[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

This if beautifully written! Thank you for posting this.

The biggest thing I take issue with is this:

Barack Obama says today’s economic problems are “a stark reminder of the failures of . . . an economic philosophy that sees any regulation at all as unwise and unnecessary.”

Why single out Obama? Bush is giving us the biggest intervention in the markets in American history. Sure McCain would “stay the course”. Neither party or candidate wants free markets. We must pick our next president on some other criteria.

The other minor issue concerns the skating rink metaphor. There is some “regulation” at the rink. There is the rule that everyone go clockwise around the rink. But I would call this “rule of law” more so than “regulation”. In the markets, a similar rule of law would be “do not commit fraud”, or “honor contractual obligations”. Obama is wrong, we do not see all regulation as bad. We need some rules of engagement, some protocols that we all agree on, like going clockwise. But beyond that, we do NOT need a central planner. It begs the question, who would regulate the central planner? So McCain is wrong too. He would give us Paulson and Bernanke as Bush has, with no one regulating them. Hooray for anyone, like Stossel, calling for TRUE free markets!!!

[underdose]

[quote]
In both 1933 and 1965, liberal majorities imposed vast expansions of government that have never been repealed, and the current financial panic may give today’s left another pretext to return to those heydays of welfare-state liberalism. Americans voting for “change” should know they may get far more than they ever imagined
[/quote]

Full disclosure: I am aligned with true Republicanism in the libertarian sense. I voted straight Republican up until W. in 2000. I too have misgivings about the Democratic party’s socialistic bent.

BUT….

I would argue that the biggest period of expansion of the government was 2001-2006, far surpassing 1933 and 1965. The neo-con hijacking of the Republican party — controlling all three branches of the government — brought us full on Big Brother, unprovoked and bankrupting militarism, and nationalization of the markets to the tune of more trillions of dollars than borrowed by all previous administrations combined. Sadly, we have the choice of something crappy, Obama’s new New Deal, or something far worse, McCain’s more of the same that brought us to this point of emergency.

If Obama wins, the Republican party can take full credit for putting him in the White House. They have completely lost their way and chased away everyone who used to vote for them except for the evangelicals.

[underdose]

[quote]
In both 1933 and 1965, liberal majorities imposed vast expansions of government that have never been repealed, and the current financial panic may give today’s left another pretext to return to those heydays of welfare-state liberalism. Americans voting for “change” should know they may get far more than they ever imagined
[/quote]

Full disclosure: I am aligned with true Republicanism in the libertarian sense. I voted straight Republican up until W. in 2000. I too have misgivings about the Democratic party’s socialistic bent.

BUT….

I would argue that the biggest period of expansion of the government was 2001-2006, far surpassing 1933 and 1965. The neo-con hijacking of the Republican party — controlling all three branches of the government — brought us full on Big Brother, unprovoked and bankrupting militarism, and nationalization of the markets to the tune of more trillions of dollars than borrowed by all previous administrations combined. Sadly, we have the choice of something crappy, Obama’s new New Deal, or something far worse, McCain’s more of the same that brought us to this point of emergency.

If Obama wins, the Republican party can take full credit for putting him in the White House. They have completely lost their way and chased away everyone who used to vote for them except for the evangelicals.

[underdose]

[quote]
In both 1933 and 1965, liberal majorities imposed vast expansions of government that have never been repealed, and the current financial panic may give today’s left another pretext to return to those heydays of welfare-state liberalism. Americans voting for “change” should know they may get far more than they ever imagined
[/quote]

Full disclosure: I am aligned with true Republicanism in the libertarian sense. I voted straight Republican up until W. in 2000. I too have misgivings about the Democratic party’s socialistic bent.

BUT….

I would argue that the biggest period of expansion of the government was 2001-2006, far surpassing 1933 and 1965. The neo-con hijacking of the Republican party — controlling all three branches of the government — brought us full on Big Brother, unprovoked and bankrupting militarism, and nationalization of the markets to the tune of more trillions of dollars than borrowed by all previous administrations combined. Sadly, we have the choice of something crappy, Obama’s new New Deal, or something far worse, McCain’s more of the same that brought us to this point of emergency.

If Obama wins, the Republican party can take full credit for putting him in the White House. They have completely lost their way and chased away everyone who used to vote for them except for the evangelicals.

[underdose]

[quote]
In both 1933 and 1965, liberal majorities imposed vast expansions of government that have never been repealed, and the current financial panic may give today’s left another pretext to return to those heydays of welfare-state liberalism. Americans voting for “change” should know they may get far more than they ever imagined
[/quote]

Full disclosure: I am aligned with true Republicanism in the libertarian sense. I voted straight Republican up until W. in 2000. I too have misgivings about the Democratic party’s socialistic bent.

