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February 21, 2010 at 3:36 PM in reply to: Need help obtaining homeowners insurance for Poway / Scripps Ranch area #517105
cabal
ParticipantThis bailout tracker from MONEY is valid as of 11/2009 and says we’ve spent about 3T out of 11T committed.
Can someone link, I can’t due to spam filter…
//money.cnn.com/news/storysupplement/economy/bailouttracker/index.htmlLooks like everyone is feeding well off the trough except Joe Citizen, especially Joe Underwater Citizen. Total FDIC bailout for 2008/2009 is a respectable 45T, but pocket change compared to say the GSE bailouts.
ParticipantThis bailout tracker from MONEY is valid as of 11/2009 and says we’ve spent about 3T out of 11T committed.
Can someone link, I can’t due to spam filter…
//money.cnn.com/news/storysupplement/economy/bailouttracker/index.htmlLooks like everyone is feeding well off the trough except Joe Citizen, especially Joe Underwater Citizen. Total FDIC bailout for 2008/2009 is a respectable 45T, but pocket change compared to say the GSE bailouts.
ParticipantThis bailout tracker from MONEY is valid as of 11/2009 and says we’ve spent about 3T out of 11T committed.
Can someone link, I can’t due to spam filter…
//money.cnn.com/news/storysupplement/economy/bailouttracker/index.htmlLooks like everyone is feeding well off the trough except Joe Citizen, especially Joe Underwater Citizen. Total FDIC bailout for 2008/2009 is a respectable 45T, but pocket change compared to say the GSE bailouts.
ParticipantThis bailout tracker from MONEY is valid as of 11/2009 and says we’ve spent about 3T out of 11T committed.
Can someone link, I can’t due to spam filter…
//money.cnn.com/news/storysupplement/economy/bailouttracker/index.htmlLooks like everyone is feeding well off the trough except Joe Citizen, especially Joe Underwater Citizen. Total FDIC bailout for 2008/2009 is a respectable 45T, but pocket change compared to say the GSE bailouts.
ParticipantThis bailout tracker from MONEY is valid as of 11/2009 and says we’ve spent about 3T out of 11T committed.
Can someone link, I can’t due to spam filter…
//money.cnn.com/news/storysupplement/economy/bailouttracker/index.htmlLooks like everyone is feeding well off the trough except Joe Citizen, especially Joe Underwater Citizen. Total FDIC bailout for 2008/2009 is a respectable 45T, but pocket change compared to say the GSE bailouts.
Participant[quote=CA renter]Pretty much in agreement with your timeline, but disagree with fear and greed causing “artificial” lows and highs. Fear and greed are normal in any market and drive prices up and down based on emotions (and technical analysis, IMHO).
While fear and greed do cause the normal fluctuations seen in any boom/bust market, when I refer to “artificial” forces in the market, I’m specifically referring to intervention or actions that are not related to emotions or fundamentals. Actions and policies that are not normally a part of the market (like when an investor/govt/entity corners the market in a particular good), or when credit is ramped up to such levels that there is no possible way for it to be paid back, etc. Governmental intervention or institutional intervention on a large scale — especially over an extended period of time, and also when they run counter to what “the market” wants to do — would be considered “artificial” forces, IMHO.
Not sure if that’s really clear, but there is a distinct difference between “normal” market forces (which include fear, greed, euphoria, etc.) and “artificial” forces, IMHO.[/quote]
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.
Participant[quote=CA renter]Pretty much in agreement with your timeline, but disagree with fear and greed causing “artificial” lows and highs. Fear and greed are normal in any market and drive prices up and down based on emotions (and technical analysis, IMHO).
While fear and greed do cause the normal fluctuations seen in any boom/bust market, when I refer to “artificial” forces in the market, I’m specifically referring to intervention or actions that are not related to emotions or fundamentals. Actions and policies that are not normally a part of the market (like when an investor/govt/entity corners the market in a particular good), or when credit is ramped up to such levels that there is no possible way for it to be paid back, etc. Governmental intervention or institutional intervention on a large scale — especially over an extended period of time, and also when they run counter to what “the market” wants to do — would be considered “artificial” forces, IMHO.
