The Housing Bubble

They make thousands off you over the lifetime of the loan, they don’t need to stick it to you for closing costs.

For the most part yes. Some of the closing costs aren’t necessary, since they’re redundant (title search, etc.); others are amortized into the loan.

I did this several times in 2001-2004 when rates were going down. It’s well worthwhile, as long as:

- You don’t increase your principle (unless you really need to)

- You’re aware that it’ll take longer to pay off the loan, or that if you pre-pay then you’ll have less principle paid off at some point.

- The lower interest rates are enough to more than offset the fees that are amortized into the loan.

That when I ask them for their phone number so I can call blasted off my bean @ 2 AM.. Um, I’d like to buy a mortgage (hic-up), What the h-e-l-l, I’ll take another one for the road. You there? HEY MAN/ or LADY, ARE YOU THERE???

Obvious answer is no. There is a larger amount of M3 than M0 so….

Hey watch that

TaxFlat gave us a nearby zip code once. Poor thing, it’s near to the intersection of the Beltway with I-95. The can of worms is referred to as the Mixing Bowl, but I’m convinced it’s one of those vortex portals to hell that you see at the end of every bad horror movie. Taxme is suffering the ill-effects of the bad vibes.

‘TaxFlat gave us a nearby zip code once. Poor thing, it’s near to the intersection of the Beltway with I-95.’

You know what? I just realized something. Oxide! YOU are a GIRL, aren’t you? I had assumed that anyone named ‘oxide’ was a chemist, and thus more likely to be a boy–not dissin and getting all PC, simply a real-world observation here, most chemists are boys–and so all this time I was thinkin’ you was a boy, but NOW I know you are a GIRL, because you are SENSITIVE and all tender with taxmebootay’s issues.

Hahahahaha! (Not all girls are sensitive, by the way. Some are fairly brutal, except in unpredictable spurts.)
But my point is, so, taxmebootay IS in a cave? So to speak?
Anyhow, Sat*an can spell good, I notice, and He’s in H*ell, as well, so that’s no excuse.
Anyhow, I too have a proximate portal to He*l*l. That happened by accident, long story. I never have got rid of it, too much work, and nowadays I use it as a waste disposal for the very few items I can’t recycle or compost, or at parties for annoying guests who turn out to be secretly Republicans, or else demons.

Oh, I forgot my point. Let me think for a minute.

You figured that out just now?

LMAO, oxide!

Great retort to some long-winded expression (and no, Oly, that’s not meant to be insulting). It just made me laugh, that’s all.

How are we going to get hyperinflation with job losses leading to LOWER pay? I don’t see how the money is making it into the system. It seems to me all this bailout money is being hoarded by banks, and disappearing into thin air as the assets backing their loans continue to go south.

Speaking of job losses, here are a few more:

“More layoffs were announced Thursday. New Britain, Conn.-based tool maker Stanley Works said it plans to cut 2,000 jobs and close three manufacturing facilities, while Sara Lee Corp., known for food brands such as Jimmy Dean and Hillshire Farm, said it will cut 700 jobs as the Downers Grove, Ill.-based company outsources parts of its business.”

When are we going to start penalizing US companies for outsourcing? Keep on outsourcing, and we’ll outsource ourselves into the 3rd world.

maybe some real US entrepreneur can start organising investment education trips to Zimbabwe, to get a taste of things to come. In Netherlands the whole trip would be more than 100% subsidized (as foreign aid / educational expenses) but I’m not sure if that works in the USSA

At the moment the going rate for the US dollar is still good in Zimbabwe, so grab this opportunity while it lasts. For those short on cash, doing a google search on Weimar might be an alternative.

BanteringBear
All I can say is that I don’t want my Jimmy Dean sausages made from feral swine imported from Botswana.
What’s next? Little Debbie Snack Cakes made from flour milled in Tradefreekistan?

How are we going to get hyperinflation with job losses leading to LOWER pay?

By filling in the wage gap with credit cards and home equity extraction. Oh, wait…

Bantering Bear,

Consumption will drop very far and the value of outsourcing will not be there.

Except for a very few rich mofo’s who still will see value in it. I’m talking the bill gates type billionares. The garden variety millionaries will get eaten.

We will have hyperinflation when we have zero productive capability due to malinvestment and the government has to monitize the debt to pay foreign creditors.

We will stop outsourcing when the pay gets low enough for people to afford US-made products. Which is why the Dems idea of more expensive greener cars made by more expensive UAW workers will never prosper and is basically throwing our taxpayer dollars down the toilet. All they’re doing is pandering to their two biggest supporters and the rest of the taxpayers can take a hike. We have two roads to choose from and neither is very appealling (socialism/lower wages). Someone mentioned buying a Mazda cx-7 the other day($38,000/ 36 mo/$1,000/mo) nice car, but it’s a Mazda not a maserati. I make a good salary and would not pay $1,000/mo for a mazda, Buick or mercury. Cars, houses,education and health care have to be more affordable. Housing was first.

I’m ok with tax policy that taxes Corps at higher rates if they outsource to china/India/whatever. This would be one of the few ways of attempting to correct the perverted system of incentives in American-style capitalism: High Exec compensation for high short term earnings at the expense of shareholder’s book value, or long term earnings.

They shouldn’t have gotten any either.

RE: What about AIG?

It’s a sad thing exeter…but every finance periodical I pick up from the “The Economist”, “WSJ”, to “Biz Week”, says that not bailin’ out AIG would have constitued “recklessness” in the face of world financial collapse

I simply view it as one more nail in the coffin with the problem being bigger than me. The only thing I can do is lay up another case of spam and .223 ammo.

But some pretty heavy duty rhetoric is flyin’ on the Detroit thing.

Senator Jim DeMint from SC is talkin’ riots if the bailout goes thru.

The “S” is definitely hittin’ the proverbial fan.
http://www.businessandmedia.org/articles/2008/20081211131911.aspx

You have to be explicit about that every time, or else ex has a conniption.

Paraphrasing Ron Paul:

The freedom to make bad economic decisions is inherant in the freedom to make good ones. If we are not free to make bad decisions, we are not really free.

Well, are we free?

From HD’s link:

Sen. Jim DeMint, R-S.C., warned that the perception that some industries are being bailed out and some aren’t could lead to violence.
=================

What a load of bull. Most people were against bailing out the financial industry because those capitalist pigs are the ones who tore down this country. Far more Americans are in favor of bailing out the auto manufacturers. They employ hard-working people and actually produce something of value.

If we **don’t** bail out the auto industry, then we might see some riots. Mr. DeMint is an ass.

You have problem with Corporate Communist Capitalism©®™, comrade?

Maybe time in financial Siberia change your mind, yes?

Thanks Muggy. To quote Buffett: “There seems to be some perverse human characteristic that likes to make easy things difficult”.

