Housing Prices?

[Orange_Juice]

How will this bill solve the fall in housing prices?

 

[Zoomie1980]

Housing prices will not turn around until demand begins to equate with inventory. So far, in the hardest hit market, inventory still FAR outstrips demand, so expect more slumping home prices for some time yet.

When a 1500sq ft home on a 1/6th acre plot in San Jose sells for $150,000 the California market will have finally begun reaching stability. The fact such a home still commands over $400,000 means that market still has a LOOOONNNNGGGGG way to go yet.

 

[AVG-JOE]

How will this bill solve the fall in housing prices?

It won't.

It is designed to give liquidity to the idiots who have been loaning out other peoples money around here for the last 50 years, so they can continue to make more loans.

Essentially, we borrowed up all that we could scrape together to buy rubber dog shit from China and other necessities and paid a small group of people a kings ransom to do the paperwork.

Pretty stupid, eh?

 

[Toro]

It won't.

Prices are still too high. Giving people cheaper money to buy an over-valued asset will not stabilize the housing market.

 

[Bern80]

It won't.

Prices are still too high. Giving people cheaper money to buy an over-valued asset will not stabilize the housing market.

Maybe some others (or maybe me) are confused here. OJ is asking how this will solve the 'problem' of FALLING home prices.

First, it depends on how you define 'problem'. It's problematic for sellers right now, but it is very much a buyers market.

Couldn't one argue that this bailout is going to 'help' the fall in home prices (or keep them from falling)? Afterall as you say, this is going to keep levels in inflated rather then just letting them come off of this enormous bubble they were on top of before.

 

[editec]

It won't.

It is designed to give liquidity to the idiots who have been loaning out other peoples money around here for the last 50 years, so they can continue to make more loans.

Minor correction...they weren't loaning out "other people's money".

They were loaning out money they invented our of thin air thanks to the FED, dude.

Banks were lending out 40 times as much as their capitalization.

Wish I could do that. I'd be rich as they were.

Essentially, we borrowed up all that we could scrape together to buy rubber dog shit from China and other necessities and paid a small group of people a kings ransom to do the paperwork

Yup!

Pretty stupid, eh?

We were born into economic slavery, and told our entire lives were were free men because we had to pay for our own enslavement.

Yeah, I'd say stupid about covers it.

 

[AVG-JOE]

...

Banks were lending out 40 times as much as their capitalization.

Wish I could do that. I'd be rich as they were.

...

Are you sure about that number?

It doesn't surprise me given the players, but I would have guessed about half that... which is still ridiculous.

It is disgusting.

-Joe

 

[editec]

Are you sure about that number?

It doesn't surprise me given the players, but I would have guessed about half that... which is still ridiculous.

It is disgusting.

-Joe

I'm sure about that number for Lehman.

 

[Bern80]

We were born into economic slavery, and told our entire lives were were free men because we had to pay for our own enslavement.

Yeah, I'd say stupid about covers it.

Dude, does makeing excuses ever get old for you? You never did answer my question; What are these big bad corporations doing to you SPECIFICALLY, that is keeping you from becoming wealthy?

Then again, maybe you're right. Many people do pay for their own enslavement, but it isn't the fault of evil corporate America. Most of the time it's their own fault because most people are financial morons. But hey you do what comes easy. Take no ownership whatsoever and keep passing the buck. I'm sure it will aid in your self improvement.

 

[editec]

Dude, I don't know what the hell you are talking about.

I never said any such thing.

Take your fastasy debate with that strawman you've invented and shove it up you ass, okay?

When you address me in the future , don't start out your ignorant posts by trying to put words into my mouth, okay?

 

[Bern80]

Dude, I don't know what the hell you are talking about.

I never said any such thing.

Take your fastasy debate with that strawman you've invented and shove it up you ass, okay?

When you address me in the future , don't start out your ignorant posts by trying to put words into my mouth, okay?

You didn't say what I quoted you as saying? What words did I put in your mouth?

You said people are born into economic enslavement, which I call a useless, defeatist, victim mentality tact.

 

[AVG-JOE]

... You never did answer my question; What are these big bad corporations doing to you SPECIFICALLY, that is keeping you from becoming wealthy?...

