The Malinvestments Policies Inspire
Readers suggested a topic on the finance system and bubbles. “Let’s talk about the Wall Street/Bankster corruption machine that led to all the problems we have seen in this country and around the world since 1998. The stock bubble and the housing bubble were the result of Federal Reserve and Wall Street collusion. The major problem was the repeal of Glass-Steagle, allowing Wallstreet to turn the markets into a casino, mostly for themselves, with borrowed and leveraged money.”
“Central banks cause bubbles by creating massive amounts of ‘loans,’ with no collateral. This is how some people get fabulously wealthy. The other problem is state protection of their Fiefdoms. The Fed is there to provide the money whether they win or lose. What we have is crony capitalism at it’s worse, and neither party wants to break up the money-skimming operations because a portion of that money goes to them. It is the very definition of corruption.”
One said, “Quantitative easing is purported to enrich the wealthy. What is the mechanism by which it does this, if this is understood? And why don’t other classes invest the same way that they are (for those sufficiently non-poor to have funds to invest)?”
A reply, “1. It hammers the returns on safe investments like U.S. Treasurys and CDs. 2. It encourages and rewards reckless speculative financing in stupid investments like subprime mortgages, a form of gambling which favors investing by too-big-to-fail financial institutions which follow the ‘privatize profits / socialize losses’ business model. 3. Abysmally low returns on CDs and Treasurys are an effective way to socialize losses.”
“They never own up to the economic costs of the malinvestments their policies inspire.”
And finally, “Also it exports inflation to growing economies. Money flows around to the best return. And free money flows even faster becoming ‘hot money’ in the hands of ‘Whales’ or whatever they call rouge traders these days. Nice way to run a economy; not. I see free money as careless and stupid money I guess the Fed sees it differently.”
From State House News. “During a visit to a Dorchester neighborhood he said has been affected by foreclosures, Housing and Urban Development Secretary Shaun Donovan called on Congress Monday to pass three bills that he said would put money in the pockets of homeowners, thereby staving off foreclosures. Donovan said he hoped Congress would pass the bills in September rather than waiting for the lame duck session after the November elections. ‘There’s real urgency because nobody can say how long interest rates can stay this low,’ said Donovan.”
“Donovan said there had been a 55 percent increase in refinancing in Massachusetts once the Obama Administration allowed underwater owners with federally backed mortgages to refinance. He also said the financial benefits of easing the fiscal burdens for homeowners would offset the meager costs associated with the three bills. ‘There is nothing in these bills that would suggest we’re costing taxpayers money. In fact, it’s the opposite,’ Donovan said.”
The New York Times. “Wednesday’s report from the National Association of Realtors showed that average sales prices actually dipped slightly from June to July. This seeming contradiction — increasing demand but anemic growth in home values — could represent a new normal in the housing market, experts said. Real estate agents across the country cited the weak job market, stagnant wages and tight lending standards as continuing restraints on prices, despite pent-up demand and mortgage rates near record lows.”
“Joe Abbruzzese, a retired farmer from upstate New York, was in southwest Florida this week bargain hunting for a second home. ‘I wanted to get down here before the snowbirds arrive,’ he said. He was looking at five or six properties in the low- to mid-$100,000s before he left New York, but by the time he arrived in Florida only one was left. Mr. Abbruzzese said that while prices had increased in recent months, he was betting that they would rise still more after the presidential election restored some certainty to the country’s political course. ‘I think people are really scared right now; they’re not spending the money,’ he said.”
“Michael Parra, a real estate agent in Las Vegas, said investors who had been fueling the market with cash purchases were starting to get cold feet, fearing values would not appreciate further as long as incomes lag and jobs are scarce. ‘You’re going to have a catfish market,’ Mr. Parra said. ‘You know, catfish stay on the bottom and they occasionally jump up to the surface.’”
“Barbara Gargiulo, a real estate broker in northern New Jersey, said market conditions in her area varied widely. Montclair, she said, has only a two-month supply of houses on the market — far less than some of its neighbors. Still, she said, a house that sold last year for $620,000 sold again this year for $650,000, above its list price. ‘I think we’ll have some small little peaks, small little valleys, but in general we’ll see an upward curve over the next few years,’ she said.”
