How Obama causes thge housing recession.

[Avorysuds]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

Oh bullshit.

George W. Bush started the housing bubble by dropping interest rates to zero, allowing unregulated lending companies to do subprimes and allowing financial institutions to bundle them up and sell them on the big board.

Oh Bullshit Clinton... Wait, Clinton was a Democrats, so you are not capable of listening.

While I understand the role Republicans and Bush played in the housing bubble, I also understand that the OP is correct in that Obama has done everything to keep prices artificially inflated.

You quite literally can’t blame Bush for getting people into homes that shouldn’t be but then want to be taken seriously by not giving Obama blame for keeping people in homes that shouldn’t be… It’s the same problem only extended and with more Government money (debt) involved.

 

[Avorysuds]

The OP's title should have been " How Obama extended the housing bubble & recession."

 

[EdwardBaiamonte]

Corporate executives are saying that several new policies such as healthcare reform and Dodd-Frank have increased uncertainty and thus investment and the recovery.

so are you a tool now who believes what ever corporations tell u?

If corporations are telling us that they are not investing because of the uncertainty of their future cost structure caused by new government regulations, yes I believe them.

a liberal Marxist would have us believe they are not investing and making more money because they are evil.

In truth they are not investing because people aren't buying much while we're in a housing depression. Uncertainty about the new socialist regulations from the new socialist president who voted to the left of Bernie Sanders is also a big factor.

 

[itfitzme]

BO's programs all slowed down the eviction process. Banks had to get the paper work just right and then try various programs to see if folks could stay in their homes. None of these worked and so we have BO's depression.

Oh, you mean they had to actually had to have the paperwork, the standard legal mortgage documents, that they that decided not to bother with when they were packaging and reselling them like crazy during the housing boom? How is that any ones problem but the banks? Last I heard, legal contracts are the foundation of our capitalism economy.

 

[itfitzme]

It's going to get much worse. Have you seen the new "green" regulations for new construction? They will add a minimum of $25,000 to all new homes.

So let's see. At the peak of the housing boom, when investors had driven the medium price of houses far beyond the "real" market rate, the median house price was $260k. Just as an estimate, a straight line regression put the "real" market value at about $212K. So houses were overpriced by about $48k. And yet, the demand was tremendous. So exactly how is $25k going to be an issue?

And no, I haven't seen the new "green" regulations for new construction. What exactly are they?

 

[itfitzme]

We had a housing collapse in 1990 as well, starting with a change in tax law in 1986.
The 2000 recession was only 8 months long. And it was marked also by a large amount of gov't intervention.
As James Grant writes in The Trouble With Prosperity, the more the gov't tries to ameliorate the effects of a recession, the worse they make the recovery. This is why this recession's recovery has been so anemic.

The 2000 recession didn't last very long because Bush wasn't in office long enough to lead the country into the worst recession since the Great Depression.

Actually it didnt last long because Bush has a GOP Congress to deal with. Things went downhill after '06 and the Dums got in power, screwing everything up. A trend they've continued.

Employment level and the labor force participation rate began to fall in 2001. Every indication is that the underlying economic problem began then and was only masked by the output created by the housing bubble. All I'm saying here, really, is the economy ran out of tricks for sustained growth in 2001, with the exception of the housing boom. Let's face it, we've had new products since then, but no substantially new technologies. All we have really seen were increased efficiencies in the technologies that predated 2001. Even the internet was pretty much tapped out as a new technology by then.

Even so, it seems pretty weak to say that everything was all great right up to 2006 and then suddenly the Dems crashed the economy by late '07. This would be the first time I've heard this theory. You must be the only one proposing it because, one way or the other, every other theory revolves around the housing bubble, in one way or another, something that began either as a result of CRA or simply a free market investment bubble, neither of which started as late as '06.

You really need to back up this extraordinary claim with some details.

I can show you a series of data sets that all begin new trends in 2001, employment and the labor force being two of them. Real oil prices also began to climb in 2001.

Honestly, I think your partisan bullshit has you completely unable to recognize that there were, and are, economic processes at work that have absolutely nothing to do with the Fed, or any political party ideology.

 

[itfitzme]

The 2000 recession didn't last very long because Bush wasn't in office long enough to lead the country into the worst recession since the Great Depression.

Actually it didnt last long because Bush has a GOP Congress to deal with. Things went downhill after '06 and the Dums got in power, screwing everything up. A trend they've continued.

Home prices did not go anywhere near as crazy in the 80s and 90s as they did in the 00s. The decline was nowhere near as dramatic in the 90s because valuation never got as nuts.

Case Shiller Home Prices | Flickr - Photo Sharing!

It's not always about politics.

I have to agree with you here. In looking at the two, the bubble of the '90s kind of just went flat, dipping by about $7k and holding at about $120k until the underlying trend caught up to it in 1992.

This last bubble plummeted by about $60k over two years, falling below the straight line projected trend. The median price should be about $240k and is sitting at about $213k now.

------

Another point about this Great Depression II, is that it was the first time since the Great Depression (1932) that the monthly rate of inflation every hit -2%. That level of deflation is extra ordinary. The average rate of monthly inflation, since 1950, is 0.31%. The standard deviation comes in at 0.36%. Getting anything less then 0.31% - 3 * 0.36% = -0.78% is one in 100. Getting below -1.14% is completely impossible under any normal circumstances. There is no doubt that this recession was an extra ordinary event outside the scope of anything we have experienced in the past half decade.

 

[The Rabbi]

The 2000 recession didn't last very long because Bush wasn't in office long enough to lead the country into the worst recession since the Great Depression.

