[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

From that article by Jim Grant:

“The Fed may be worried about something else. By sitting on interest rates, it is distorting every business and investment decision. If mispriced debt was the root cause of the narrowly-averted destruction of global finance, the Fed is well on its way to setting the stage for some distant (let us hope) Act II. In the meantime, ultra-low interest rates have lit a fire under the stock and debt markets.”

So he is saying that the Fed is goosing the markets in the short term, and building up more problems for the long term. Since the WSJ wouldn’t have published a negative article from him, he focused on the short term part of the story. But pay attention to the whole story Jim Grant tells.

[patientrenter]

[quote=jpinpb]The insanity continues. Now I just keep checking to see what else they have up their sleeves.

Really, when you think about it, the real estate market has just been perpetually and continually government sponsored, from when Clinton did away w/the capital gains tax ….[/quote]

Actually, jpnpb, it goes back further than that. Deductibility of home mortgage interest goes back a long way, as do the price support schemes called FNM, FRE, FHA etc. (With more limited programs than they are offering now, but still very important, and designed to boost prices to benefit older folks who bought earlier at the expense of younger folks who have to buy later.)

[patientrenter]

[quote=jpinpb]The insanity continues. Now I just keep checking to see what else they have up their sleeves.

Really, when you think about it, the real estate market has just been perpetually and continually government sponsored, from when Clinton did away w/the capital gains tax ….[/quote]

Actually, jpnpb, it goes back further than that. Deductibility of home mortgage interest goes back a long way, as do the price support schemes called FNM, FRE, FHA etc. (With more limited programs than they are offering now, but still very important, and designed to boost prices to benefit older folks who bought earlier at the expense of younger folks who have to buy later.)

[patientrenter]

[quote=jpinpb]The insanity continues. Now I just keep checking to see what else they have up their sleeves.

Really, when you think about it, the real estate market has just been perpetually and continually government sponsored, from when Clinton did away w/the capital gains tax ….[/quote]

Actually, jpnpb, it goes back further than that. Deductibility of home mortgage interest goes back a long way, as do the price support schemes called FNM, FRE, FHA etc. (With more limited programs than they are offering now, but still very important, and designed to boost prices to benefit older folks who bought earlier at the expense of younger folks who have to buy later.)

[patientrenter]

[quote=jpinpb]The insanity continues. Now I just keep checking to see what else they have up their sleeves.

Really, when you think about it, the real estate market has just been perpetually and continually government sponsored, from when Clinton did away w/the capital gains tax ….[/quote]

Actually, jpnpb, it goes back further than that. Deductibility of home mortgage interest goes back a long way, as do the price support schemes called FNM, FRE, FHA etc. (With more limited programs than they are offering now, but still very important, and designed to boost prices to benefit older folks who bought earlier at the expense of younger folks who have to buy later.)

[patientrenter]

[quote=jpinpb]The insanity continues. Now I just keep checking to see what else they have up their sleeves.

Really, when you think about it, the real estate market has just been perpetually and continually government sponsored, from when Clinton did away w/the capital gains tax ….[/quote]

Actually, jpnpb, it goes back further than that. Deductibility of home mortgage interest goes back a long way, as do the price support schemes called FNM, FRE, FHA etc. (With more limited programs than they are offering now, but still very important, and designed to boost prices to benefit older folks who bought earlier at the expense of younger folks who have to buy later.)

[patientrenter]

[quote=urbanrealtor]Before you go all legalistic on their asses, you might want to recall that the seller is broke (hence the short sale)….[/quote]

A short sale is not the same as a bankruptcy. You can own an expensive BMW, a 401k, a stock portfolio, another property, and… lots of other things, and still get a short sale.

[patientrenter]

[quote=urbanrealtor]Before you go all legalistic on their asses, you might want to recall that the seller is broke (hence the short sale)….[/quote]

A short sale is not the same as a bankruptcy. You can own an expensive BMW, a 401k, a stock portfolio, another property, and… lots of other things, and still get a short sale.

[patientrenter]

[quote=urbanrealtor]Before you go all legalistic on their asses, you might want to recall that the seller is broke (hence the short sale)….[/quote]

A short sale is not the same as a bankruptcy. You can own an expensive BMW, a 401k, a stock portfolio, another property, and… lots of other things, and still get a short sale.

[patientrenter]

[quote=urbanrealtor]Before you go all legalistic on their asses, you might want to recall that the seller is broke (hence the short sale)….[/quote]

A short sale is not the same as a bankruptcy. You can own an expensive BMW, a 401k, a stock portfolio, another property, and… lots of other things, and still get a short sale.

[patientrenter]

[quote=urbanrealtor]Before you go all legalistic on their asses, you might want to recall that the seller is broke (hence the short sale)….[/quote]

A short sale is not the same as a bankruptcy. You can own an expensive BMW, a 401k, a stock portfolio, another property, and… lots of other things, and still get a short sale.

[patientrenter]

[quote=HLS]….
Lying about income and allowing 100% financing had NOTHING to do with the housing bubble, it was not getting loan disclosures early enough that was the problem……[/quote]

You know, HLS, that doing something like requiring a minimum down payment of 20% on owner occupied homes, and 30% otherwise, is not being considered as a fix for our financial problems precisely because it would… fix them.

Everything is being done to keep home prices high. Measures to clamp down on foolish lending are implemented only if they leave enough wiggle room for home prices to stay high. So proposals like tinkering with disclosures for consumer protection are now very popular, because everyone knows they will be ineffective. Changing loan applications will have zero impact. The fact that during the bubble everyone was lying on loan applications, and no one was checking, and no one was even reading the loan agreements they were signing, is now conveniently ignored.

We need to get rid of down payments of less than some reasonable number, like 20%, for once and for all. Otherwise the madness and economic damage will continue for many more years, and we’re just wasting our time and letting ourselves be distracted by reforms that don’t actually get the necessary result.

[Author]

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