The Housing Bubble

Shorthand for “buying a house outright using cash that was borrowed from somewhere else at a really low interest rate.” We still haven’t figured out where Blackstone got all the cash to buy those investment houses, but I don’t think they had the Clevelands and Madisons laying around gathering dust.

[The Chinese probably DID have the Clevelands and Madisons, possibly hot.]

possibly hot ??

Ya Think ?? That cash stinks to all high heaven….

The Chinese will buy Blackstone American homes etc. the justice dept will allow them because its not a security risk, and eventually a million homes will be owned by the Chinese…then on to the next million. Easy way to get them off the Feds books without massive tapering.

yea that sounds about right

I just assumed a lot of that cash were margin loans from the markets recent high. Can you imagine if these stooges borrowed against stocks and those tank along with housing??? What an epic house-o-cards that would be.

“We still haven’t figured out where Blackstone got all the cash to buy those investment houses, but I don’t think they had the Clevelands and Madisons laying around gathering dust.”

Blackstone is an “alternative investment” (ie. where pension funds, endowments, etc. invest a lot of their money). The money generally comes in as equity, NOT debt. I’m pretty sure like most private equity funds, the fund itself isn’t leveraged, but money is borrowed at the individual asset level.

So, if Blackstone wants to buy a $100 house with 50% debt, they contribute $50 of equity (which they ultimately got from pension funds, etc.), and they borrow $50 from a bank (or other lender, insurance company, etc.) that is secured by the real estate. Typically these loans are not cross collateralized (so a default on an apartment building in Germany doesn’t impact the loan on a property in NYC).

Take a look at Calpers annual report (which you can Google and search for the word “Blackstone”). They have invested in 7 different Blackstone entities.

Texas Teachers has 9 Blackstone entities in their annual report.

Likewise the NY Pension system discloses fees paid to Blackstone.

And I just picked three of the largest Pension funds that I know of (who are required to disclose such investments).

I’m willing to bet that if you had a list of funds that Yale, Harvard, Stanford, etc. have invested in, you would see Blackstone commonly found there too.

There is no mystery…the money comes from us. Soylent Green is us, we’re eating ourselves! (or less cynical, Jimmy Stewart from It’s a Wonderful Life)

“Can you imagine if these stooges borrowed against stocks and those tank along with housing??? What an epic house-o-cards that would be.”

Then we would start hearing about how it was “necessary” for the government to take over 401k’s, IRA’s, and private pensions, along with a one-time tax on any savings accounts to “save” the 1%’ers, I mean the “country”, you know.

I’m just saying that the sub-680 crowd are the ones I’d worry about. If everyone buying a house during the 00’s was 700+ FICO and put down a legit down payment (not necessarily full 20%, but not 0% or 3.5% either), there would’ve been fewer transactions and far less defaults.

I can think of many reasons someone has slightly-dinged credit and most of them wouldn’t worry me if there was a solid down payment involved.

if not IL goes bk

Bankruptcy would be the logical conclusion. Not before every possible tax is raised through the roof, however.

You know it’s bad when I start thinking thoughts about public unions that would make 2b proud.

In Illinois, the long-term solution really is the COLA benefits. I haven’t been able to verify this, but the states that have COLAs on the entire pension are the states that are the least funded. You can’t have sustainability if every $40,000 pension becomes a $140,000 pension in 20 years. The unions would be wise to not fight this issue. They will fight it because they claim the problem was lack of state contributions. While this is true, its water under the bridge. I would rather keep my pension and lose the COLAs than risk losing it entirely. Politics, blame game same ol’ same ol’.

SCarton, that’s an excellent point. The current COLA annual raises are in the 3% range for state of IL pensions. Contrast that with my nonprofit employer and husband’s Fortune 100 employer, whose pension plans have a ZERO percent COLA. The unions will fight tooth and nail to keep those raises, though. If they can be brought to concede half of the amount it’ll be a step in the right direction.

I still contend they grossly underestimated the number of people who quit smoking and live 5-10-15+ years longer and collecting money when they should have died.

With reported CPI-U running something like 1.5%, why a 3% COLA?

its the way the bankers keep track of you.

car companies just reported higher-than expected sales (pickup trucks again ??