+1

That being said:

$$$$$$$$$$$$$$$$$$$$$$$ USD = F-22 x 380

“A strategy that has served me well in life is doubting answers that require long explanations. Most day-to-day problems, even complex ones, can be addressed in one sentence.”

Occam’s razor

“Combo, one of the reasons you don’t set off my BS detector (aside from being correct thus far) is the brevity of your statements.

A strategy that has served me well in life is doubting answers that require long explanations. Most day-to-day problems, even complex ones, can be addressed in one sentence.”

+1

buying things they don’t need

The Russians have indeed become just like US.

Is two sentences okay?

Stop going for the easy buck and start producing something with your life. Create, instead of living off the buying and selling of others. — Wall Street

Russia has a different problem today - low oil prices!

Occam - Thanks Prof.

GH:
Re low oil prices, you are right. I wouldn’t, however, look for that to last due to tinderbox global issues. Jets bombing Iran (setting off harbor mining) are just as likely under the outgoing Prez, as with his eminence, the Prince of Change. His chief of staff may make it even more likely.
Anyhow, the people who are buying SUVs over 6,000 pounds to get fed tax subsidies (along with 10 mpg) are gonna yearn for those low gas prices next year.

Most day-to-day problems, even complex ones, can be addressed in one sentence.

Wrong.

Not sure - it depends on how it’s measured.

One reason for seasonal adjustment is that many employers cease hiring towards the end of the year, in order to make year-end bottom line numbers, and also to not have to pay people through the holidays, plus just the logistics of handling hiring at that time. Hiring usually picks up in January.

Christmas retail hiring is factored in somehow as well.

drop it.

I agreed with the Freudian slip version: The markets no longer do seem to be based on realty.

OT but there used to be some RE outfit called “Reality Network” whose signs were up all over about 15 years ago. I called them once to ask why they were called that. Dope just laughed and said he didn’t know. I always thought it was really a typo in their signs.

Does that make this group the National Association of Realitors?

Perhaps a new job description is born :
Hi am your “Realitor”

I think Dennis just coined a new name for HHBers. Anyone up for getting a TM and starting the National Association of Realitors?

I’m not a millionaire I’m a realionaire…

Real wages. If inflation were to occur, wages will not keep pace - kinda like the last three decades but it will be more prenounced.

look at what is happening in Europe: wages are going UP strongly in most countries, more than official inflation. Also, mortgage rates have declined to about the lowest value ever, without any direct government intervention. As a result, homeprices are holding up (only in UK/Ireland, with an economy that is more like the US, homeprices are plunging).

I’m not saying the EU has the better solution or that this will work in the long run, but seems like the path of adjustment is not set in stone.

Is socialism the answer? or will europe eventually fall harder and faster? it will be interesting, since the dems want to take the socialism route.

I think the median income should only get you a small condo with 20% down. Not that nice house on a big lot. You need to compare incomes of individual areas not just the entire city.
This 2-3x is worthless and a pipe dream. but, bring it on I will take a dozen.

Hey Milk,

So you were in Bakerspatch today, too?
Tule fog=perfect day to belch toxic emissions. Yack, what a stench….

I agree. It will take about 5 years to build up a base of eligible young homebuyers. The current crop got sucked in too soon (too young) and at too high a price.

They’re going to be bitter about selling their houses in five years for 20% less than they paid for it (if they haven’t foreclosed by then)…

I’m guessing we’ll see a multi-decade downturn.

-Wages are going down.

-Baby Boomers will be net sellers of real estate and all other assets.

-Defined-benefit pension plans (including SS) and company-provided healthcare are becoming obsolete…they will not be solvent, IMHO. People will need to allocate more money toward savings. Probably more than at any time in history, because we have moved away from multi-generational living situations where kids took care of their parents and grandparents in old age.

-As jobs become even less secure, people will be less willing to take on huge amounts of debt for housing.

I see nothing but downward pressure for a long, long time to come.

Just MHO.

Oh, and one of the big ones…

-The credit bubble that ran from 1982-2007 will have to be unwound. It will be interesting to see, once it unwinds, how quickly it can return to 2007 levels, and if it ever goes there again. I have my doubts.

“Nobody goes there no more, it’s too crowded!”

- Yogi Berra

My right brain read this sentence this way:

“There will be…quite…a few qualified buyers over the next few years.”

My left brain retorted:

“Most of people that meet qualifications…are ready own a home.”

“Most of people that meet qualifications…are ready own a home.”

goes to

“most people who own a home, wont qualify for any loan in a few years”

That would be Maryland, for example.

Previous for Wheezer…

I’m in central Texas (but not Austin area). So small-town Texas.

Excellent point re bubble income. The top industries: medical, education and construction. I can see where construction could be an issue. What about the others?

I thought we had mostly escaped unsustainable price increases until I saw a couple realtors on the news saying things ‘were different here.’

I am trying to find data documenting income history over the past 10-15 years to see if there’s been an inflation in salaries, but not much luck there. Personally, house prices have increased at about the same rate as our income. Any good sites with salary history by geographic location?

I have been reading the HBB for a couple years now, and this has been very educational. I had no idea how badly people were speculating their lives away. It is scary how reckless people can be.

I would say medical incomes are definitely bubblicious. Take a look at what nurses, pharmacists, doctors, etc are all paid, compared to other countries. As we socialize our medical system over the next decade, I expect those salaries will come down correspondingly…

Dam*n does that mean Sarah, John, Cameron, Derek and the terminators won’t be able to time travel?

Of course, they’re all upside down so they HAVE to dismiss me just to keep from jumping off a bridge.

That’s why you should “talk bubble” only amongst friends. My favorite bubble participants/indicators (in-laws) have literally taken off for home. I’m happy to report we did not discuss real estate or much of anything else, thus keeping the peace and holding together my MIL’s rather fragile psyche for a few more days at least.

“That’s why you should “talk bubble” only amongst friends.”

This is terrible but…all our friends are upside down! Okay, not ALL, but nearly all. Heck, some are still in such deep denial that they are buying MORE REAL ESTATE as an investment.

We were able to get out of all holiday parties except one party on the 20th. It’s BYOB and I’m making Tucker’s Death Mix*. Anytime someone mentions the economy, I’m gonna shove a cup of this ghastly stuff at them and tell them to drink up.

*Everclear, Gatorade and Red Bull. Mmmmm.

Everclear, Seven-Up, and Hawaiian Punch.

Tastes and drinks like non-alcoholic punch. You’ll know it’s kicking in when the old guys start playing tackle football out in the gravel parking lot, and the sweet little old church ladies start bi%#h-slapping each other.

This is terrible but…all our friends are upside down!

I’m sorry - yikes!

My favorite mix is “Ed’s Red”. It’s a equal mixture of kerosene, mineral spirits, acetone, and ATF.