From Cincinnati.com. “Home sales shot up 13.6 percent in Southwest Ohio and 7 percent in Northern Kentucky last month compared with July 2011, Realtor associations reported. ‘Obviously, it has to do with interest rates,’ said Tom Hasselbeck, president of the Cincinnati Area Board of Realtors, which posted its 13th straight monthly sales increase. Fixed rates on a 30-year mortgage were well under 4 percent in July, although they’ve started to climb slightly.”
“Inventory in Southwest Ohio remained virtually unchanged from June, hovering around 12,000 active listings, the Cincinnati board said. ‘I think the fear of buying something and the value going down is dissipating,’ Hasselbeck said. ‘I don’t think buyers are worrying about that any more.’”
From CNBC. “Fed Chairman Ben Bernanke won the nickname ‘Helicopter Ben’ after he referred to a statement by Nobel economist Milton Friedman about fighting deflation by using a helicopter drop of money. Now, traders expect to see a money drop, with a better chance it will come when the Fed meets next week. Goldman Sachs economists quickly put the chances at above 50 percent that the Fed would announce a plan to purchase mortgage-backed securities and Treasurys, in an open-ended program that would be dependent on the progress of the economy.”
“Others agree that the Fed, if it acts, will look to give an added boost to the recovering housing market and keep rates low with mortgage purchases. ‘I wouldn’t say this seals the deal, but it does make it more likely they announce asset purchases next week,’ said JPMorgan economist Michael Feroli. ‘It probably will involve some mortgages.’”
I view this as a very bad sigh for us fence-sitters that inventory is low. It means that the people that have to sell did, or are simply planning to live rent-free for a while - this combined with both planned and unplanned “off the books” inventory.”
I am not optimistic about the next few years.
Just keep renting for half the price of buying. It really is that straight forward.
And stash the difference.
+1 combo. I still believe in a paid-off house at retirement, and if stashing the difference between rent and buying, and having enough left over for an Oil City house, well, that’s the way you gotta go.
Paying mortgage installments that are 200% of rental rates until you’re retired is a massive loss.
What is your plan to recover from this loss?
Investment Property?
GM and FB Stock?
Give my money to John Corzine to invest?
Treasuries and CDs at 0.000001% interest rates?
What is your plan to recover from this loss?
Paying mortgage installments that are 200% of rental rates until you’re retired is a massive loss.
What is your plan to recover from this loss?
Sell it for millions?
“Sell it for millions?”
Upgrade, renovate, remodel, decorate!
“Sell it for millions?”
Upgrade, renovate, remodel, decorate!
Then sell it with the price marked up to cover all costs of upgrades, renovations, remodeling and decorating, plus a 50% investment gain.
Actually I’ll be happy to get 50% out of my renovations. And that’s (hopefully) over 15-20 years.
“Actually I’ll be happy to get 50% out of my renovations.”
:shaking head:
You really don’t understand do you……
Just keep renting for half the price of buying. It really is that straight forward.
Why is this simple argument so hard to understand?
It all comes down to some fear: You’ll be priced out of the rental market forever, or some such.
It’s borderline insane!
“It’s borderline insane!”
I don’t see why, with policymakers openly promoting the goal of pushing up home prices to there level before a vast sea of U.S. home debtors became submerged.
Seems perfectly rational, unless it is somehow obvious that the housing reflation plan is a mirage.
Not only that, but the housing market reflation policies are evidently working!
U.S. home sales move at faster pace — a sign of recovery
A pending home sale in Palo Alto. (Paul Sakuma / Associated Press / August 21, 2012)
By Alejandro Lazo
September 5, 2012, 12:12 p.m.
Homes in the U.S. sold at the fastest clip in more than a year last month, new data show, a testament to the strength of the housing recovery this year.
The median time a home was listed for sale was 69 days in July, a 29.6% plunge from the same month just a year ago, according to data from the National Assn. of Realtors.
Home buyers, agents and other professionals have been complaining for months that a lack of inventory has become a major force in the market this year — leading to bidding wars in some cases.
“As inventory has tightened, homes have been selling more quickly,” Lawrence Yun, chief economist of the group said in a prepared statement. “A notable shortening of time on market began this spring, and this has created a general balance between home buyers and sellers in much of the country. This equilibrium is supporting sustained price growth, and homes that are correctly priced tend to sell quickly, while those that aren’t often languish on the market.”