Actually it didnt last long because Bush has a GOP Congress to deal with. Things went downhill after '06 and the Dums got in power, screwing everything up. A trend they've continued.

Employment level and the labor force participation rate began to fall in 2001. Every indication is that the underlying economic problem began then and was only masked by the output created by the housing bubble. All I'm saying here, really, is the economy ran out of tricks for sustained growth in 2001, with the exception of the housing boom. Let's face it, we've had new products since then, but no substantially new technologies. All we have really seen were increased efficiencies in the technologies that predated 2001. Even the internet was pretty much tapped out as a new technology by then.

Even so, it seems pretty weak to say that everything was all great right up to 2006 and then suddenly the Dems crashed the economy by late '07. This would be the first time I've heard this theory. You must be the only one proposing it because, one way or the other, every other theory revolves around the housing bubble, in one way or another, something that began either as a result of CRA or simply a free market investment bubble, neither of which started as late as '06.

You really need to back up this extraordinary claim with some details.

I can show you a series of data sets that all begin new trends in 2001, employment and the labor force being two of them. Real oil prices also began to climb in 2001.

Honestly, I think your partisan bullshit has you completely unable to recognize that there were, and are, economic processes at work that have absolutely nothing to do with the Fed, or any political party ideology.

No, everything was going along great until Reagan took office. Then the economy collapsed. But we didnt see that until 2007.
Get your screwed up story right, ya hack.

 

[rdean]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

Don't worry, Romney has a "solution". A "final" solution:

Romney says foreclosures should "hit the bottom" - Boston.com

LAS VEGAS—Mitt Romney came to the state with the highest foreclosure rate in the nation and said he wants to allow home foreclosures to "hit the bottom" to help the housing industry recover.

In an interview published Tuesday ahead of presidential debate, Romney told Las Vegas Review Journal's editorial board that solving the foreclosure crisis would require letting banks proceed against homeowners who have defaulted on their mortgages. New investors could then rent out the homes until markets adjusted.

---------------------

See how neat and tidy his solution is? Kick people out of their homes and then "rent" them.

 

[The Rabbi]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

Don't worry, Romney has a "solution". A "final" solution:

Romney says foreclosures should "hit the bottom" - Boston.com

LAS VEGAS—Mitt Romney came to the state with the highest foreclosure rate in the nation and said he wants to allow home foreclosures to "hit the bottom" to help the housing industry recover.

In an interview published Tuesday ahead of presidential debate, Romney told Las Vegas Review Journal's editorial board that solving the foreclosure crisis would require letting banks proceed against homeowners who have defaulted on their mortgages. New investors could then rent out the homes until markets adjusted.

---------------------

See how neat and tidy his solution is? Kick people out of their homes and then "rent" them.

We see how well Obama's solution--keeping people who can't pay in homes they can't afford--has worked.
Yes, Romney is right. Prices need to drop and hit bottom before we can have any kind of recovery.
This is Econ 101. No wonder you dont know about it.

 

[JoeNormal]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

How do you figure? The banks currently have about a 10 year backlog that they're holding on to because they don't want to accelerate the devaluation. The housing market is not going to clear anytime soon.

 

[Toro]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

How do you figure? The banks currently have about a 10 year backlog that they're holding on to because they don't want to accelerate the devaluation. The housing market is not going to clear anytime soon.

It's not a 10 year backlog. It's about a 2 year backlog.

 

[The Rabbi]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

How do you figure? The banks currently have about a 10 year backlog that they're holding on to because they don't want to accelerate the devaluation. The housing market is not going to clear anytime soon.

It's not a 10 year backlog. It's about a 2 year backlog.

It could be a 2 month backlog, depending on how you price the things. That's the whole discussion.

 

[JoeNormal]

How do you figure? The banks currently have about a 10 year backlog that they're holding on to because they don't want to accelerate the devaluation. The housing market is not going to clear anytime soon.

It's not a 10 year backlog. It's about a 2 year backlog.

It could be a 2 month backlog, depending on how you price the things. That's the whole discussion.

Sounds like you'd better blame the banks then. They're the ones who don't want to sell at a price that anyone can afford today.

 

[Toro]

How do you figure? The banks currently have about a 10 year backlog that they're holding on to because they don't want to accelerate the devaluation. The housing market is not going to clear anytime soon.

It's not a 10 year backlog. It's about a 2 year backlog.

It could be a 2 month backlog, depending on how you price the things. That's the whole discussion.

Well ...

If you calculate the outstanding inventory, shadow inventory, household formation and home starts, there is an 18-24 month excess backlog, more or less.

 

[Wry Catcher]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

Proof?

 

[Moonglow]

that is about what it was before the crash. In our area

 

[rdean]

that is about what it was before the crash. In our area

Gasp! That would put it in the Republicans ball court. But wait, they aren't responsible for anything. How do we know? They told us.

 

[EdwardBaiamonte]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

Proof?

well if there are 10,000 forclosures a day that take 2 years to conclude figure out what that costs the economy. Imagine if it took everyone 2 years to buy a car. Would that depress the economy??

 

[Rshermr]

This is so true, we are in a housing depression because BO has prevented recovery by eliminating the free market in housing. Had it been allowed to work the market would have cleared long long ago and the economy would be booming now.

Proof?

well if there are 10,000 forclosures a day that take 2 years to conclude figure out what that costs the economy. Imagine if it took everyone 2 years to buy a car. Would that depress the economy??

If there were 10,000 forclosures a day, what you said could be looked at as some slight bit of logic. That would be 300,000 forclosures per month, or 900,000 per quarter. The latest completed quarter ending March 2012 had 198,000 forclosures, and that number has been dropping.
But then integrity is not one of your strong suites, is it ed.