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CA renter
Participant[quote=scaredyclassic]i sometimes do bodyweight squats in line at costco or traderjoes and my wife and kids disapprove.[/quote]
Do you really? That would be fun to watch! 🙂
Participant[quote=spdrun]Why not just a normal condo or house? Is spending one’s old age surrounded by lizards(*) really good fun?
(*) – in EMT parlance, not in bearishgurl’s parlance.[/quote]
Have to interject here…we have kids and are extremely fortunate to have a few other families with kids on our street. While we love it, and some of the elderly folks seem to like it, there are other “elders” who absolutely HATE having kids playing outside, riding bikes, etc. We even had one neighbor who called the cops *multiple times just because our kids were riding past their house, and this was all in the afternoon — not late at night or in the early morning.
If some older people like things to be extremely quiet and dead all day and night, I thing it’s best for them to live in 55+ communities. That way, everyone can be happy. Just my 2 cents.
Participant[quote=FlyerInHi]Another thing CAr, in your wish to micromanage everything, you’re drawing too many distinctions on what is productive or not.
People trading commodities is productive. There’s a speculative aspect, but higher prices eventually result in more production and more technology. Plus there’s employment in the trading activities.
If I give you a hair cut this week, and you give me a hair cut next week, that’s productive work. We are doing work and exchanging money and that’s a good thing. If there were a lack of liquidity, we’d be sitting around doing nothing. Bad for the economy.[/quote]
Glad you posted this…you knew how I was going to respond to your previous post. 😉
Yes, I draw a distinction between productive and non-productive activities, and I always will until somebody shows me a *genuine* reason for not doing so.
Spdrun already addressed a few of the problems with your post. As for that misallocation of labor resources, he’s spot on. I have a couple of friends who graduated from Harvard. Both have said that the advisers there will guide the brightest and most driven students toward a career on Wall Street (one of these friends followed their advice). Mathematicians, scientifically-minded students, etc. are often re-routed to the financial sector.
Additionally, speculation is zero-sum. And all of that extra production (misallocation of resources) that might result from speculation? I’ve addressed that in another post, above.
[quote=CA renter]
Asset prices can affect GDP numbers, too. The prices of raw commodities is priced into things that we buy.
Additionally, when asset/commodity prices are artificially inflated, it causes a misallocation of resources. You’ve noted energy, so let’s use that as an example. If prices are being driven up by speculation, it will cause people in the energy industry to commit more resources to drilling for oil, or building massive solar or wind farms, etc. That’s good IF the prices are based on real supply and demand (not speculators of any sort). If the prices increases were caused by speculation or other market manipulations, then the boom will eventually go bust, and all of those direct and indirect jobs will be lost, the equipment will be sidelined (possibly only working a fraction of its intended lifespan), the environment will be damaged (and the companies responsible for the damage might go BK, leaving the mess for taxpayers to clean up) and the economy will be decimated, especially in the regions where all of this work was happening.
This is just one example. Market manipulations have a ripple effect on the economy, and if booms are allowed to grow to bubble proportions, they can take down whole sectors of the economy for a prolonged period of time.
And I doubt that a “lack of liquidity” will exist for very long. If the economy is that dicey, it will usually collapse, then the money from elsewhere comes rushing in during the vulture stage. Of course, I favor a public bank, so in my theoretically ideal world, there would almost always be liquidity in the system, especially if the boom-bust cycle was damped as speculators are prevented from controlling or greatly affecting the market.[/quote]
Participant[quote=FlyerInHi][quote=CA renter]The Federal Reserve is “lots of people”?
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The Federal Reserve buys assets on the open market. They are prohibited from buying directly from Treasury. So the Fed buys from savers.[quote=CA renter]
And it’s not “lots of people,” even outside of that. The money/power has been concentrated into fewer and fewer hands. [/quote]That’s social and fiscal policy that calls for things like a higher minimum wage, paid vacation, child care, etc…[/quote]
Yes, social and fiscal policy are largely responsible for the wealth/income gap, but the Federal Reserve’s policies are what has fueled the booms/bubbles and busts, and this is also significantly responsible for the wealth inequality we’re seeing in this country (and in many other parts of the world, too).
The Fed usually buys from Primary Dealers who may or may not being selling treasuries purchased from Joe Sixpack, the saver. I don’t have exact numbers, but have read that a significant portion of the Fed’s purchases since the economic crisis were new issues, especially the QE portion. And many of the original mortgage-related assets that were purchased by the Fed hadn’t yet been sold on the open market.
And the fact that investors of all stripes are buying so many “risk-free” bonds when interest rates are at/near historic lows shows that there is a tremendous amount of pessimism about the economy, especially when the stock/commodities/housing markets have been on fire, relatively speaking. Many investors are desperate, and they’re scared to death about the future, both individuals and institutional buyers.
Participant[quote=The-Shoveler]Then you got the Axis of Happiness.
http://www.cnbc.com/id/102290355
Me I think if they raise the minimum wage that will lift from the bottom, I think that is starting to happen, too slow but its starting.[/quote]
Love the responses from commenters on that real estate fluff piece.
And agree with you on wages maybe, hopefully going up, especially at the bottom which is where it really needs to happen. We can thank unions for that; they’re behind the push for increasing minimum wage (and boycotting/shaming Walmart, McDs, etc.).