BUT….

I would argue that the biggest period of expansion of the government was 2001-2006, far surpassing 1933 and 1965. The neo-con hijacking of the Republican party — controlling all three branches of the government — brought us full on Big Brother, unprovoked and bankrupting militarism, and nationalization of the markets to the tune of more trillions of dollars than borrowed by all previous administrations combined. Sadly, we have the choice of something crappy, Obama’s new New Deal, or something far worse, McCain’s more of the same that brought us to this point of emergency.

If Obama wins, the Republican party can take full credit for putting him in the White House. They have completely lost their way and chased away everyone who used to vote for them except for the evangelicals.

[underdose]

[quote]
In both 1933 and 1965, liberal majorities imposed vast expansions of government that have never been repealed, and the current financial panic may give today’s left another pretext to return to those heydays of welfare-state liberalism. Americans voting for “change” should know they may get far more than they ever imagined
[/quote]

Full disclosure: I am aligned with true Republicanism in the libertarian sense. I voted straight Republican up until W. in 2000. I too have misgivings about the Democratic party’s socialistic bent.

BUT….

I would argue that the biggest period of expansion of the government was 2001-2006, far surpassing 1933 and 1965. The neo-con hijacking of the Republican party — controlling all three branches of the government — brought us full on Big Brother, unprovoked and bankrupting militarism, and nationalization of the markets to the tune of more trillions of dollars than borrowed by all previous administrations combined. Sadly, we have the choice of something crappy, Obama’s new New Deal, or something far worse, McCain’s more of the same that brought us to this point of emergency.

If Obama wins, the Republican party can take full credit for putting him in the White House. They have completely lost their way and chased away everyone who used to vote for them except for the evangelicals.

[underdose]

[quote=TheBreeze]
I wasn’t alive back then, but I’ve read that Volcker took interest rates to 13% back in the early 80’s in order to combat hyperinflation. That would be a little less than a doubling of the interest rate from here. What would happen to housing if that happened? Could prices get cut in half even from these levels?
[/quote]

Volcker wanted to fight inflation. Bernanke wants to cause it. Bernanke will not raise the Fed funds rate to 13%. No chance, no how.

However, the federal funds rate only can influence mortgage rates, but it doesn’t control them. Mortgage rates could go to double digits even with the fed funds rate at 1%. That would be if mortgage interest rates were controlled by market forces. But sadly, the government just nationalized everything, and market forces have much less clout than they used to. The government can print new money and push it through the mortgage markets at an interest rate well below the rate of inflation. They can even do what Bernanke suggested during his 2002 “helicopter” speech, print money to buy US Treasuries and manipulate the interest rate on the national debt. Great! The Treasury can borrow directly from the Fed. Who can guess what long term interest rates will do anymore?

That really isn’t the question. If inflation becomes that severe, if Bernanke prints that much money, any inflation hedge will go up in price in nominal terms. If inflation is 100% and mortgage interest rates are also 100%, home prices will rise again. They may rise at 90%, lagging inflation, but people will take out 100% interest rate loans rather than hold cash.

The key is: real estate must still correct further in real terms, but what homes do in nominal terms depends on how aggressively the Fed prints money, regardless of interest rates.

[underdose]

[quote=TheBreeze]
I wasn’t alive back then, but I’ve read that Volcker took interest rates to 13% back in the early 80’s in order to combat hyperinflation. That would be a little less than a doubling of the interest rate from here. What would happen to housing if that happened? Could prices get cut in half even from these levels?
[/quote]

Volcker wanted to fight inflation. Bernanke wants to cause it. Bernanke will not raise the Fed funds rate to 13%. No chance, no how.

However, the federal funds rate only can influence mortgage rates, but it doesn’t control them. Mortgage rates could go to double digits even with the fed funds rate at 1%. That would be if mortgage interest rates were controlled by market forces. But sadly, the government just nationalized everything, and market forces have much less clout than they used to. The government can print new money and push it through the mortgage markets at an interest rate well below the rate of inflation. They can even do what Bernanke suggested during his 2002 “helicopter” speech, print money to buy US Treasuries and manipulate the interest rate on the national debt. Great! The Treasury can borrow directly from the Fed. Who can guess what long term interest rates will do anymore?

That really isn’t the question. If inflation becomes that severe, if Bernanke prints that much money, any inflation hedge will go up in price in nominal terms. If inflation is 100% and mortgage interest rates are also 100%, home prices will rise again. They may rise at 90%, lagging inflation, but people will take out 100% interest rate loans rather than hold cash.