Yeah but, thats rear-view mirror stuff…Those guys on Wall street up on the 50th floor have their index finger on the “sell button”…

Well, yeah. When you look at the run up the market has taken lately, at this point at the party no body wants to leave any extra punch in the bowl, but everybody want’s to be closer to the door than everybody else, ready to make their exit and prove that they ARE smarter than everybody else.

Maybe China should turn some attention to building aircraft carriers instead of more ghost towns.

What is China going to do ??

Call our Bluff….China knows full well the most important thing to the PTB in America is the 1% wallet…

The golden rule. He who has the gold makes the rules. While the PTB is actively suppressing the price of gold China is buying it up. When they announce a currency backed by gold, we will lose the ability to support our military with fiat currency. They will win the war without firing a shot which they are taught is the best way to win a war.

“PTB are”, we are not quite down to one billionaire running things. For an understanding of how the Chinese think about war:
To fight and conquer in all your battles is not supreme excellence; supreme excellence consists in breaking the enemy’s resistance without fighting.
-Sun Tzu, the Art of War

The golden rule:
“He who has the gold makes the rules” 1980, Arthur Laffer to Ronald Reagan

The “other” golden rule:
One should treat others as one would like others to treat oneself Confucius, Buddah and Jesus Christ

excellence consists in breaking the enemy’s resistance without fighting ??

Well, you are making my point Adan…They call our bluff and we back down…They win…Do you really think we will escalate this thing by challenging China on their own turf…Not a chance…We will beat our chest…Thats about it…

Coincidentally, haven’t we been reading in the news lately about a lot of chinese capital flight…Buying crap site-unseen…

One should treat others as one would like others to treat oneself Confucius, Buddah and Jesus Christ

Actually, I think Buddah promulgated the silver rule, Don’t do to others what you don’t want done to you.

You know you still are a rabid dog about Reagan. Just can’t accept that defeated communism, exposed communism for the evil system it was and reinvigorated free enterprise and national pride. It is a shame that after his presidency we reverted to the same U.N. promoting, world government advocating political hacks that have run America down again. We are on the verge of collapse just like we were in 1980. Of course, your Obama by running up almost 7 trillion dollars of debt with three years left in his reign, has done more damage to the country since Carter.

You know you still are a rabid dog about Reagan. Just can’t accept that defeated communism,

Yes, he did that. That was good. Many say Communism would have collapsed maybe 5 years later than it did even without Reagan’s overspending. My point with him is on economics. Reaganomics ruined America.

your Obama by running up almost 7 trillion dollars of debt with three years left in his reign,

Because Reaganomics gutted America like a fish. The 7 trillion was to patch up America’s supply-side hell. It was to protect the Rich. (Reagan’s Supply-side dogma in action) You are surprised?

It must be nice to live in a bubble….

No Rio, I am not buying it because Ronald Reagan left the country far stronger than he found it. I think he created something like 20 million plus jobs during his presidency. See that is why people on the left hate him. The country was suppose to collapse when he took office. If it had, the left would not have let a good crisis go to waste and would have followed the George Soros’ model and created a much more socialistic and internationally integrated country. Instead he set back their agenda by decades and even today they resent that people point to Reagan’s way as the way to economic prosperity not the statist way that you want.

See that is why people on the left hate him. The country was suppose to collapse when he took office.

That is so much BS. No rational person on the left or right wanted or wants the country to collapse. I sure didn’t and don’t. Reagan got many votes from the left - Reagan Democrats.

The problem now is those wackjobs on the right DO want the country to collapse. The right-wing has been whipped up into a frenzy and they HATE Obama so much they’d take the country down to spite him. “End of days”…”go time”, California GOP putting up fake Obamacare websites, ” FOXZ and AM radio “all hate all the time” Mitch McConnel’s only goal of “making Obama a one term president” Trying to torpedo ACA etc.

Reagan’s way as the way to economic prosperity

It’s not theory anymore. It worked for awhile and has now imploded. ReaganOmics, Supply-side dogma has been the economic model we’ve followed for 33 years. It has gutted our economy, destroyed the middle class and made the rich richer than major kings of the past. Supply-side FAILED.

“…Ronald Reagan left the country far stronger than he found it.”

2014 REAGAN RANCH CALENDAR
http://www.ebay.com/itm/291025879561

Reaganomics put us where we are today.