ParticipantAn interesting discussion about how more people feel worse off today than they did during the Great Recession.
http://www.pbs.org/newshour/bb/economic-reality-wiping-american-dream/
December 24, 2014 at 1:04 AM in reply to: Interesting commentary on the Vegas economy (paging FlyerInHI) #781334ParticipantJust came across this article by Robert Reich that relates to this very topic:
https://theconversation.com/college-grads-still-earn-a-premium-if-they-can-find-a-good-job-35744
December 24, 2014 at 1:03 AM in reply to: Interesting commentary on the Vegas economy (paging FlyerInHI) #781333ParticipantBecause those educations cost money. Whether it’s paid for by taxpayers or the individual students (see student debt bubble articles), if it doesn’t make financial sense, it shouldn’t be done. Students should be able to get a good education in the 12+ years that they currently get on the taxpayer’s dime.
ParticipantThe Federal Reserve is “lots of people”?
And it’s not “lots of people,” even outside of that. The money/power has been concentrated into fewer and fewer hands. That surplus money at the top (leveraged, on top of that!) is what’s driving all of the asset bubbles…including the bond bubble. The only question, IMO, is how long it can continue before it implodes. Speculators rely on other people to pay more for things than the speculators paid…who will be able to step up to the plate to relieve these speculators of their “investments”? It will be interesting to see who will be left holding the bag when all is said and done.
December 23, 2014 at 11:10 PM in reply to: Interesting commentary on the Vegas economy (paging FlyerInHI) #781329ParticipantAgree with deadzone, while also acknowledging the need for the general public to understand finance and have some familiarity with social sciences, etc.
But every year of education costs a lot of money, so we have to do a cost analysis to determine if extending the years of academic education is worth it, either individually, or to society.
Also, many people are not cut out for college. They just aren’t academic types, with many of them either dropping out of high school, or just barely scraping by through school. Does that mean that they are worthless to society? Hell no! And that’s where we fall short — we send the message that their contributions don’t mean anything, and that their work isn’t valuable. The truth is that their work is often the most valuable because they’re the ones who physically build and maintain all of the things that the “smart” folks are buying and selling. They create the infrastructure that facilitates trade.
Blue collar work is every bit as important as white collar work, if not more so. We need to change the message and get the right types of education to the right people, whether it’s vocational training or university (or something altogether different). And we need to stop pretending that one type of education or skill set is superior to another. Society is best off when the skills and talents of every person are maximized.
Participant[quote=FlyerInHi]”Destroyed economy” is totally inaccurate.
GDP now is well above the peak before recession. There was a recession, but no destruction.
Productive capacity has always been there, but lack of liquidity idled resources. The financial system nearly collapsed and the Fed restored liquidity and avoided a collapse.
Money is man-made and an artificial constraint. Nothing in the physical universe prevents people from working. But they won’t work without money.[/quote]
Fixed!
http://www.federalreserve.gov/monetarypolicy/bst_recenttrends.htm
http://www.whitehouse.gov/infographics/us-national-debt
http://www.advisorperspectives.com/dshort/updates/NYSE-Margin-Debt-and-the-SPX.php
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And just consider for a moment that if interest rates were to normalize, that govt debt would destroy the budget (which is the real reason for the Fed’s sitting on rates for so long, IMO).
Just keep whistling past the graveyard…
ParticipantThat says nothing at all about the millions upon millions of people who have seen their purchasing power, job security, old-age security, etc. decline over the past few decades.
“Growth” doesn’t mean much if ~95% of the economic gains have gone to the top 1%. For most of the population, the economy has been destroyed.
December 23, 2014 at 1:23 AM in reply to: local realtor may have stolen property from mentally disabled man #781294ParticipantThanks for doing the research on this, BG. That is definitely your forte!
Still deserves a closer look, IMO. The home was sold for below market value. In a case like this, it doesn’t matter if the neighbor was in the right place at the right time; the trustee has an obligation to get the highest price for the estate. I’ve been the trustee/executor of a couple of estates/trusts, and can assure you that I would never sell something without putting it on the open market for a sufficient enough time to attract the highest price. A trustee can be sued for that. In this particular case, if the only beneficiary is the disabled son, the trustee might feel emboldened to do things that aren’t in the best interests of the beneficiary.
December 23, 2014 at 12:14 AM in reply to: local realtor may have stolen property from mentally disabled man #781289ParticipantOkay, I’m going to retract my statement about it being *very* shady. After looking at the condition of the house (via the internet), and comparing it to the comps, this would be an exceptionally good deal, and might not warrant *very shady.*
However, the fact that this house was not put on the open market leads me to believe that the trustee of the estate did not do his/her job. Everyone knows that the best price is achieved by opening up the market to the greatest possible number of potential buyers. If the son is disabled enough to live in a group home, he’s not capable of making the decisions for the estate, and I’m sure his parents would have wanted to maximize whatever the estate could get for the home in order to care for their son. Because of that alone, this looks unethical, to say the least. It warrants some more attention.
An afterthought…maybe the neighbors were such good friends that they are trying to help this son by flipping the house for the highest possible price and then giving him the net profits. It’s a long shot, but at least it’s a possibility. Just trying to think of the different angles.
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