WatchYou write the script. If you could imagine an ending to the housing bubble that would meet all your expectations, what would it be?
You can be creative or not-- your choice.
Also-- what would happen to salaries in the ideal bubble burst? Would the salaries rise to meet the cost of housing, or would housing crash so hard that it wouldn't matter?
Follow
Befriend
2 threads
2,944 comments
Different Sean's website
I agree Iran is not a physical threat to the US, but it is ruled by people who are ideologically anti-US and it has the potential to cause an economic threat by disrupting oil supplies through the Gulf of Hormuz.
so what. bad luck.
Follow
Befriend
1 threads
3,248 comments
PS,
same thing happened to me before. Don't put immediately after another sign.
Follow
Befriend
2 threads
2,498 comments
Completely OT,
But did anyone else see this headline on CNN.com and bust a gut?
http://money.cnn.com/2006/04/09/news/economy/oil_gasprices/index.htm
"Bracing for Summer Gas Pains"
Ouch - get out the Beano!
Follow
Befriend
23 threads
2,038 comments
surfer-x's website
shit -taken +taking
SQT can yous be fixing for me?
Follow
Befriend (1)
119 threads
4,785 comments
HARM's website
What Surfer-X said plus:
1. End of Fed interest rate/M3 manipulation (not holding my breath).
2. Complete destruction of GSEs (and MBS/CMO risk shifting from lenders to taxpayers).
3. End of Realt-whore MLS monopoly & market infomation asymmetry (happening as we speak).
4. Return to sane lending standards (which should automatically result from #1, 2 & 3).
5. End of local/state NIMBY anti-development laws.
6. Time Magazine front-page article, "Real Estate: Worst Investment Mistake Ever?"
Follow
Befriend
91 comments
Dream on.
This crash will make the great depression look like a picknic.
Follow
Befriend
2 threads
2,944 comments
Different Sean's website
My prediction: the govt will swoop in and help everyone by clever affordable housing schemes and a new New Deal deal - in fact it will be called the New New Deal Deal. Every young person struggling will be helped in proportion with their need. Inflation will be headed off at the pass simultaneously, due to incredibly adroit economic management by the infinitely wise Fed. George Bush will show even more interest in the plight of the people than he does even now, which is hard to believe, I know - that's compassionate conservatism for you - they keep on giving til it hurts. There will be no more drugs or poverty either. Meds will be free.
Follow
Befriend
1 threads
3,248 comments
RP,
not next to the exit, if you are going south on 101, just past the 85 merging point to your left. You can't possibly miss it, it sticks out like a sore thumb. I am not sure the address is in South San Jose or Coyote, but who cares after all.
Follow
Befriend
15 threads
5,071 comments
astrid's website
Premium
DS,
Since John Howard's government also support American actions in Iraq, what country's flag do young Australians place on their backpack when they go abroad?
Follow
Befriend (5)
44 threads
4,602 comments
Los Altos, CA
Premium
frank,
My fantasy scenario would have to include the end of the global fiat money system that caused this all prior asset bubbles.
This contradicts your inflation versus deflation stand. Commodity money systems suffer from intrinsic inflationary pressures which cannot be controlled through monetary means.
Not only that, but fiat money has always been the natural evolution of interdependent economic systems. Sometimes even farmers needed horseshoes in the winter, and they didn't really want to carry around large amounts of gold (or certificates equivalent to such). Contractual forward IOUs of grain for horseshoes were fiat money because the government imposed the validity of such contracts.
Follow
Befriend
2 threads
2,944 comments
Different Sean's website
also, if the ASCII code total of your post equals the first 5 digits of e to the power pi it won't go on either... just a wordpress thing...
Follow
Befriend
15 threads
5,071 comments
astrid's website
Premium
LOL and thanks for sharing.
Follow
Befriend (5)
44 threads
4,602 comments
Los Altos, CA
Premium
(by the way)...
I study a similar economic abstraction that occurs in "virtual economies" with "virtual assets" in MMOGs and VWs (massively multiplayer online games and virtual worlds).
Follow
Befriend (5)
44 threads
4,602 comments
Los Altos, CA
Premium
Try it again and I'll check the spam filter. I didn't see it there earlier when I pulled the data for the above comment.
Follow
Befriend
15 threads
5,071 comments
astrid's website
Premium
"There is no “non-fiat” currency, except for pure, direct commodity barter within small, non-interdependent economic microcosms."
Which would run into availability and transactional cost issues of their own, especially for larger contracts.
DS,
"they will nuke themselves? they will nuke US bases in iraq? they will nuke israel for invading palestine and portions of syria?"
Oye. That might be just a wee bit OT for a BA RE blog.