Not sure if that’s really clear, but there is a distinct difference between “normal” market forces (which include fear, greed, euphoria, etc.) and “artificial” forces, IMHO.[/quote]
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.
Participant[quote=CA renter]Pretty much in agreement with your timeline, but disagree with fear and greed causing “artificial” lows and highs. Fear and greed are normal in any market and drive prices up and down based on emotions (and technical analysis, IMHO).
While fear and greed do cause the normal fluctuations seen in any boom/bust market, when I refer to “artificial” forces in the market, I’m specifically referring to intervention or actions that are not related to emotions or fundamentals. Actions and policies that are not normally a part of the market (like when an investor/govt/entity corners the market in a particular good), or when credit is ramped up to such levels that there is no possible way for it to be paid back, etc. Governmental intervention or institutional intervention on a large scale — especially over an extended period of time, and also when they run counter to what “the market” wants to do — would be considered “artificial” forces, IMHO.
Not sure if that’s really clear, but there is a distinct difference between “normal” market forces (which include fear, greed, euphoria, etc.) and “artificial” forces, IMHO.[/quote]
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.
Participant[quote=CA renter]Pretty much in agreement with your timeline, but disagree with fear and greed causing “artificial” lows and highs. Fear and greed are normal in any market and drive prices up and down based on emotions (and technical analysis, IMHO).
While fear and greed do cause the normal fluctuations seen in any boom/bust market, when I refer to “artificial” forces in the market, I’m specifically referring to intervention or actions that are not related to emotions or fundamentals. Actions and policies that are not normally a part of the market (like when an investor/govt/entity corners the market in a particular good), or when credit is ramped up to such levels that there is no possible way for it to be paid back, etc. Governmental intervention or institutional intervention on a large scale — especially over an extended period of time, and also when they run counter to what “the market” wants to do — would be considered “artificial” forces, IMHO.
Not sure if that’s really clear, but there is a distinct difference between “normal” market forces (which include fear, greed, euphoria, etc.) and “artificial” forces, IMHO.[/quote]
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.
Participant[quote=CA renter]Pretty much in agreement with your timeline, but disagree with fear and greed causing “artificial” lows and highs. Fear and greed are normal in any market and drive prices up and down based on emotions (and technical analysis, IMHO).
While fear and greed do cause the normal fluctuations seen in any boom/bust market, when I refer to “artificial” forces in the market, I’m specifically referring to intervention or actions that are not related to emotions or fundamentals. Actions and policies that are not normally a part of the market (like when an investor/govt/entity corners the market in a particular good), or when credit is ramped up to such levels that there is no possible way for it to be paid back, etc. Governmental intervention or institutional intervention on a large scale — especially over an extended period of time, and also when they run counter to what “the market” wants to do — would be considered “artificial” forces, IMHO.
Not sure if that’s really clear, but there is a distinct difference between “normal” market forces (which include fear, greed, euphoria, etc.) and “artificial” forces, IMHO.[/quote]
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.
Participant[quote]
BTW, I’d like to know what forces could keep housing prices “artificially” low. To the best of my knowledge, nobody has ever tried to keep housing prices “artificially” low (though that would have benefitted society far more than “artificially high” prices, IMHO). I’ve never seen anything that would cause “artificially low” prices, other than insider deals at banks or S&Ls, but those were never considered “market prices.”[/quote]The forces of fear and greed drive prices artificially low and high, respectively. These are the prime factors for near term valuation on most assets, equities, etc, not fundamentals.
My recollection from 1990 to present day is as follows:
1990-1997: Slight dip, but essentially flat. If you got a good deal in 1990 in a good location, you didn’t see any depreciation. I bought a house in 90/91 with fair market value near 280K for 250K. Based on the occasional sale in the neighborhood, I’m pretty sure I could’ve sold it conservatively for 260K anytime during this period.
1997-1998: Based on trends from the 80s, there was a belief by many in the so called 8-10 yr cycle. Applied to the 90s, the flat prices from 1990-1997should be followed by 2-3 yrs of exceptional appreciation. Many people started to look casually, either to upgrade or invest in rental property. In parallel, people also noticed abnormal movement in the Nasdaq, which removed focus on real estate to some degree. Regardless, prices did start to trend up with above average slope. I don’t recall lines, but any development you visited, the choicest lots were always soldout by day 1. However, you can go back a month later and find 50% of any phase still available.