Well, for one thing they have used their influence in government to eliminate, stifle, and buy up their competition. That practice alone has reduced the wealth of somebody.

-Joe

 

[Bern80]

Well, for one thing they have used their influence in government to eliminate, stifle, and buy up their competition. That practice alone has reduced the wealth of somebody.

-Joe

How so? Please be specific.

Ways you can eliminate competetion are essentially provide a better product or service then the competition, or buy them which last I checked, took an agreement between the two parties.

What other more nefarious policies are you talking about?

 

[AVG-JOE]

How so? Please be specific.

Ways you can eliminate competetion are essentially provide a better product or service then the competition, or buy them which last I checked, took an agreement between the two parties.

What other more nefarious policies are you talking about?

There was a time when several oil companies competed with each other to provide independent distributors with fuel to sell retail. The distributors were small businesses that provided a good living for their owners and start up jobs for young people.

Now we have 3 oil companies that pay minimum wages to the people who manage the distribution outlets that are owned by the oil companies.

So far, cell phone service has a lot of companies competing for your business; service is good and prices are reasonable. What will happen when the lobbyists for AT&T and Verizon convince law makers that it is in the public interest to consolidate all those service providers into 2 or 3 huge companies?

Entrepreneurship in America has been under siege by big business since the '60's. The death blow may have been struck this week by Bush... Time will tell.

-Joe

 

[Navy1960]

This *bailout* bill will NOT solve the housing crisis, for one simple reason, it does nothing to solve the amount of inventory thats on the market at the moment i.e. foreclosed homes, over developed new homes, current homes for sale, etc. etc. . Further, lenders are not lending, money on home purchases at the moment. i.e. "credit crunch" The amount of debt in this country is so high, that lenders are extremely tight. This "bailout" will NOT solve that as the inventory of homes still rests on the books of these banks, as assets that have lost value, that the banks borrowed against. So in order to clear up this mess you need to first, reduce the amount of housing on the market, if anything, the trillion dollars for this "bailout" would have been better served in a massive home purchase by the FED and a sell back program to homeowners rather than giving the money directly to the banks.

 

[Bern80]

Well, for one thing they have used their influence in government to eliminate, stifle, and buy up their competition. That practice alone has reduced the wealth of somebody.

-Joe

Specifcally I'm asking about you (well originally directed to Editec). The better question is why is it, that people are absolutely refusing to hold themselves accountable anymore? What does it accomplish FOR YOU to blame someone else for your lot in life? If you had to be honest do you think you have a better shot at becoming wealthy through your own efforts, or waiting for someone or something to make you rich?

 

[Bern80]

There was a time when several oil companies competed with each other to provide independent distributors with fuel to sell retail. The distributors were small businesses that provided a good living for their owners and start up jobs for young people.

Now we have 3 oil companies that pay minimum wages to the people who manage the distribution outlets that are owned by the oil companies.

Come on man, you know that isn't true. If a manager is making minimum wage, how much are the people he is managing makeing?

Entrepreneurship in America has been under siege by big business since the '60's. The death blow may have been struck this week by Bush... Time will tell.

-Joe

This is an example of what I've been saying time and time again. No seems to get how much the evolution of the avg American mindset has to do with this. More and more people seem to have the mindset you do. That failure is everybody else's fault and your just a victim. Maybe that's true, but it probably isn't and regardless if becomeing wealthy or at leat financially independent is a goal I have never seen such a mindset be of much aid in that goal.

 

[AVG-JOE]

Specifcally I'm asking about you (well originally directed to Editec). The better question is why is it, that people are absolutely refusing to hold themselves accountable anymore? What does it accomplish FOR YOU to blame someone else for your lot in life? If you had to be honest do you think you have a better shot at becoming wealthy through your own efforts, or waiting for someone or something to make you rich?

Dude,

No one I'm thinking of is trying to shirk responsibility, quite the contrary, I am talking of entrepreneurs who would love to keep responsibility for ownership in a retail shop, but they can't compete with a predatory Wal-mart moving into town.

Americans, as a general rule prefer opportunity to "waiting for someone or something to make them rich". How many small businesses don't happen or fail because the government paperwork is a bitch? Do you think the big corporations who have a staff of lawyers and accountants give a shit if the paperwork of business is reducing their competition? How else can lobbyists and lawyers screw with the system to discourage small business success?