Works really well as a gun cleaner/lubricant. I haven’t tried drinking any yet but would offer it to people I don’t like…..

“This is terrible but…all our friends are upside down!”

Well then, you better wear pants to that party.

PS That one is in Eagle Canyon on the San Rafael Swell. I forgot to add that next to it is a rainbow with stick figures ascending through it and under it are some squiggles that look like they say something like:

cash is king…

only in Fremont, of course…

PPS Sorry, Lad, just reporting here…

‘A Fremont rock art panel I found near Swasey’s Beach on the Green River in SE Utah. It kind of looks like an upside down house and has scratches that look like that date.’

Well, losty, I’m sorry to report that that was me, from on a river-rafting trip a couple years ago when I still lived in Utarr. That’s not a house, that’s a cute little bunny–jeeze, you don’t appreciate fine art much, losty– and those scratches are how I was keeping count of the beer. I got to fifty-eleven, which is why the NEXT series of scratches/petroglyphs was a little stick figure barfing into some bushes, while the surrounding stick figures slap their knees in merriment. Plus there’s a few leprechauns.

(I never draw anything without there’s some leprechauns in there somewhere.)

I had a chip dated in a lab, and you’re a heckuvva lot older than you’re letting on, Oly!!

Nice artwork, though.

+2

There is plenty of blame to go around for members of both parties…

P.S. The policy also encouraged lots of rich white people to buy houses they could not afford, in order to avoid getting priced out forever.

This is not blaming poor brown people.This is blaming demand-side housing policy which encouraged poor brown people to buy houses they could not afford with loose credit.

Hah — Why am I not surprised that the author, a former Reaganite and current AEI darling, is attacking several of the favorite boogeymen of any self-respecting Supply Side Greedheads.

Short version of this Reagan crony’s argument: poor people are a problem, liberals are a problem, legislation/regulation is a problem — but hey, a lack of regulation, scruples, prudent behavior, enforcement, and risk management in the financial industry — that’s not a problem. Please turn your head toward the shiny object I dangle before you …

Please ignore the explosion in the derivatives market and the general easing of credit across economic strata. These issues are contained to subprime, right?

Please ignore the fact that the legislation in question was enacted in 1977 … it was a ticking time bomb.

Please also ignore the fact that 4 out of 5 mortgages were (allegedly) not subprime, even at the peak of frothiness. How could we have known that the risk managers and rating agencies were pulling triple-A gold stars out of their butts?

“Why am I not surprised that the author, a former Reaganite and current AEI darling, is attacking several of the favorite boogeymen of any self-respecting Supply Side Greedheads.”

Political vitriol has apparently fogged your brain to the extent that objective discussion is not an option.

Political vitriol has apparently fogged your brain to the extent that objective discussion is not an option.

And I see that you, like the author, choose to ignore the larger scope of the problem, fixating instead on one small herring caught in the net — facts, data, causality, and historical context be damned.

“…fixating instead on one small herring caught in the net — facts, data, causality, and historical context be damned…”

If you had read many of my posts here over the past four years, then you would realize that I do not subscribe to a ‘this one small herring caused the bubble’ mindset.

You, on the other hand, fail to grasp the terrible market distortion caused when one group (those with relatively less income) is, for political reasons, targeted with all manner of financial engineering gimmicks which have the effect of enabling them to financially hang themselves by purchasing homes they cannot afford, while bidding up the price of said homes to levels where even those with more incomes cannot afford them, all in the name of making housing ‘more affordable.’ This notion that loaning people more money than they will ever be able to repay has something to do with making homes more affordable is completely insane, and yet the folks who advocate it (including some leading Dumbocrat politicians) have not yet admitted their folly to this day.

Good thing the now verified rampant fraud and outright (and again verified) predatory lending to folks who could afford to buy had nothing to with it.

Whew!

I have seen no convincing evidence that CRA was the cause.

In my book CRA was the symptom.

Wallstreet wanted to steal money from Pensions, gov, and conservative investors. They came up with securitization and rigged a system that rewarded the rating agencies for covering crap with gold covered spray paint. They then sold these nuggets to pensions, gov, and conservative investors. Gamblers started using the gold covered crap as collateral to borrow money from other conservative investors. CRA and the GSE’s were not the cause, they were the target of thieves. As far as I can tell CRA did not push subprime it pushed the banks to do away with Red Lining. I imagine the poor were targeted by bankers with subprime loans because they are less financially Astute.

This is from the CRA

The majority of subprime loans were originated by non-CRA covered financial institutions. In fact, only about 25 percent of sub-prime loans were made by institutions covered by CRA
Myth: Rapid growth of subprime loans was a direct response to financial institutions efforts to expand homeownership for low and moderate and minority households.
Facts:
Between 1998-2006 over half of subprime mortgage originations were for refinancing
In that same time, less than 10% of subprime mortgage originations went to first time homebuyers.
Significant gains in homeownership occurred in the 1990s when prime lending was offered to low and moderate income and minority borrowers.
Myth: Federal banking agencies encouraged banks to engage in risky lending practices. In particular, a 1992 Boston Federal Reserve Bank publication, Closing the Credit Gap: A Guide to Equal Opportunity Lending, provided unsound advice to banks.

Facts:
Federal Reserve Guidance: Lack of credit history should not be seen as a negative factor for potential homebuyers.
Justification: Willingness to pay debt promptly can be determined through alternative sources of information including timely rent, utility bills, and other scheduled payments.
Foreclosure Reality: Foreclosures are not a result of alternative credit scoring, but rather the product of excessive interest rates and unearned fees making loans unaffordable.
Federal Reserve Guidance: Valid income sources may include social security, second jobs, and other sources.
Justification: Many low to moderate-income households have varying sources but consistent or rising levels income throughout the year.
Foreclosure Reality: Subprime loans are not failing as a result of the use of alternative sources of income. Rather, problematic subprime loans are characterized by a lack of income verification, not source of income.

I want some of you who blame this mess on CRA to put up some numbers that support it. I’ve seen a lot of propaganda but I haven’t seen any data that supports the notion that CRA played a major role in the housing/credit bubble.

I want to see language in the CRA that forced banks to give subprime loans, and I want to see stats that refute the ones I’ve posted above that show CRA loans were the majority of subprime loans made from 1998 to present.

I want some of you who blame this mess on CRA to put up some numbers that support it.

This has been discussed before, and the same people (some ordinarily data-driven) who champion the CRA Myth a la Mr. Limbaugh, Mr. Wallison, and other Noted Thinkers have yet to show us any viable data supporting their argument. They are curiously fact-free on this issue.

I want to see stats that refute the ones I’ve posted above that show CRA loans were the majority of subprime loans made from 1998 to present.