The new measure shows that the typical amount of time it takes to sell a home is back to historic norms for so-called traditional sellers, in other words sellers whose homes are neither foreclosures or short sales.
At the end of July, there was a supply of about 6 1/2 months on the market, compared with a supply of about nine months and just over two weeks for the same month last year.
They’re not working.
There’s an illusion of it working. Let’s discuss next May-June.
But by next May-June, they will be recycling these lies! And the market will be improving a bit by next May-June. As with all of the best lies, they have a tiny nugget of truth in them: it always improves over the peak buying months.
I think this winter will be very interesting, though. Let’s compare notes in February.
I’m feeling this overwhelming urge to casually inquire why my colleague at work’s home is still on the market at the end of the second season they tried to sell it. I know the reason — they have it priced $100K below the Zestimate, and the Zestimate is wrong — but I am always fascinated by the excuses people give for not being able to sell something, when the real reason is plainly obvious:
YOU ARE HOLDING OUT FOR A BUYER WHO IS WILLING TO PAY ABOVE FAIR MARKET VALUE.
Please do ask, PB—and then share the answers here! That would be a fun one…
But by next May-June, they will be recycling these lies!
Then, let the debt-slaves die under their burden.
Me, I’m sick of it.
We know the gig. It’s effin’ obvious.
“Just keep renting for half the price of buying. It really is that straight forward.”
Where that applies. It’s evening out now, but three years ago when we bought, we literally could not rent the equivalent space for less than half again our PITI. And in terms of apartment spaces, it was even worse than house rentals.
I know it’s an eddy in the housing market (among other things, the area experienced incredible growth during but not driven by the housing boom, so rental space was incredibly hard to find.) And of course, we found the ugly-but-solid house, so we got a good deal. But yeah, we rented as long as it made financial sense.
That’s the bottom line. Understand your finances! Don’t let anyone sway you to do something you can’t afford!
Yes - it is a bad sign.
Obama has done it. $5 Trillion in deficit spending and he has re-inflated the housing bubble.
It will be his legacy (well, that and obamacare and obamamotors).
It is a shame. All that money and really NOTHING to show for it.
Except for people who play by the rules and now get to get rent the rest of their lives.
FYI - obama has also re-inflated sub-prime loans for cars too.
We have learned nothing. The next crash will be even bigger and badder.
I am sure the next president will then go on to blame obama for 4/8 years…wash and repeat.
I kinda agree with you…
True, but with an exception…and it’s a doozy.
Democrats have always wanted low income housing supported by taxpayers.
Guess what we have now?
On purpose.
How’s that for chapping butt-flaps?
And when Romney wins, what will be his legacy for his $1.3+T a year deficits?
I hope not - but I can tell you this.
If Romney wins and also has the house and senate
and has deficits HIGHER THAN OBAMA.
Romney WILL be a one term president.
Will you consider private sector debt as bad as government debt?
Remember, when Reagan took office, there was a total of $3.9T in debt in this country, and 8 years later it was $9.3T in debt.
Just because more of it was household and business than government does not mean that Reagan’s debt based economics is a good thing.
“I view this as a very bad sigh for us fence-sitters that inventory is low.”
Low inventory? Hahahahaha! Sure, mls inventory. But, make no mistake about it, real inventory is sky high. Quit buying into their lies.
Exactly.
And save yourself from assured financial destruction from which you’ll never recover.
“Low inventory? Hahahahaha! Sure, mls inventory. But, make no mistake about it, real inventory is sky high. Quit buying into their lies.”
You’re “missing the point”: it’s inventory when it’s “for sale,” not just because “I think” I should be able to “buy” it.
I “know” the “shadow inventory” is “massive,” duh.
That’s “why” I put “off the books” in “quotations.”
“Does” that “make sense?”
I talked to my brother this morning and the subject of bankruptcy came up with one of his neighbors. He is a condo owner in the same complex.
He purchased around 2003, and is underwater. Not paying. Defaulting on condo fees and been living free for a few months now.
I says another neighbor has been a NO-pay for a least a year. It concerns my brother, as he will need to pony up with his neighbors to cover the deadbeats in the complex. My brother purchased his unit around 1987.
