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patientrenter
Participant[quote=sdrealtor]Correct on price but part of the cost of buying a house is interest charges and including that its half.[/quote]
Interest charges play no part in the cost of buying a house – unless you happen to be unable or unwilling to pay the purchase price with your own money.
Americans have become so used to stratospheric prices for homes, way beyond what they can afford, that they assume financing is an automatic part of the purchase process.
Participant[quote=ninaprincess]This house, sold for $630,000 and now sold for $400,000.[/quote]
Maybe I am not as good at math as I thought, but 400/630 is 63.5%. So the house is now 36.5% cheaper than before. If you can’t afford to buy the house, you can get financing, and the financing may have dropped in cost as well. However, the house price is down by 36.5%, not over 50%.
Participant[quote=CA renter]……
As far as “bailouts” are concerned, TARP is only the tip of the iceburg.How much is being taken from elderly people (and others on fixed income) every single month — for years now — via the Fed’s manipulation of interest rates?
How much will taxpayers lose on bad mortgages that were refi’d from private lenders to govt-backed lenders?
How much will taxpayers end up paying through the FDIC (we are nowhere near done with bank failures, IMHO).
How much purchasing power have wage earners lost as the Fed/Treasury pumped more money into the system to prop up asset owners at the expense of those who earn wages or live on fixed income?
How much have taxpayers paid via extended unemployment and other benefits — which was caused by the boom-bust cycle of the Fed and the “capital gains” crew?
How much have taxpayers lost because of backdoor deals between govt choosen private parties who have been given assets for 17 cents on the dollar (worth about 40-60 cents)?
The list goes on and on… TARP is being used as a distraction from the real damage that has been done by the financial elite. Time to rein them in.[/quote]
This sums it up as well as I’ve seen it done anywhere. The TARP was just the short-term measure until the Fed’s printing of trillions could kick in. Once the Fed got going, the TARP money could be given back, leading to the illusion of little or no cost.
October 24, 2011 at 8:05 PM in reply to: Low Mortgage Interest Rates For Everyone!!!: U.S. May Back Refinance Plan for Mortgages #731253Participant[quote=briansd1]
….That’s besides the point. It’s not a question of “deserving” or not, but a question of getting the economy growing….[/quote]You advocate an interesting world, brian. So let’s apply your principles consistently, shall we? Hand over all your assets to me, and I promise to stimulate the economy.
I hate to take anything from you, brian. I don’t deserve it. But we all have to do whatever is best to get the economy growing, you know. LoL!
I think we have had too little accountability and responsibility. Between bailouts for Wall Streeters and for homeowners, we have had enough. We aren’t going to have a healthier economy in the long run by encouraging bad behavior, nor matter how good it feels in the short run.
Participant[quote=patb]If Ron Paul won the Primaries, you would see the GOP leadership
embrace Obama….[/quote]That’s correct. Of course, they would do it subtly, by campaigning only very faintly for him. That way they’d know he would lose, and they would avoid the wrath of their own Republican rank and file after the loss.
For the people running Wall Street and the two parties, it matters less which party wins the contest than that they retain control over the winning party. Obama is firmly under control, following Geithner’s and Bernanke’s prescriptions, so he would be a very acceptable alternative to any establishhment Republican candidate. It’s the non-establishment candidates, in either party, that make them nervous.
Participant[quote=briansd1]patientrenter, your facts make my point. Despite all the money printing and government spending, inflation did not take off in Japan. That’s the Japan lesson…… [/quote]
I am sorry, I missed your reference to an absence of inflation in Japan. I only saw your comment referring to Japanese “deflation”. I was pointing out that Japan is not experiencing deflation. It’s not experiencing inflation either. What Japan has experienced since 1993 is simply price stability.
Participant[quote=briansd1]…….If the government had not gone on a building spree, deflation would have been much worse in Japan.[/quote]
Deflation in Japan?
