August 23, 2013

Weekend Topic Suggestions

Please post topic ideas here!

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Comment by Ol'Bubba
2013-08-23 04:47:01

Remember, folks, this ain’t rocket surgery.

Comment by Housing Analyst
2013-08-23 05:20:19

That’s a good thing O’ Barbara because youre far from a surgeon or scientist.

Comment by goon squad
2013-08-23 07:06:07

And you’re not an “analyst”, you should listen to educated, qualified people like Lawrence Yun and Amy Hoak.

Comment by Housing Analyst
2013-08-23 07:12:25


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Comment by goon squad
2013-08-23 07:22:35

You spread lies, I spread knowledge and wisdom:

Comment by Housing Analyst
2013-08-23 07:26:04


Comment by goon squad
2013-08-23 07:50:43

Post some links to these $5,000 lots within commutable distance to Manhattan please.

Comment by Housing Analyst
2013-08-23 08:00:19

It’s been done time and time again Trollholio. You just didn’t like it.

Comment by tresho
2013-08-23 06:21:21

I’d like to see a weekend topic on cleaning up / disposing of the unused and unsellable houses left over from the housing bubble.

Comment by Strawberrypicker
2013-08-23 06:52:10

Why not sell them at peak market value to an all cash foreign investor!

Comment by Housing Analyst
2013-08-23 06:57:57

What do you do with 25 MILLION excess empty houses?

At this point, they’re simply moved from balance sheet to balance sheet. They’re still empty, still depreciating, still worth half or less of the fantasy prices.

Contractors have a field day with this. Profitable at current inflated asking prices of resale housing. Still profitable at 50% of current inflated asking prices of resale housing.

Comment by Whac-A-Bubble™
2013-08-23 07:20:39

Who will replace BB at the Fed, and will it make any difference?

Comment by Whac-A-Bubble™
2013-08-23 07:24:23

The Jackson Hole Federal Reserve conference

Key policymakers and economists meet in Jackson Hole, Wyo. to talk about Federal Reserve policy and leadership. Stay here for continuing coverage, including stories, blogs, video and tweets from the event. (Photo: Bloomberg)

Comment by Neuromance
2013-08-23 08:35:38

So. QE 1, 2, 3-Infinity:

1) What did the models predict should happen, what did happen, and has it worked?

2) What were the immediate, direct impacts of the buys? What were the indirect impacts?

3) Are the claims of success or failure unfalsifiable?

Comment by Neuromance
2013-08-23 08:49:44

The GSE’s are a massive wealth pump the FIRE sector. Why on earth would any politician support their shutdown?

1) FIRE contributions to pols:

2) GSEs nearly 100% of MBS market since 2008:

Comment by Carl Morris
2013-08-23 08:56:05

Can’t remember if we discuss actual examples of bubble construction on weekend topics, but here’s something I found out about last weekend and wanted to share. Notice that this new little development of horrible little duplexes is built in an extremely undesirable location, definitely NOT where the jobs are, and they are still asking and getting well over 100k for them because interest is low and rents are high…,-Cody,-WY_rb/

Keep in mind that this part of the sticks (my home town) is so far from population centers that it tends to be well behind everyone on the way up and the way down. The government stopped the crash before it ever made it this far…

Comment by alpha-sloth
2013-08-23 14:12:56

new little development of horrible little duplexes

I see older SFHs when I click the link.

Do you live in Cody, Carl? I thought you were in Colorado.

Comment by Carl Morris
2013-08-23 14:54:49

Sorry, you have to zoom in and look at just Marlisa Lane in the center of the default view. I am in Colorado, but that’s where I grew up.

Comment by United States of Moral Hazard
2013-08-23 22:28:15

All I needed to do was look on the right sidebar and see an asking price of $499k in Cody, Wyoming to remind me how insane this current bubble is.

Comment by Brett
2013-08-23 09:52:20

I usually stay out of politics, but I’ve been amazed at how many companies (Delta, UPS, etc) have come forward to denounce Obamacare as a reason to drop benefits, increase prices, lay off people or only hire part time workers.

To my knowledge, there is no ‘proof’ any of their statements are accurate… They could be honest, or they may be using Obamacare as an excuse to further cut costs.

Either way, people going part time or laid off because of this will hurt the economy and it will have a negative effect on the housing market.

Thus, I would like to explore the link between Obamacare and housing

Comment by Housing Analyst
2013-08-23 09:55:56

How less demand for housing a “negative effect”? Less demand means much lower prices. Lower prices of anything is always a good thing.

Comment by Bluto
2013-08-23 10:35:06

This actually goes back as far as 2010 or so, AT&T took a $1 billion charge against earnings citing Obamacare as the reason, other companies made similar moves then too…

Comment by Arizona Slim
2013-08-23 11:01:30

I think that it’s high time for employers to get out of the health insurance business.

Comment by Neuromance
2013-08-23 12:52:12

I’ve always found it extremely odd that my employer had anything to do whatsoever with my personal health insurance. What next? They’re responsible for my car insurance?

