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February 11, 2010 at 9:56 PM #513219February 12, 2010 at 12:44 PM #512475
CA renter
Participant[quote=Cabal]
CAR – Fear and greed in normal markets seldom alter inevitable decisions, rather they induce greater due diligence. I was afraid buying my first home, but did it anyways because it made sense from a financial and life circumstance perspective. Fear and greed in an inflating/deflating bubble environment are at a totally different level and leads to irrational decisions. Examples are buying a 500K house on 30K income on the upside, artificially inflating prices. Conversely on the down side, being afraid to buy when prices are below book value (or cost of construction), with the land and landscape thrown in for free, or when rent to PITI parity is exceeded. These are examples of inducing artificially low prices relative to historical norms.
On your second point, I was literally stunned by your assertion that Govt intervention or artificial forces are not imbedded into normal markets. To coin a phrase from one of Allans posts, I almost blew Coke Zero out of my nose. Please don’t take offense, but you cannot possibly believe we live in a laissez-faire free economy? It has never existed, not even for a nanosecond. If you widen your field of vision from the past 5 years to say the past 200 years, you’ll need a calculator to add up the number of times our govt has interfered to promote economic growth via bailouts, monetary stimulus, fiscal stimulus, erosion of civil liberties, etc. Here are a few examples; taking an equity stake in the first banks in late 1700s, railroad system of the 1800s, creation of the federal reserve in early 1900s, FDRs the New Deal, the Marshall plan after WWII, Eisenhowers interstate freeway system, Reagans defense spending bubble, not to mention the thousands of regulatory, deregulatory actions taken to combat the baneful actions of the oligarchs or the suffocating nature of excessive govt. Govt intervention and its residual effects is the normal market.[/quote]
Yes, the govt is always involved in some way, but never to the degree we are witnessing today, and never so targeted. Are there any examples of trillions of dollars being spent in two years (not to mention non-monetary policies like “foreclosure moratoriums,” etc.) on a single market? Every single entity out there from local govt to the Federal govt is trying to keep inventory off the market and pump money into a market that should be declining.
February 12, 2010 at 12:44 PM #512621Participant[quote=Cabal]
CAR – Fear and greed in normal markets seldom alter inevitable decisions, rather they induce greater due diligence. I was afraid buying my first home, but did it anyways because it made sense from a financial and life circumstance perspective. Fear and greed in an inflating/deflating bubble environment are at a totally different level and leads to irrational decisions. Examples are buying a 500K house on 30K income on the upside, artificially inflating prices. Conversely on the down side, being afraid to buy when prices are below book value (or cost of construction), with the land and landscape thrown in for free, or when rent to PITI parity is exceeded. These are examples of inducing artificially low prices relative to historical norms.
On your second point, I was literally stunned by your assertion that Govt intervention or artificial forces are not imbedded into normal markets. To coin a phrase from one of Allans posts, I almost blew Coke Zero out of my nose. Please don’t take offense, but you cannot possibly believe we live in a laissez-faire free economy? It has never existed, not even for a nanosecond. If you widen your field of vision from the past 5 years to say the past 200 years, you’ll need a calculator to add up the number of times our govt has interfered to promote economic growth via bailouts, monetary stimulus, fiscal stimulus, erosion of civil liberties, etc. Here are a few examples; taking an equity stake in the first banks in late 1700s, railroad system of the 1800s, creation of the federal reserve in early 1900s, FDRs the New Deal, the Marshall plan after WWII, Eisenhowers interstate freeway system, Reagans defense spending bubble, not to mention the thousands of regulatory, deregulatory actions taken to combat the baneful actions of the oligarchs or the suffocating nature of excessive govt. Govt intervention and its residual effects is the normal market.[/quote]
Yes, the govt is always involved in some way, but never to the degree we are witnessing today, and never so targeted. Are there any examples of trillions of dollars being spent in two years (not to mention non-monetary policies like “foreclosure moratoriums,” etc.) on a single market? Every single entity out there from local govt to the Federal govt is trying to keep inventory off the market and pump money into a market that should be declining.
February 12, 2010 at 12:44 PM #513040Participant[quote=Cabal]
CAR – Fear and greed in normal markets seldom alter inevitable decisions, rather they induce greater due diligence. I was afraid buying my first home, but did it anyways because it made sense from a financial and life circumstance perspective. Fear and greed in an inflating/deflating bubble environment are at a totally different level and leads to irrational decisions. Examples are buying a 500K house on 30K income on the upside, artificially inflating prices. Conversely on the down side, being afraid to buy when prices are below book value (or cost of construction), with the land and landscape thrown in for free, or when rent to PITI parity is exceeded. These are examples of inducing artificially low prices relative to historical norms.