“Reagan’s approach accelerated a de-industrialization of the United States and a slump in the growth of American jobs”

The Abject Failure of Reaganomics

http://consortiumnews.com/2013/10/17/the-abject-failure-of-reaganomics/

….the Tea Partiers keep promoting a false narrative on why the U.S. debt has ballooned and why the economy struggles,

…The first point to understand is that the current $16.7 trillion federal debt is about $11 trillion more than it was when George W. Bush took office. Not only did Bush’s tax-cut-and-war-spending policies send the debt soaring over the next dozen years but it was those policies that eliminated the federal surpluses of Bill Clinton’s final years and reversed a downward trend in the debt that had “threatened” to eliminate the debt entirely over the ensuing decade.

…Amazingly, President Clinton left office in January 2001 with the federal budget in the black by $236 billion and with a projected 10-year budget surplus of $5.6 trillion…

……Thus, Greenspan, an Ayn Rand acolyte who was first appointed by Ronald Reagan, threw his considerable prestige behind George W. Bush’s plan for massive tax cuts that would primarily benefit the wealthy……When Bush left office in January 2009 – amid a meltdown of an under-regulated Wall Street – there was no more talk about a debt-free government.

Reaganomics’ Failure

……But this debt crisis did not originate with George W. Bush. It can be traced back primarily to President Reagan, who arrived in the White House in 1981 with fanciful notions about restoring America’s economic vitality through massive tax cuts for the wealthy, a strategy called “supply-side” by its admirers and “trickle-down” by its critics.

Reagan’s tax cuts brought a rapid ballooning of the federal debt, which was $934 billion in January 1981 when Reagan took office. When he departed in January 1989, the debt had jumped to $2.7 trillion, a three-fold increase. And the consequences of Reagan’s reckless tax-cutting continued to build under his successor, George H.W. Bush, who left office in January 1993 with a national debt of $4.2 trillion, more than a four-fold increase since the arrival of Republican-dominated governance in 1981.

……During 1993, Clinton’s first year in office, the new Democratic administration pushed through tax increases, partially reversing the massive tax cuts implemented under Reagan. Finally, the debt problem began to stabilize, with the total debt at $5.7 trillion and heading downward, when Clinton left office in January 2001.

Indeed, at the time of Clinton’s departure, the projected ten-year surplus of $5.6 trillion meant that virtually the entire federal debt would be retired. That was what Fed Chairman Greenspan found worrisome enough to support George W. Bush’s new round of tax cuts aimed primarily at the wealthy, another dose of Reagan’s “supply-side.”

…..The consequences – especially when combined with Bush’s decision to rush into two major wars without paying for them – proved disastrous. The federal debt resumed its upward climb. By August 2008, just before the Wall Street crash, the debt was over $9.6 trillion, nearly a $4 trillion jump since Bush took office.

And, after the Wall Street collapse in September 2008, the federal government had little choice but to increase its borrowing even more to avert a global economic catastrophe potentially worse than the Great Depression. By January 2009, just five months later, the debt was $10.6 trillion, a $1 trillion increase and counting.

Many of the Republican leaders who stomped their feet during the recent budget showdown, including House Speaker John Boehner, R-Ohio, were among those who favored the Bush tax cuts, the costly invasion of Iraq and bank deregulation. In other words, they were denouncing President Obama for a debt crisis that they helped create.

But the record of reckless Republican budget policies from Reagan through Bush-43 was not only destructive to the fiscal health of the government. The “supply-side,” “free-trade” and deregulatory strategies – including some facilitated by the Clinton administration – proved devastating to the nation’s ability to create good-paying jobs and to sustain the Great American Middle Class.

Zero Job Growth

During the decade of George W. Bush’s presidency, the United States experienced zero job growth. And zero is actually worse than it sounds since none of the preceding six decades registered job growth of less than 20 percent.

By comparison, the 1970s, which are often bemoaned as a time of economic stagflation and political malaise, registered a 27 percent increase in jobs. Yet, in part because of that relatively slow rise in jobs – down from 31 percent in the 1960s – American voters turned to Ronald Reagan and his radical economic theories of tax cuts, global “free markets” and deregulation.

…‘Voodoo Economics’

The U.S. political/media process seems resistant to the one of most obvious lessons of the past three decades: Simply put, Reaganomics didn’t work. As George H.W. Bush once commented – when he was running against Reagan in the 1980 primaries – it is “voodoo economics.”

