The Housing Bubble

I thought technology was going to lead us to a future where everyone could work less, and yet still be better off.

Why was this such a common idea 30-40 years ago when now such ideas would be labeled as some type of “socialism”?

Could it be that the propaganda machine of the uber-rich corporatists have warped American’s minds?

I thought technology was going to lead us to a future where everyone could work less, and yet still be better off.

the benefits of technology can’t keep up with the damaging effects of higher taxes and more regulations. in other words, technology is stifled by big brotha government.

“the benefits of technology can’t keep up with the damaging effects of higher taxes and more regulations. in other words, technology is stifled by big brotha government.”

Are you kidding me? The most egregious “end-arounds” are from the tech companies themselves. I took Steve Job’s death as an opportunity to highlight this, but nobody likes to think of their iPad as the reason why people live in polluted areas and throw themselves from the tops of buildings.

Could it be that the propaganda machine of the uber-rich corporatists have warped American’s minds?

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the benefits of technology can’t keep up with the damaging effects of higher taxes and more regulations. in other words, technology is stifled by big brotha government.

There’s your answer, Rio.

The most egregious “end-arounds” are from the tech companies themselves.

what “end-arounds” are you talking about?

I took Steve Job’s death as an opportunity to highlight this, but nobody likes to think of their iPad as the reason why people live in polluted areas and throw themselves from the tops of buildings.

technology can clean polluted areas. technology also can be misused, just like anything else.

compared to how we live now, our lives would seem unbearable without technology.

What are they smoking?

One of the greatest “technologies” of all time is the flushable toilet. Everything else is a rounding error on that invention as far as progress is concerned.

Whoever invents the self-cleaning toilet or bathroom (and they’re not that far off - I’m betting on the Japanese) has the ultimate money-maker on their hands.

Facebook, we never knew ya!

Anyone that rants about technology simply doesn’t understand how important extraordinarily small inventions are. Like the paper clip, or the zipper.

Seriously, people? Get some reading done, OK?

When a job is automated, the wages that would have been paid to the worker now flow directly to the owner. Seeing as the objective of a business is to maximize profits, there is no incentive to share the wealth among those who are not the owners. The end result is the 1%/99% split that is happening now.

When a job is automated, the wages that would have been paid to the worker now flow directly to the owner.

and no matter what he does with his profit, it’s good for the economy.

yes, you can say that automation ends jobs, but another way to look at it, is that automation frees up labor to do other, more productive things. automation allows all of us to live better.

Seeing as the objective of a business is to maximize profits, there is no incentive to share the wealth among those who are not the owners.

“sharing the wealth” sounds nice, but ’sharing’ wealth destroys it, in the sense that it has to be accumulated again, to be able to do big things with it, like building factories etc.. and building factories, and investing or saving wealth creates more jobs.

The end result is the 1%/99% split that is happening now.

the 1%/99% thing, is a made up red herring. first, envy isn’t a very flattering demeanor. second, the wealthier a society becomes, the larger the gap will be. but as long as the poorest keep getting wealthier, (as they would with free market capitalism) why complain? are you willing to make the rich poorer, even if such actions hurt the poor more than the rich? would you be satisfied if the rich made a $100,000 less, even if the poor made a $1,000 less as a result?

And never lower prices for the buyer of the widget? Good grief! You guys slept through the computer revolution! Ever hear of the PC? My first computer had 64k memory and cost $4,000 in 1982, I clouded printer, monitor, disk drives.

I’m not going to argue that automation doesn’t make goods cheaper. That is true and everyone who can afford to buy the goods benefits. The problem is about how many can afford to buy goods.

As for the growing wealth divide between rich and poor, it has nothing to do with envy and everything to do with a healthy economy. The middle and lower class are making more money now than they were 20 years ago but after adjusting for inflation, their standard of living is less. The floating boat analogy does not hold water because the tide does not raise all boats equally.

The middle and lower class are making more money now than they were 20 years ago but after adjusting for inflation, their standard of living is less.

true, but that’s because our economy has grown weaker. and automation doesn’t weaken an economy, it strengthens it.

The floating boat analogy does not hold water because the tide does not raise all boats equally.

it doesn’t matter if some boats are on a higher tide than others, as long as all boats are rising. but i agree, not all boats are rising now. all boats only rise in free market capitalism. we don’t have that anymore.

Artificially low rates merely delay the inevitable for housing. Delaying the outcome results in an outcome far worse.

Old news my friend. What is new is that we never anticipated the MoneyChangers were willing exacerbate the correction to such extremes. It’s going to be very ugly.

