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The people you cited are not professionals. They have no duty of care or fiduciary responsibility.
Yes. And herein lies the biggest problem of public perception. The public almost universally *believes* mortgage brokers and realtwhores ARE "professionals" with fiduciary responsibility.
Stockbrokers are required by law NOT to make claims like "stocks always go up" or "20% is in the bag" and are prevented by law from certain conflicts of interest --like personally trading the stocks they're hawking to other people.
Why can't Realtwhores and mortgage brokers be regulated like stockbrokers? I'd say the time has come.
Peter P
2007 Jan 25, 8:40am
SFWoman, I flew from Taiwan to Hong Kong last year. They managed to squeeze a full lunch on a 90-minute flight. I was NOT flying business or first.
I think only some airlines are bad.
Peter P
2007 Jan 25, 8:46am
I think the future is the business class only flights, there are several out of NY now, and they are worth the premium, and the super cheapo discount carriers for the masses and the young.
I think premium economy is the future. Most people do not need the individual attention of business class service. However, they may want a decent "tray" meal and a comfortable seat for a reasonable premium (less than 30% over regular economy).
Really good post and thread topic, HARM. I think the system is now WORSE than feudal, as you now have so much spin and manipulation and middlemen involved in the process.
(Of course, when I wonder aloud, the echoes of accusations of Trotskyism reverberate for aeons through the halls of patrick...)
Virgin Atlantic seem to pack in more features than most in economy class, from what I've heard. Then they are talking about more 'sub business class' fares where people pay a little more than economy for more leg room etc. There must be something in between BYO stale Mcdonalds and hiring your own jet... Even 1st class to France x 7 would only come to $20K tops, wouldn't it?
As to caveat emptor- if the people profiting were ultimately the ones assuming the risk and paying for the fall out I’d agree, but we know that won’t be the case. With the secondary market for mortgages was there ever any incentive to keep things on the up and up? No, the socialization of risk has perverted the system.
Yes. This brings me back to one of my favorite themes: Socialize Risk, Privatize Profit. Otherwise know as the "reverse Robin Hood". Mortgage brokers, banksters, REITs and MBS issuing firms are the biggest Social-ists on the planet --but only in one direction.
Death to Fannie Mae, death to Freddie Mac, and death to Alan Greedspan (and his "legacy").
Don’t I have *some right* to expect that the people who are legally employed as market “professionals†behave in a marginally professional and lawful way (i.e, not trying to anally rape me at every opportunity)?
Come to think of it, isn't that what so-called 'professionals' do as well? Think legal fees, medical salaries, and so on... It's just that they've managed to institute it better...
(Although my contacts with RE agents and rent managers over the last couple of years suggests they're rude, immoral, arrogant and indifferent -- kind of what happens if you let inarticulate schoolyard bullies who barely graduated from HS fixated at Stage 2 of Kohlberg's moral reasoning model rule the roost -- the worst offenders are a chain called 'The Professionals' of all things...)
(Of course, when I wonder aloud, the echoes of accusations of Trotskyism reverberate for aeons through the halls of patrick…)
:-) Well, I'm not really in favor of more government housing subsidies --quite the contrary actually. But I believe we could use a lot more of the "right" kind of regulation. As in, better aligning risks and rewards, and jailing people for committing outright fraud and market manipulation.
A mate of mine flew Egypt Air once, and the steward was a male, apparently something like Borat, who handed out inflight food as sandwiches from a plastic bucket. He emphatically declared 'No smoking!' to the whole flight, and went down the back, sat down, and proceeeded to light up a smoke, savouring every lungful with expansive gestures... I think it only got worse...
Peter P
2007 Jan 25, 9:14am
MANDATING the price of land and stopping profiteering and heading off booms is NOT a subsidy!
You cannot mandate the price of anything. Doing so will cause huge economic inefficiency.
@DS,
C'mon, now. Wouldn't you WANT to see Greedspan or D. Lereah in jail? I'd happily volunteer 1/2 of my net worth to see it happen right now.
HARM, stockbrokers are not fiduciaries either.
DS, don't be silly about claiming Trotsky as inspiration. Some of my best friends are Trotskyites. You're a Stalinist through and through.
Of course, if all else fails, govt subsidies are an option... I would take the subsidies out of the land tax levied on investment properties to help people get into the housing market. Therefore, you would be punishing landlords to give renters a chance at getting into their own housing... There's a risk and reward balance for you...
ok, huge economic 'inefficiency' from controlling the price of land in a sensible direction. and the entire pathology as pointed out in this thread of middlemen and corruption, of excessive land prices, of looming macro- and micro-economic disaster, of housholds cleaned out, is 'an EFFICIENT market'? When you put the wolves in charge of the flock? hmmm
DS,
Air France had a sale on business class tickets, so I bought them. They were $3000/each (I think the sale is till on, and it is good for flights through the end of the summer at least). That I can handle. The first class were about $7000 each at the time, I am way too cheap to buy those. Regular full fare economy were $1800, so the business class tickets were priced appropriately. I hate when they are 5x economy, then I am too cheap to buy them.