He says that given the going sales prices, he would be lucky to break even if he had to sell.
What this little anecdote reveals is that defaults are continuous and on-going. Banks are NOT foreclosing. They don’t want the loss.
It’s a sign of the times. We’ve never seen a situation in recent memory where the mortgage holder didn’t want the property because the market value would result in a huge loss.
Condos are always the worst at this type of situation because the FEES add an additional lien on the property.
Sorry for the fence sitting.
Buy a motor home and live in a National Park for a while.
“Buy a motor home and live in a National Park for a while.”
Most people’s hampster wheel is set at too high an rpm.
We’ve never seen a situation in recent memory where the mortgage holder didn’t want the property because the market value would result in a huge loss.
We’ve never suspended Mark to Market before as far as I know. Stop do that, and they’d have no choice but to take what they could get for it rather than letting it decay while propping up the books.
“It means that the people that have to sell did….”
Doesn’t matter if you “have to sell”. Unless you have real equity or cash to bring to the table, you can’t. Nobody cares what you need (not you Muggy, the FB). You will either hang on some way, refi makes this easier, or let the bank take over, which they won’t do because their ledgers are already rotten. So the market is frozen, except for the occasional cheap credit fool that wants to solve things by overpaying.
The problem isn’t lack of “inventory”, it’s insolvency on a national level.
Exactly. I do not care that the person I am buying from paid $132K in 2006. I don’t care that the last tenants trashed the place so badly that he just had to put $6K into a remodel, or that he had to put another $1K into the breaker panels.
I don’t care that he’s been losing money for 6 years.
“…So the market is frozen, except for the occasional cheap credit fool that wants to solve things by overpaying.
The problem isn’t lack of “inventory”, it’s insolvency on a national level.”
That seems like a reasonable assessment. What I don’t get is, how does this unravel, how long will it take, and will we continue with frozen-in-time national-level insolvency in the interim?
It looks like it will take just as long as the PTB can make it last, but the result will be the same or worse. It has lasted longer than I thought possible and the underlying problems have not been solved. The aswner for us personally though is not to live in fantasy land.
Ugh, dyslexic typing.
I am not optimistic about the next few years, because we are living in a time of extraordinary political failure and it will continue no matter which of the two major political party candidates is elected president or what is announced at this or any other Fed meeting.
But on that latter subject, I expect the Fed to announce that ZIRP will be continued indefinitely. Think of what that would do to stocks! Awesome! Dow 36,000! Bernanke already is regarded as a hero in some circles, and that would put him on f_____g Mount Rushmore. It would be a fitting momument for a hapless country that has totally surrendered to high finance.
“…we are living in a time of extraordinary political failure and it will continue no matter which of the two major political party candidates is elected president or what is announced at this or any other Fed meeting.”
Good point!
“…would put money in the pockets of homeowners, thereby staving off foreclosures. Donovan said he hoped Congress would pass the bills in September rather than waiting for the lame duck session after the November elections. ‘There’s real urgency because nobody can say how long interest rates can stay this low,’ said Donovan.”
Would HUD continue policies to ‘put money into people’s pockets’ under an R&R presidency?
Yes.
I know you reject the notion, but the alternative truly is cascade default into depression.
Easy money is going to continue for the foreseeable future because the alternatives are unacceptable.
We already have the unacceptable, and the cheap credit with which to make it worse.
“We already have the unacceptable, ”
Yes, but most people still see Reaganomics as win, not fail.
Look at 2banana…. any time I mention how total debt increased 141% during Regan’s 8 years…. crickets.
Denial is not just a river in Africa.
Too many factoids floating around in your head, you can’t see where we are. Now, not in 1980.
I’m selling tickets and popcorn to the Donovan v. DeMarco Mudpit Match to the Death.
I personally can’t see how DeMarco stands a chance, given that he is up against more or less the entire executive branch?
Mr. Abbruzzese said that while prices had increased in recent months, he was betting that they would rise
Abbruzzi is a fruit stand operator in the Albany suburbs, not a farmer. Even so, farmers are great at what they do but they’re horrible businessmen. This guy is just one more of millions of suckers who lost everything because they do not understand that houses are depreciating assets and are not “investments”, EVER.
You always hear this and you know it is a lie.