Yet, the fact that the United States has embraced “voodoo economics” for much of the past three-plus decades and refuses to recognize the statistical evidence of Reaganomics’ abject failure suggests that the larger lesson of this era is that the U.S. political process is dysfunctional, a point driven home by the recent Tea Party-led government shutdown and threatened debt default.

I think (Reagan) created something like 20 million plus jobs during his presidency.

Reganomics fact:
Jobs growth percentage has declined in every decade in America since Ronald Reagan took office. In the 80s it was less than the 70’s (Carter years included) and so on and so on.

http://www.chartoftheday.com/20100108.htm

“Reagan’s approach accelerated a de-industrialization of the United States and a slump in the growth of American jobs, down to 20 percent during the 1980s…
…By comparison, the 1970s, which are often bemoaned as a time of economic stagflation and political malaise, registered a 27 percent increase in jobs. Yet, in part because of that relatively slow rise in jobs – down from 31 percent in the 1960s – American voters turned to Ronald Reagan and his radical economic theories of tax cuts, global “free markets” and deregulation.”
consortiumnews dot com

http://www.americanthinker.com/blog/2012/08/m-jobs_reagan_versus_obama.html

Why Obama’s minions do not want us to compare Obama and Reagan:

August 25, 2012
Jobs: Reagan versus Obama
Otto Sorenson

Stephanie Cutter, President Obama’s deputy campaign manager, recently boasted to Willie Geist of MSNBC that, from an employment perspective, the recovery of the economy under President Obama compares favorably with the Reagan recovery. Her claim seemed adequately outlandish to warrant comparing the two recoveries based on two criteria of central importance to the American people: the net number of new jobs created and the change in the number of people of working age who are either unemployed or not in the workforce (and therefore not counted as unemployed).

In each case I used unadjusted data from the Bureau of Labor Statistics from the month which was the trough of the recession experienced at the beginning of each President’s term of office. Those months were January 1983 and January 2010. I then compared that data to the identical data from January of 1989 and July of this year. The results are as follows.

The Reagan recovery, encompassing a period of 72 months, resulted in the creation of 24,833,000 net new jobs, or approximately 344,900 jobs per month. Over that same period the total number of people of working age who were either unemployed or not in the workforce decreased by 5,234,000, or approximately 72,700 per month.

The Obama recovery, encompassing a period of 31 months, has resulted in the creation of 6,317,000 net new jobs, or approximately 203,800 jobs per month. Over that same period, the total number of people of working age who are either unemployed or not in the labor force increased by 205,000, or approximately 6,600 per month.
These differences between the Reagan recovery and the Obama economy take on added significance when you realize that the size of the working-age population increased by approximately 43,180,000 people from January 1983 to January 2010. When that factor is considered, President Reagan’s recovery created 0.0031 net new jobs per month per working-age person. By contrast, President Obama’s “recovery” has created only 0.0013 net new jobs per month per working age person. In other words, when it comes to job-creation, President Reagan was more than twice as effective as President Obama — and President Obama’s policies have been so counterproductive that, during a recovery, they have actually resulted in an increase in the number of Americans who are either unemployed or simply no longer in the work force.

These figures demonstrate the truth of what those of us who were in the workforce during both recoveries intuitively understand. We knew President Reagan, President Reagan was our friend, and Barack Obama is no Ronald Reagan.

Yet, in part because of that relatively slow rise in jobs – down from 31 percent in the 1960s – American voters turned to Ronald Reagan and his radical economic theories of tax cuts, global “free markets” and deregulation.”

No, it was due to double digit inflation eroding worker’s lifestyle and pushing them into higher tax brackets with no rise in living standards just higher taxes. Comparing the beginning of the 70’s with the end of the 70’s is comparing two different economies.

Before Carter economists thought there was a trade off between unemployment and inflation. They did not believe you could have a period of high unemployment and inflation. Carter proved them wrong. They had to create a new term for it, stagflation. And they created a way to measure it called the misery index where you add the inflation and unemployment rate. The misery index was far lower when Obama took office then when Reagan took office, Reagan inherited the bigger mess and fixed the problem not the blame. The fact that someone would even suggest that Carter was thrown out merely because the job creation was slightly slower shows just how much the left is willing to lie to protect Obama.