I would love an entirely premium economy airline.
I flew Air Turkey once (I got 99 pound round trip tickets London/Istanbul). It was filled with Borat types walking up and down the aisle smoking, people were getting stuff out of overhead bins during take offs and landings and they served cherry juice as the beverage. The stewardesses were these beautiful green eyed blond Turkish women who rolled their eyes at everyone and read fashion magazines the entire flight. Borat would have fit in with the other passengers beautifully.
SFWoman, I flew from Taiwan to Hong Kong last year. They managed to squeeze a full lunch on a 90-minute flight. I was NOT flying business or first.
I think only some airlines are bad.
Not for long they won't be. There's a whole bunch of discount asian airlines that are now finally really getting into the full swing of things.
They're at where RyanAir was many years ago. When they reach the RyanAir stage - watch out!
It's only a matter or time.
eburbed,
I flew British Midlands from London to Edinburgh once. They served lunch. It was simple, a sandwich, crisps and a beverage. The stewardess handed my husband the lunch box and he asked "What type of sandwich is it?' and she replied, 'Oh, it's cold lamb liver.' My husband said, 'Oh, I'm a vegetarian, do you have anything else?' (He's not, but that was an acceptable lie, IMHO). She gave him the cheese and Bransten pickle sandwich.
Who on earth thought, 'Hmmm, let's go with a sandwich everyone is sure to love. I know, cold slices of lamb's liver.'?
George Bush is a Stalinist...
How do you like being in the same camp then?
What can be expected of them other than promoting sales?
Not much --they are all salesmen. But when the guy from Morgan Stanley gets 10-20 for backdating a few stock options, while my local Realtwhore can go on stating "it never goes down" or "20% a year is in the bag" as FACT with NO repercussions, something is seriously F&#%ed up.
Fraudulent behavior is another issue and should be punished, but fraud is not what causes mass hysteria during market bubbles.
Partially disagree on this point. AG's 1%, risk-offloading via Fannie/Freddie and other government subsidies are what really got the ball rolling here --that much I agree with. But MASSIVE FRAUD and reckless speculation at all levels of the money chain at the very least hugely contributed to the enormous size and longevity of this bubble. And of course, let's not forget the look-the-other way, nod-nod/wink-wink complicity at all levels of government by our beloved "regulators".
There’s no saving someone from self destructive behavior.
True, but at least force the *idiot* or the *idiot's lender* to foot the bill for their stupidity --not me.
Who on earth thought, ‘Hmmm, let’s go with a sandwich everyone is sure to love. I know, cold slices of lamb’s liver.’?
I remember in grade school I always wondered why the British were out at sea looking for tea and spices.
And then I visited England and had a meat pie.
DS,
W isn't a Stalinist. I agree that he represses dissent and opposing viewpoints and tends toward dictatorship, but Stalin was just mad about communism, and I don't see W putting forward any ideas on doing much to spread the wealth to the common man.
Who is the guy with the orange Man Tan in the top left photo on this thread?
eburbed,
I have had good meat pies. I have also had bad meat pies. I like good cornish pasties.
England had great Indian food. I went to a couple of fantastic places in the East End. I actually ate well when I lived there.
@SFWoman,
Hover your mouse over the photo and the identifying caption will show.
Not much –they are all salesmen. But when the guy from Morgan Stanley gets 10-20 for backdating a few stock options, while my local Realtwhore can go on stating “it never goes down†or “20% a year is in the bag†as FACT with NO repercussions, something is seriously F&#%ed up.
Backdating options is dramatically worse than just lying about stats. The victim, shareholders, aren't even there to defend themselves. That's outright theft.
Lying Realtors on the other hand at least have to have the chutzpah to tell you that "it always goes up".
I'm going to have to take the side of the drug dealers on this one: The Sheeple are to blame. They didn't have to buy the product.
Speaking of sheeple:
http://news.yahoo.com/s/nm/20070125/hl_nm/rampant_consumerism_dc
From that piece:
James freely admits that interviewing the affluent in Sydney was a depressing job, calling it "the Dolly Parton of cities in Australia, the most vacuous."
I know next to nothing about Sydney - what's going on there??
@cruzpo & eburbed,
Perhaps that was a poor choice for direct comparison. How about hawking your own real estate to buyers w/out disclosing that the "seller" also happens to be a good "friend" who also happens to be a flip partner. Or presenting shill bids as real ones? Or running a scam where you use the identity of a homeless guy to buy multiple properties with big cash-backs, then split town?
Stockbrokers are also not allowed to provide rosy "guarantees" of stock appreciation, are they? When I see "Past performance is no guarantee of future results" across EVERY piece of Realtor propaganda, that's the day I'll change my mind.