But they keep saying it.
He also said the financial benefits of easing the fiscal burdens for homeowners would offset the meager costs associated with the three bills. ‘There is nothing in these bills that would suggest we’re costing taxpayers money. In fact, it’s the opposite,’ Donovan said.”
Corporations want their customers to spend, but don’t want to have to pay the wages necessary to permit that spending.
Debt.
Government spending.
Wealth effect of asset price bubbles.
Oh, and the best of all… stock gains. Not only do potential customers spend based on stock prices, but the CEOs and board members get massive direct wealth increases.
Keep them spending, but without paying them the money they would need to spend.
Anyone else find it somewhat ironic that yesterday, 2Banana rips on debt, and denies that was the key to the success of Reaganomics, then doesn’t reply when I point out how total debt in the USA increased 141% during Regan’s 8 years….. and then he held up Hong Kong and Singapore as great examples of countries with few natural resources but strong economies, as if he didn’t know those economies are 100% based on banking and massive debt creation.
I actually did reply.
You said Reaganomics was based on debt and ultra low interest rates.
I replied that interest rates under Reagan were approaching 20% for a mortgage. A question which you still have no answer for.
Reagan cut taxes and cut government. Revenue to the Federal Government DOUBLED. Yet a democrat congress spent ALL that and more.
Face it. Reagan is going down in history as one of our better presidents. Obama as one as our worst.
But keep drinking the kool-aid. Bigger and bigger government is the way to prosperity. It is what made America great, well, that and insane public unions.
4 more years. Hope and change. Stay the course…
How’d that deregulation of Wall St. work out?
Deregulation = Banks fail when they make poor choices. Bankers go to jail.
Socialism or crony capitalism - socialize those losses, banks can never fail.
Not that long ago (under Bush I) - 1500 bankers went to jail…
Under obama - ZERO
Wrong. There have been many prosecutions and convictions.
Just google “wall st convictions”.
Remind us again under whose administration and what party ruled when the majority of those poor choices were made. Under whose watch the failures occurred. Whose administration told the FBI to ignore the ever growing cases of mortgage fraud.
Obama created the deregulation?
You really do live in a fantasy world.
I replied to your claim of 20% interest rates. That is what it was when he took office, but 8 years later rates were more like 7-9% depending on the loan type.
Look at the z.1. Total debt when Reagan took office was $3.9T. When he lift office it was $9.3T. Total debt increased 141% in his 8 years.
Tax receipts increased because of the economic stimulus effects of all that unsustainable debt growth.
“Face it. Reagan is going down in history as one of our better presidents. Obama as one as our worst.”
Obama should go down in history as one of the worst, for continuing Reaganomics policies of unsustainable debt growth to fund trade imbalances. I think history will eventually revisit Reagan and his unleashing of debt. It has taken 30 years, but his chickens are coming home to roost.
Reagan fired the source of those 20% rates (Volcker), and hired Greenspan. Need we say anymore on this topic?
I think if you want to save america you need to get all americans on food stamps ,section 8 housing wick and welfare.second do away with border patrol ,make spanish the official language give amnesty to all.that will ensure lower wages,and no middle class.to get this started just relect pres. obama,then the drug cartel will bring up GDP and the violence will give more jobs for law inforcement,problem solved.
Obama has the most deportations than any other president in history.
http://www.nytimes.com/2012/09/08/us/us-deports-record-number-of-foreigners-in-2011.html
Republicans blocked ending tax break for offshoring jobs and were promtply given more power.
http://www.reuters.com/article/idUSTRE68R40I20100928
Obama has added to the Border Patrol.
http://thehill.com/homenews/administration/200145-border-patrol-increase-in-drug-seizures-decrease-in-illegal-border-crossers-in-2011
Where are the jailed bankers responsible for sending the economy into a depression?
In the Hamptons and on Martha’s Vineyard bundling campaign donations for obama…?
And Romney?
Google “wall st convictions”
Google “mortgage fraud convictions”
Google “how do I use google?”
As usual the NYT is lying for Obama. The figures for “DEPORTATIONS”, which you believe are people being sent back to Mexico from the US, is padded by turn-arounds.
If an illegal alien gets stopped at the border and doens’t get in, then this is a “deportation” under Obama.
It’s a lie.
