The housing bubble is over!

[equalizer]

bsrsharma is right when stating "One way the Fed is helping to solve our severe indebtedness is through inflation. By successively shrinking the value of US $, we actually have to pay less in real value to our Creditors, both public and private. Since most of the Debtors are American and Creditors are Foreign, this is politically very attractive. "

That’s what most level-headed economists like peter navarro are saying, even if they disagree with the policy. Peter stated in Feb 2003 that war was going to stimulate the economy and turned bullish on stocks then.

The bears will enjoy his site: http://www.peternavarro.com/dailyblog.html

[vagabondo]

–You're considering only variable costs, my friend. There are fixed costs too: store's rent (or the opportunity cost if you own), insurance, etc. Anyways, thanks for the entertainment and going into the minutiae of burger selling. I could have said "$300 airfare" or "$0.75 pen", etc.

This is a very interesting topic.

I am by no means an econ guru. I am in manufacturing/sourcing. Yes those are variable costs. But if you exclude technology, the US manufacturing asset base is relatively depreciated making variable costs more of the driver. I see this every day in the chemical industry. 10 or 20 (or 30) years ago it made more sense to build a new plant and depreciate over 10-20 years. Today I see more "fixing" which is fully expensed.

[vagabondo]

–You're considering only variable costs, my friend. There are fixed costs too: store's rent (or the opportunity cost if you own), insurance, etc. Anyways, thanks for the entertainment and going into the minutiae of burger selling. I could have said "$300 airfare" or "$0.75 pen", etc.

This is a very interesting topic.

I am by no means an econ guru. I am in manufacturing/sourcing. Yes those are variable costs. But if you exclude technology, the US manufacturing asset base is relatively depreciated making variable costs more of the driver. I see this every day in the chemical industry. 10 or 20 (or 30) years ago it made more sense to build a new plant and depreciate over 10-20 years. Today I see more "fixing" which is fully expensed.

[vagabondo]

–You're considering only variable costs, my friend. There are fixed costs too: store's rent (or the opportunity cost if you own), insurance, etc. Anyways, thanks for the entertainment and going into the minutiae of burger selling. I could have said "$300 airfare" or "$0.75 pen", etc.

This is a very interesting topic.

I am by no means an econ guru. I am in manufacturing/sourcing. Yes those are variable costs. But if you exclude technology, the US manufacturing asset base is relatively depreciated making variable costs more of the driver. I see this every day in the chemical industry. 10 or 20 (or 30) years ago it made more sense to build a new plant and depreciate over 10-20 years. Today I see more "fixing" which is fully expensed.

[vagabondo]

–You're considering only variable costs, my friend. There are fixed costs too: store's rent (or the opportunity cost if you own), insurance, etc. Anyways, thanks for the entertainment and going into the minutiae of burger selling. I could have said "$300 airfare" or "$0.75 pen", etc.

This is a very interesting topic.

I am by no means an econ guru. I am in manufacturing/sourcing. Yes those are variable costs. But if you exclude technology, the US manufacturing asset base is relatively depreciated making variable costs more of the driver. I see this every day in the chemical industry. 10 or 20 (or 30) years ago it made more sense to build a new plant and depreciate over 10-20 years. Today I see more "fixing" which is fully expensed.

[vagabondo]

–You're considering only variable costs, my friend. There are fixed costs too: store's rent (or the opportunity cost if you own), insurance, etc. Anyways, thanks for the entertainment and going into the minutiae of burger selling. I could have said "$300 airfare" or "$0.75 pen", etc.

This is a very interesting topic.

I am by no means an econ guru. I am in manufacturing/sourcing. Yes those are variable costs. But if you exclude technology, the US manufacturing asset base is relatively depreciated making variable costs more of the driver. I see this every day in the chemical industry. 10 or 20 (or 30) years ago it made more sense to build a new plant and depreciate over 10-20 years. Today I see more "fixing" which is fully expensed.

[bobby]

I see your original argument. The problem is one of supply and demand. Even if the houses are supposed to be worth $500K (based on your analysis) but no one can buy it because we are paid in dollars (not euros) and because the bank won’t let anyone borrow, then the price has to go down.. or there wont be any transaction, either scenario is more likely than houses being sold at $500K.
also, you pick monetary metrics that supports your arguments. can’t we pick #shares of GM or Countrywide per housing unit cost. Why pick euros instead of dollars when dollars IS the currency in the US of A?
heck, if I really want to support your thesis, I’d pick shares of Google for my monetary metrics. Housing value is 30% what it should be right now!!!

