People Are Freakin' Ignorant

[Tigerjaw]

Quote from Smart Money:

So...if the government were to implement economic incentives to increase the demand for housing, thereby increasing the property values, that would be ignorant?

They were talking about somehow directly "doing something" to maintain housing prices. Bernanke paused a second or two after being asked the question - - he must have been thinking "I'm dealing with morons." - - and said that the government didn't have the ability to do such a thing. They seemed to be talking about some kind of price controls, and those do not work.

Housing prices rose in a bubble driven by cheap money. The bubble has burst. The houses are finding their true value in the market. There's no free lunch. The piper must be paid for the stupidity. The question seems to be who's going to have to pay for that stupidity - - the people who made those decisions, or all of the rest of us. There was plenty of demand before, the problem was with the ability to pay. And so, here we are. - - - If we had a world where people weren't trying to pass the hot potato to someone else what would happen ? Those over extended would stop wasting personal resources & dumping money into housing they should never have tried to buy. They'd learn their lesson, become frugal, rent for awhile, and maybe later buy a house they could afford at true market value. Everyone else would have more money available for other products and for investment rather than have it siphoned off in additional taxes to pay for what others did to themselves. - - - Again, there is no free lunch - - - but many people don't seem to get that. - -

P.S. - - I would fully support a new Trader Recovery Act, however. That would allow me to pocket all trading gains, but provide 'government incentives' for any loss due to unforeseen economic circumstances. I assure you, under such a program I wouldn't be a burden to society or riot in the streets during my retirement years ! In addition, I have become a political opportunist and would vote for any candidate or party who would offer such a program.

 

[achilles28]

Quote from gnome:

Correct. Gummint/Fed supported the housing bubble until that at the margin homes could only be afforded by gimmick financing.

Now that such financing is removed, house prices are still too high to be affordable vs. income. Yet, the Gummint is trying to prevent housing from coming down to affordable levels.

Even if/when they succeed in liquifying the credit markets, incomes are STILL going to be too low to afford artificially high home prices for the marginal buyer.

The Gummint/Fed screwed up by promoting the housing bubble (not an accident.. they did it on purpose... for all the usual greedy reasons). Now they are screwing up again by not allowing that past bad judgement to deflate.

How will we EVER survive these bastards..

We won't. Good points.

Inflated values won't help owners make payments they can't afford. Nor will it help new people get into homes, as Gnome mentioned.

I've heard America is going Iceland, within 12 months.

 

[Tigerjaw]

Quote from achilles28:

We won't. Good points.

Inflated values won't help owners make payments they can't afford. Nor will it help new people get into homes, as Gnome mentioned.

I've heard America is going Iceland, within 12 months.

Its easy to fix the income problem. Just make a new law instantly adding two or three zeros to everyone's income.

See, - - this is damned easy. I outta run for office.

 

[killthesunshine]

Quote from Tigerjaw:

They were talking about somehow directly "doing something" to maintain housing prices. Bernanke paused a second or two after being asked the question - - he must have been thinking "I'm dealing with morons." - - and said that the government didn't have the ability to do such a thing. They seemed to be talking about some kind of price controls, and those do not work.

Housing prices rose in a bubble driven by cheap money. The bubble has burst. The houses are finding their true value in the market. There's no free lunch. The piper must be paid for the stupidity. The question seems to be who's going to have to pay for that stupidity - - the people who made those decisions, or all of the rest of us. There was plenty of demand before, the problem was with the ability to pay. And so, here we are. - - - If we had a world where people weren't trying to pass the hot potato to someone else what would happen ? Those over extended would stop wasting personal resources & dumping money into housing they should never have tried to buy. They'd learn their lesson, become frugal, rent for awhile, and maybe later buy a house they could afford at true market value. Everyone else would have more money available for other products and for investment rather than have it siphoned off in additional taxes to pay for what others did to themselves. - - - Again, there is no free lunch - - - but many people don't seem to get that. - -

P.S. - - I would fully support a new Trader Recovery Act, however. That would allow me to pocket all trading gains, but provide 'government incentives' for any loss due to unforeseen economic circumstances. I assure you, under such a program I wouldn't be a burden to society or riot in the streets during my retirement years ! In addition, I have become a political opportunist and would vote for any candidate or party who would offer such a program.

the world is full of guys like you 'armchairing' the economy after the fact.

shut up and watch your Sunday NFL games

 

[Now is Now]

Quote from gnome:

Depending upon how deep your NWO conspiracies run, you could make an argument that all of this mess and bailout was intentionally orchestrated ...