Even if CRA-mandated issues were the majority or near-majority of subprime loans (thank you for pointing out they’re not), the CRA demonizers would still be wrong — there are larger forces at play than the issuance of subprime.

They’re simply focused on the wrong problem.

Cripes measton. You’re being awfully defensive. I don’t have data with me (will check later). Plus you’re not reading what anyone’s saying. No one is saying that CRA is THE cause of the bubble. All we’re saying is that it was a significant contributor. Would the bubble have happened without CRA? Probably. However IMO it probably would have been a) later, and b) smaller and therefore less destructive.

It makes very good sense that of course CRA loans weren’t the majority of subprime, or of refi’s, etc. after 1998. That’s because the vast majority of these loans were originated after the bubble got way into gear, in about 2003 or so, and were issued to large numbers of just the general population.

I would liken it to JATO - Jet-Assisted Take Off. The primary propulsion of the vehicle isn’t the JATO unit, but the vehicle itself. The JATO just gives it a big nudge at the beginning, to get the vehicle going.

The primary propulsion units were indeed two things:
1. Greenspan’s insanely low interest rates
2. The complex investment vehicles - CDS’s etc.

What CRA did was set the precedent - that the government was willing to take steps to encourage homeownership, beyond normal market forces.

P.S. with regards to this ludicrous statement:

“Foreclosure Reality: Foreclosures are not a result of alternative credit scoring, but rather the product of excessive interest rates and unearned fees making loans unaffordable.”

BullS***, BullS***, BULL***!!!!!

EXCESSIVE INTEREST RATES???!!! ARE YOU F****** KIDDING ME?

Since when, in this total foreclosure meltdown, have we had “excessive interest rates”? We have remained at near-historic-low interest rates for years now!

Get your head out of your butt. The foreclosure crisis is a function of one thing - the fact that housing prices stopped climbing - period. It has nothing to do with interest rates, or with fees.

(Sorry Ben if that crosses the “personal insults” line, but IMO it was asked for).

I got your “excessive interest rates” right here:

http://research.stlouisfed.org/fred2/series/MORTG

DOES THAT LOOK EXCESSIVE RECENTLY TO YOU?

CRA set no precedent for government involvement in finance or housing. The precedent was set when the Federal government, during the Great Depression, stepped in to support double and triple decade mortgages. Prior to that time home ownership rates were lower, mostly farms. If the Federal government did not intervene, with the home interest mortgage deduction, laws to police mortgage credit, and more–a policy that debuted at a minimum some 75 years ago–there would be no large middle class of homeloaners crying in their milk in 2008. It’s absurd to blame the housing crash and the fallout on CRA–the worst that can be said of CRA is that it tried to give to the poor what the government gave to the middle class three-quarters of a century ago–subsidized housing.

But, as I said–AEI and their ilk think we’re so dumb and have so little grasp of the facts, that they can say “anything” and some people will line up to applaud and call it wisdom. Ridiculous (i.e., appropriately subject to ridicule).

IAT

The reason I’m defensive is that blaming CRA diverts attention away from the criminals that brought us this mess. It wasn’t CRA, It wasn’t GSE, blaming them is like blaming pensions and conservative investors who purchased AAA rated MBS. They were the target/sucker that Wallstreet sold too. Interest rates were not the problem, I agree they were low but they are still low, if Greenspan had cut rates it certainly would have cut the bubble off a bit earlier but that is not the problem.

The #1,#2, #3 cause of this is securitization, criminal rating agencies, and piss poor regulation by our government. I’ll throw leverage and Glass Steagle in as #4 and 5. Low interest rates were icing on the crap filled cake. The tax payer (via GSE/CRA/bailouts/FED ect) pensions and conservative investors are not the cause they are the target.

Packman says
“Cripes measton. You’re being awfully defensive. I don’t have data with me (will check later). Plus you’re not reading what anyone’s saying. No one is saying that CRA is THE cause of the bubble.”

Uh I think that is exactly what he said, read the quote reposted below, then look above at those who supported it.

“” Wallison says the crisis wouldn’t have happened if Congress hadn’t pressured banks to make loans to low-income borrowers through the Community Reinvestment Act. In his view, that began to erode the quality of home loans throughout the financial system and led to the subprime mortgage crisis.”

Again, all I ask for is evidence that CRA was a major player in causing the housing bubble and the current economic collapse. I’m not being defensive, I’m asking those who believe this to back it up. He11 maybe you’ll convince me that I’m wrong, but so far I haven’t seen any rigorous defense, just hot air.

PS you might want to compare these two nuggets from your last two posts

“The primary propulsion units were indeed two things:
1. Greenspan’s insanely low interest rates
2. The complex investment vehicles - CDS’s etc.”

and then in your very next post

“Get your head out of your butt. The foreclosure crisis is a function of one thing - the fact that housing prices stopped climbing - period. It has nothing to do with interest rates, or with fees.”

Measton for propagandist-in-chief…

Packman says
“Cripes measton. You’re being awfully defensive. I don’t have data with me (will check later). Plus you’re not reading what anyone’s saying. No one is saying that CRA is THE cause of the bubble.”

Uh I think that is exactly what he said, read the quote reposted below, then look above at those who supported it.

No - that’s not what he said. He said that the bubble wouldn’t have happened without CRA. That doesn’t mean that the CRA was THE cause of the bubble.

My car won’t run without a fuel line. Does that mean my fuel line is what makes my car run? No. It just means it was one of the components that make it run.

(P.S. I took a logic class as part of my comp sci degree - can you tell?)

What grade did you receive? If the fuel line is broken, the car won’t go. Thus, repairing the fuel line causes the car to *now* being able to go.

Analogically, according to you the AEI talking head says, “the bubble wouldn’t have happened without CRA.” So, according to your paraphrase of the AEI guy, no CRA, no bubble.

But, let’s go at this another way. AEI guy is clearly pushing a policy–no CRA (in the future). And, the point of policy is to cause some things to happen, and cause other things to not happen. No?

So, he is making a causal claim. And, he is wrong.

IAT

Again, all I ask for is evidence that CRA was a major player in causing the housing bubble and the current economic collapse. I’m not being defensive, I’m asking those who believe this to back it up. He11 maybe you’ll convince me that I’m wrong, but so far I haven’t seen any rigorous defense, just hot air.

Ask and ye shall receive:

From Stan Leibowitz, professor of economics at UT:

http://www.nypost.com/seven/02052008/postopinion/opedcolumnists/the_real_scandal_243911.htm

No sooner had the ink dried on its discrimination study than the Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: “discrimination may be observed when a lender’s underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.”

Some of these “outdated” criteria included the size of the mortgage payment relative to income, credit history, savings history and income verification. Instead, the Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant’s ability to manage debt.