What would Home Depot rather have... Harvy's Hardware operating down the street, creating a good living for Harvy, or Harvy working for HD at minimum wage?

My point is that since the 60's big business has used all of its assets to reduce or eliminate competition and one of those assets has been unfair influence over government through money.

Tell my you see more opportunities for small business today than we did in the 60's & 70's. The tax paperwork alone made me think twice about going into business for myself... I can easily earn all I need as long as I don't need to hire specialists like lawyers and accountants to do the paperwork!

-Joe

 

[Bern80]

Dude,

No one I'm thinking of is trying to shirk responsibility, quite the contrary, I am talking of entrepreneurs who would love to keep responsibility for ownership in a retail shop, but they can't compete with a predatory Wal-mart moving into town.

Americans, as a general rule prefer opportunity to "waiting for someone or something to make them rich". How many small businesses don't happen or fail because the government paperwork is a bitch? Do you think the big corporations who have a staff of lawyers and accountants give a shit if the paperwork of business is reducing their competition? How else can lobbyists and lawyers screw with the system to discourage small business success?

Well my Dad owned his own Veterinary practice. I can't say I noticed him filling out mountains of government paperwork. Your getting close to hitting on a big piece of the problem. Starting a business, even if their was zero paperwork, is a big risk where success or failure rests, pretty much solely with you. You do have to make tough decisions such as laying off people for the sake of the companies future. Conciously or subconciously most people today don't have the fortitude to take those kinds of risks. As I've said before there is little denying we are instant gratification society. If we have choice, we are more often then not going to choose the easier of the options, i.e. it is easier to work for someone else, have a modicum of job security and more or less get by, then it is to put in the work of starting your business, and have to make the tough day to day decisions that insure the survival of your company and ultimately yourself.

What would Home Depot rather have... Harvy's Hardware operating down the street, creating a good living for Harvy, or Harvy working for HD at minimum wage?

My point is that since the 60's big business has used all of its assets to reduce or eliminate competition and one of those assets has been unfair influence over government through money.

But Home Dept or Super Wal-Mart no matter how huge they are wouldn't stay in business if they weren't providing something people want. There is good with the bad and one could easily argue, more good. Wal-Mart may have put mon and pop out of business but they did that by providing cost savings to an awful lot of consumers.

Tell my you see more opportunities for small business today than we did in the 60's & 70's. The tax paperwork alone made me think twice about going into business for myself... I can easily earn all I need as long as I don't need to hire specialists like lawyers and accountants to do the paperwork!

-Joe

So you've just testified that you are an example of what I said in the first pargraph. It was too much work for you. The perceived difficulty outwieghed your motivation to continue on with your venture. I think you are overstating the need to have this extra outlay for lawyers and the such for filing paperwork. There is almost nothing you can't find or figure out how to do from the internet. With a little research I bet you could figure it out. As you said you will be fine, probably not wealthy, but you'll be content most likely.

 

[editec]

This *bailout* bill will NOT solve the housing crisis, for one simple reason, it does nothing to solve the amount of inventory thats on the market at the moment i.e. foreclosed homes, over developed new homes, current homes for sale, etc. etc. .

Absolutely, right.

Further, lenders are not lending, money on home purchases at the moment. i.e. "credit crunch" The amount of debt in this country is so high, that lenders are extremely tight. This "bailout" will NOT solve that as the inventory of homes still rests on the books of these banks, as assets that have lost value, that the banks borrowed against.

Yes.

So in order to clear up this mess you need to first, reduce the amount of housing on the market, if anything, the trillion dollars for this "bailout" would have been better served in a massive home purchase by the FED and a sell back program to homeowners rather than giving the money directly to the banks.

Exactly.

Two quick ways to do that...either keep those people in their homes, by giving them mortgages they can afford, or just bulldoze the houses.

I think the former idea makes more sense since by bulldozing the houses we'll create a pointless housing and rental shortage.

Seems to me like no matter what we do the RE market will be depressed for some time, though.

The investor of mortgage backed paper might be a tad gun-shy so the banks aren't going to be real interested in lending money to consumers of they can't offload the paper to keep their capitalization numbers on the up and up.