Why Obama’s minions do not want us to compare Obama and Reagan:

You don’t get it because you don’t want to get it. Obama is president of an economy that has imploded as the result of 30 years of Reaganomics.

What? You think that every time a President takes office there is an economic “reset button”? Like he’s not inheriting the results of decades of prior and in-place economic policy?

I think you might which is why I always question your lack of understanding of long-term trends and the effects of long term policies. You are blind to them when they contradict your narrow view of the world.

That you would equate jobs created under Obama after 30 years of ReaganOmics with jobs created under Reagan (before ReagonOmics destroyed our jobs base) shows that you lack understanding of trends and policy ramifications. And it’s because of your now-proven-to-have failed economic trickle-down dogma.

Trickle down failed. Obama and America are living it. And the Repubs won’t change it or let anyone change it. Enjoy.

Reagan inherited the bigger mess and fixed the problem not the blame.

Reagan inherited a much better situation than Obama.

When Reagan took office in 1981:
1. We were not in 2 very expensive wars
2. Reagonomics had not yet gutted USA manufacturing
3. There was not the health-care crisis
4. Before Reaganomics there was much less wealth/income disparity. Thus a base of demand for products.
5. The rich paid their fair-share of taxes
6. Corporations paid their fair share of taxes
7. Reagan did not inherit a very expensive post 9-11 police state
8. We were a younger population
9. Higher education was affordable
10. There was no bursting of housing bubbles
11. The financial industry was properly regulated
12. The country’s debt was only 33% of what it would be at the end of Reagan’s presidency.
13. There was no credit bubble
14. ……And girls had big hair (I didn’t want to stop on 13)
15. Very little offshoring - There were more private unions and pay was generally a lot higher for the middle class
16. Reagan had great cooperation from the Democrats especially the Speaker of the house Tip O’Niell.

Going on about Reagan just shows how old you are. There is no trickle down anymore. No Chicago school, or even Keynes. What is the dominate economic theory in Washington? Or of this group or that? It doesn’t exist, except on websites. Or white papers from think tanks. The only economics for the past several years is Globalism/Central Bank-ism. Create money, and push it out into the economy in one way or another. It churns from one part of the world to the other, round and round. Next day, do it again.

Sure, we can grow the economy by driving house prices up. Why not, it worked a few years ago. Punish people who save too! That’ll have them hopping into profitless IPO’s lickety-split. That worked a few years ago too.

I remember when there was an economic debate, with different camps. Now we all just sit around and watch, hoping to get a little crumb from the “serious people” in charge.

When was the last time we saw what is going on at the WTO? I mean, actually saw a breaking news report from a meeting, or election or anything? Is this thing on auto-pilot?

Globalism and what these central banks do now determines everything. Is it a revolving door with the multinational corporations? I don’t know, that doesn’t get reported either.

What I see here is a lot of squabbling over ancient history, while these bastards are robbing us blind.

What I see here is a lot of squabbling over ancient history,

Your points on Globalization are good but many of those points are caused by one of the philosophies of trickle-down. But saying there is no more trickle-down is wrong.

Look around America today. The America economy today is the direct result of 30 years of Reagonomics.

Here’s proof:
“Trickle-down’s” core tenant is to put a lot of money in the hands of the rich, throw in offshoring and the rich will invest and create jobs and everyone will be better off.

We did it and half of the “theory” worked - the rich are way richer than when America bought into Reagonomics 30 years ago.
But half the theory failed. The wealth did not trickle-down to the rest of us. The rich got way richer because wealth was redistributed from the middle class to the rich. It was a farce but a farce Americans are living today.

Reaganomics-trickledown-supply-side-globalization is the dominate economic theory that America is living.

You’ll notice neither party in DC is against it.

People in China and Brazil are more wealthy. But isn’t it interesting that there are real estate bubbles in all of the BRIC’s?

Re-casting an 80’s debate into what we are facing today is likely to get us nowhere.

What I see here is a lot of squabbling over ancient history, while these bastards are robbing us blind.

I agree Ben other than the fact that the history helps determine the path out of this. Reagan was the last President that did not think the path to prosperity was to print money and he created prosperity with tight or a responsible amount of money creation. It is the Globalism/Central Bank-ism that is the problem and no president has practiced it more than Obama. When people complain they are told that it is the only path to prosperity. It isn’t, and Reagan is hated due to his successful path in an entirely different direction.