Let’s look at the actual numbers. Here is the consumer price index for Japan, from the official Japanese government website http://www.e-stat.go.jp/SG1/estat/ListE.do?bid=000001015975&cycode=0 :
1980 76.9
1981 80.6
1982 82.9
1983 84.4
1984 86.3
1985 88.1
1986 88.6
1987 88.7
1988 89.3
1989 91.3
1990 94.1
1991 97.3
1992 98.9
1993 100.2
1994 100.8
1995 100.7
1996 100.8
1997 102.7
1998 103.3
1999 103
2000 102.2
2001 101.5
2002 100.6
2003 100.3
2004 100.3
2005 100
2006 100.3
2007 100.3
2008 101.7
2009 100.3
2010 99.6When I look at these values, I see price stability in Japan from 1993 on. The cumulative deflation from 1993 to 2010, a period of 17 years, adds up to a grand total of 0.6%. That’s 0.036% per year, which is barely discernible.
I love the (Rich-inspired) motto at piggington: Bring facts.
Participant[quote=Brutus]Warren is a Harvard lawyer, an elitist that lives in a two million dollar mansion, makes $400,000 a year from teaching one class and, like most Harvard lawyers, thinks she’s the smartest person in any room. She’s also despises capitalism in all its forms which makes her a HYPOCRITE, too.
She will lose, because NOBODY likes Harvard lawyers, even other Harvard lawyers. If it wasn’t for liberal Hollywood movie-stars, Harvard lawyers would be the most obnoxious, smarmy, know-it-all, jerks on the planet.
They still have a way to go to outdo Tim Robbins and Danny Glover, though.[/quote]
LoL! Well, this is all true, I am afraid. Warren may be better than many alternatives, but it is true that she lives deep inside the world of the elite and wealthy. Her dinner table guests don’t include too many of the “ordinary people”. She happens to wear the Democrat label and sings those tunes, but that’s kind of mandatory if you operate at a senior level in academia. If she gains any power, it will be interesting to see if she causes a deep recession in the wealthy enclaves of Manhattan, Greenwich, The Hamptons, and the leafy environs around her own Harvard. (Most of these areas are Democratic, BTW. This is a bipartisan problem.)
I seriously doubt Warren would move against her own people. Instead, the unwashed masses will be bought off with bright cheap baubles, or perhaps from money taken from those outside the elite axis. Certain groups are off-limits to attack from either Republicans or Democrats, and the power axis elite of Washington DC and Wall Street have guaranteed bipartisan immunity. When Bernanke replaced Greenspan, and Summers/Geithner replaced Paulson, Blankfein and Dimon etc didn’t worry.
What was interesting about the early days of the Tea Party was how the supporters opposed the Wall Street bailouts, above all else. That was quickly turned by the establishment into a traditional and diffuse radical right wing movement. Now the Occupy Wall Street movement has focused people, once again, on the way in which the establishment – in Wall Street and Washington DC – has feathered its own nest at the expense of the rest of the country. However, the establishment will try very hard to diffuse that focus, and turn the movement into a mirror image of the current tea party, but on the left. It will simply become the left wing of the Democratic party. That way, Wall Street and Washington DC escapes the haircut the rest of the country is experiencing.
Oh, and all that doesn’t mean I can’t admire Warren’s consumerist, populist, comments. I admired Obama’s also – another elite Harvard lawyer- before he was elected. Then he appointed Summers and Geithner, and re-appointed Bernanke, and supported their policies designed to protect a very elite slice of America. I am just alert to the notion that, when the chips are down, the elite will find ways to put themselves first.
Participant[quote=LuckyInOC]IMO, it is not lost wealth. It is lost debt-inflated dollars. The economy was built on a house of cards….[/quote]
I tend to agree.
Blaming our economic ills on the crash of 2008 ignores the underlying cause of that crash – the runaway asset inflation of prior years. That was allowed to happen because it allowed us to dream that we were doing well, even as spendable incomes, net of health care costs, were declining for many Americans. Now the tide has gone out some, and the promise of affluence without fundamental, painful, reform is the naked man on the beach.