1999-2000: Crazy years! The dotcom bubble was in full bloom. I remember doing an informal survey at work and concluded 50% of the employees were actively day trading, especially engineers. Anyone breathing was making money, big money. I knew one engineer with a 100K salary that made and lost 1M in one year. As an added bonus, employees in companies like Intel & Qualcomm (Quillionaires) that offered lucrative stock options essentially double dipped. People were euphoric, buying toys and having kids. Eventually bubble popped and many cashed out well in the black.
2001-2002: Interest rates were slashed from 7-8% to under 6% to combat potential recession from dotcom crash and 9/11. At the same time, home designs really improved moving away from large useless LR/DR to large functional kitchen/FR. Attractive features normally reserved for high end homes started to show up in midrange homes, such as walkin closets, large pantry, courtyards, granite, etc. These two factors, coupled with obscene cash from the dotcom bubble, and needs of a growing family really ignited the bubble imo.
2003-present: Housing bubble goes exponential with creative financing and the rest is history.
Participant[quote]
BTW, I’d like to know what forces could keep housing prices “artificially” low. To the best of my knowledge, nobody has ever tried to keep housing prices “artificially” low (though that would have benefitted society far more than “artificially high” prices, IMHO). I’ve never seen anything that would cause “artificially low” prices, other than insider deals at banks or S&Ls, but those were never considered “market prices.”[/quote]The forces of fear and greed drive prices artificially low and high, respectively. These are the prime factors for near term valuation on most assets, equities, etc, not fundamentals.
My recollection from 1990 to present day is as follows:
1990-1997: Slight dip, but essentially flat. If you got a good deal in 1990 in a good location, you didn’t see any depreciation. I bought a house in 90/91 with fair market value near 280K for 250K. Based on the occasional sale in the neighborhood, I’m pretty sure I could’ve sold it conservatively for 260K anytime during this period.
1997-1998: Based on trends from the 80s, there was a belief by many in the so called 8-10 yr cycle. Applied to the 90s, the flat prices from 1990-1997should be followed by 2-3 yrs of exceptional appreciation. Many people started to look casually, either to upgrade or invest in rental property. In parallel, people also noticed abnormal movement in the Nasdaq, which removed focus on real estate to some degree. Regardless, prices did start to trend up with above average slope. I don’t recall lines, but any development you visited, the choicest lots were always soldout by day 1. However, you can go back a month later and find 50% of any phase still available.
1999-2000: Crazy years! The dotcom bubble was in full bloom. I remember doing an informal survey at work and concluded 50% of the employees were actively day trading, especially engineers. Anyone breathing was making money, big money. I knew one engineer with a 100K salary that made and lost 1M in one year. As an added bonus, employees in companies like Intel & Qualcomm (Quillionaires) that offered lucrative stock options essentially double dipped. People were euphoric, buying toys and having kids. Eventually bubble popped and many cashed out well in the black.
2001-2002: Interest rates were slashed from 7-8% to under 6% to combat potential recession from dotcom crash and 9/11. At the same time, home designs really improved moving away from large useless LR/DR to large functional kitchen/FR. Attractive features normally reserved for high end homes started to show up in midrange homes, such as walkin closets, large pantry, courtyards, granite, etc. These two factors, coupled with obscene cash from the dotcom bubble, and needs of a growing family really ignited the bubble imo.
2003-present: Housing bubble goes exponential with creative financing and the rest is history.
Participant[quote]
BTW, I’d like to know what forces could keep housing prices “artificially” low. To the best of my knowledge, nobody has ever tried to keep housing prices “artificially” low (though that would have benefitted society far more than “artificially high” prices, IMHO). I’ve never seen anything that would cause “artificially low” prices, other than insider deals at banks or S&Ls, but those were never considered “market prices.”[/quote]The forces of fear and greed drive prices artificially low and high, respectively. These are the prime factors for near term valuation on most assets, equities, etc, not fundamentals.