Sound crazy? You bet. Those “outdated” standards existed to limit defaults. But bank regulators required the loosened underwriting standards, with approval by politicians and the chattering class. A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.

Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.

From Russel Roberts (1992 reference is to Financial Safety and Soundness Act, a legislative change to strengthen CRA):

http://online.wsj.com/article/SB122298982558700341.html

Beginning in 1992, Congress pushed Fannie Mae and Freddie Mac to increase their purchases of mortgages going to low and moderate income borrowers. For 1996, the Department of Housing and Urban Development (HUD) gave Fannie and Freddie an explicit target — 42% of their mortgage financing had to go to borrowers with income below the median in their area. The target increased to 50% in 2000 and 52% in 2005.

For 1996, HUD required that 12% of all mortgage purchases by Fannie and Freddie be “special affordable” loans, typically to borrowers with income less than 60% of their area’s median income. That number was increased to 20% in 2000 and 22% in 2005. The 2008 goal was to be 28%. Between 2000 and 2005, Fannie and Freddie met those goals every year, funding hundreds of billions of dollars worth of loans, many of them subprime and adjustable-rate loans, and made to borrowers who bought houses with less than 10% down.

Chevy Chase Bank fined for redlining:

http://www.washingtonpost.com/wp-dyn/content/article/2008/12/04/AR2008120401068.html

In 1994, Chevy Chase paid $11 million to settle federal allegations that it had improperly avoided making mortgage loans in minority neighborhoods, a practice known as redlining. The bank denied wrongdoing.

An excellent Milken institute study showing the role of subprime.

http://www.milkeninstitute.org/events/events.taf?function=detail&ID=246&cat=Forums

See the PDF link with great slides on the right.

Note that the effects of subprime lending had already started in the mid/late 90’s before the CDS deregulation in 2000, the American Dream Downpayment initiative in 2001, and the insanely-low interest rates in 2001-2004 (all of which also contributed to the bubble)

- Slide 29 showing a big jump in percentage of securitized subprime loans starting in 1996 (coincided with new set of CRA rules that went into effect on Jan 31, 1995)

- Slide 37 showing first big upticks in home price increases starting in 1997/1998 (green line - national average - is most significant), despite no CPI jumps (in fact CPI was very low in the 1997 - 1999 timeframe - see http://research.stlouisfed.org/fred2/fredgraph?chart_type=line&s1id=CPIAUCNS&s1transformation=pc1)

- Slide 65 showing low rent/price ratios going back to 1995

A U.S. treasury report showing a large increase in CRA lending between 1993 and 1998 ($600B):

http://www.treas.gov/press/releases/ls564.htm

The U.S. Treasury Department released a report on Wednesday detailing lending to low- and moderate-income borrowers and low- and moderate-income communities covered by the Community Reinvestment Act. The study found that such lending rose significantly, totaling more than $600 billion between 1993 and 1998.

PS you might want to compare these two nuggets from your last two posts

“The primary propulsion units were indeed two things:
1. Greenspan’s insanely low interest rates
2. The complex investment vehicles - CDS’s etc.”

and then in your very next post

“Get your head out of your butt. The foreclosure crisis is a function of one thing - the fact that housing prices stopped climbing - period. It has nothing to do with interest rates, or with fees.”

Not sure what your point is.

The housing bubble was caused by many things, including CRA, Greenspan’s rates, and the CDS’s etc.

The foreclosure crises was caused by the popping of the housing bubble - i.e. home prices stopped going up.

I don’t see any contradiction.

Once the housing bubble happened - the foreclosure crisis was the inevitable consequence, because all bubbles must pop, since they are by their nature an imbalance.

What grade did you receive? If the fuel line is broken, the car won’t go. Thus, repairing the fuel line causes the car to *now* being able to go.

Analogically, according to you the AEI talking head says, “the bubble wouldn’t have happened without CRA.” So, according to your paraphrase of the AEI guy, no CRA, no bubble.

But, let’s go at this another way. AEI guy is clearly pushing a policy–no CRA (in the future). And, the point of policy is to cause some things to happen, and cause other things to not happen. No?

So, he is making a causal claim. And, he is wrong.

IAT

IAT you don’t seem to get the concept that a given result may have multiple causes, and that it’s possible for the lack of any of these causes to make the result not happen.

How about another analogy.

Michael Jordan is an excellent basketball player - agree?

He’s excellent because:

- He can dribble well
- He can shoot well
- He can pass well

etc.

If he didn’t do *any* one of those things well, he would not be an excellent basketball player.

- If he couldn’t dribble, defenders could guard him from 6 inches away, preventing him from shooting or passing

- If he couldn’t shoot, people wouldn’t defend him at all

- If he couldn’t pass, he could be triple-teamed by defenders constantly, preventing him from doing anything well.

Therefore - there is no any one of those three things that cause him to be an excellent basketball player - only the combination of all three cause it.

Get it?

So back to the CRA thing. I would say - and most others (probably even Wallison) would agree that the housing bubble also wouldn’t have happened if we didn’t have these complex financial instruments, and that it also wouldn’t have happened if we didn’t have the insanely-low interest rates. All of these are causes, such that removal of any one of them would have either eliminated, or at least significantly reduced, the housing bubble.

P.S. I have no clue what AEI is.

Packman, AEI is American Enterprise Institute, from which Wallison comes.

Second, I understand multiple causation. You seem to have it backwards. You say:

Therefore - there is no any one of those three things that cause him to be an excellent basketball player - only the combination of all three cause it.

which is correct. However, earlier you claimed that the fuel line is not a cause of the car going. This is incorrect. It would mean you are saying that if there are multiple causes, not one of the multiple causes is a cause. That’s . . . indefensible.

Back to Wallison. He is saying CRA is a cause. What I have access to does not have him identifying other causes, but even if he does list other causes, he is still wrong about CRA because CRA is not a cause of the housing crash.

We can disagree on that point, but please, stop confusing the matter by suggesting the identification of multiple causes makes any single part of the multiple not a cause.

Back to the car. Yes, the fuel line is ONE cause of the car being able to go. Break it, and the car won’t go. Is it the only cause? No. But it is one cause. The “in combination” versus “singly” point is not relevant to this discussion.

IAT

Packman

“I would say - and most others (probably even Wallison) would agree that the housing bubble also wouldn’t have happened if we didn’t have these complex financial instruments, and that it also wouldn’t have happened if we didn’t have the insanely-low interest rates. All of these are causes, such that removal of any one of them would have either eliminated, or at least significantly reduced, the housing bubble.”