On your second point, I was literally stunned by your assertion that Govt intervention or artificial forces are not imbedded into normal markets. To coin a phrase from one of Allans posts, I almost blew Coke Zero out of my nose. Please don’t take offense, but you cannot possibly believe we live in a laissez-faire free economy? It has never existed, not even for a nanosecond. If you widen your field of vision from the past 5 years to say the past 200 years, you’ll need a calculator to add up the number of times our govt has interfered to promote economic growth via bailouts, monetary stimulus, fiscal stimulus, erosion of civil liberties, etc. Here are a few examples; taking an equity stake in the first banks in late 1700s, railroad system of the 1800s, creation of the federal reserve in early 1900s, FDRs the New Deal, the Marshall plan after WWII, Eisenhowers interstate freeway system, Reagans defense spending bubble, not to mention the thousands of regulatory, deregulatory actions taken to combat the baneful actions of the oligarchs or the suffocating nature of excessive govt. Govt intervention and its residual effects is the normal market.[/quote]
Yes, the govt is always involved in some way, but never to the degree we are witnessing today, and never so targeted. Are there any examples of trillions of dollars being spent in two years (not to mention non-monetary policies like “foreclosure moratoriums,” etc.) on a single market? Every single entity out there from local govt to the Federal govt is trying to keep inventory off the market and pump money into a market that should be declining.
February 12, 2010 at 12:44 PM #513132Participant[quote=Cabal]
CAR – Fear and greed in normal markets seldom alter inevitable decisions, rather they induce greater due diligence. I was afraid buying my first home, but did it anyways because it made sense from a financial and life circumstance perspective. Fear and greed in an inflating/deflating bubble environment are at a totally different level and leads to irrational decisions. Examples are buying a 500K house on 30K income on the upside, artificially inflating prices. Conversely on the down side, being afraid to buy when prices are below book value (or cost of construction), with the land and landscape thrown in for free, or when rent to PITI parity is exceeded. These are examples of inducing artificially low prices relative to historical norms.
On your second point, I was literally stunned by your assertion that Govt intervention or artificial forces are not imbedded into normal markets. To coin a phrase from one of Allans posts, I almost blew Coke Zero out of my nose. Please don’t take offense, but you cannot possibly believe we live in a laissez-faire free economy? It has never existed, not even for a nanosecond. If you widen your field of vision from the past 5 years to say the past 200 years, you’ll need a calculator to add up the number of times our govt has interfered to promote economic growth via bailouts, monetary stimulus, fiscal stimulus, erosion of civil liberties, etc. Here are a few examples; taking an equity stake in the first banks in late 1700s, railroad system of the 1800s, creation of the federal reserve in early 1900s, FDRs the New Deal, the Marshall plan after WWII, Eisenhowers interstate freeway system, Reagans defense spending bubble, not to mention the thousands of regulatory, deregulatory actions taken to combat the baneful actions of the oligarchs or the suffocating nature of excessive govt. Govt intervention and its residual effects is the normal market.[/quote]
Yes, the govt is always involved in some way, but never to the degree we are witnessing today, and never so targeted. Are there any examples of trillions of dollars being spent in two years (not to mention non-monetary policies like “foreclosure moratoriums,” etc.) on a single market? Every single entity out there from local govt to the Federal govt is trying to keep inventory off the market and pump money into a market that should be declining.
February 12, 2010 at 12:44 PM #513385Participant[quote=Cabal]
CAR – Fear and greed in normal markets seldom alter inevitable decisions, rather they induce greater due diligence. I was afraid buying my first home, but did it anyways because it made sense from a financial and life circumstance perspective. Fear and greed in an inflating/deflating bubble environment are at a totally different level and leads to irrational decisions. Examples are buying a 500K house on 30K income on the upside, artificially inflating prices. Conversely on the down side, being afraid to buy when prices are below book value (or cost of construction), with the land and landscape thrown in for free, or when rent to PITI parity is exceeded. These are examples of inducing artificially low prices relative to historical norms.
On your second point, I was literally stunned by your assertion that Govt intervention or artificial forces are not imbedded into normal markets. To coin a phrase from one of Allans posts, I almost blew Coke Zero out of my nose. Please don’t take offense, but you cannot possibly believe we live in a laissez-faire free economy? It has never existed, not even for a nanosecond. If you widen your field of vision from the past 5 years to say the past 200 years, you’ll need a calculator to add up the number of times our govt has interfered to promote economic growth via bailouts, monetary stimulus, fiscal stimulus, erosion of civil liberties, etc. Here are a few examples; taking an equity stake in the first banks in late 1700s, railroad system of the 1800s, creation of the federal reserve in early 1900s, FDRs the New Deal, the Marshall plan after WWII, Eisenhowers interstate freeway system, Reagans defense spending bubble, not to mention the thousands of regulatory, deregulatory actions taken to combat the baneful actions of the oligarchs or the suffocating nature of excessive govt. Govt intervention and its residual effects is the normal market.[/quote]
Yes, the govt is always involved in some way, but never to the degree we are witnessing today, and never so targeted. Are there any examples of trillions of dollars being spent in two years (not to mention non-monetary policies like “foreclosure moratoriums,” etc.) on a single market? Every single entity out there from local govt to the Federal govt is trying to keep inventory off the market and pump money into a market that should be declining.