NWO doesn't want chaos...they would prefer to create it....we beat them to the punch with housing alone.

A rent/purchase arrangement cannot really work as those that may be interested may not have a job for long and it will do virtually nothing to establish a bottom in the values at present as they are still way too high.

Let the free market work and simply take our lumps.

 

[Tigerjaw]

Quote from killthesunshine:

the world is full of guys like you 'armchairing' the economy after the fact.

shut up and watch your Sunday NFL games

Democracy is about the ongoing conversation. No conversation, and the citizenry is run over roughshod by their government. Actually, many people have been speaking about the very issues that we are dealing with as a nation for many years. (I'm sure you could find many of my friends who could testify to being bored by me on these topics going years back.) IMO our only hope is in the battle for peoples minds and opinions. Much of this may be 'preaching to the choir' & venting on this website. But, it may just cause someone else to pause and think a little bit before supporting some of these proposals.

So, do you have something enlightening to add to the conversation - - - or was that it ? What would you like to see done, and why ?

P.S. - - I do like football, but don't have the time or patience to sit and watch a game for hours.

 

[achilles28]

Quote from Tigerjaw:

Its easy to fix the income problem. Just make a new law instantly adding two or three zeros to everyone's income.

See, - - this is damned easy. I outta run for office.

You've got Jprads vote!

 

[swtrader]

Quote from gnome:

Depending upon how deep your NWO conspiracies run, you could make an argument that all of this mess and bailout was intentionally orchestrated ...

there's no question the greenspan deliberately created the housing bubble - no doubt at all. and no doubt that the fed reserve is international bankers. they dont even deny it to anyone who bothers to ask what it really is. most americans see FEDERAL reserve, and that's enough for them.

i know that in corporate situations, 'seeming incompetance' is a tactic of many vp's. they seem dopey, but all the errors fall in their favor.

hard to tell what the endgame is here, but anyone who does the math knows the the bailout just left the American citizen enslaved to foreign nations for organizations that dont even have a passing interest in the citizen's welfare

no iffs ands or butts about it

 

[killthesunshine]

Quote from Tigerjaw:

Democracy is about the ongoing conversation. No conversation, and the citizenry is run over roughshod by their government. Actually, many people have been speaking about the very issues that we are dealing with as a nation for many years. (I'm sure you could find many of my friends who could testify to being bored by me on these topics going years back.) IMO our only hope is in the battle for peoples minds and opinions. Much of this may be 'preaching to the choir' & venting on this website. But, it may just cause someone else to pause and think a little bit before supporting some of these proposals.

So, do you have something enlightening to add to the conversation - - - or was that it ? What would you like to see done, and why ?

P.S. - - I do like football, but don't have the time or patience to sit and watch a game for hours.

i'm pretty much done

 

[Smart Money]

Quote from bozwood:

that's right, we should make most all gains not subject to capital gains. oh wait, we did that. well, how about we push mortgages to people just so they will buy a house and, therefore, support housing prices, banks, and the american dream? oh wait, we did that too. how about we push money out through govt sponsored entities with implicit federal guarantees so that they can borrow at a lower cost and allow more people to enjoy the american dream while at the same time supporting higher housing prices? wow, we tried that too. finally, how about we take interest rates to artificially low levels so that prices for houses go up and everyone can buy more house and borrow more of that *real* equity? holy cow, that was tried too.

all of this worked so well 3 yrs ago (obviously so far in the past that people forget the outcome; oh wait, we are living it now), so let's do it again; that's not ignorant at all is it?

All true. You've underscored my point that the government can take a role in effecting housing prices in the upward direction. Thank you. Which brings us full circle on the original question. Why doesn't the government do something that will keep the housing prices propped up? And what is wrong with (again) propping it up in spite of the current mess? Then taking those "props" away slowly?

SM