Always a lie.
You’re splitting hairs when the original accusation was that Obama was doing nothing.
As for the NYT, google “deportations under Obama” for other sources that verify the increase.
from the article:
“Pressure from Latino and immigrant groups helped persuade Mr. Obama to take a sweeping executive action in June to suspend deportations temporarily for as many as 1.7 million young illegal immigrants who came to this country as children.”
Apparently he is holding back just a tad personally on enforcing the law.
How is record deportations an accomplishment anyway. We’ve had the largest illegal immigration bubble in history and half of the deportees are reported as convicted criminals. I see no accomplishment for our President in this.
“How is record deportations an accomplishment anyway. We’ve had the largest illegal immigration bubble in history and half of the deportees are reported as convicted criminals. I see no accomplishment for our President in this.”
I answered that question in the post above yours.
This Administration (big time liars) add “turnarounds” at the border as “deportations”. They are saying, essentially, that since we kept them from crossing the border, they have been “deported”.
Like most other shenanigans with the Obama White House, they tell us stories to support their lies. This story is to gain the approval of Conservatives who want border control.
That way, Obama can have it both ways. He’s stopped deportations: YEA, for the Mexican vote.
He’s deported more than anybody: Yea for stupid white folks.
It’s the same with “unemployment”.
The real number is OVER 11%, when you consider those “not considered in the work-force” (government fudging of facts).
There has been a huge reduction in the number of people in the work-force, as the working age population increases (new graduates, immigrants, etc.). Larger population, smaller workforce. I think that even includes the retiring baby boomers)
Expect the NYT and WaPo to provide imaginary lies for the democrats at every turn. The will present them as “facts”.
The original accusation was that he was doing nothing which has now been proven wrong.
The temporary suspension was to check the legal status of the children. Other president have had trouble with the exact same ambiguity.
Other than that see my above post.
The backpedaling here is hilarious.
wait untill his second tour he will do a amnesty like regan, then the lib. elite can get there grass cut even cheaper!
I guess I must be part of the liberal elite, as I get my grass cut essentially for free, as our landlord hires the Mexican labor crew who cuts it for us. I have to say weekends are far more enjoyable without the ongoing burden of having to push around a fossil-fuel-powered lawnmower to mow down blades of fossil-fuel fertilized grass. And I no longer have to endure the guilt that comes from creating all the greenhouse gases associated with yard care, as it is our landlord and the Mexican labor crew’s lawnmowers and leafblowers that are to blame for the carbon dioxide emissions.
Seems David learned punctuation and spelling from Housing Wizard.
-:)
“Wednesday’s report from the National Association of Realtors showed that average sales prices actually dipped slightly from June to July. This seeming contradiction — increasing demand but anemic growth in home values — could represent a new normal in the housing market, experts said.”
I thought lying about home prices then acting surprised when the lies turn out to be lies was the old normal?
Average sales price is HIGHLY influenced by the mix of houses.
In 2007, as the bottom end of the market froze with sub-prime, average prices kept on going up, even as the price of individual houses went down.
This is the strength of the Case-Shiller index. By comparing repeated sales of similar houses, you minimize the effects of a changing mix of houses.
i.e. since I will never buy a $10 million house, I could not care less if fewer $10 million houses sold, bringing down the average price of houses sold.
Darryl The Liar, You’re lying again…. and hiding.
Why are you hiding and lying?
“3. Abysmally low returns on CDs and Treasurys are an effective way to socialize losses.”
Ben/all,
Appreciate your editing, thought in powerful first four paragraphs of The Malinvestments Policies Inspire
I was hoping there would be some discussion of the failure of the FEDERAL RESERVE to cope with all the problems they have created. (I know Krugman and the NYT, WaPo, NPR, and all the big media outlets say he saved the world).
If you have read some of the commentary from the FED minutes, essentially Bernanke ,the Buffoon, is saying, well, gee, he’s not sure how much all his little tricks with accounting and money printing and FREE loans to his banker buddies have helped. In fact, they just don’t understand how, with all the cheap money, the markets aren’t booming and employment increasing. They think they have their hands on the levers of a “free market” and can steer it any way they choose. That is what got us into the messes we are in.