This last paragraph is wrong. The housing bubble would have been minimal and easily corrected if it was due to interest rates being low. Just lower interest rates and problem solved. Interest rates are low now, the problem is not solved. You stated earlier that interest rates were not the cause. Likewise CRA alone would not have caused the housing bubble and economic collapse. If this was the primary problem the gov buying up all CRA loans would have solved the problem. Securitization (which lead to fraudulant lending as risk was past on to others) and fraudulant rating agencies could cause this economic collapse even without low interest rates or CRA. They are the primary cause of this mess. CRA and the GSE’s were just one of many marks (pensions, foreign gov, retirees, conservative investors, ect ect) that these banks/financial/mafia houses sold this fools gold too.

IAT - our argument is over four letters:

“a” vs. “the”

“The” implies singular, where “a” does not. When someone says something is “the” cause of something else - that implies that they think it is the one and the only cause. When someone says that something is “a” cause of something else, there is no such implication.

Packman you said
“P.S. with regards to this ludicrous statement:
“Foreclosure Reality: Foreclosures are not a result of alternative credit scoring, but rather the product of excessive interest rates and unearned fees making loans unaffordable.”
BullS***, BullS***, BULL***!!!!!
EXCESSIVE INTEREST RATES???!!! ARE YOU F****** KIDDING”

Read up on adjustable rate loans and you might begin to understand. They stated
“Willingness to pay debt promptly can be determined through alternative sources of information including timely rent, utility bills, and other scheduled payments.” I think that this is a reasonable statement, and that people who have paid their rent,utility and other bills in a timely fashion are likely to make their house payment in a timely fashion if they don’t get suckered into an adjustable rate mortgage. We know from transcripts that mortgage brokers were told to push this subprime crap, and told these unsofisticated home buyers that there would be no problem when the rates increased as they could just refinance. We know investment houses paid mortgage brokers higher fees for selling this crap. Why ??because investment houses knew that these subprime loans could be sold via securitization to people/gov/institutions that didn’t understand them if they got the rating agencies to tell everyone they were AAA as good as treasuries.

measton - sorry, I guess I just can’t argue, since you can’t seem to get the logic. I don’t know any other way to present it, except to maybe state it in very general terms.

The whole housing bubble and subsequent crash is not the result of a constant singular, even constant multiple, factors. New factors came into being over time, and often these new factors were the result of previous factors.

Foreclosures is the most obvious example. Home price declines are now being “pushed” downward faster than they would otherwise be, due to the high number of homes hitting the market due to foreclosures. However this wasn’t a factor two years ago, when home prices first started falling in many areas. Home prices *started* falling simply because they got too high, and people realized this fact and decided to “sell high” their investments. The first huge wave of unsold inventory in mid 2005 was not foreclosures, but was speculators trying to get out. Home prices didn’t really start falling until 2006 in any area, and 2007 in most areas.

Likewise the first wave of foreclosures was not caused by home prices falling, but just the fact that prices stopped going up; combined with sales going down. Many people counted on prices to continue going up and an easy sale so they could flip houses and make a profit, and wouldn’t even have to worry about paying mortgage for more than a few months. So even if they couldn’t afford the mortgage - it didn’t matter.

However now a large number of foreclosures are people who’s home values are going down a lot, thus they’re way underwater, and thus it’s better financially to walk away. A different cause of foreclosures.

W/regards to CRA:

- IMO the initial home price increases - the very front, and barely discernable, edge of the bubble was primarily caused by CRA. This happened in the late 90’s, continuing into the early 2000’s.

However then in the early 2000’s:

A. People started sniffing good investment returns on real estate - especially when compared with the then-crashing stock market. (This includes the banks sniffing profits)

B. AG lowered interest rates.

C. MBS-based CDS’s etc started becoming more popular; in part after being enabled by deregulation in 1997 and 2000.

That then was all she wrote - the housing bubble took off. CRA was indeed no longer a factor - the primary thrusters of the bubble had taken over. CRA wasn’t a factor in either the later stages of the bubble, or in the crash itself. It was only a factor in the early stages of the bubble. However the later stages would have been significantly different, or even non-existent, if they weren’t fed by the early stage.

Packman, two things:

First, my quarrel may not be with you, but it is with Wallison (and with you to the extent you support Wallison, seemingly by changing what he is saying). Go back above and see what the quote says. It says “that” which seems singular to me, as in “that” is the “cause” of “this.” But, singular or plural, I do not believe CRA is a, the, or any cause of the housing crash, even as I personally believe it had multiple causes (as the vast majority of social and economic outcomes do).

Second, I think CRA was irrelevant because, if you recall, house prices starting going up when the NASDAQ started going up. That new wealth, coupled with a booming economy, drove up purchases. As areas became more and more frothy, . . . and so on. Another way to see this is to ask this question: where did prices rise first? In ghettos and poor rural areas and bad parts of cities? Or, in well-off areas? If the former, then that is consistent with a CRA effect; if the latter, not bloody likely a CRA effect. I have no data, but I have a sense it is the latter. But, this is easy; if someone can find the data, and we can assess the quality of that data, then we can get some empirical evidence that bears on this point.

As we recall, prices were going up so fast in, say, the solid good neighborhoods that it became more affordable to buy hours away from one’s job. People had 6 hour round trip commutes. That bid up the prices in those places. At the same time, as prices rose slowly, people took out home equity loans, to invest in the fast-rising stock market! And so on. Truth be told, the abject poor were very late to the party.

Basically, blaming the housing crash on CRA and the poor people it aimed to help is like blaming the Titanic iceberg crash on the people in steerage for trying to get past the locked gates before all the lifeboats are gone. Indefensible.

IAT

PS I’m OK with kneeing Democrats and Republicans in the groin for allowing the thieves to sell this crap to the Gov, I just don’t believe that CRA or the GSE’s were the cause of this.

Your place or mine?

When PITI is lower than rent, the “skin in the game” is not having to go back to paying rent. There should be fairly limited risk of housing prices collapsing when PITI is lower than rent and mortgage rates aren’t being made artificially low (whether for fixed rate, fully amortizing or by giving out loans that aren’t fully amortizing). And with a downpayment (whether assisted or not) and an amortizing loan, the lender has a solid chunk of protection. I’m talking traditional 20% here, not stupid 3%.

I admit that there is a risk of forcloseure at a time when salaries are going down. But that risk is there even if people do save up for the downpayment themselves. If they can’t pay, they can’t pay. Blood from the proverbial stone and/or turnip.

Thanks. The “downpayment assistance in afordable housing programs should have stopped when house payments rose above rent” is at least part of what my “I doubt you could implement well in the real world” parenthetical referred to. Programs like that are not nimble - it takes ages to get them to adjust to something like changing market conditions. It would require regulations so tough, that you probably couldn’t implement it at all.

There’s another way to look at this. Why were the banks so eager to lend?

All the time the banks could make a loan, parcel it into an Asset Backed Security, get paid for making the loan, and get paid for selling them on, why wouldn’t they want to make loans? And why would they care who to?

It starts and ends with the banks. Everything else is desperate smoke blowing.

