It's just another data point on the timeline...
Awesome. Then if I do the exact same chart for the 2007 - 2012 time period, houses must have been EXTREMELY underpriced in 2012, right?
OK, then tell me what exact number was used as a wage amount for the baseline, and tell me what median house price on that chart was used as a value for the baseline. These numbers should be clear on the chart, since they were used as the "starting point" for the "baseline", right?
huh? Are you trying to argue that 2012 isn't the baseline for a chart that clearly says:
2012 - 2014 pct. change?
Second, they are a snapshot in time, they just didn't "start" in 2012. They show a percentage "change" over a specific time period.
Yes, they did. The percentages are calculated using 2012 as a baseline.
When it's so clearly an anomaly-
You don't think the end of a bubble popping is an unusual data point?
Yep, but apparently you don't.
I'm not sure you do. The question was why would you use 2012 as a starting point? When it's so clearly an anomaly--most would call that cherry picking data points.
Because the data in the charts was a timeline, NOT a baseline.
lol--do you know what a baseline is?
Wow, this is really going to upset all the faux liberals.
99% of whom dont even know the term economic rent, let alone what it means
Better to just keep voting democrat from their million dollar enclaves while shaming everyone else for being too dumb to support higher wages, and higher income taxes. Because everyone should know that without any type of LVT, all wage increases are immediately devoured by higher rents.
Are you under the impression that it is liberals (more than conservatives) that would fight a LVT? Where did you get that idea?
hint: The vast majority of millionaires vote Republican.
This analysis is weak. Looking at price increase/wage increase for only the last two years after a large housing crash is flawed at best, and misleading at worst. In 2012, housing prices were underpriced, as is typical after a bubble pops. So, a large percentage of the housing gains were just getting back to "normal" and were possible with no wage gains at all.
If you want to see if house prices are in bubble territory, look at price/rent ratios. That is the easiest metric that tells the story.
Clearly he's indicating that he's serious about winning the nomination for the GOP ticket...
Yep--anyone who thinks he's "different' than other Republicans has hopefully come to their senses now.
Are you talking about the chart your presented for years prior to 1971? That was when the USD was still linked to gold internationally under Bretton Woods. That was before the USD became a pure fiat money. I did not comment on it because I was busy dealing with Iwog's nonsense.
Ah. I should have expected this type of response. It's always about the Fed or Bretton Woods. OK, let's look at recent history then and see how that works.
1. In approx. 1998, rates go from falling to rising. 10 year treasuries lead the way.
2. In approx. 2000, rates go from rising to falling. 10 year treasuries lead the way.
3. In late 2003/early 2004, rates reverse again starting to rise. Guess what-10 year treasuries lead again.
4. Finally in 2006, rates begin falling again. . 10 year treasuries lead the way.
So, to summarize--in every change of direction, the market based 10 year treasury did not follow but actually guided the Fed funds rate.
What's the excuse this time? Reality says
Look at the fiat money era, especially the current era after the early 1980's. The Fed Fund rate of course help the big banks get loans on the open market: by denying yield on savings. The FED Funds rate has been below the 10yr rate almost the entire 30+ years, leading the way down.
Wong again. Reality says
The FED funds window is only accessible by big financial insitutions. "Almost never" is a meaningless statement for what is essentially a safetynet for big banks: the safetynet serves its purpose even when not actively used constantly.
wtf does that mean? Either they get loans at those low rates, or they don't. A safety net and a dollar will get you a cup of coffee.
Deposit customers (deposit rates are highly and immediately suppressed by Fed funds rate, which competes directly with demand deposit when banks need reserve money on the balance sheet), and money created out of thin air and they can expect the Fed Window to stump up and lend them when necessary as safety net. i.e. the cost of money to the big banks is no higher than the Fed Funds window rate. That's the real reason why the FED crashes the FED Fund rate whenever there is any risk of yield curve inversion. Big banks borrow short and lend long; the difference is how the big banks generate profit.