And, yet, they are sure they what they have done has been helpful, and like OBAMA is so fond of saying, well, if we didn’t do what we did, then it would have been much worse.
The truth is no one knows how things would have turned out. It could be by NOT adding trillions of dollars in debt and making money “free”, the markets would have healed themselves already.
And yet, the FED, useless and blind as they are, are hereby ready to provide MORE “accommodation” of the kinds they have been providing, if they feel it warrants it. Yes, Mr. Bernanke, stands at the printing presses, ready to swamp the banks with more money, to buy up all the bonds in the world to drive down rates and to take every kind of useless paper document into the FED vault for safe-keeping while extending “loans” to the undeserving, all while indebting America and destroying the value of our money.
The LIES that “inflation” is “contained”, are similar to the lies that “subprime is contained”. You all remember that one, don’t you?
GAS, FOOD, SERVICES (FEDex wanted $3 to send a one page FAX, previously $1 when I went in yesterday, gone up the last 2 years), TOLLS (up in my State), Bank charges, FEES, yes, virtually most things you need to buy have increased substantially in price, except RE and your Interest Income (that’s down). Real estate may start going up, too, at least in the short-run.
Inflation, the GOAL of the FED, is stealing from you and me. It is a slow, continual robbery of your money and savings. It should not be pursued as a policy of ’stability’. WE need to KILL the FED.
Stop the Bankster game of taxpayer robbery.
The ROBBER BARONS of the 21st Century have been BAnksters in collusion with Wallstreet Brokerage houses.
Break up Goldman-Sachs and CLAW back all the money they took from us. Throw Lloyd Blankfein on the Street and go after Rahm Emmanuel, Larry Summers, Hank Paulsen, and ALL the others who have colluded with them. Get a REAL Attorney General, instead of an EEOC appointee.
That is what America needs. The is exactly the OPPOSITE of what Obama has done. NO PROSECUTIONS. NONE. Just GRaft.
Yea, all you OBAMA supporters, go vote for your cheese. Get your handout. It doesn’t matter what his actual policies have been, so long as you get your “stuff”.
Every year, $1.3T leaks from active circulation within the USA economy. $600B to international trade imbalances, and $700B to the rich getting richer.
Now clearly, the ONLY solution to our economic troubles is to end free trade and return to a 1950s/1960s style tax code. We MUST attack and reverse those trade deficits, or we’ll be forced to continue the unsustainable debt growth that we’ve been using to paper over those underlying flaws.
But the Fed has no ability to attack and reverse the trade imbalances.
Politicians that have the power, have no interest in fixing things.
So, what would you have the Fed do? They have two choices…. don’t ease lending conditions, and see cascade debt default into depression, or create loose lending conditions to keep the debt pumping in, even if only for a little bit longer.
The Fed has a hemmer, but the problem is a bolt. The people with the wrench aren’t doing their job.
“Now clearly, the ONLY solution to our economic troubles is to end free trade and return to a 1950s/1960s style tax code. We MUST attack and reverse those trade deficits, or we’ll be forced to continue the unsustainable debt growth that we’ve been using to paper over those underlying flaws.”
Keep banging that drum. I’m sure somebody high up will eventually hear it and act quickly to adopt your recommended panacea.
“end free trade and return to a 1950s/1960s style tax code”
That will never happen. The elite are more than happy to cash out the middle class, suborn the nation and reform it as the Argentina of the 21st Century, and attempt to re-create new indebted middle classes in Chindia in order to continue their debt-based corporate growth model.
Sadly, even when you explain this fate to the avg US voter, he can’t accept it. Maybe it’s too horrible to contemplate, or maybe he can’t accept that the elite would so viciously destroy him and people like him. Regardless, it WILL happen that way.
Sadly, even when you explain this fate to the avg US voter, he can’t accept it. Maybe it’s too horrible to contemplate, or maybe he can’t accept that the elite would so viciously destroy him and people like him.
I think the average voter is pretty suspicious of the elites right now. I think what they can’t accept yet are the people they would have to ally with to fight the elites. What they need is an OWS that looks like them, while all they see from the MSM are squad car poopers and drum circle bangers.
“I think the average voter is pretty suspicious of the elites right now.”
Uh, not really. If they’re truly suspicious, it’s not reflected in their life patterns: voting, spending, media, saving.