BINGO!!!

Well, what do you propose to do? Cut off all their pinkies so that they are NOT technically stupendous?

It’s just a law of large numbers argument. The dreck gets weeded out. If they want to get to Carnegie Hall, they are going to have to compete with their peers, and the bar is set higher and higher with each passing generation.

The rest will go off and teach Czerny exercises to the tiny tots and pimply-faced maggots. It’s how it works.

And nobody’s stopping them from playing in their own homes (badly or otherwise.)

To me, music belongs to everyone, not just those who have the talent and drive to acheive virtiousity.

Me too.

I prefer the inspired amateur or gifted self-taught musician to the regimented, classically trained virtuoso.

(Curiously, I know several very good formally trained musicians who’ve said they wish they could unlearn their technique and training.)

There is room enough in music to accommodate each philosophy, however.

Well, what do you propose to do? Cut off all their pinkies so that they are NOT technically stupendous?

LOL - not at all. As a matter of fact, I want them to achieve their absolute best. Juilliard is for the best technical musicians and it should stay that way.

What I’m saying is that the rest of us far less gifted folk have a place and a right to music, too. It was not all that long ago that people went to church and heard less than perfect, but enjoyable music in their choirs. Or went a barn dance and heard a real person play real dance tunes with the squeaks and mistakes that go with it. The “average” person today is far less exposed to the errors that must come with process of music making.

Head shake - our culture makes no allowances for musical performances that are less perfect. (And simultaneously sets the bar ever higher…) I stopped playing for a long time because I knew I could never achieve the perfect performances I heard around me. I lost something important until I let go of that killer perfection in my head. So I don’t expect I’ll ever make Julliard but it’s okay.

There are theree arguments here which you conveniently conflate:

[1] Rise of technically proficient performances.

[2] Fall of communal and local music making.

[3] Technology makes marginal players obsolete.

[3] is a given. Technology always enables a higher level of perfection in everything from making better atom bombs to zither playing.

I think I will just ignore your William Gaddis-style anti-technology rant.

I think I will just ignore your William Gaddis-style anti-technology rant.

By no means should you take my rant seriously, that’s for sure.

But it’s not a technology rant. As long as there have been musicians there have been superior ones. Some of the most technically proficient piano music ever created was written before advent of recorded music. We “peaked” on several instruments 200-300 years ago.

The loss of local music making is that, a loss, which is far more cultural than anything else. It has been made possible and accelerated by technology but it has been a *social* change, not a “given’ of technological progress. Heck, I’m teaching myself fiddle now (poorly) from a DVD and CD. Technology could train armies of local musicians, instead of eliminating the “need”.

I guess what I’m saying is that the value of any artistic process is unrelated to either to technology or ironically, the end result. I’d argue that the average person finds more meaning and more value in music that is arguably less perfect than those found at Julliard. Efficiency applies to factories, not people or art.

And does music have less meaning for your kid’s piano teacher because she has less talent than the folks at Julliard? Or that she gave a crap enough to do something else with her time other than obsessively practice her craft? (Like raise a family, hold down a job, etc.) Unless you live a blessed life, Julliard requires that you and your parents have made tremendous sacrifices to get there. Music is *all* you “do” that level - nothing else.

It’s stuff to think about before throwing that music teacher or local musician on the junk pile because they will never make the best of the best. Or you can ignore me and go to concerts at Julliard. It’s all good..

We “peaked” on several instruments 200-300 years ago.

I don’t know a single instrument in which the technical playing is not superior now rather than say 1950 so I call total BS on this.

I don’t know a single instrument in which the technical playing is not superior now rather than say 1950 so I call total BS on this.

Even in the classical milieu, technical playing is not the only measure of the superior player, of course.

There are the notes and there are the spaces between the notes, and there is that hard-to-quantify other stuff, like the relative sweetness of one’s vibrato.

I think Vermonter is making a claim that all three mingle and matter, an alchemy which is inherently subjective.

Unless she has personal knowledge or proof of something that “peaked” 300 years ago, I still call BS on the statement.

It’s far easier for me to believe in “romanticism” for a “lost age” that no one even knew than a statement that can have any basis in fact.

While acknowledging your point about “other factors” (and I agree,) my point at least has the modest virtue of meeting the standards of proof.

I don’t know a single instrument in which the technical playing is not superior now rather than say 1950 so I call total BS on this.

Well, I was thinking primarily of the piano when I made this statement. Have we made any fantastic movements on that instrument since the 50’s?

For instance, if I remembering my music history/piano right, Chopin is still the standard by which virtuosity on the piano instrument is still measured. Chopin was both a composer and a gifted performer in his own right.

How many modern Julliard graduates today are gifted enough to be both virtuosic *and* compose music popular over 100 years later? Who is technically superior - the modern pianist or the one who invented the standard?

Have we gone up or sideways since Chopin? Have we made any real strides in orchestral music since the 1850’s, other than a few tweaks in technique?

Music always changes but does not necessarily “progress” simply because time happens. It is completely possible that some of the best performers of all time on a given instrument have already lived and died.

I think Vermonter is making a claim that all three mingle and matter, an alchemy which is inherently subjective.

Yep. Some of the most pleasant musicians are not necessarily the most technically superior ones, in any genre. Expression and musicality is all too easy sacrifice in the quest for more perfect technique.

My original point (I think I had one somewhere) is that the current unwillingness to accept than thing less than a “perfect” performance is a real loss. Mistakes are part of life and therefore part of music performance.

I really, really, really am not advocating a “special olympics” type attitude toward music. (”Gosh, we’re all special..). (Really!) On the other hand, there’s no need to think that everyone who can’t be a rock superstar or go to Julliard are simply redundant and “only” good for teaching the next Julliard graduate or rock superstar.

Unless she has personal knowledge or proof of something that “peaked” 300 years ago, I still call BS on the statement.

I wrote up a whole post on the piano, which may come through some day. Actually, I’d argue that most classical instruments peaked before the 20th century. Piano had it’s heyday in the 1700 and particularly 1800’s with a noticeable decline in popularity since then. So I got the exact years wrong - luckily, I’m into mistakes, so it all works for me.

In my mind, the guitar has been the choice instrument of the 20th century and really, modern musical development has been all about that instrument (including the production modern virtuosos)

Also, as a postscript here, isn’t the burden of proof also on you? Can you name me some sort of amazing advance in technical playing on the piano or anything else since the 50’s (1950 or 1850)? Saying Julliard players get better ever year is pretty subjective, too. (Although I do know what kind of T-Shirt to get you for Christmas..)

You mean the development of the instrument. I was talking about the virtuosity of the playing. These are very different things.

When Carter wrote his 3rd Qt., the famous Juilliard Qt. could barely play it without headphones and a click track. Now, quartets routinely demolish it with the kinda secure virtuousic playing that didn’t even exist 20 years ago.

