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January 14, 2012 at 7:14 PM in reply to: OT- CONTEST!!! Guess public sector household earnings #735903patientrenterParticipant
I am curious, do these public pensions typically come with post-retirement inflation protection?
patientrenterParticipantThe title is very telling. Apparently a lower demand for owner occupied housing – in other words, lower house prices – is considered “ruin” for the housing market.
In reality, the more affordable housing becomes, the better for the economy and for society at large. Would we cheer for higher oil prices? Or for higher bread prices? Housing is just a simple consumer good, and cheaper (for the same quality) is better.
patientrenterParticipant[quote=Arraya]The big question is why did academics fail at forecasting this? THAT is the question and how that applies to society overall?[/quote]
Shiller, Roubini, Roach, and a few other luminaries, academic or otherwise, did in fact diagnose the bubble and forecast a crash.
But they were a tiny minority, and were marginalized by the mainstream media. The reasons are several:
1. Inside academia, most economists spend their entire careers fine-tuning theories that predict a few economic variables for the next quarter. As a profession, economists spend very little time developing a more rigorous understanding of economics or finance over the long term.
2. In the finance world, those who develop a theory saying that the current bonuses and profits of their firm might be largely bogus, simply not sustainable over the long run, or an example of egregious economic rent extraction, will either decide they don’t have enough evidence and keep collecting their paychecks, or they will speak up and promptly be cast out of the community. It’s a tough choice. Most take the easy path.
3. Most mainstream media organizations are supported or controlled by the same people and firms that do well as long as the bubble continues. They will be made to feel disapproval if they suggest we have a bubble. Even now, how many people are suggesting that the Federal Reserve should let asset prices slip back to their levels in the mind-1990’s, before the huge expansion beyond historical trendlines since then? No one in the mainstream media wants to call that.
patientrenterParticipant[quote=urbanrealtor]….
Printing money is not inflation per se.
Printing money is printing money.
Inflation is broad based price increases.
Printing often historically has led to inflation but they are not the same thing….[/quote]urbanrealtor, thank goodness you and some other people still respect the English language, and little details like meaning and accurate definitions.
Do we still have one-note markmax singing the same old tune here? Even those of us who didn’t mind the tune are now tired of hearing it. We are so done, markmax.
patientrenterParticipant[quote=swave]…..But eventually Madoff did stop because of the SEC and government prosecutors….[/quote]
Huh? Madoff handed himself in. The SEC is just a fig leaf, to make us feel that we are being protected from Wall Street shenanigans.
November 30, 2011 at 6:43 PM in reply to: People who can’t afford their house but get to keep it?! #733674patientrenterParticipant[quote=UCGal]It’s very frustrating.
There’s moral hazard everywhere around us.
There are no consequences for bad decisions.From the banks who gave out crappy loans to the buyers who bought more than they could reasonably afford. Neither side is paying the price for these stupid transactions.[/quote]
I am afraid that the obvious is true:
– Most of the top Wall Streeters kept their ill-gotten gains, and are still doing very nicely compared to the rest of us
– Many homeowners who did the most irresponsible things – and who drove up the price of houses for the rest of us so that we had to remain renters – are getting lots of free breaks now that are worth far more than the average renter gets.
[And, yes, jp, I work inside FIRE, and am in the top 1%, but I know what happened, and I know it is unfair and that the unfairness is unnecessary. Good article at http://dealbook.nytimes.com/2011/11/30/on-wall-street-some-insiders-express-quiet-outrage/%5D
November 28, 2011 at 3:42 PM in reply to: Bloomberg story: Feds loaned $7.77 Trillion to banks #733489patientrenterParticipant[quote=Allan from Fallbrook]
…..All politicians, regardless of stripe or affiliation, are lying shitbags. What further proof do you need?[/quote]
All of what he said. Good for you, Allan.
(Can we get rid of the single-theme Ron Paul poster? I actually like Ron Paul, but I get tired listening to anyone who only shows one thought.)
November 18, 2011 at 5:59 PM in reply to: I am shocked. Shocked! Conforming limits going back up. #733249patientrenterParticipantFHA loans: Another few trillion dollars for the Housing-Finance complex. All told, it actually eats more resources than the Military-Industrial complex we are all familiar with.
November 14, 2011 at 7:16 PM in reply to: Excellent Economist Mag. article on CA’s Gov. retiree Pension problems #732976patientrenterParticipant[quote=gandalf]….The parties on Wall Street made the majority of the profits off what they knew to be a swindle. That is why my ire is directed at ‘Wall Street’…..[/quote]
Hang ’em high!
