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Who is it that works and who is it that reaps?


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2021 Jun 30, 7:11pm   711 views  17 comments

by GNL   ➕follow (1)   💰tip   ignore  

The lying realtor realizes a one time positive jolt to his wealth accumulation when he successfully persuades his mark to Just Do It. A one time jolt and he is out of the picture.

The lender also gets to enjoy a one time jolt in the form of a lending fee PLUS he gets to enjoy monthly wealth accumulation jolts each and every month for the duration of the loan. If it is worked right (and if the mark is dumb enough) the lifespan of the loan may very well extend past the lifespan of the lender which means the lender will enjoy the fruits of the mark’s labor for his entire life.

So, who is it that works and who is it that reaps? The realtor works to land the mark, the mark works because he is a mark, and the lender … the lender does what?

The lender opens up for business and the realtor brings the mark in for some dotted line signing and – presto! – the deed is done. The realtor then goes searching for another mark, the mark goes back to work, and the lender goes to the beach.

--Unknown Commenter

Comments 1 - 17 of 17        Search these comments

1   AmericanKulak   2021 Jun 30, 7:19pm  

Where are the Clients' Yachts? - Fred Schwed
2   Patrick   2021 Jun 30, 7:52pm  

I used to think that lenders do nothing, but actually they do one thing, and it is kind of tricky: they evaluate the probability of getting repaid by the borrower.

But of course when the government guarantees the loan, then the lender does not even have that responsibility. Just has to check some boxes. Taxpayers are on the hook for any default.
3   stfu   2021 Jul 1, 5:26am  

Without leverage and fiat we would all be living in mud huts. Sometimes we need to ignore what's fair and be thankful for the standard of living that we have.
4   WookieMan   2021 Jul 1, 6:13am  

stfu says
Without leverage and fiat we would all be living in mud huts. Sometimes we need to ignore what's fair and be thankful for the standard of living that we have.

I tend to agree with this statement. It could be substantially worse. We also don't have to pay anything back to anyone that has bonds or treasuries. Who is going to make us?

MAD is a defense. Our location is a huge defense. 2A is a huge defense. And then obviously our military capabilities. Our resources. Sure there could be an attack, but our military is our "gold" standard so to speak.

With regards to lenders, they're likely more worthless than Realtors. It's a do nothing job as long as there's a mark as Wine mentions. The name/person/lender you know just passes the buck to administrative assistants to get the job done (usually slowly). As with Realtors, most don't even understand what they're actually doing. Lenders not doing their job is the biggest hold up in most real estate transactions. Sometimes the attorney if they're a dick. Then you have the title company. Too many god damn hands in the cookie jar for what is likely the largest purchase in most peoples lives.
5   HeadSet   2021 Jul 1, 7:23am  

stfu says
Without leverage and fiat we would all be living in mud huts.

Not at all. Americans have lived in houses long before fiat money and mortgages. Without easy credit, we would have smaller homes that would actually be affordable, and mostly paid for. No mini-mansion fad when you have to be a saver before buying. Also, without so much debt, we would likely be at a 4 day work week by now. With prices naturally decreasing through productivity increases, one could maintain the same standard of living with less pay. But that blows up when you have debt to service.
6   Onvacation   2021 Jul 1, 7:29am  

stfu says
Without leverage and fiat we would all be living in mud huts. Sometimes we need to ignore what's fair and be thankful for the standard of living that we have.

How did we ever build the Empire State Building before the Federal Reserve?

Fiat and leverage work for the government (not the elected government, the ones they work for).
7   SumatraBosch   2021 Jul 1, 7:52am  

Patrick says
I used to think that lenders do nothing, but actually they do one thing, and it is kind of tricky: they evaluate the probability of getting repaid by the borrower.

But of course when the government guarantees the loan, then the lender does not even have that responsibility. Just has to check some boxes. Taxpayers are on the hook for any default.


Underwriting can be fine art. Seen it do justice in the hands of originator who, by experience and judgement, could actually understand the quality of the risk he was assessing, even if the manuals would force him to reject the petitioner.
8   Shaman   2021 Jul 1, 8:46am  

Maybe the realtors got more than they deserved when I bought my house, but I’ve gained so much equity since then that I’m sure I got the best part of that deal. I barely had 20% down when I bought. Now I’m getting real close to 50% loan to value.
9   HeadSet   2021 Jul 1, 9:59am  

Shaman says
I’ve gained so much equity since then that I’m sure I got the best part of that deal.

Oh yeah?
Plan on moving? - your new house will also have shot up in price.
Plan on staying? - your assessed value goes up, along with taxes (unless Prop 13).
10   Onvacation   2021 Jul 1, 10:25am  

Onvacation says

How did we ever build the Empire State Building before the Federal Reserve?

Oh wait, we didn't. The Empire State Building wasn't built until 1931. This was after Jekyll Island but before full on fiat implemented after they killed Kennedy.

Those that forget their history are condemned to repeat it.
11   GNL   2021 Jul 1, 11:42am  

What builds/creates value? Anyone?
12   Bd6r   2021 Jul 1, 11:45am  

WineHorror1 says
What builds/creates value? Anyone?

guy digging a ditch comes to mind, not banksters
13   AmericanKulak   2021 Jul 1, 11:57am  

We're now at a point where Target and Dairy Queen 20-somethings HODL'ing a few shares of GameStop as retail buyers is "Market Manipulation".

But massive naked shorts by Hedge Funds, exceeding to total number of shares outstanding exponentially, or the buying of entire Subdivisions by Blackrock, is fine and dandy.
14   GNL   2021 Jul 1, 12:04pm  

Rb6d says
WineHorror1 says
What builds/creates value? Anyone?

guy digging a ditch comes to mind, not banksters

I say it's the combination of physical labor and land. Everything else is a skim.
15   SunnyvaleCA   2021 Jul 1, 1:31pm  

stfu says
Without leverage and fiat we would all be living in mud huts. Sometimes we need to ignore what's fair and be thankful for the standard of living that we have.

The house — whether mud or mansion — still has to be built. Leverage and fiat just shifts the power of who controls the workers and the works they build.

90% of the "value" of my silicon valley shack is the dirt it is sitting on. The only reason barely-improved dirt is so expensive is because of leverage and fiat creating a pricing war. Without leverage and fiat the 20% downpayment would be enough to purchase the whole thing.
16   Patrick   2021 Jul 1, 9:59pm  

Rb6d says
WineHorror1 says
What builds/creates value? Anyone?

guy digging a ditch comes to mind, not banksters


Long before mortgages, bankers used to have a useful function in brokering capital, imho. They would take deposits and then lend them out to people who needed to borrow to build a business, a kind of venture capital with debt instead of equity.

But now the lending market is dominated by mortgages (I think, can't find the numbers) and mortgage lending is all pretty much a scam which drives the cost of housing higher, of no benefit at all to the buyer or to the economy.

If we had no mortgages at all, and people had to save to pay cash to buy, housing would be a lot cheaper and we would have to work a lot less.

The Fed tosses them a sop by inflating away part of their debt, making the math very hard for most people to figure out, so they don't get angry about being screwed.

You describe something as a sop to a person when they are offered something small or unimportant in order to prevent them from getting angry or causing trouble.
17   HeadSet   2021 Jul 2, 11:38am  

Patrick says
If we had no mortgages at all, and people had to save to pay cash to buy, housing would be a lot cheaper and we would have to work a lot less.

Correct. But since about half the houses in the country are paid off, the government introduced the "reverse mortgage." Gotta get those folks back into debt.

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