You better have cash. You’re going to need it.

if you want to keep being real negative than that’s your deal.

trying to look on the bright side and lower interest rates are helping the housing market.

I do not want to see a total crash. Things will get better.

“It is the saver who can’t find yield and forced to buy facebook garbage.”

And it is the money manager who has to at least earn his fee in order to keep his clients. Which is tough to do in this low return environment hence he needs to extend the risk part of the risk/reward ratio out a bit.

And just whose money is it that is at risk?

BTW, I know of money managers that are promising their clients ten-plus percent annual returns - and that’s after deducting their fees.

if you want to keep being real negative than that’s your deal.

I do not want to see a total crash. Things will get better.

You have a strange understanding of “help”.

And oddly, dramatically lower prices of housing is positive and bullish optimism.

You might want to pick yourself up off the floor.

‘if you want to keep being real negative than that’s your deal…trying to look on the bright side…’

You left out Homer Simpsons ‘rocket go now’.

Some things from yesterdays post:

‘The general rationale behind driving down interest rates is that such a policy is beneficial to the Canadian economy. Well, that all depends on how and by whom said benefits are defined…The temptation to go on a borrow-and-spend spree has proven irresistible to consumers who view low interest rates as ‘cheap money.’ One consequence is that the ratio of household debt to disposable income has risen by 40 per cent over the past decade: earlier this year it breeched an astounding 150 per cent, and continues to rise.’

‘Canada’s house prices have doubled since 2002. Low interest rates have fuelled a buying frenzy…and the consequence is that the market is now influenced by speculation rather than the needs of ordinary Canadian families seeking a home, more and more of whom are being excluded from that opportunity’

And: ‘Because households now borrow so much more, we’re actually paying banks almost twice as much in interest payments than we were back when interest rates were at 17 per cent – and it takes much longer to repay the average home loan’

Anything artificial merely distorts. And what was misunderstood years ago is still misunderstood today. That is, an artificially low rate environment for a few months is one thing, but having artificially low rates for years, with no end in sight, is an entirely different level of distortion.

I was going through some papers for the shred truck (I love it when big companies try to be good neighbors and sponsor events like that), and in 2006 I was making over 4% on a money market savings account. No wonder I had increased my withholding at work to make up the taxes I was going to have to pay on interest. Since then, it has ceased to be much of a problem.

“And oddly, dramatically lower prices of housing is positive and bullish optimism.

You might want to pick yourself up off the floor.”

Are you one of those people just sitting back and b@tching about everything and hoping for doom and gloom?

Most of those kind of people missed out on a lot of opportunities to make money.

Dramatically lower housing prices is gloom and doom? Really?

And “most of those kind of people” who bought a house 2003-2012 are underwater and sinking.

And you think that’s optimistic and bullish?

Get a grip.

“Yet rising credit card rates …”

Because … throughout the land there is a shortage of …

… cash.

By the volume of CC offers I get in the mail, it feels like late 90’s.

Yup Combo Trillions of dollars in paper accounting fixes, yet they fight over giving the 99er’s 20 more weeks of unemployment cash.

Happiness is having a diverse portfolio so that you can load up on nearly 0% yielding 52-week T-bills and stare down the Feds. Yes, balanced out with municipals, series I savings bonds, and stock mutual funds and gold. One or two of those asset classes will balance out the losers.

Cash is king, in that sense.

“Cash is king, in that sense.”

It wasn’t all that long ago (before times became “interesting”) that debt was considered by many to be king, that anyone who was loaded up with cash or untapped home equity was considered to be somewhat of a fool.

You too, eh?

I got read that speech in Aug 2008 literally one day before times got, shall we say, interesting?

Just a week later, I noticed that they couldn’t pick up their own tab and my father gallantly did saving them the embarassment.

“Yet Rising Credit Card rates….dont you love it?”

Stop using your credit card.

I always use my credit cards. I pay them off. Going to an ATM is inconvenient. Paying the credit card balance online is convenient. Zero debt and lots o’ cash? You are king.

Well, if he bought it for her, what’s the big deal?

Surely all they have to do is pay the co-op fees and property taxes.

And if they can’t pay that, what are they even doing there?

Unless they pulled out “equity” in which case they are the classic debt-hobo’s. What can I say?

It isn’t a big deal. But with childcare expenses and nursery school fees on top of co-op fees, it isn’t a piece of cake either. It will get easier once the munchkin is in school full time. They have a few more years where they feel seriously constrained. The G&T school is a nice bonus, but the kids were going to be in public school after preschool no matter what.

And, no, no equity was pulled out at all. She redid the kitchen right before they met, but she did it by having a roommate and saving up for it from the roommate money. Totally responsible, but kids are expensive, no matter how responsible you are.