I am all for true accountability, and that would send people like Greenspan, Bernanke, Paulson, Summers, Rubin, Dodd, Frank, and Geithner to prison for life. They were entrusted with the public interest and used it to enrich their friends. And with them would go people on Wall Street like Dimon, Blankfein, and half the senior people at the investment banks, hedge funds, private equity funds, rating agencies, mortgage brokers, etc. who made millions from what was essentially fraud.
But who actually made the most money from our giant asset bubbles? Wall Streeters walked away with hundreds of billions. But there were gains of many trillions cashed in during the bubble years. Who got most of that money?
Well, the people who got the most were the net sellers of assets during the bubble. They have in their bank accounts most of the money that is the mirror image of the losses everyone is now gnashing their teeth about. That’s a lot of homeowners who congratulate themselves on good timing.
It’s a lot of baby boomers who got fat defined benefit pensions based on unsupportable bubble returns on the pension assets. The most egregious examples are public employees who voted themselves pensions that were unbelievably generous in amount and age of eligibility.
It’s not something we like to think about. “We have met the enemy, and he is us.”
Edit: Oh, and inflation is just another way to send the bill for all this to….. someone else, namely the savers of our society.
patientrenterParticipant[quote=Coronadoflyer]French pastry is good, mix in American steak and you have a meal.[/quote]
Don’t forget the red wine!
[This was close to my diet for almost a year. I got gout. Other than that, I loved it.]
patientrenterParticipant[quote=Zeitgeist]What a waste of taxpayer money!….[/quote]
I don’t know enough about the Volt to say if it is a waste of taxpayer money. But it is clear that the Volt was created by the government deciding which technical solution to a problem was best. Yes, we like the lobby that got the government’s ear on this, because it represents smart, technical, environmentally conscious people like us. However, the problems with Solyndra and maybe the Volt show that the government is much better off providing equal incentives for any solution that works, and letting individuals and companies come up with the actual solutions.
In the case of gasoline consumption, that means applying a higher tax on oil, applied in predictable and roughly equal increments over many years, and letting the higher gas prices spur industry and people to come up with solutions. People would arrange to travel to work less, and to buy more fuel-efficient cars. Industry would adapt housing to cater to the people moving, and would make cars of all types that use less gasoline.
It’s always easier to get things done if you use the natural flow. Smart tax policy that creates incentives for a wide variety of solutions, in a way that is equal for equal results, can be far more effective than trying to pick winning solutions.
November 13, 2011 at 9:28 AM in reply to: CA Revenue comes in 6.5% lower than expected (and some common sense solutions) #732825patientrenterParticipant[quote=EconProf]I taught for 23 years, mostly at SDSU, while also investing in SD real estate, which eventually displaced teaching in my family’s priorities……. [/quote]
It is a little bit bizarre, you’ll have to admit, EconProf, that an advocate for sensible free markets happens to have made most of his living from a sheltered government job, and from an asset bubble – California real estate – that was stoked by government actions such as easy money policies from the Federal Reserve, government guarantees from the FHA and Fannie Mae etc, and a complete failure to enforce underwriting standards on the home loan industry. (If we went back to minimum 20% downpayments, and no government guarantees, and no Fed intervention in the market for mortgages, we’d fix our current housing problems for once and for all, yet no one is advancing these things. Everyone is still anxious to receive their free lunch.)
I work deep inside FIRE, and yet I advocate a complete ripping out of its influence over our real economy. Therefore I understand your situation a little. Sometimes being on the inside enables you to see things more clearly.
patientrenterParticipant[quote=sdrealtor]….Simply taking punitive actions is not the solution. We can only go forward in cleaning up this mess to the best of our abilities.[/quote]
No accountability.
This is definitely the grand plan, as organized by Congressmen, the Treasury Secretary, the Fed chair, and the doyens of Wall Street. All members of the 1%. I am sure the fact that this plan is best for them has nothing to do with their preference for it.
“No accountability”. The new motto for a good and just economic system.
patientrenterParticipant[quote=bearishgurl]….The Richards are “philosophical” in the end and state that they don’t blame the “mean banks.”
Why should they? They got $200K of “free money” and the debt “pardoned.”….[/quote]
I find myself agreeing with your posts, bearishgirl. I was raised to keep my promises, and not to make any that I couldn’t keep. I am not perfect at following that moral code, but I try very, very hard, even if it means personal sacrifice. We live in a world where that level of effort is unusual. I suppose the upside is that we can enjoy supporting all the freeloaders 🙂
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