Many of the Republican leaders who stomped their feet during the recent budget showdown, including House Speaker John Boehner, R-Ohio, were among those who favored the Bush tax cuts, the costly invasion of Iraq and bank deregulation. In other words, they were denouncing President Obama for a debt crisis that they helped create.

QFT

Will you guys ever wake up to the fact that corruption(regulatory capture is a great euphemism for it) is rampant through both sides of the aisle? If you’re spending your time rooting for one team or the other, you’re part of the problem.

Either that, or you’re in some way benefitting from the corruption i.e. you’re part of the problem.

The game is to divide the middle and lower classes and keep them fighting amongst themselves over petty differences while the powerful and wealthy run off to the bank with all the money. The ruling class in every society has done this since the Egyptians with few exception.

Only now they’ve bought the bank and the rights to privately counterfeit create new money, and you still actually think it’s worth arguing over whether Quanesha spends her food stamps on Kraft Dinner or Lobster.

All I can say is wow, you’re really dumb.

Re-casting an 80’s debate into what we are facing today is likely to get us nowhere.

I don’t understand. Today’s structurally broken USA economy is the direct result of “Supply-Side” winning the 80’s debate and being the dominant theory practiced the past 30 years.

It failed. It is our current problem. It has to be discussed.

Reagan’s supply side proved to funnel middle-class money to the rich. It did not work.

We need to get back to Demand-Side where more money is put in the hands of the middle-class, thus creating demand.

The rich don’t “create jobs” as we were told. In general they hoard it. A strong middle-class (Demand) creates jobs.

What I see here is a lot of squabbling over ancient history, while these bastards are robbing us blind.

What he said.

‘It has to be discussed’

It has been discussed, for 30 years, and the current system just becomes more entrenched. I’m no political strategist, but if I was to go out and try to convince people to change things, and I started talking about Reagan or trickle down, they would roll their eyes and walk away. At some point we have to stop assigning blame to people who have been dead for decades and work on what’s wrong right now.

I can find wide agreement that allowing corporations to take jobs over-seas was a mistake. Isn’t it interesting that no major politician takes up that cause? Why? Because the establishment would bury that person. What’s ruining the economy is the establishment. If we’re to turn this thing around, we have to quit letting the reds and blues divide us, and unite on what many of us would agree is the primary problem.

Reagan was the last President that did not think the path to prosperity was to print money

Maybe Reagan didn’t think it, but he did it. Reagan almost tripled the national debt. Wake me up when Obama even doubles it. Reagan turned USA into a debtor nation. USA has not been a creditor nation since Jimmy Carter

(Under Reagan) the U.S. borrowed both domestically and abroad to cover the Federal budget deficits, raising the national debt from $997 billion to $2.85 trillion.[18] This led to the U.S. moving from the world’s largest international creditor to the world’s largest debtor nation.[19] Reagan described the new debt as the “greatest disappointment” of his presidency.[2

we have to quit letting the reds and blues divide us, and unite on what many of us would agree is the primary problem.

The fight for the middle-class is “a hill to die on”. And the middle-class is almost killed. What if the primary economic problem is that 30 years of “Supply-side” killed the middle class? (Which I firmly believe is)

How are you ever going to get the far reds to understand the major problem when their puppet masters mislabel any remedy to supply-side as “socialism” - and refuse to allow any policies favoring the middle-class over the rich?

On economics, the far reds are never going to unite with the far blues. Ever. But I think the purples (middle) are starting to wake up to supply-side’s abject failure. And to get to the purples, you have to let them know what the heck happened the past 30 years - and forget about the far reds - they are as irrational as the far blues.

‘the far reds are never going to unite with the far blues’

Here’s what I think would work. Start off with a group/plan to get the US out of the WTO, and maybe NAFTA too. Just tell people, we’ve got disagreements. We can go back to feuding over those disagreements after we stop the economic bleeding.

Lola has to be right. H/she is a high net worth individual. Or so he can claim until his losses on that Brazilian crapshack are realized.

All this bitching about Reagan by Lola, but if you believe his lies then he was this great capitalist job creator businessman who did well enuf during this last 30 year period of economic destruction to now be a high net worth individual. It makes no sense, just like the rest of his lies.