Double income, no mortgage or rent.

Substitute with childcare and day-care. Temporarily.

Did they save for that ahead of time? Or just “hope” that the little bundle of joy came attached with gold bars.

My heart bleeds for them. I’ll hire a violinist from Juilliard to play them a sad tune!

They got pregnant right after the wedding. Age required they not spend a lot of extra time saving up. My brother works for his commuting costs and the child care. It is the right decision. You don’t give up a tenured position to stay home with the kids and end up with no job at the end of the process. She makes more than he does. Also, she stayed home for a year with each kid, and their savings suffered, but it was the right decision for the kids. As I said before, kids are expensive. Kids in New York City are very expensive when you are trying to keep up to middle class standards.

Kids and NYC don’t mix unless you got a lot of dough. That’s the bottom line.

They got dealt an excellent card. Paid for apartment in NYC, and access to excellent public schools. (Some of the best even paid for by other people!)

So short of a lot of whining, the world’s tiniest violin is playing a dirge for them.

Do they know how to cook? Do they cook each day or just rely on takeout? Is the academic pulling his weight?

Short of specifics, given the absurdly handsome cards that they were dealt, I am underwhelmed. I only hear whining.

Just how common is this occurrence I’ve been running into quite a lot? By that I mean people having houses bought or given to them by parents, grandparents etc.

I’ve learned of three in my circle of friends within the last few months. They are all solidly middle class, but have homes way out of their price ranges. One of them even has the grandparents paying for the kids schooling at the most exclusive private school in town.

My wife and I are always grousing about how impossible it would be to save 20 percent for a downpayment and then keep learning of these people that have everything just given to them. We can’t compete.

We can’t compete.

Which is all according to plan. Not your plan, of course. But your plan doesn’t count.

Where is the whining, honey? I said I was interested in your perspective on what is going on in NY rents and prices because I had family there and they were staying. Where is that a complaint about anything? Real estate values will impact them because other people in the building bought and much more recently. It could be an issue if a lot of people in the building end up underwater. Probably not a tragedy, but it could influence their lives. For example, the obnoxious jerks downstairs might not be able to sell if prices go down too much too quickly. They would dearly love for the a–holes to be able to move. It could impact their lives if people get so desperate for the good school that the school is forced to stop sibling preferences, which is a horrible system but one that currently works to their benefit since their older child got in.

Is money tight for them? Yup. Why? Because they are prioritizing their kids for a few years. Lots of people do that. Ask Muggy.

And, yes, they cook. The favor at their wedding was a collection of the recipes they cooked for each other while dating. I don’ think they cook every day, but they certainly do most days.

Now whining? Whining would be if they were moaning to me about not being able to take fancy vacations. They don’t. Never have. No whining involved. I do wish she would stop lecturing me about buying a new car. I don’t want one. Can’t seem to get that across.

I find a Manhattan talking about cars positively weird.

Most here don’t even have driver’s licences!

Mild climate can make homelessness a ittle easier.

I think he is adding in all the sales taxes he paid in addition to the income taxes. Plus real estate taxes, real estate transfer taxes and travel taxes. Then he added in tolls and airport fees and whatever.

So federal income taxes, state income taxes if any, local taxes other than property, property taxes, sales taxes (paid for a huge wedding last year), travel taxes and fees, transfer taxes on buying a big house, tolls on toll roads, gas taxes, and so on and so on and so on.

As I said, I’m surprised it is only 50%. And I think I backed out that his income was a minimum of $350K, possibly a lot more depending on how much was tax free interest and/or low tax dividends and cap gains. Plus with the wedding, he may have spent more than his after tax income last year upping the sales taxes.

So to borrow a classic ploy, why doesn’t he spend less and not take vacations?

He’ll save on taxes.

Let him eat moldy cake!

One could say for decades that tax money was invested in America from 1945 to 1970 maybe.

Vietnam?

It’s one of the factors that made the US go off the gold standard and effectively “default”.

The US has been overspending for a very long time.

vs. what the phone company calls a fee for “their” tax.

Some of what they tack on and call “fees” is not even for “their tax”—it’s just a revenue stream for them. Somewhere along the line, they discovered that if they make it look like a tax based on the location that they list it on the bill, then people don’t consider it in their rate-comparisons.

Just like any other tax by companies, it is never actually paid by companies but simply passed on to consumers/employees.

I don’t disagree with this point of view, but can’t I equally well argue that I, as an employee, do not actually pay my own taxes, but rather I pass them along to my employer? After all, they could pay me a lot less if there weren’t so many taxes taken out of my paycheck before it hits my bank account.