You have very little idea of what you are talking about.

And who cares about popularity anyway? By that standard, we should all be watching American Idol and their pathetic one-octave vocal range instead.

You mean the development of the instrument. I was talking about the virtuosity of the playing. These are very different things.

Actually, no, I meant virtuosity. It was in the post that never came through. I discussed Chopin and the idea that we really haven’t gotten much better than that.

Composing music that is hard to play isn’t a big whoop nor is it an advance. Can you name me an advance in style or technique offered by Carter or is it just gosh darn hard to play?

Also, it maybe that quartets now demolish that Quartet because they’ve *heard* the quartet played properly. It is much easier to pick up any music after you’ve heard it, rather than trying to play from notation. (Just a thought, as I’ll honestly admit I’ve never heard it…)

You have very little idea of what you are talking about

Probably, but that’s never stopped me before. And also, if that’s the case, why are you taking me so seriously?

And who cares about popularity anyway? By that standard, we should all be watching American Idol and their pathetic one-octave vocal range instead.

Because there is no separation between musical development and the popularity of an instrument. We’re talking about a sheer numbers game here and the idea that true genius is born and not made by a school system.

I want to say that there is nothing wrong with liking classical music. It’s current form however, dictates that only a certain type of musician will be attracted to it. Musicians on the very edge of innovation in music are probably not spending time composing for the Julliard quartet (or playing in one for that matter).

If you are looking for real honest to god advances in style and technique, as opposed to high level tweaks, you necessarily have to look at where the bulk of musicians choose to spend their time. In the late 20th century, that was the guitar. (And That’s not American Idol, either, which is more like televised karoke.)

*shrug* I’m not expert in music and never claimed to be. I still find the attitude that only people who can perform at Julliard the only people who are worth listening (and therefore the rest of us, including teachers are to be discarded like so much backward factory trash) a whole lot sad.

“Well, firstly houses are not fungible units…”

They get lots more fungible when sold by absolute auction at fire sale prices, especially when lots of near-identical condos or tract homes are involved.

Where are the chantarelles?

In my purse. Same as right now.

(closing scene, continued)

(Olympiagal, being hauled off in handcuffs, screeching dramatically, with faux bearskin cap flapping)
(angrily) : “Hey! Don’t squish my mushrooms! Be gentle! And I don’t like these handcuffs; they’re ugly! I want some CUTE handcuffs!” (to arresting officer) “Hey, don’t I know you? You look different with your clothes on. Can’t you please get me some CUTE handcuffs, like last time? And tell my mom I love her. Sort of. Most of the time. Ah, f–ck it, I’ll send a note later. Hey! I SAID don’t squish my MUSHROOMS! Say, do they have mushrooms in jail?…etc etc.”

(end credits roll)

Say, do they have mushrooms in jail?

Maybe not, but I’d say your chances of acquiring fungi is pretty good…

Icky!

What do you call a mushroom that buys everyone in the bar a drink?

A fun guy.

Do you mean like Dexter’s Lab? If so, sadly, I am the walking talking version of DeeDee. Lookit! I love unicorns.

Sigh. Complexity is hard, isn’t it?
hahahahaha!

read the chronicle of higher education; they’re following the money….

Fundamentals don’t matter to these clowns. They shrugged of most of last week’s extremely negative data. In fact, extreme negative popular sentiment is considered bullish. It means the bottom is near.

The states are getting their comeuppance. All levels of government - federal, state, and local — together with the REIC, milked the housing cash cow. They lived off its fat. They over did it. The cash cow is dead — no more MEW.

Look at yesterday’s Bits. The last comment he made.

Mobin,

I found his post. Dang I wanted to say goodbye.

Comment by aladinsane
2008-12-10 12:51:30
Bon Voyage…

This will be my last message on the Housing Bubble Blog, and i’d like to thank Ben for being such a hospitable host to all of us, the past few years~

My eyes are tired from too much reading, quite frankly.

The USA has reached the push meets shove part of collapse, and we want no part of it.

Gun sales are the only leading indicator in terms of growth here, and to us, this is the scariest statistic imaginable…

Living in fear is bad enough, but being afraid of our fellow man, and being willing to take his or her life because they have nothing and wish to get your something, is a recipe for disaster.

We’ll be watching from afar, and hoping for the best-but expecting the worst…

Thanks to all of you for the scintillating conversations, and i’ve learned much, and hopefully I was able to return the favor.

bye-bye

Tried to post, Lad, best of luck, will miss you.

No, I’m sorry I said that.

Alad! Alad! Come BACK! PleeeaaaaAAAAASSSSE!
(look, let’s lure him back with peanuts and gentle words. That often works for me, when someone runs away into the woods. Quickly! All of you!)

I’m sorry, but as much as I enjoyed his wordplay, I found Aladinsane to be a bit of a drama queen.

The last week or so he has seemed a bit chastened that his multiple predictions of financial armageddon didn’t come to pass. Or that his “mellow yellow” didn’t ascend to the lofty heights to which he ascribed.

I wish him the best…

“Keeping it real” was not his strong point. Plus, he was a gold-dealer so he had a huge vested interest in getting the crowd to jump.

I guess I believe that people are far more sheep-like than you believe, Paul…

Great, Florida tin-folier agreeing with a Cali ton-foiler. Anybody from Canada and Arizona wanna get in on this?

I posted earlier below, but it hasn’t posted, so I’ll retry.

As for sheep-like, it’s the “sheep-like” quality of people that leads me to my analysis, as well as a pretty thorough background in history and economics.

As for agreeing, I’m only agreeing relative to the timing of an action. Although alad and I disasgree on many/most things, we share footlooseness, and therefore see the world in a somewhat different way than others, being able to find a home in different environments. People (95+%) who do not have the option of escaping their current situation are naturally more inclined toward optimism about the current economic and political climate.

The fact that certain people insist on gratuitous belittlement of an analysis (rather than addressing specific points) which I even willingly characterize as not necessarily what will happen is very strange to me.

“gratuitous belittlement of an analysis (rather than addressing specific points)”

I asked Alad many times why he would want to live in a world like he was planning for.

He never answered…

If anyone here was gratuitous or belittling, it was him.

I’m not responding to alad, I’m responding to you.

I’ll say it again, Alad’s version of the future sucks.

Any questions?

(Feel free to “envision” what ever future suits your business needs.)

Well, it all comes down to them realizing that they are not as rich as they thought they were and/or their futures look really bleak.

It’s a sort of projection of their personal feelings on to the external environment.

Even during GD1 and Weimar, they were many many who lived quite well. The world as you pointed out will go on.

The world has been coming to an end since Adam and Eve were kicked out of the Garden of Eden.

The world has been coming to an end faster than usual lately…