[joestool]

Seems like this plan didn’t get thought all the way through: A moratorium on short selling underlying stocks would cause increased demand for put options and tend to raise their premium. If sellers of put options ca’nt short stock to hedge their put selling, this too will tend to increase put option premium. If buying put options as insurance to hedge against a long equity position therefore becomes too expensive, this will tend to decrease demand for buying the equity — and tend to lower its price.
Then there’s option exercise: how do equity options settle if you can’t be assigned on in-the-money short calls or long puts if it would result in taking a short position?

[joestool]

Seems like this plan didn’t get thought all the way through: A moratorium on short selling underlying stocks would cause increased demand for put options and tend to raise their premium. If sellers of put options ca’nt short stock to hedge their put selling, this too will tend to increase put option premium. If buying put options as insurance to hedge against a long equity position therefore becomes too expensive, this will tend to decrease demand for buying the equity — and tend to lower its price.
Then there’s option exercise: how do equity options settle if you can’t be assigned on in-the-money short calls or long puts if it would result in taking a short position?

[joestool]

Seems like this plan didn’t get thought all the way through: A moratorium on short selling underlying stocks would cause increased demand for put options and tend to raise their premium. If sellers of put options ca’nt short stock to hedge their put selling, this too will tend to increase put option premium. If buying put options as insurance to hedge against a long equity position therefore becomes too expensive, this will tend to decrease demand for buying the equity — and tend to lower its price.
Then there’s option exercise: how do equity options settle if you can’t be assigned on in-the-money short calls or long puts if it would result in taking a short position?

[joestool]

Seems like this plan didn’t get thought all the way through: A moratorium on short selling underlying stocks would cause increased demand for put options and tend to raise their premium. If sellers of put options ca’nt short stock to hedge their put selling, this too will tend to increase put option premium. If buying put options as insurance to hedge against a long equity position therefore becomes too expensive, this will tend to decrease demand for buying the equity — and tend to lower its price.
Then there’s option exercise: how do equity options settle if you can’t be assigned on in-the-money short calls or long puts if it would result in taking a short position?

[joestool]

Seems like this plan didn’t get thought all the way through: A moratorium on short selling underlying stocks would cause increased demand for put options and tend to raise their premium. If sellers of put options ca’nt short stock to hedge their put selling, this too will tend to increase put option premium. If buying put options as insurance to hedge against a long equity position therefore becomes too expensive, this will tend to decrease demand for buying the equity — and tend to lower its price.
Then there’s option exercise: how do equity options settle if you can’t be assigned on in-the-money short calls or long puts if it would result in taking a short position?

[joestool]

[quote=kev374]It is an agreed upon concept that inflation lowers the value of savings and decreasing the purchasing power of the currency. But here is my question, if there is no income inflation isn’t the relative value of the currency still held?

For instance, say an item costs $1000 today and someone earns $2000/month and has savings of $1000 to exactly afford that one item.

Now forward some time period, that item costs $2000, earning is still $2000/month and savings is $1000 (forget interest income).

In both cases it still takes 15 days of earning to result in a savings of $1000. So in terms of “amount of work” required the value of the savings has not gone down.

Does this even make sense? I’m just trying to look at this from a different lens.[/quote]

Makes perfect sense: In nominal terms, your work still earns the same $1000. In real terms, the value of your work was cut in half.
Real is what matters.

[joestool]

[quote=kev374]It is an agreed upon concept that inflation lowers the value of savings and decreasing the purchasing power of the currency. But here is my question, if there is no income inflation isn’t the relative value of the currency still held?

For instance, say an item costs $1000 today and someone earns $2000/month and has savings of $1000 to exactly afford that one item.

Now forward some time period, that item costs $2000, earning is still $2000/month and savings is $1000 (forget interest income).

In both cases it still takes 15 days of earning to result in a savings of $1000. So in terms of “amount of work” required the value of the savings has not gone down.

Does this even make sense? I’m just trying to look at this from a different lens.[/quote]

Makes perfect sense: In nominal terms, your work still earns the same $1000. In real terms, the value of your work was cut in half.
Real is what matters.

[joestool]

[quote=kev374]It is an agreed upon concept that inflation lowers the value of savings and decreasing the purchasing power of the currency. But here is my question, if there is no income inflation isn’t the relative value of the currency still held?

For instance, say an item costs $1000 today and someone earns $2000/month and has savings of $1000 to exactly afford that one item.

Now forward some time period, that item costs $2000, earning is still $2000/month and savings is $1000 (forget interest income).

In both cases it still takes 15 days of earning to result in a savings of $1000. So in terms of “amount of work” required the value of the savings has not gone down.

Does this even make sense? I’m just trying to look at this from a different lens.[/quote]

Makes perfect sense: In nominal terms, your work still earns the same $1000. In real terms, the value of your work was cut in half.
Real is what matters.

[joestool]

[quote=kev374]It is an agreed upon concept that inflation lowers the value of savings and decreasing the purchasing power of the currency. But here is my question, if there is no income inflation isn’t the relative value of the currency still held?