My recollection from 1990 to present day is as follows:
1990-1997: Slight dip, but essentially flat. If you got a good deal in 1990 in a good location, you didn’t see any depreciation. I bought a house in 90/91 with fair market value near 280K for 250K. Based on the occasional sale in the neighborhood, I’m pretty sure I could’ve sold it conservatively for 260K anytime during this period.
1997-1998: Based on trends from the 80s, there was a belief by many in the so called 8-10 yr cycle. Applied to the 90s, the flat prices from 1990-1997should be followed by 2-3 yrs of exceptional appreciation. Many people started to look casually, either to upgrade or invest in rental property. In parallel, people also noticed abnormal movement in the Nasdaq, which removed focus on real estate to some degree. Regardless, prices did start to trend up with above average slope. I don’t recall lines, but any development you visited, the choicest lots were always soldout by day 1. However, you can go back a month later and find 50% of any phase still available.
1999-2000: Crazy years! The dotcom bubble was in full bloom. I remember doing an informal survey at work and concluded 50% of the employees were actively day trading, especially engineers. Anyone breathing was making money, big money. I knew one engineer with a 100K salary that made and lost 1M in one year. As an added bonus, employees in companies like Intel & Qualcomm (Quillionaires) that offered lucrative stock options essentially double dipped. People were euphoric, buying toys and having kids. Eventually bubble popped and many cashed out well in the black.
2001-2002: Interest rates were slashed from 7-8% to under 6% to combat potential recession from dotcom crash and 9/11. At the same time, home designs really improved moving away from large useless LR/DR to large functional kitchen/FR. Attractive features normally reserved for high end homes started to show up in midrange homes, such as walkin closets, large pantry, courtyards, granite, etc. These two factors, coupled with obscene cash from the dotcom bubble, and needs of a growing family really ignited the bubble imo.
2003-present: Housing bubble goes exponential with creative financing and the rest is history.
Participant[quote]
BTW, I’d like to know what forces could keep housing prices “artificially” low. To the best of my knowledge, nobody has ever tried to keep housing prices “artificially” low (though that would have benefitted society far more than “artificially high” prices, IMHO). I’ve never seen anything that would cause “artificially low” prices, other than insider deals at banks or S&Ls, but those were never considered “market prices.”[/quote]The forces of fear and greed drive prices artificially low and high, respectively. These are the prime factors for near term valuation on most assets, equities, etc, not fundamentals.
My recollection from 1990 to present day is as follows:
1990-1997: Slight dip, but essentially flat. If you got a good deal in 1990 in a good location, you didn’t see any depreciation. I bought a house in 90/91 with fair market value near 280K for 250K. Based on the occasional sale in the neighborhood, I’m pretty sure I could’ve sold it conservatively for 260K anytime during this period.
1997-1998: Based on trends from the 80s, there was a belief by many in the so called 8-10 yr cycle. Applied to the 90s, the flat prices from 1990-1997should be followed by 2-3 yrs of exceptional appreciation. Many people started to look casually, either to upgrade or invest in rental property. In parallel, people also noticed abnormal movement in the Nasdaq, which removed focus on real estate to some degree. Regardless, prices did start to trend up with above average slope. I don’t recall lines, but any development you visited, the choicest lots were always soldout by day 1. However, you can go back a month later and find 50% of any phase still available.
1999-2000: Crazy years! The dotcom bubble was in full bloom. I remember doing an informal survey at work and concluded 50% of the employees were actively day trading, especially engineers. Anyone breathing was making money, big money. I knew one engineer with a 100K salary that made and lost 1M in one year. As an added bonus, employees in companies like Intel & Qualcomm (Quillionaires) that offered lucrative stock options essentially double dipped. People were euphoric, buying toys and having kids. Eventually bubble popped and many cashed out well in the black.
2001-2002: Interest rates were slashed from 7-8% to under 6% to combat potential recession from dotcom crash and 9/11. At the same time, home designs really improved moving away from large useless LR/DR to large functional kitchen/FR. Attractive features normally reserved for high end homes started to show up in midrange homes, such as walkin closets, large pantry, courtyards, granite, etc. These two factors, coupled with obscene cash from the dotcom bubble, and needs of a growing family really ignited the bubble imo.
2003-present: Housing bubble goes exponential with creative financing and the rest is history.
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