How can deposit customers be in competition with the Fed funds rate when banks NEVER use the Fed window. Reality says
You f*cked up with your strawman tactic: what I said was FED artificially suppress interest rates. You were the one who countered that "But FED does not control long term interest rate," which is an irrelevant statement and non-rebuttal to my statement if by "control" you mean rigid price setting at the risk of no-trade at all on the legal market and driving nearly all transactions to black market
You said the Fed artificially suppresses interest rates. I reminded you that all important rates for consumers are market driven, not controlled by the Fed. You then countered that the 10 year treasury is the Fed Funds plus a risk premium. Now that I've showed that to be complete bullshit, you're trying to weasel out saying that "control" really just means that they sometimes buy or sell on the open market with uneven success. Let's not distract with black market nonsense, OK?
Just yesterday, a coworker who I respect discussed the housing market. Her reply: "This housing bubble is more ridiculous than the last."
Yes, Thank You, I believe someone would need to be a 'Full Retard' to believe these numbers !
Those are contradictory statements. If we are in a housing bubble, that would be all the more reason that you would believe these numbers.
People like CIC make me chuckle. You don't see him disbelieving the government numbers when they agree with him...
10yr treasuries are bought ans sold on the market based on expectations of future money supply vs. future demand/supply of treasuries.
The current FED funds certainly has plenty influence on the 10yr rate: the primary dealers usually borrow short at near the current FED funds rate while lend long including purchasing 10yr. When the primary dealers became reluctant due to their tattered balance sheets, the FED itself got in on the act through "Operation Twist" bought 10yr treasuries directly! How ignorant and deliberately dishonest do you have to be to argue that the FED doesn't suppress long term rate when it explicitly suppresses it and brags about it on its own website!
Nope--future money supply is included in estimate of future demand. Expectation of future supply/demand covers it all.
So, where are primary dealers borrowing short at "near" Fed funds rate? Who is loaning them that money?
Obviously the Fed influences at times by buying (or selling) on the open market. That's what I said, idiot. wtf is wrong with you??? You said the Fed CONTROLS the rate. That the rate is simply the Fed funds rate plus a risk premium. Now, that I've shown you how patently wrong you are--you're going to come back with:
Yes, but, but, but sometimes they buy on the open market and can influence the rates slightly.. Talk about weaseling out.
You f*$ked up. Own it.
As for weaseling, you are the ones weaseling. My contention was always that FED artificially suppress interest rates for favored big financial institutions. Your reply "but FED doesn't control interest rate" is a complete weaseling strawman non-rebuttal.
My rebuttal was the post where I showed you conclusively that long term interest rates move INDEPENDENTLY of the Fed Funds rate. The Fed Funds rate actually follows the market--it doesn't lead it. I notice you haven't commented on that one. So, the Fed Fund rate isn't doing anything to help them get loans on the open market.
And, the big financial institutions almost never use the Fed funds window to get loans, so that doesn't help them either.
That is the rebuttal. Care to comment this time?
Neither does Chicago. Boston and Chicago are actually very similar.
Yup, if you want to watch american league baseball in chicago you will see the military disbursing you for your own safety, and the suggest you wear full body armor and pack semi auto heat. Just like fenway, lol
The Cell is not in the best neighborhood, for sure, but the area around the stadium is fine. How many Sox games have you been to?
Sure, but still, Chicago ain't no Boston. In general, we don't have regular muggings, around our version of *the loop*
Neither does Chicago. Boston and Chicago are actually very similar.
Chicago is the murder capital of America, enough said. You better hide on North Lake Shore Dr or better yet, move to Wisconsin and commute in.
lol--give me a break. It's very easy to stay out of the bad neighborhoods in Chicago just like any other large city. Same as Boston.
If you're not a gang-banger, you're fine.
It's just another way of saying risk premium and unit time value of a fixed 10year contract are lower than shorter duration contracts that will get repriced after the fixed shorter duration or after no specific fixed duration at all.