I’m not urban chic. I want good food, and I cook daily from scratch.

I make my own broths, I can my tomatoes at the end of summer. I have friend’s help my haul my tomatoes at the end of summer so they can all get my homemade tomato past.

I also write a serious food blog (which some regulars here know about.)

So you know nothing about me.

And they get there at about 7:00am. I’ve been there before at 6:45 and it was awesome. Do you know how great it is to see Manhattan totally deserted?

Didn’t have my camera but I wish I had.

As a self-proclaimed, “salt-of-the-earth” type, I bet you don’t even know what to do with pea pods (an example from today!)

I challenge you. Tell me what you do with them besides feed cattle!

You people are full of yourself without any knowledge to back up the bluster.

what to do with pea pods

I use them in my stir frys.

That’s for the tender ones.

What do you do with the tough fibrous ones?

I really wanna see this “oh-your’e-so-urban” type actually answer a few tough cooking questions!

I ain’t know nuthing bout stringy pea pods cuz we just ate them raw. Shell and all. Of course I ain’t talking English, or snow, rather sugar snap peas.

Yeah I heard about your blog but you still did not get fresh pricked corn. Sorry

I’m talking shell peas. You’re evading as might be obvious.

You haven’t a clue.

All these salt-of-the-earth, mono-lingual types are all the same. Push through the extent of their ignorance and they collapse faster than a classical souflée;.

The other option is to cloak it in patriotic dogsh!te. There’s nothing wrong with a steak for me, etc.

No clue whatsoever. “All hat, no cattle,” as they say!

Isn’t it spelled “soufflé”? Just how mult-lingual are you?

It was a typo. Anger is not conducive to reason.

And I speak French just fine.

I never dodged/ claimed knowing what to do with the shell of peas (English); just the sugar snaps. We tried English a few times but we could bring 200 lbs of snaps at $5/lb; a single box of English just took up room in the truck that could be better utilized for profit.

The people, the great unwashed, as it were, just were not interested in anything but Sugar Snap Peas. I told you if they were English peas I would not know what to do with the shells. I am alright as a cook but know little of haute cuisine. But arguing with the narcissist is in vain. The only time you were ever wrong must have been the time you thought you were wrong. So I lose, but you still get corn quickly turning to starch.

I was simply telling you if you bought corn early A.M., it was most likely picked yesterday. Starch starts to form as soon as you pick it; you are settling based upon availability due to your unfortunate location for getting boutique produce year round. What do you do for fresh produce in the winter?

I have grown radish; honking 3 foot Daikons, parsnips, garlic, turnips, french breakfast radishs, and round red ones. Mandarins to mulberries. Mixed greens and baby spinach. Orange and red and striped beets, Nantes carrots Purple kohlradi, dandelion greens, celeriac radiccio,Dinosour(black) kale, pimiento pepper, pickles, english, and regular cukes, summer and winter squash. Eggplant, japanese eggplant, basil, cilantro. And scores of others A lot of the specialty items I really never wanted to mess with as I lived within a cornocopia for a decade. And we could trade with other farmes to get what we wanted to eat that was not grown in the field such as honey, eggs, etc. I may not know food but I know about growing it organically.

Mostly I liked to eat raw foods and would compost English peas shells; which is another legimate use for them. If I still ran a farmer’s market booth I would ask you for a recipe, but I don’t, so I wont. And my wife cooks now that I have taught her the basics.

I always giggled when we sent strawberries clear across the country so NY could have “fresh” organic strawberries. Sometimes $36 per case wholesale, and the berries were harder and blander to withstand shipping. For the markets we had a different variety that were great but we could not ship. Again the urban folks need to settle for high priced ripoff organics in your off season.

Mono lingual??
Me speakee spanish and french
Take your ball and go home now.

Oh yeah
You have yet to even scratch the surface regarding the depths of my ignorance.

Keep dishing it out and making assumptions about others while telling others they know nothing of you somehow you know everything about them. I am surprised that some random from the web could make you angry. Dish out all you want but maybe learn to take it too; it’s good for you!

As a foodie, do you know the only whole grain that provides a perfect protein? there is a reason rice and beans are served together as neither of those are perfect proteins and thusly combined

I’d trade beer or cigerettes for SNAP cards 50 cents on the dollar if I could then use the SNAP card at a farmers market.

But no I shouldn’t be buying losers smokes and beer which is why I never give homeless money just snacks I carry in my car.

But someone will

U.T., you can use your food stamps to purchase a bow and arrow set in Alaska, since hunting there is used for food.

There ain`t much hunting going on in Jupiter Fl.