February 13, 2010 at 12:56 AM #512713temeculaguy
ParticipantIt only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.
Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.
Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.
February 13, 2010 at 12:56 AM #512861ParticipantIt only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.
Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.
Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.
February 13, 2010 at 12:56 AM #513280ParticipantIt only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.
Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.
Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.
February 13, 2010 at 12:56 AM #513374ParticipantIt only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.
Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.
Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.
February 13, 2010 at 12:56 AM #513627ParticipantIt only feels that way CAR, it’s actually nothing out of the norm and nothing we wont survive. I actually had a lengthy discussion with my son last night as I helped him with his homework. It’s amazing how beneficial it is to an adult to relive their education through their children, you learn so much more the second time through. The lad made a huge mistake, he asked his ubergeek dad about adam smith, karl marx, socialism, and a few other topics. That was at 6 p.m., at 11:15, we finished. I went into Phil Jackson, zen master mode, and the prodigal son made me proud for noticing something I never did. After we recount economic cycles of the last few hundred years, in different parts of the world, he made the profound observation that as time wears on, the cycles are the same but the consequences become milder. As history progressed, the consequences of the down cycles became less life threatening.
Of course he wasn’t as eloqunet as his old man, I believe he made mention that during downturns in the 17th, 18th, and 19th centuries, people died of starvation. Nowadays, regardless of how bad things get, people still eat, in fact, many poor people are fat, even homeless people are fat.
Maybe I wasn’t so proud of that observatoin but it is one I would have never noticed without his help. We are in our generation’s “new deal.” We are all still eating fine, we may not be able to roll on 22″ rims, but were fine. And as Cabal pointed out, government intervention is not only not new, it’s never not present. Same product, different wrapper.
February 14, 2010 at 1:23 AM #512963ParticipantGreat reply, especially because it’s so cool that you and your son got to have that conversation. Sounds like a chip off the ol’ block. 🙂
We’ll have to agree to disagree about the size and scope of this manipulation, though. I can’t think of a single instance where a particular market was targeted with this much money over this period of time.
BTW, (IMHO) the reason we are having less severe recessions is because of the “evil” socialist safety nets that have developed as a result of the severe downturns of the past. Some might argue that these (housing/bank) bailouts are a form of safety net, and they might be right. I just see a big difference between protecting the innocent by providing food, **basic** shelter, and medical assistance vs. rewarding thieves and gamblers who believe they are entitled to “own” a house for free.
February 14, 2010 at 1:23 AM #513111ParticipantGreat reply, especially because it’s so cool that you and your son got to have that conversation. Sounds like a chip off the ol’ block. 🙂
We’ll have to agree to disagree about the size and scope of this manipulation, though. I can’t think of a single instance where a particular market was targeted with this much money over this period of time.
BTW, (IMHO) the reason we are having less severe recessions is because of the “evil” socialist safety nets that have developed as a result of the severe downturns of the past. Some might argue that these (housing/bank) bailouts are a form of safety net, and they might be right. I just see a big difference between protecting the innocent by providing food, **basic** shelter, and medical assistance vs. rewarding thieves and gamblers who believe they are entitled to “own” a house for free.
February 14, 2010 at 1:23 AM #513533ParticipantGreat reply, especially because it’s so cool that you and your son got to have that conversation. Sounds like a chip off the ol’ block. 🙂
We’ll have to agree to disagree about the size and scope of this manipulation, though. I can’t think of a single instance where a particular market was targeted with this much money over this period of time.
BTW, (IMHO) the reason we are having less severe recessions is because of the “evil” socialist safety nets that have developed as a result of the severe downturns of the past. Some might argue that these (housing/bank) bailouts are a form of safety net, and they might be right. I just see a big difference between protecting the innocent by providing food, **basic** shelter, and medical assistance vs. rewarding thieves and gamblers who believe they are entitled to “own” a house for free.
February 14, 2010 at 1:23 AM #513625ParticipantGreat reply, especially because it’s so cool that you and your son got to have that conversation. Sounds like a chip off the ol’ block. 🙂
We’ll have to agree to disagree about the size and scope of this manipulation, though. I can’t think of a single instance where a particular market was targeted with this much money over this period of time.
BTW, (IMHO) the reason we are having less severe recessions is because of the “evil” socialist safety nets that have developed as a result of the severe downturns of the past. Some might argue that these (housing/bank) bailouts are a form of safety net, and they might be right. I just see a big difference between protecting the innocent by providing food, **basic** shelter, and medical assistance vs. rewarding thieves and gamblers who believe they are entitled to “own” a house for free.
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