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View Poll Results: Do you support the housing bailout legislation?

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    6 25.00%
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    15 62.50%
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Thread: Housing bailout

  1. #31
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Wolf View Post
    Looks like we're headed for a Japanese-style real estate market for the next two or three decades, where the prices remain flat or fall for extended periods, but very, very slowly. I was hoping for a quick correction, but I guess they screwed that up and charged me for it to boot.

    I'm pissed, too.
    Two or three decades? I doubt that. The US still has a growing population.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  2. #32
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    Quote Originally Posted by Lateralus View Post
    Two or three decades? I doubt that. The US still has a growing population.
    Yeah, of people that could never afford to buy a house. We already have pressure keeping it from falling, but they have the same thing plus extreme inflation (which we are working with right now).

    It still needs to drop considerably before we hit the old equilibrium point. I suspect that housing will be seen as a remarkably-poor investment for the next decade or two, but thanks to this the bottom won't fall out to bring it back into equilibrium as quickly and we won't get the renter conversions which would have started once it dropped enough in most areas (after all, there's no incentive to sell if the government is paying your mortgage, and without that portion of the market, the prices won't drop). Around here we're still 30-50% of price drops from the point where the market will hit a soft bottom...
    I 100%, N 88%, T 88%, J 75%

    Disclaimer: The above is my opinion and mine alone, it does not mean I cannot change my mind, nor does it guarantee that my comments are related to any deep-seated convictions. Take everything I say with a whole snowplow worth of salt and call me in the morning, if you can.

  3. #33
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Wolf View Post
    Yeah, of people that could never afford to buy a house. We already have pressure keeping it from falling, but they have the same thing plus extreme inflation (which we are working with right now).
    Of people who could never afford to buy a house? I know you live in California and that's like living on a different planet. Try to understand that most of the rest of the country has more affordable housing prices. That's not to say they're not still overpriced, just that they're not overpriced nearly as much as California. California has some other problems that drive up housing prices, like excessive zoning laws, taxes, and environmental regulations. These all make home ownership more expensive.

    It still needs to drop considerably before we hit the old equilibrium point. I suspect that housing will be seen as a remarkably-poor investment for the next decade or two, but thanks to this the bottom won't fall out to bring it back into equilibrium as quickly and we won't get the renter conversions which would have started once it dropped enough in most areas (after all, there's no incentive to sell if the government is paying your mortgage, and without that portion of the market, the prices won't drop). Around here we're still 30-50% of price drops from the point where the market will hit a soft bottom...
    That varies from market to market. California, Florida, and some other regions are in need of larger corrections than many regions in the Midwest. Kansas City didn't have nearly as many speculators as south Florida or southern California.

    There are other factors at play.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  4. #34
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    But if you bail out the speculators, there is no incentive for them to sell until they can get what they paid out of it.
    I 100%, N 88%, T 88%, J 75%

    Disclaimer: The above is my opinion and mine alone, it does not mean I cannot change my mind, nor does it guarantee that my comments are related to any deep-seated convictions. Take everything I say with a whole snowplow worth of salt and call me in the morning, if you can.

  5. #35
    Senior Member Lateralus's Avatar
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    Quote Originally Posted by Wolf View Post
    But if you bail out the speculators, there is no incentive for them to sell until they can get what they paid out of it.
    Umm, there is still plenty of incentive for them to sell. None of them are going to get what they paid for a property if they bought it near the peak. The longer they hold a property, the more expenses they'll incur (mortgage interest, taxes, insurance, etc). So unless they have a renter, they're still losing money. However, they will be losing less money because the government will end up absorbing some of the losses for them and the lenders.

    So, they'll still want to sell. They just won't lose as much when they sell. We are forced to cover part of their losses.
    "We grow up thinking that beliefs are something to be proud of, but they're really nothing but opinions one refuses to reconsider. Beliefs are easy. The stronger your beliefs are, the less open you are to growth and wisdom, because "strength of belief" is only the intensity with which you resist questioning yourself. As soon as you are proud of a belief, as soon as you think it adds something to who you are, then you've made it a part of your ego."

  6. #36
    Senior Member Lateralus's Avatar
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    Here's a good article on why Republicans suck, related to the credit crunch.

    More Awful Truths About Republicans - Robert B. Ekelund and Mark Thornton - Mises Institute

  7. #37
    Order Now! pure_mercury's Avatar
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    Quote Originally Posted by Lateralus View Post
    Here's a good article on why Republicans suck, related to the credit crunch.

    More Awful Truths About Republicans - Robert B. Ekelund and Mark Thornton - Mises Institute
    I had breakfast with Lew Rockwell (Founder and President of the Ludwig von Mises Institute) a few times at a Future of Freedom Foundation conference in June. Interesting man, although he and Murray Rothbard were apparently the authors of the racially-charged material in Ron Paul's newsletter in the late-'80s and early-'90s. That is disappointing.
    Who wants to try a bottle of merc's "Extroversion Olive Oil?"

  8. #38
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    Quote Originally Posted by pure_mercury View Post
    Bailing lenders and borrowers out will encourage more poor business practices later. Plus, I resent that my tax money will go to fund this.
    Quote Originally Posted by Wolf View Post
    Nope, basically no victims (except the stupid, and theoretically dealing with stupid people is not a crime), unless you consider criminals victims.

    However, I would totally support legislation that punished loan originators for bad loans they originated (including them shouldering a portion of the defaulted loan value) and some method of punishing bad appraisers, since both were working together to defraud people.
    Agreed. Couldn't have said it better myself.

  9. #39
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    A market economy cannot work if reckless people are shielded from the pain of the natural consequences. The behavior will simply be repeated in the future.

    Keep in mind that a bailout is not a magical solution. It will result in real inflation, which will secretly wipe out the accounts of those who scrimped and saved for their future.

    In effect, we are punishing the responsible and rewarding the reckless.

  10. #40
    Senior Member Enyo's Avatar
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    Quote Originally Posted by pure_mercury View Post
    Losing money is the market's way of telling you "Don't do that anymore!" Bailing lenders and borrowers out will encourage more poor business practices later. Plus, I resent that my tax money will go to fund this.
    ^This. Not only that, but this whole thing is a natural correction. The value of housing rose far too quickly because of inflated assessments and appraisals, and is now correcting itself to be as it should have been, anyway.
    "If you can't be a good example, you'll just have to serve as a horrible warning." Catherine Aird

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