patrick.net

Bellingham Bill says

the pensions and health expenses will be pretty redistributive

Social Security continues to distribute efficiently, but private pensions are a mix; the "two and twenty crowd" (2% of principal plus 20% of gains) take a growing share, as pensions "invest" in private equity and hedge funds. Medical spending tends to be regressive, as workers are taxed to pay for HMO executives' corporate jets; Bill McGuire's billion dollars, for example, didn't just grow on a tree.

Bellingham Bill says

This Is Why We're Broke

You peasants are always broke as usual.

curious2 says

3D house printing technology might reduce prices considerably.

the sticks and bricks aren't the dominant cost of housing.

hell, I was admiring steel pallet racks recently, thinking they'd made excellent framework for my house.

20' high, 4' wide, 3" frame uprights are $200 apiece.

http://estore.sjf.com/sjf.nsf/vwAllDocs/A4CA5EFF660BE05B862568D600694154?OpenDocument&Count=5&EndVars

12' steel crossbeams with 3T carrying capacity are $50 apiece, so 12 uprights:

plan view, x = upright, - and | are crossbeams:

x----x----x
|                   |
x----x----x

x----x----x
|                   |
x----x----x

and 24 crossbeams would enclose 2300 sqft of floor space (two levels) at a materials cost of $4000 or so.

Just add the concrete pad to bolt it down onto, tyvek, insulation, out and inner sheathing, a roof system, windows, and the rest of the house, LOL.

https://www.youtube.com/watch?v=ZBvXg0NtoMg

E-man says

Looking at the stats, I don't know how many baby boomers can afford to retire. Quite a few will have to work at Walmart and Target until the day they die

Many do that today already. And it's only going to get worse.

Government is too busy waging wars instead of fixing economic ills.

Robber Baron Elite Scum says

Bellingham Bill says

This Is Why We're Broke

You peasants are always broke as usual.

I wonder why Kapitaleest peeg.

E-man says

For individuals that are waiting for home prices to crash, they will have to wait for a very very long time. A lot of properties transferred from the weak hands to the strong hands during this downturn. We will only see a mild correction during the next recession.

Most people are now conditioned to believe the only options for real estate are either boom or bust. There is no reason why prices cannot be flat after 2017 for a few years. The strong hands you mention, i.e. cash buyers, high downs and highly qualified are the backbones of strong housing fundamentals that make it virtually impossible for prices to go down below where they are right now.

E-man says

It sucks, but you have to look at the world for what it is, and not what you want it to be. 15+ freaking years later and Patrick is still a renter. He's more priced out now than he was 15 years ago. How do you fix an issue if you're not willing to admit your own mistake?

If you had put all your money into the stock market, and Patrick may have, you would have seen an awesome jump in your portfolio value. The first house I purchased and still have was built in 1981 which the original owner had purchased for $150,000. Today it is worth a bit over $600,000, a 4 fold increase. The Dow Jones at the exact same time was less then 1000 points. Today it is close to 17,000 for a 16 fold gain. The benefit of housing comes from the leverage which would increase the 4 fold increase in that house into a 40 fold gain assuming a 10% down.

E-man says

Not quite 90 years old, but Warren Buffett is almost 84 years old. He has bought 8 residential brokerages in the last 2 years and is buying Intero Real Estate now. Apparently, WB is bullish on the residential housing market. Just like when he bought railroad companies back in the days while everyone was skeptical about it. Just like in summer 2011 he said we would have a housing shortage in a year.

It's pretty obvious Warren Buffett is expecting a huge jump in real estate activity that would generate a huge amount of commissions. WB is certainly not expecting a crash, that's for sure.

E-man says

Every bear on this site was skeptical. Guess what? The housing market took off in spring 2012. Who has the last laugh now?

They're still skeptical.

@Bellingham Bill:

Opinion on the Triffin Dilemma?
https://en.wikipedia.org/wiki/Triffin_dilemma

I am not sure what to make of it. If it's true, it explains a lot.

thunderlips11 says

I am not sure what to make of it. If it's true, it explains a lot.

some people say if nations want USD as reserves, they can borrow it from us (this was the regime prior to the Nixon Shock and increasing trade deficits in the 1970s).

http://research.stlouisfed.org/fred2/series/BOPBM

I don't know anything, but maybe instead of trade deficits we can just give them fiat money instead and live off the seignorage or whatever.

Frankly, I don't see the benefit to anyone other than the 1% of being the world's reserve currency. Running a strong currency is great if you like to buy imported stuff or vacation/live overseas on a USD-based income.

Trade deficits and a strong currency are interlinked. Weaken the dollar, and trade deficits go away.

Nations we have a surplus with: (April 2013, they stopped updating this for some reason):

http://www.census.gov/foreign-trade/top/dst/2013/04/surplus.html

Nations running a trade surplus against us:

http://www.census.gov/foreign-trade/top/dst/2013/04/deficit.html

E-man says

The stock market is another issue, but I don't see a 90% drop in the stock market like 1929

http://research.stlouisfed.org/fred2/graph/?g=B1W

"Holy Correlations, Batman!"

The System has demonstrated they can save the S&P 500. I forget what CDS Buffet wrote in 2009, something like if the S&P was 700 in 2017 he'd lose $20B or something. No worries now, LOL.

http://research.stlouisfed.org/fred2/graph/?g=B1X

is per-capita (15-64) gov't spending.

As long as the flow continues, we won't have crashes. $30,000 per every fucking working-age person in the country! That's a helluva gravy train.

I need to add this:

Bellingham Bill says

The System has demonstrated they can save the S&P 500.

at the cost of just doubling the US's debt loading:

http://research.stlouisfed.org/fred2/graph/?g=B26

and dirtying the Fed's balance sheet:

http://research.stlouisfed.org/fred2/graph/?g=B28

($3.2T of printing and counting)

first, I'll post this:

http://research.stlouisfed.org/fred2/graph/?g=B2g

man that's ugly. We now again have the debt loading of WW2, without the global victory over Nazi Germany and those expansionist Japanese shitheads to show for it.

And what's worse, adding in consumer and business debt:

http://research.stlouisfed.org/fred2/graph/?g=B2h

shows total debt leverage is 2X that of the 1940s.

Hello ZIRP. Good thing I speak Japanese, I won't need to turn on subtitles for this movie.

Bellingham Bill says

Nations we have a surplus with: (April 2013, they stopped updating this for some reason):

http://www.census.gov/foreign-trade/top/dst/2013/04/surplus.html

Nations running a trade surplus against us:

http://www.census.gov/foreign-trade/top/dst/2013/04/deficit.html

Thanks BB, this is very telling. I notice the "Surplus" countries tend to be wealthy person banking destinations: HK, Switzerland, UAE (Dubai), etc.

E-man says

Foreigners would own us if our market crashed like 1929. It's a global economy now

I can't help suspecting that was a reason for the extraordinary bailouts and QE: following the 2008 crisis, there was a brief moment in 2009 when the financial markets reached fair value, for around one day. TPTB announced a massive "rescue" to reflate the bubble. Similarly housing. It is axiomatic that the express policy of deliberate asset inflation prohibits allowing assets to trade at fair value, and I suspect an underlying motive is to retain control of those assets in the hands of the Fed member banks.