patrick.net

tatupu70 says

If house prices could magically drop and become more affordable without causing current owners to lose their current equity, then I'd agree.

Why shouldn't they lose their equity? They bought into this ponzi scheme boat line and sinker. Somebody needs to take the loss one way or another. But, instead of having these losers and the banks take the loss, we hand the losses over to the taxpayers and the prudent savers. And, this is exactly why the economy cannot grow, and will not grow for many decades.

dunnross says

Why shouldn't they lose their equity? They bought into this ponzi scheme boat
line and sinker. Somebody needs to take the loss one way or another. But,
instead of having these losers and the banks take the loss, we hand the losses
over to the taxpayers and the prudent savers. And, this is exactly why the
economy cannot grow, and will not grow for many decades.

wtf are you talking about. If prices go to 1975 nominal levels, we'd be in a depression for certain. I don't think your employer would care if you were a homeowner or renter as they laid you off. Or as they went out of business.

And contrary to your belief that we'd have a nice, short, uneventful few years of recession--it would be long and it would be ugly and there is no reason to think it would clear the way for growth in the future.

tatupu70 says

wtf are you talking about. If prices go to 1975 nominal levels, we'd be in a depression for certain. I don't think your employer would care if you were a homeowner or renter as they laid you off. Or as they went out of business.

Yes, that's the official story from the FED fear mongers who try to justify their current policies of sending the country into the abyss. On the other hand, reality and history shows otherwise. We have an example of Japan, which has the same policies that we do, and are entering a 3rd decade of a depression vs Argentina, Iceland and Russia, all defaulting and enjoying high economic growth the very next year after the default.

tatupu70 says

I don't think your employer would care if you were a homeowner or renter as they laid you off.

Unlike a homeowner, however, I would be able to move and find another job somewhere else.

dunnross says

Yes, that's the official story from the FED fear mongers who try to justify
their current policies of sending the country into the abyss. On the other hand,
reality and history shows otherwise. We have an example of Japan, which has the
same policies that we do, and are entering a 3rd decade of a depression vs
Argentina, Iceland and Russia, all defaulting and enjoying high economic growth
the very next year after the default.

But we're not talking about the government defaulting. So what's your point?

dunnross says

Unlike a homeowner, however, I would be able to move and find another job
somewhere else.

Really? You think that a depression is local? There are no jobs ANYWHERE. Move all you want. It won't matter.

tatupu70 says

But we're not talking about the government defaulting. So what's your point?

It doesn't actually matter who is defaulting. The whole idea of a quick recession is to expunge all the debt. The FED and the gov't prevented this from going into completion in 2008, thus setting the stage for decades of stagnation. Not only that, but they have just blown another bubble in real estate, which will soon bust, but the consequences of this next bust would be much more serious than the previous one.

tatupu70 says

Really? You think that a depression is local? There are no jobs ANYWHERE. Move all you want. It won't matter.

There are still over a dozen countries which are enjoying GDP growth rates over 5%.

dunnross says

There are still over a dozen countries which are enjoying GDP growth rates
over 5%.

OK--fair enough. If you want to move overseas, then that's a different story.

dunnross says

It doesn't actually matter who is defaulting. The whole idea of a quick
recession is to expunge all the debt. The FED and the gov't prevented this from
going into completion in 2008, thus setting the stage for decades of stagnation.
Not only that, but they have just blown another bubble in real estate, which
will soon bust, but the consequences of this next bust would be much more
serious than the previous one.

The debt just doesn't magically go away with no consequences. One person's debt is another person's savings. So when you default you also take away the savings of all those renters that were squirreling away a little bit each month. I don't think you understand the effects of a default like you are advocating.

All the "new bubble" stuff is BS.

tatupu70 says

The debt just doesn't magically go away with no consequences. One person's debt is another person's savings. So when you default you also take away the savings of all those renters that were squirreling away a little bit each month. I don't think you understand the effects of a default like you are advocating.

No, the renters are going to benefit from defaults. The losers will be the banks, the home owners and the bond holders.

tatupu70 says

All the "new bubble" stuff is BS.

No it's not. The graph below shows the California affordability chart, when you take into account the loans which were available at the various periods. The CAR graph doesn't take that into account, which is the BS. This one is for real:

dunnross says

tatupu70 says

Really? You think that a depression is local? There are no jobs ANYWHERE. Move all you want. It won't matter.

There are still over a dozen countries which are enjoying GDP growth rates over 5%.

Those growth rates dropped 3% pretty quickly.

Bigsby says

Those growth rates dropped 3% pretty quickly.

Yes, I checked the data. There are a few over 8%, but 5% is still much better than where we are right now. We are actually in a negative real growth period, spending $1.6T to grow $300B anually.

egads101 says

dumbross, you entirely missed the market turn in 2009, 2010. You spend those years screaming that prices would drop further.

Epic fail.

So, given your track record, why should anybody listen to you today?

If he keeps saying the same thing long enough, ...

egads101 says

So, given your track record, why should anybody listen to you today?

2010 was a fake rally due to tax incentives. 2011 decline wiped out all the gains of 2010. The prices didn't actually start going up until late 2012, and this will turn out to be short-lived as well. So, my track record is great. Since 2007, I was correct in 5 years out of 6, and if you had followed my predictions in gold, you'd be laughing all the way to the bank, now.

dunnross says

Bigsby says

Those growth rates dropped 3% pretty quickly.

Yes, I checked the data. There are a few over 8%, but 5% is still much better than where we are right now. We are actually in a negative real growth period, spending $1.6T to grow $300B anually.

It's also a very small number of economies and presumably mainly those starting from a low base or being fueled by a resources boom.

dunnross says

No, the renters are going to benefit from defaults. The losers will be the
banks, the home owners and the bond holders.

OK. Because if you say so, it must be true.

So, let's follow the money then. When banks go bust, where is that money coming from? When bond holders go bust, who actually owned the bonds? Retirement acccounts, perhaps? And might renters be invested in those?

dunnross says

No it's not. The graph below shows the California affordability chart, when
you take into account the loans which were available at the various periods. The
CAR graph doesn't take that into account, which is the BS. This one is for
real:

First--are we only speaking of CA.?

Second--who says that the median income should be able to afford the median home? 40% of the folks rent. So, we're talking about the top 60% who are buyers. And some percentage of those folks bought 20 years ago and probably couldn't afford their home today.

So that whole graphic is nonsense

egads101 says

Meanwhile, how much are home prices up in California? Az is up 68%

But I showed you all that I was shorting gold during that time.

RentingForHalfTheCost says

Didn't you just do the same. Just saying...

No. You might notice that I wasn't ignoring the comment by Roberto, I was responding to Dunnross. Just saying. But hey, paint me unsurprised you popped up to start trolling.