For instance, say an item costs $1000 today and someone earns $2000/month and has savings of $1000 to exactly afford that one item.

Now forward some time period, that item costs $2000, earning is still $2000/month and savings is $1000 (forget interest income).

In both cases it still takes 15 days of earning to result in a savings of $1000. So in terms of “amount of work” required the value of the savings has not gone down.

Does this even make sense? I’m just trying to look at this from a different lens.[/quote]

Makes perfect sense: In nominal terms, your work still earns the same $1000. In real terms, the value of your work was cut in half.
Real is what matters.

[joestool]

[quote=kev374]It is an agreed upon concept that inflation lowers the value of savings and decreasing the purchasing power of the currency. But here is my question, if there is no income inflation isn’t the relative value of the currency still held?

For instance, say an item costs $1000 today and someone earns $2000/month and has savings of $1000 to exactly afford that one item.

Now forward some time period, that item costs $2000, earning is still $2000/month and savings is $1000 (forget interest income).

In both cases it still takes 15 days of earning to result in a savings of $1000. So in terms of “amount of work” required the value of the savings has not gone down.

Does this even make sense? I’m just trying to look at this from a different lens.[/quote]

Makes perfect sense: In nominal terms, your work still earns the same $1000. In real terms, the value of your work was cut in half.
Real is what matters.

[joestool]

“I am looking for some advice. I bought in 09/2004 with a 0 down, 5 year ARM I/O loan. The same townhome that I paid 400k is now going for 300k.”

“My only hope is to keep paying and wait for the government to do something.”

So after taking on a wildly speculative and risky loan based on the fraudulent premise that you could afford to make the promised payments on such a mortgage product and contributing to the astronomical run up in real estate prices which prevented me from purchasing any kind of home to live in under any reasonable terms, you now
want me to also help pay to clean up after your mess through government confiscation in the form of increased taxes and inflation.
All this while asking for my advice on how you can avoid any tax implications yourself?

Do I understand correctly what you’re asking?
Just want to make sure before I tell you what I think you should do.

[joestool]

“I am looking for some advice. I bought in 09/2004 with a 0 down, 5 year ARM I/O loan. The same townhome that I paid 400k is now going for 300k.”

“My only hope is to keep paying and wait for the government to do something.”

So after taking on a wildly speculative and risky loan based on the fraudulent premise that you could afford to make the promised payments on such a mortgage product and contributing to the astronomical run up in real estate prices which prevented me from purchasing any kind of home to live in under any reasonable terms, you now
want me to also help pay to clean up after your mess through government confiscation in the form of increased taxes and inflation.
All this while asking for my advice on how you can avoid any tax implications yourself?

Do I understand correctly what you’re asking?
Just want to make sure before I tell you what I think you should do.

[joestool]

“I am looking for some advice. I bought in 09/2004 with a 0 down, 5 year ARM I/O loan. The same townhome that I paid 400k is now going for 300k.”

“My only hope is to keep paying and wait for the government to do something.”

So after taking on a wildly speculative and risky loan based on the fraudulent premise that you could afford to make the promised payments on such a mortgage product and contributing to the astronomical run up in real estate prices which prevented me from purchasing any kind of home to live in under any reasonable terms, you now
want me to also help pay to clean up after your mess through government confiscation in the form of increased taxes and inflation.
All this while asking for my advice on how you can avoid any tax implications yourself?

Do I understand correctly what you’re asking?
Just want to make sure before I tell you what I think you should do.

[joestool]

“I am looking for some advice. I bought in 09/2004 with a 0 down, 5 year ARM I/O loan. The same townhome that I paid 400k is now going for 300k.”

“My only hope is to keep paying and wait for the government to do something.”

So after taking on a wildly speculative and risky loan based on the fraudulent premise that you could afford to make the promised payments on such a mortgage product and contributing to the astronomical run up in real estate prices which prevented me from purchasing any kind of home to live in under any reasonable terms, you now
want me to also help pay to clean up after your mess through government confiscation in the form of increased taxes and inflation.
All this while asking for my advice on how you can avoid any tax implications yourself?

Do I understand correctly what you’re asking?
Just want to make sure before I tell you what I think you should do.

[joestool]

“I am looking for some advice. I bought in 09/2004 with a 0 down, 5 year ARM I/O loan. The same townhome that I paid 400k is now going for 300k.”

“My only hope is to keep paying and wait for the government to do something.”

So after taking on a wildly speculative and risky loan based on the fraudulent premise that you could afford to make the promised payments on such a mortgage product and contributing to the astronomical run up in real estate prices which prevented me from purchasing any kind of home to live in under any reasonable terms, you now
want me to also help pay to clean up after your mess through government confiscation in the form of increased taxes and inflation.
All this while asking for my advice on how you can avoid any tax implications yourself?

Do I understand correctly what you’re asking?
Just want to make sure before I tell you what I think you should do.

[Author]

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