If you’re truly suspicious of something, you cease interacting with it. But the average American has corrected NONE of his own behavior.
What you might be saying is that average American is EXPECTING the elite to change their behavior while changing none of their own. That’s a recipe for the current and pervasive cultural failures we see today. The elite are acting in their own best (short-term) interest, so they aren’t going to change. That’s the utter failure of the OWS movement in a nutshell: Lots of young people talking and not acting, and in fact acting contrary to their complaints. SHOWING UP isn’t acting; those OWS people kept consuming and putting their money in banks. I’d love to find out how many had trust funds and student loans, all of course entangled with Wall Street.
“And, yet, they are sure they what they have done has been helpful, and like OBAMA is so fond of saying, well, if we didn’t do what we did, then it would have been much worse. The truth is no one knows how things would have turned out. It could be by NOT adding trillions of dollars in debt and making money “free”, the markets would have healed themselves already.”
Blasphemy!!! Says Darrell and his merry band of housing cheerleaders.
There are NO signs that personal income will be headed upwards anytime soon. That puts a cap on rents. Buy-to-rent of SFH and new mulitunit construction expands supply. So where’s the price pressure going to come from?
An accelerating devaluation of the USD will put additional stress on an already overstressed American middle class. But this is exactly where our Bernankio is taking us. So what to do? Buy real estate? Seriously?
My preference - stay liquid - but use tools that our central plannersand banksters don’t completely control - select foreign currencies, precious metals, oil, etc.
Yep. It’s very hard to inflate away the value of a diversified portfolio.
Back to original topic:
http://seekingalpha.com/article/71265-the-credit-bubble-deregulation-gone-wild
Fool me once Obama, shame on you…
Fool me twice, shame on me…
And you expect 4 more years,
Are we now separating ourselves on this blog into 3 or more separate camps?
1) In the right location at the right price where within 10% of a perceived bottom, either way, especially with artificially-suppressed lending rates, it’s a great time to buy.
2) Prices are still overinflated; renting is still the best option, always.
No bottom in sight.
3) Case by case, location by location. Demographics and economics still rule our lives, no matter how much we identify with a neighborhood, a political party, a cause, or a movement. Or (can’t resist) pro or anti Darrell -
2)
Not really. The hired pimps like Darrell, Rental Pimp, Cactus and their ilk will be gone eventually. Things will be back to normal after that.
What’s the difference between 1 and 3?
Very perceptive Carl,
IMHO, the critical thinker/analyst can win in any market.
Unlike stocks, however, it’s not so easy to short (especially a local)
real estate market.
Not that I ever would. Seriously.
Renting = shorting a local real estate market
“… renting is still the best option, always.”
I doubt any posters here assume renting is always better. Why suggest a scenario to which nobody subscribes?
Are we now separating ourselves on this blog into 3 or more separate camps?
1) In the right location at the right price where within 10% of a perceived bottom, either way, especially with artificially-suppressed lending rates, it’s a great time to buy.
2) Prices are still overinflated; renting is still the best option, always.
No bottom in sight.
3) Case by case, location by location. Demographics and economics still rule our lives, no matter how much we identify with a neighborhood, a political party, a cause, or a movement. Or (can’t resist) pro or anti Darrell -
I.P.O./Offerings
September 9, 2012, 5:55 pm
Treasury to Reduce A.I.G. Stake Below 50%
By MICHAEL J. DE LA MERCED
The Treasury Department said on Sunday that it was planning its biggest sale of shares in the American International Group to date, making the federal government a minority shareholder in the bailed-out insurer for the first time since it took control of the company four years ago.
With the sale of at least $18 billion worth of shares in A.I.G., a number that could grow to $20.7 billion if investors prove enthusiastic, the Treasury Department could reduce its holdings to as little as 15 percent from 53 percent.
Taking the government’s stake in A.I.G. below 50 percent is the realization of a long-held goal by both the Obama administration and the company, helping to cut ties to one of the most controversial bailouts of the 2008 financial crisis. The Treasury Department expects to earn a profit on its investment in A.I.G., though it is unclear how large.
“This was always meant as a temporary measure,” Henry T. C. Hu, a professor at the University of Texas School of Law at Austin, said. “The faster we can do this as a practical matter, the better for everyone involved.”
…