It benefits the big lobbies - medical-related, insurance-related and business-related but puts a major limitation on workers.

Probably some real sausage-factory-esque dealmaking went into that bizarre deal.

Comment by alpha-sloth
2013-08-23 14:24:29

I think that it’s high time for employers to get out of the health insurance business.

+1 As we’ve both stated before, universal single-payer health insurance would be a huge boon both to entrepreneurship and to the mobility and flexibility of the work force. Obamacare will be the next best thing.

Comment by In Colorado
2013-08-23 14:53:07

I think that it’s high time for employers to get out of the health insurance business.

They are dying to do that. We are being marshalled in HD plans now, and will later be herded into health savings plans where the employer contributes a fixed amount, which later will be a generous “match’ to what we contribute. Then the match will be less generous, until (like 401K matches) it disappears altogether. And then, just like they got out of the “retirement biz” employers will be out of the health insurance biz. It’s just easier to do when you do it little by little.

Comment by United States of Moral Hazard
2013-08-23 22:30:17

There is absolutely no reason why health insurance should be tied to employment. A lot of people are slaves to crappy jobs just because of it.

Comment by Rental Watch
2013-08-24 02:06:42

Then don’t give them beneficial tax treatment for health insurance premium payments.

If a company can pay $1,000 for a premium, and get to deduct it, but that same premium for an individual is non-deductible, the market settles into an tax efficient efficient solution:

The employee is willing to provide something more than $1,000 of service for that $1,000 benefit, since they would have to earn more than $1,000 (pre-tax) to pay for that benefit anyway. The employer gets more than $1,000 of service for a $1,000 cost.

Everyone wins, but to get to that “everybody wins” situation (employees get healthcare for less, and employees get more service), the employer needs to provide healthcare. Take away the deductibility for employers, and all of a sudden, that “win-win” possibility goes away.

Comment by In Colorado
2013-08-23 12:52:10

They could be honest, or they may be using Obamacare as an excuse to further cut costs.

Hmmm … my money is on #2.

Comment by ahansen
2013-08-23 15:36:48

The same thing happened when they instituted Medicare in the 60’s. Doctors threatened to quit, hospitals threatened to close, businessmen threatened to leave the country. The AMA just about busted a gut for about three years, then…it worked.

Comment by Resistor
2013-08-24 03:25:41

A colleague of mine has a dad who, for this reason, sold his practice in the 60’s. What has he been doing for the last 40 years?

Real estate.

Comment by Neuromance
2013-08-23 17:59:07

Just heard an ad on the radio for a national mortgage lender. The fellow said something to the effect of “as prices go up, interest rates are sure to follow!”

Imagine if someone made a similarly deceptive statement about a nutritional supplement. Or about any other product.

Street corner hustlers run the shell game and dice and card games. None of these are government backed. But once the hustle becomes big enough, it becomes useful for politicians to protect and advance it.

Comment by Combotechie
2013-08-24 04:36:47

“But once the hustle becomes big enough, it becomes useful for politicians to protect and advance it.”

Also, once a hustle becomes IMPORTANT enough, it becomes useful for politicians to protect and advance it.

Lenders have a stake in keeping RE prices up so the value of their mortgages will be kept up. Homeowners and home buyers (who, together, make up the majority of voters) also have a stake in keeping RE prices up since this is where most of them have their money “invested”.

So many have an interest in High RE prices and few have an interest in lower RE prices so high RE prices is what we end up with.

There is no balance here, the other side of the argument (the lower-RE-price-just-might-be-a-good-thing argument) is never presented because it has been declared to be in the National Interest that RE prices be supported. This means hustlers have an unspoken liscense to hustle as long as their hustle acts to support RE prices. (A blatant example, IMHO, is the behavior of RE “investors” who use huge pools of OPM to pump up RE prices in targeted areas so as to extract hefty fees for themselves in the form of capital gains and while doing so enjoy no opposition and no oversight whatsoever as to what they are up to.)

Comment by shendi
2013-08-23 18:10:55

Off topic: Anyone following Bo Xilai trial? It appears that the people are talking about how this guy is a scapegoat and how he was for the people etc. Someone here mentioned way back that Bo’s meteoric rise and people centric politics was not liked by western companies. Maybe be there is a kernel of truth in that.

Comment by Carl Morris
2013-08-23 22:10:56

Wow…so now people are intentionally cutting back everywhere else to put more money into their housing “investment”…

Comment by Combotechie
2013-08-24 04:53:47

This is because the economy we now have is a contracting one and not an expanding one.

People used to have a surplus of money because the previously expanding economy allowed them to have a surplus. But now the economy is contracting and this contraction has made the surplus go away.

The surplus went away but the commitments that were made during the days of surplus haven’t. So to attend to these commitments spending cuts need to be made in other areas and these spending cuts cause the economy to contract even more so.

Comment by AmazingRuss
2013-08-24 11:52:47

Bankers NEED those interest contributions to continue buying our government.

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