The key is: real estate must still correct further in real terms, but what homes do in nominal terms depends on how aggressively the Fed prints money, regardless of interest rates.

[underdose]

[quote=TheBreeze]
I wasn’t alive back then, but I’ve read that Volcker took interest rates to 13% back in the early 80’s in order to combat hyperinflation. That would be a little less than a doubling of the interest rate from here. What would happen to housing if that happened? Could prices get cut in half even from these levels?
[/quote]

Volcker wanted to fight inflation. Bernanke wants to cause it. Bernanke will not raise the Fed funds rate to 13%. No chance, no how.

However, the federal funds rate only can influence mortgage rates, but it doesn’t control them. Mortgage rates could go to double digits even with the fed funds rate at 1%. That would be if mortgage interest rates were controlled by market forces. But sadly, the government just nationalized everything, and market forces have much less clout than they used to. The government can print new money and push it through the mortgage markets at an interest rate well below the rate of inflation. They can even do what Bernanke suggested during his 2002 “helicopter” speech, print money to buy US Treasuries and manipulate the interest rate on the national debt. Great! The Treasury can borrow directly from the Fed. Who can guess what long term interest rates will do anymore?

That really isn’t the question. If inflation becomes that severe, if Bernanke prints that much money, any inflation hedge will go up in price in nominal terms. If inflation is 100% and mortgage interest rates are also 100%, home prices will rise again. They may rise at 90%, lagging inflation, but people will take out 100% interest rate loans rather than hold cash.

The key is: real estate must still correct further in real terms, but what homes do in nominal terms depends on how aggressively the Fed prints money, regardless of interest rates.

[underdose]

[quote=TheBreeze]
I wasn’t alive back then, but I’ve read that Volcker took interest rates to 13% back in the early 80’s in order to combat hyperinflation. That would be a little less than a doubling of the interest rate from here. What would happen to housing if that happened? Could prices get cut in half even from these levels?
[/quote]

Volcker wanted to fight inflation. Bernanke wants to cause it. Bernanke will not raise the Fed funds rate to 13%. No chance, no how.

However, the federal funds rate only can influence mortgage rates, but it doesn’t control them. Mortgage rates could go to double digits even with the fed funds rate at 1%. That would be if mortgage interest rates were controlled by market forces. But sadly, the government just nationalized everything, and market forces have much less clout than they used to. The government can print new money and push it through the mortgage markets at an interest rate well below the rate of inflation. They can even do what Bernanke suggested during his 2002 “helicopter” speech, print money to buy US Treasuries and manipulate the interest rate on the national debt. Great! The Treasury can borrow directly from the Fed. Who can guess what long term interest rates will do anymore?

That really isn’t the question. If inflation becomes that severe, if Bernanke prints that much money, any inflation hedge will go up in price in nominal terms. If inflation is 100% and mortgage interest rates are also 100%, home prices will rise again. They may rise at 90%, lagging inflation, but people will take out 100% interest rate loans rather than hold cash.

The key is: real estate must still correct further in real terms, but what homes do in nominal terms depends on how aggressively the Fed prints money, regardless of interest rates.

[underdose]

[quote=TheBreeze]
I wasn’t alive back then, but I’ve read that Volcker took interest rates to 13% back in the early 80’s in order to combat hyperinflation. That would be a little less than a doubling of the interest rate from here. What would happen to housing if that happened? Could prices get cut in half even from these levels?
[/quote]

Volcker wanted to fight inflation. Bernanke wants to cause it. Bernanke will not raise the Fed funds rate to 13%. No chance, no how.

However, the federal funds rate only can influence mortgage rates, but it doesn’t control them. Mortgage rates could go to double digits even with the fed funds rate at 1%. That would be if mortgage interest rates were controlled by market forces. But sadly, the government just nationalized everything, and market forces have much less clout than they used to. The government can print new money and push it through the mortgage markets at an interest rate well below the rate of inflation. They can even do what Bernanke suggested during his 2002 “helicopter” speech, print money to buy US Treasuries and manipulate the interest rate on the national debt. Great! The Treasury can borrow directly from the Fed. Who can guess what long term interest rates will do anymore?

That really isn’t the question. If inflation becomes that severe, if Bernanke prints that much money, any inflation hedge will go up in price in nominal terms. If inflation is 100% and mortgage interest rates are also 100%, home prices will rise again. They may rise at 90%, lagging inflation, but people will take out 100% interest rate loans rather than hold cash.

The key is: real estate must still correct further in real terms, but what homes do in nominal terms depends on how aggressively the Fed prints money, regardless of interest rates.

[Author]

Posts