No, it's actually not. 10 year treasuries are bought and sold in a marketplace based on traders expectations for future economic conditions and future supply/demand of treasuries. The current Fed funds rate has very little to no influence on the 10 year rate. And the 10 year treasury obviously is not the Fed funds rate plus a risk premium.
The "control" that can be established over another human being and his/her action is always subject to limitations. Interest rate involve two "another human beings" on the two sides of a contract. How much "control" a 3rd party can have is always subject to limitations. That's the limit of any "government control." Government "price control" does not mean there is no black market or having sufficient transaction at the government "set" price point.
lol--nice weaseling out there. So, when you say government controls rates, what you actually meant is that the government sometimes influences them?? And you think that's the same?
Long dated bonds trading at shorter dated bonds was not a phenomenon unique to 2007-2008. Yield curve inversion happens before almost every recession; in fact, it happens more frequently than the frequency of recession itself.
Of course they can--it's not risk premium though. It's the market saying that they are willing to buy long bonds at a higher price because the expectation is that rates will go down over the next 10 years.
LOL. Are you becoming Austrian? "Control" as in attempting to control.
Huh? What are you even trying to say here?
Also, risk premium and time value for longer maturity can indeed be negative simply due to the value of future money being different from current money: just like 10year fixed savings rate can indeed be lower than demand deposit like money market funds at major turns of the economy, like it happened in 2007-08.
That is a horrible analogy. The 2007-2008 event was a unique, once in a lifetime occurrence caused by the panic. People were acting irrationally.
Tell me--how is it ever less risky to get a 10 year treasury than an overnight loan from the Fed?
No it is not the same: the FED is not :"just as anyone," it can create unlimited amount of money out of thin air and dominate/distort any market that it wishes to.
Nope--there is a limit to what the Fed can and will do. It can influence. It cannot control.
Look at the graph more close. At major turns, the FED rate changes lead the 10yr. Also, risk premium and time value for longer maturity can indeed be negative simply due to the value of future money being different from current money: just like 10year fixed savings rate can indeed be lower than demand deposit like money market funds at major turns of the economy, like it happened in 2007-08.
OK, let's zoom in on one time period--I chose the start of the graph. It will be the same over the entire time period, I imagine.
So, your theory is that the Fed leads the treasuries. Let's examine that:
1. Starting in late 1954 the treasury begins to rise. Fed funds remains constant until mid 1955 before rising. Treasury leads Fed funds
2. End of 1957/beginning of 1958 treasury begins to fall rapidly. Fed Funds follows shortly thereafter. Treasury leads Fed funds
3. Early 1958 treasury begins rising again. Fed funds follows shortly thereafter. Treasury leads Fed funds.
4. Late 1959/early 1960 treasury begins falling. Fed funds follows several months thereafter. Treasury leads Fed funds.
In EVERY case, the treasury LED the Fed Funds. The Fed FOLLOWS the market, it does not lead it.
If you took a closer look at the tax responsibilities you would see that the top quintile pays almost all of the taxes.
And do you why that is?? It's precisely because of the current state of inequality. When 1% of the people own 90% of the wealth, the only place you can tax is on them. If you want a broader tax base with more people paying in--you have to find a way to reduce this inequality.
Now for the idiots who repeat the long held lie that FED doesn't influence long term rate, what the heck do you think "Operation Twist" was? Here is the direct quote from the FED itself:
Another perfect example of a strawman argument here. You said the Fed CONTROLS rates, not INFLUENCES them. That the 10 year treasury is simply the Fed Funds rate PLUS a risk premium. Nevermind that this risk premium is often negative, the graph proves this not to be the case. The 10 year treasury often (usually?) changes direction before the Fed Funds rate. The Fed lags the market. This is obvious and altogether proof that the 10 year treasury is market based and not controlled by the Fed.
Of course the Fed can influence it just as anyone can by buying or selling it on the open market.
How many $45K jobs are available for graduates vs. how may $100K jobs are available?
Well, it depends if you're looking in Ocean County, NJ or Bay Area, CA.