October 3, 2011 at 6:28 PM in reply to: It’s going to get much worse…there is no escape (ECRI) #729991Participant[quote=CA renter]
…….Bingo!………..
[/quote]
And bingo back, CA Renter! I agree with almost all of your comments, to the point that I rarely comment myself. Between you and Rich himself, I can at least see that my own crazy minority view of what is going on is not completely unique. And you are both far more articulate. Thanks!
Participant[quote=Nor-LA-SD-GUY2]While I do agree the real issue is too much debt,
Yet lower home prices will not solve the above….[/quote]We have already tried creating ‘wealth’ by inflating asset prices, turbocharged with leverage. This is what we specialized in until 2008. This creates nothing of any real value. It merely transfers real wealth from one group to another. Real wealth is created when we actually manufacture things, or provide services, that other people want enough to make trades for.
Inflation is just a way to subsidize those who bet on paper-shuffling as a way to make their living. Since it is a zero-sum game, others who are actually creating wealth are made to pay for these inflation subsidies.
What is the real solution to our macro-economic problems? Is it re-starting the game of becoming rich through leveraged asset speculation, as Bernanke has been attempting? That certainly suits Wall Street, and many others who want to live off financial gambling. Or is the solution to be found in reducing our trade deficit and increasing domestic demand?
It probably isn’t possible to increase domestic demand enough until we lower the trade deficit and re-distribute domestic income. Wealthy people save a high fraction of their incomes, so when we allow high concentrations of national income accrue to the wealthiest few %, there’s not enough spending to keep everyone employed. A trade deficit does the same thing, allowing too much domestic demand leak into employment for foreign workers, not Americans. Applying a 50% tax on capital gains, and to the highest income bracket, and reducing social security taxes by the total dollar amount of the resulting increase in taxes, would stimulate demand. So would applying a tax on imports from countries that hold their currency value well below its natural purchasing power, thereby encouraging US businesses to supplant the imports.
We keep reaching for false easy solutions, when the real solution is waiting. Yes, it doesn’t involve getting paid (through ultimate capital appreciation) to buy homes, or other obviously unsustainable dreams. But just dealing with reality isn’t that hard an alternative. We’ve just become hopelessly lazy as a nation.
October 1, 2011 at 9:41 AM in reply to: It’s going to get much worse…there is no escape (ECRI) #729943Participant[quote=Nor-LA-SD-GUY2]…….
Funny thing is just like japan (because we don’t want to inflate) we will end up with larger and larger defect spending just to keep people busy so they don’t revolt. You cannot get more Gov revenue without growth, you cannot get growth until you solve the housing situation (one way or the other)….[/quote]Those who gambled on earning income from leveraged speculation on asset prices, especially house prices, are desperate for inflation. It’s the easy way to generate income for those who bought assets with borrowed money. Make thousands every month without having to produce anything! What a deal! Bernanke is a God!
The actual solution to our problems is making more real stuff that we all want enough to pay for, and that substitutes for imports, and exporting things that other people want enough to pay for. Instead we are anxious to shuffle money around so that we can dream that we can get rich by sitting on leveraged housing assets, just like we were doing before 2008.
ParticipantHiggy
Lincoln just increased prices on this MoneyGuard product. It may not be as good a deal as it was before.
Participant[quote=ice9]…I’m 40 yrs old and keep thinking about stopping work and living off investments…. dividend paying stocks that average 5.5%, and only withdrawal the dividend income…. that income combined with dividend income from my other investments would allow me to stop working.
Any fatal flaws to this thinking?[/quote]
Fatal flaws? Yep. Where do I start?
-A sustainable, inflation-protected, diversified dividend yield of 5.5% isn’t a reasonable assumption
-Retiring at 40 when you don’t have enough saved is a very high risk move, and it is unnecessary. Surely your job isn’t that bad.
That’s enough. They’re pretty basic problems.
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