[bobby]

I see your original argument. The problem is one of supply and demand. Even if the houses are supposed to be worth $500K (based on your analysis) but no one can buy it because we are paid in dollars (not euros) and because the bank won’t let anyone borrow, then the price has to go down.. or there wont be any transaction, either scenario is more likely than houses being sold at $500K.
also, you pick monetary metrics that supports your arguments. can’t we pick #shares of GM or Countrywide per housing unit cost. Why pick euros instead of dollars when dollars IS the currency in the US of A?
heck, if I really want to support your thesis, I’d pick shares of Google for my monetary metrics. Housing value is 30% what it should be right now!!!

[bobby]

I see your original argument. The problem is one of supply and demand. Even if the houses are supposed to be worth $500K (based on your analysis) but no one can buy it because we are paid in dollars (not euros) and because the bank won’t let anyone borrow, then the price has to go down.. or there wont be any transaction, either scenario is more likely than houses being sold at $500K.
also, you pick monetary metrics that supports your arguments. can’t we pick #shares of GM or Countrywide per housing unit cost. Why pick euros instead of dollars when dollars IS the currency in the US of A?
heck, if I really want to support your thesis, I’d pick shares of Google for my monetary metrics. Housing value is 30% what it should be right now!!!

[bobby]

I see your original argument. The problem is one of supply and demand. Even if the houses are supposed to be worth $500K (based on your analysis) but no one can buy it because we are paid in dollars (not euros) and because the bank won’t let anyone borrow, then the price has to go down.. or there wont be any transaction, either scenario is more likely than houses being sold at $500K.
also, you pick monetary metrics that supports your arguments. can’t we pick #shares of GM or Countrywide per housing unit cost. Why pick euros instead of dollars when dollars IS the currency in the US of A?
heck, if I really want to support your thesis, I’d pick shares of Google for my monetary metrics. Housing value is 30% what it should be right now!!!

[bobby]

I see your original argument. The problem is one of supply and demand. Even if the houses are supposed to be worth $500K (based on your analysis) but no one can buy it because we are paid in dollars (not euros) and because the bank won’t let anyone borrow, then the price has to go down.. or there wont be any transaction, either scenario is more likely than houses being sold at $500K.
also, you pick monetary metrics that supports your arguments. can’t we pick #shares of GM or Countrywide per housing unit cost. Why pick euros instead of dollars when dollars IS the currency in the US of A?
heck, if I really want to support your thesis, I’d pick shares of Google for my monetary metrics. Housing value is 30% what it should be right now!!!

[Diego Mamani]

bsrsharma is right when stating “One way the Fed is helping to solve our severe indebtedness is through inflation (…)”

Equalizer: I think that bsrsharma understood my argument right away and then re-phrased it very cogently. Where I don’t agree with him is that he appears to see this policy as a positive. For those of us who are not debtors, who save compulsively and pay taxes, that inflationary policy is mistaken. It’ll do more harm than good, unless one is a FB or a bank holding too much toxic paper.

[Diego Mamani]

bsrsharma is right when stating “One way the Fed is helping to solve our severe indebtedness is through inflation (…)”

Equalizer: I think that bsrsharma understood my argument right away and then re-phrased it very cogently. Where I don’t agree with him is that he appears to see this policy as a positive. For those of us who are not debtors, who save compulsively and pay taxes, that inflationary policy is mistaken. It’ll do more harm than good, unless one is a FB or a bank holding too much toxic paper.

[Diego Mamani]

bsrsharma is right when stating “One way the Fed is helping to solve our severe indebtedness is through inflation (…)”

Equalizer: I think that bsrsharma understood my argument right away and then re-phrased it very cogently. Where I don’t agree with him is that he appears to see this policy as a positive. For those of us who are not debtors, who save compulsively and pay taxes, that inflationary policy is mistaken. It’ll do more harm than good, unless one is a FB or a bank holding too much toxic paper.

[Diego Mamani]

bsrsharma is right when stating “One way the Fed is helping to solve our severe indebtedness is through inflation (…)”

Equalizer: I think that bsrsharma understood my argument right away and then re-phrased it very cogently. Where I don’t agree with him is that he appears to see this policy as a positive. For those of us who are not debtors, who save compulsively and pay taxes, that inflationary policy is mistaken. It’ll do more harm than good, unless one is a FB or a bank holding too much toxic paper.

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