in retirement plans with an option to use the money for home purchases.

38:50 – 44:00 discussion of how the Fed will try to keep interest rates low; the impact on rising rates on new home purchasers; the plight of the millennials and their impact on the housing market; the impact of Obama care and unemployment benefits on the economy in 2014.

44:00- discussion of cultural issues that are holding back the economy; how QE shut out the next generation from economy advancement by propping up failures; how millennials need to reevaluate economic opportunities; how QE enshrined and rewarded failure; the housing recovery and the job market; productive capacity moving to Asia.