[quote=DWCAP]A) I dont think most people are looking for ANTHER 40% off. Atleast I have not heard it from anyone who is a regular poster (or anyone else for that matter, but I sometimes miss threads). Usually when I hear 40% off stuff, it is in relation to peak prices. So, a house that was 750k ‘should’ be 450k but is still at 550k. (this is what I hear the argument as).
As I understand it, your saying that the argument is the house which is now 550k ‘should’ be 330k, and I have just never seen anyone outside of Zerohedge make such claims.
Please feel free to prove me wrong on this, I only get spotty time on Piggington.
B) Housing prices have been trending up until very reciently, due mostly to tax credits and ‘REO/modification’ shortages of inventory. The loss of these gains is not ‘cutting into real equity’. Unless you live in RSF, in which case I have no sympthay for you, your neighboorhood likley has a 10-20% equity cushion that is due purely to governement intervention and is not ‘real’.
C) Would people really riot because of their house not being worth what they want it to be? Really? I mean they wont be happy, but they would riot over it?
Now, they would riot over another depression style loss of jobs (read jan 09 X12) but that came from the implosion of too much debt (only some of which was housing debt), not falling house prices. I just dont see it.
Rather, I think what we would see is a further rise in fringe canadates, and the resulting chaos in congress. Canadates who would make Sarah Palin look moderate, and the story would be different on the left.[/quote]
DWCAP,
Thank you for this perfectly sane post. People didn’t riot when their stocks imploded in 2000-2003, they didn’t riot when housing prices dropped 50-70% in some areas (the lower-end areas that were allowed to drop to normal levels before all the govt intervention).
People might riot if the govt doesn’t provide jobs/assistance while we allow the unwinding of debt/asset prices to take place. This is why I think there IS room for govt spending, but it should not be directed at elevating asset prices that were driven by a credit bubble.
The trillions spent these past few years have been a total waste, and the primary beneficiaries were those in the financial industry, while J6 was being hung out to dry (forced into staying deeply in debt to the capitalists/financiers via ridiculous promises of loan mods and principal reductions — which was only designed to buy time so the risks could be transferred from the private sector to the taxpayers).
These threats of riots are used to control the masses — to convince them that giving money to Wall Street is for their own good.