I think he is a disgruntled fired air traffic controller holding a 30 year grudge.

Moral Hazard, you’re thinking like a CEO obsessed with hitting the quarterly numbers. Oil is long-term. The Chinese want that nice little patch of rock, with its oil safely stored in it right where the gods put it, for their own. Let the foolish Americans beat their chests and burn up their supply! The Chinese will bide their time, and when Mad Max shifts from future to present, they can dribble out their black gold and defeat the Americans without firing a shot. Just as they were taught.

And that is why I’m in no hurry to drill in ANWR. 50 years or more from now, that oil will still be there…And I’m guessing that the technology to get it out safely will be better and the oil will be worth more, so why not burn more Saudi crude in the mean time?

I actually have had that belief for decades. However, I think that the time to get maximum value out of it is probably now. Within thirty years, I do believe alternative energy will have dropped in price so much that it will be cheaper in real terms than presently priced oil. I think the value of the oil today is so high that we can and should require that the best technology is used to extract the oil safely. If we start today it would still take ten years to get production so the window is beginning to close rapidly.

OilHeads continue to look in the rearview mirror.

My oh my are the next two decades going to be a shocker for you.

I think there is a pretty strong relationship with scarcity and value.

also when your calculating value your thinkn is the next guy who has what you want going to find value in what you have to offer.The only reason you take that dollar bill as payment is cause you know the next guy will take it for what you want. Once that chain is broken those bills are worthless.

Don’t tell me we aren’t only running out of houses, but now also toilet paper as well!?

“Bitcoin is.”

For the moment, at least.

Store credit without the store.

Well, you know, come to think of it, toilet paper has probably never been used to facilitate an illegal or illicit transaction, so it’s probably more of a legit currency than Bitcoin, according to Weidner’s column. Then again, that would make toilet paper more of a legit currency than just about any currently accepted medium of exchange.

I bet somewhere someone really needs to wipe badly. what if you were out in the ocean on a boat. for a period of time that toilet paper has some real value because it is scarce. how much value does a roll of tp have vs a 100 mile trip back to land or a quick shower?

There’s someone on HBB we can ask… but he’s an old freshy(?), not an old salt.

This captain does not advise other adults on matters of personal hygiene, some things a person just has to figure out for themselves. Be prepared, have options and stay off the rocks.

Hey folks, just get your info from MarketWatch, because those guys really know what they’re talking about, yessir.

And now she’s stuck with a rapidly depreciating asset that bled her dry.

Houses are never “investments”. Houses depreciate rapidly and are a loss ALWAYS.

Your mother bought before prices became OVERINLFATED. She did well. If you buy now and pay more than what it cost to build in the late 90’s you’re throwing your money away. If you borrow to buy now your killing yerself. Mortgage interest deduction is a ruse.

And now she’s stuck with a rapidly depreciating asset that bled her dry.

Everything about your sentence is false. Everything.

And now she’s stuck

Stuck? How so? She could sell it for a lot of money. If she priced it 15% below recent comps, she could sell it and be out in a couple months.

a rapidly depreciating asset

“rapidly depreciating” It’s a house, not sushi or unrefrigerated milk. It’s kept pace with inflation for almost 40 years. While providing shelter.

that bled her dry
“bled her dry”? It has been one of the joys of her and her family’s life. For almost 40 years. And financially, it has no more “bled her dry” than renting. And now she has an asset.

In my mom’s case everything about your above sentence is wrong. Your thinking is one-track.

If you buy now and pay more than what it cost to build in the late 90’s you’re throwing your money away.

Not if you can buy for less or about the same as renting right? Isn’t that what everyone was saying here in 2006? Why has that changed now?

Not necessarily Puggs. When his mom bought before prices were overinflated, INTEREST RATES were overinflated, so PITI probably wasn’t that much different, relatively speaking.

The house I bought cost more than that magical 2.5x income, and yet my PITI is still less than the magical 28% gross income.

Don’t be silly Donkey. The price/interest ratio isn’t linear. (I know you wish it were)

Yes houses depreciate…But they do provide the “in kind” dividend of HOUSING. And if you’re not selling what do you care what the “price” of the house is? I don’t. Higher prices just mean more taxes, so the bubble didn’t do me any favors. (although the lower interest rates that the bust brought did) Having paid off my house a year ago, my housing costs are significantly lower than rent, and have been for years. And rent/price ratios are pretty competitive with Dividend/Price ratios on the stock market.
The idea that housing is ALWAYS a bad purchase is JUST as stupid at “RE always goes up.” Price, people, price MATTERS.