Follow
Befriend (5)
44 threads
4,602 comments
Los Altos, CA
Premium
-two "distorted"
+too distorted
Follow
Befriend
15 threads
5,071 comments
astrid's website
Premium
frank,
The gold standard was abandoned for a reason. It makes it impossible for the government to ease a bad social situation (great depression public works) without creating deflation. And deflation sucks, people hoard money and refuse to invest.
Given how volatile our oil producers are, do you want to give them that much power? Ditto for other energy sources, controlled by a small number of (rather corrupt) corporations and nations.
I'll go with an easy to supervise printing press that is at least nominally controlled by the American people.
Nor is a gold standard uninflatable. The ancient European soverigns used to start debasing their coinage everytime they needed cash for something. Like it or not, control of any money supply lies in national governments and should lie there. A commodities based currency system isn't going to change that. Any private sector bartering system will run into structural and transactional problems very quickly, and be very expensive and inefficient for its users.
Follow
Befriend (5)
44 threads
4,602 comments
Los Altos, CA
Premium
DS,
MMOG = massively multiplayer online game
VW = virtual world. These are "games" but often without a specific goal, more open-ended virtual realities.
Examples of MMOGs are the hyper popular World of Warcraft, or previously EverQuest. Lineage is a huge MMOG in Asia. Examples of VWs are The Sims Onine or Second Life.
frank,
These "games" have enormous economies, both internal economies and "secondary" economies. A game such as WoW has an economy within the game as created by the game designers. It is based on "gold", or as we call it "virtual currency". There is a phenomenon called RMT (real money trade), which started as people in these games started selling stuff like gold, houses, magic flaming swords, etc. to each other on Ebay for real money. This is the RMT market or Secondary Market.
The RMT market is almost $1bn worldwide today, and expected to grow to $7bn by 2009. It is enormous, and creates a huge profit opportunity. Because of this "farmers" popped up. Entrepreneurs who would play these games purely to accumulate gold and items to sell for profit. Then came sophisticated farming operations -- mainly in China where cost of labor is low and internet infrastructure is good, and a gaming culture exists. These operations will produce more currency as fast as they can, usually selling through middle-men operators (the supply chain is a bit complicated, but think of it as a frontier, wild west economy with few governing laws and no taxation).
The problem is that in these games there exists almost no monetary or fiscal controls, so the game designers see their games' economies forfeiting all power to the productivity of the inflation-driving "farmers". Worse, since the middle-men operators have exclusive information regarding future price direction, they operationally arbitrage the system to the cost of the game-world community, hurting both people who buy and sell stuff as well as those who don't (people who just play the games as designed).
Worse yet, there is really no production constraint other than time and operational efficiency, both of which are overcome by scale and sophistication. So, you see an experimental example of a worst-case situation where a commodity-based monetary system (often intended to be a barter system) yields to basic capitalist forces to the demise of the entire community. The reaction by game publisher has been largely legal in nature, but has also been completely ineffective. The real answer is to engineer a real, functional economy where the internal "primary" economy has monetary, fiscal and production constraint (microeconomic) levers.
Follow
Befriend
15 threads
5,071 comments
astrid's website
Premium
Frank,
Please correct me if I’m wrong but the bad social situations of the Great Depression was not due to excess government interventions. The 1920s was known to be an era of laisse faire government. Ditto for the numerous economic crises of the late 19th century. In those instances, it was the lack of government oversight structure that led to credit bubbles and speculative behavior. The government didn’t come up with regulatory bodies because it liked to put handcuffs on progress, it was because a large movement of people demanded the oversight.
Can you elaborate on how the government wants to separate me from my wealth, beyond the legal obligations my elected representatives have agreed to place on me? I might not like everything these people do, but I still have nominal control over them.
While currency debasement can be corrected, is the end result superior to fiat currency? If the American government arbitrarily debased the dollar, people will start bartering and flee into substantive currencies. I think you’re assuming that the American government is a completely uncontrollable beast. I don’t think it has crossed that bridge yet, and that numerous checks exist to dissuade serious fiat currency shark jumping (via hyper-inflation).
Follow
Befriend (5)
44 threads
4,602 comments
Los Altos, CA
Premium
frank,
I haven't read Hamilton, but will be sure to take him in before our next encounter. My studies in the phenomena of local maxima comes from Hubbard and Beim (Columbia Business School). Admittedly, most of their research is of a global macro nature.
My definition of inflation comes from Mankiw, the well known neoclassical economist. The popular definition of inflation is "price increases", as he acknowledges. But the economic definition is categorically not micro economic in nature and has nothing to do with specific supply and demand, only with macroeconomic aggregate supply and aggregate demand in conjunction with the quantity theory of money.
As Mankiw puts it: "Thus, any system of commodity money eventually evolves into a system of fiat money once the economy reaches a sufficient scale. Notice that in the end, the use of money -- any type of money -- in exchange is a social convention: everyone values money, fiat, commodity backed or direct commodity, because they expect everyone else to also value it."