Rio, it is very, very hard to do, but I believe the best response to HA is no response at all. The rest of those on this blog whom HA has not already driven away will thank you for it.

I believe that is anal-yst. I agree with your assessment. Anyone who repeatedly uses the words always and never is ignorant of the facts.

The rest of those on this blog whom HA has not already driven away will thank you for it ??

I hope they come back….Don’t engage with him…Ignore his post…Just scroll right by them…

Yes… please ignore. But you won’t be.

“My mother lives in a beautiful place, paid off the past about 14 years and for 20 years of her 25 year mortgage”

Woo hoo, your Mama bought 39 years ago, that is relevant to now how? Might as well be talking about the civil war.

I just want to know if Weidner would prefer to get paid in toilet paper than dollars, since toilet paper doesn’t have much of a potential to be used to facilitate illegal or illicit transactions.

On another note, it’s not like I haven’t made some real boner statements myself. But I don’t get paid to make them. And people don’t take them seriously anyway.

can you finance physical gold? Lets say i wanted to own an oz of gold. Is there anyone who would sell it to me on payments?

can you finance physical gold?

Yes. And all PM’s.

http://www.monex.com/

Lola…. Back for more schooling today?

I don’t want the garbage to tell you the truth. what I am saying is basically the taxpayer is going into more debt so the stock market can go higher. is that anyway to have a recovery?

thats true dude. but the whole basis of this recovery is the FED printing money, buying treasuries so the govt has more money to spend. that borrowed money has to be paid back. of course this scheme can go on basically forever by issuing more treasuries to pay off maturing treasuries. it seems like one big game of shuffling treasuries.

Well… I thought about hittin’ up Liberace and Lola but they’re a dedicated pair.

But they are looking for a threesome with Obama.

‘Invesco Mortgage Capital Inc. (IVR) bought all of the residential mortgage-backed securities created last month in a $300 million deal without government backing, amid lower demand for the top-rated portions of such transactions that’s stunted a revival in the non-agency bond market.’

‘While issuance of non-agency securities tied to new loans has climbed to about $13.4 billion in 2013 from $3.5 billion in all of last year, the pace has slumped since July, as investors demanded higher yields and banks retained more loans, according to data compiled by Bloomberg.’

‘Analysts at Bank of America Corp. and Credit Suisse in 2014 outlooks published last month forecast a drop or little change in issuance, after the AAA securities went from being sold at the same or higher prices than similar U.S.-backed agency mortgage bonds earlier this year to about four cents on the dollar less than debt with comparable coupons.’

http://www.bloomberg.com/news/2013-12-03/invesco-mortgage-purchases-all-of-bond-deal-as-demand-declines.html?cmpid=yhoo

Thanks for that link Ben.

All signs point to higher long-term rates in the relatively near future…got taper?

Sorry education is filled with self-proclaimed Marxists.

Education is filled with self-proclaimed “capitalists” too.

But fine:
Elaborate on how American schools indoctrinate and promote dialectical materialism?

Says the self proclaimed member of the petite bourgeoisie

Why tell an untruth? When did I ever describe myself in that term?

Why when I always outdo you in facts, you lie and call names?
(It takes awhile but it’s predictable.)

Face facts:
America is in it’s lousy shape because supply-side failed. We did it, it didn’t work. America is living the results of Reagan’s faulty ideas. I think Reagan truly loved America. He was just too intellectually limited and scarred to know his ideas would sink the country he loved.

Reagan was a soldier of a real war - the Cold War - which somewhat understandably warped his ideology too far in one direction - a sort of economic theory PTSD.

anarchist socialists

Isn’t that an oxymoron?

Per wikipedia: “Anarchism holds the state to be undesirable, unnecessary, or harmful”

No actually it is an actual political term. They believed that centralized government was bad and would always lead to tyranny. However, they believed that means of production should be in the hands of the workers. So the workers ran the factory and had a democracy at the factory level. You do not hear about them because like I said they were shot very quickly when the Lenin type Marxists came to power.