Borat is actually more Turkish/near Eastern in character, it's a bit of a copy of this man, who should be demanding co-royalties... kazakhstanis are more asiatic in constitution, principally due to genghis khan...
cruzpo Says:
Greed, Keeping up with The Jones’s and ignorance have driven this real estate market on the buyers side. What can be expected of them other than promoting sales? Fraudulent behavior is another issue and should be punished, but fraud is not what causes mass hysteria during market bubbles.
Absolutely right. You can't attribute the housing boom we've seen in many countries to fraudulent or illegal activity -- that would mean that every inflationary transaction was somehow fraudulent. There have certainly been instances of fraud, and cashing in, and misrepresentation, but the boom has been driven by greed, fear, easy credit, and so on... a case where the 'invisible hand of the market' has certainly not operated in a constructive or healthy way...
eburbed Says:
I know next to nothing about Sydney - what’s going on there??
Next to nothing...
(that was the short answer ;) the long answer would be longer...)
HARM, do the 'cia1is' posts go to the moderation queue, or to the bit bucket? Don't want to retype :(
Eliza Says:
> Big “L†Libertarianism always strikes me as a bit
> solipsistic. How did so many people get that way?
Most Libertarians are self reliant, but they are not solipsists…
The world would be a much better place if we had more Libertarians (who take care of themselves and never blame anything on anyone else). As a kid I often blamed others for my problems. I think it was around the year that I struggled through Atlas Shrugged for the first time that I stopped blaming others and took full responsibility for everything that happens in my life…
P.S. Since Libertarians generally all have the “teach a man to fish†outlook on life they tend to be not only generous with their time and money but will actually “solve†problems…
Different Sean Says:
> George Bush is a Stalinist…
I’m betting that he would not agree with you (at least in a televised interview)…
Then SFWoman Says:
> DS, W isn’t a Stalinist. I agree that he represses
> dissent and opposing viewpoints and tends toward
> dictatorship
I’m no GW fan, but come on what does he do to actually “repress†opposing viewpoints. I just typed Bush and Idiot in to Google and got 1.8mm hits…
how many 'self-reliant' Libertarians rely on income from investment properties or jobs, paid by others? so-called big L Libertarians as put forward overlook the network of interdependencies that props them up...
e.g.
"Dr. Anna Yeatman rejects the traditional liberal theory, stemming from John Locke and Jean-Jacques Rousseau, that individuals exist naturally and that the goal of the state must be to enable individuals to express their own nature.
"The individual isn't just already 'there'. A self-determining individual is a complex achievement on the part of government, society, and the individual. In this sense, the individual has to be made. There has to be an entire infrastructure of support that prompts, prods, and facilitates you to become a self-determining individual," Yeatman said."
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Quite a lot of debate among us Amerika-and-success-hating Patrick.netters has focused on where to lay the responsibility for the current housing bubble crash (which doesn't exist, btw). For most of us, it's not a strictly either/or binary choice between sellers or buyers, or lenders vs. regulators. There is plenty of blame to go around, and sometimes it seems very hard to sort out exactly who was responsible for what part of this slow-motion train wreck we've been spectators to.
However, I've noticed a recurring theme among some of the big-"L" Libertarians* here and elsewhere: the belief that most (if not all) of the blame and responsibility deserves to be lain at the feet of f@cked borrowers. (*disclaimer: I consider myself a small-"l" libertarian who thinks some regulation of the right kind is not only desirable, but necessary for "free markets" to function in a way that benefits everyone --not just banksters and crooks).
Now, I'm as pro-caveat emptor as the next guy, and I sure as hell do not have much sympathy for lazy, greedy clowns like Casey Serin or Howmuchamonth retards who "can't" even try to understand the terms of a mortgage before signing their names. But somehow, the idea that the banksters, bubble-blowing Federal Reserve, fly-by-night mortgage brokers, hit-the-number appraisers, "it only goes up" Realtwhores, and assorted other professional crooks and lying scumbags have NO responsibility whatsoever beggars belief.
No one put a gun to anyone's head --this is true. But it's also true that no one asked ME whether or not it was *good idea* to start handing out unsecured $million-dollar neg-am loans to unemployed 24-year-old con artists. It's also true that if I choose to buy in the current market, I have *no choice* but to compete against unemployed 24-year-old con artists with unsecured $million-dollar neg-am loans. And guess who's more likely to win that bidding war? Anyone...?
Oh, and thank God for renting. Without it, my only other "free will choice" for shelter would be pitching a tent in the local park or living out of my car.
I completely agree that I, as a prospective buyer, have a certain responsibility to educate myself about any deal --and the risks-- before entering into it. And I agree that there is no risk-free transaction. However, I --like most people-- am not a professional real estate expert nor a financial wizard. Don't I have *some right* to expect that the people who are legally employed as market "professionals" behave in a marginally professional and lawful way (i.e, not trying to anally rape me at every opportunity)? Don't I, as a citizen, have *some right* to expect that the people who I've voted into office and whose salaries I'm paying (Congress, President, state legislators, etc.) will "regulate" on my behalf occasionally ? At the very least, shouldn't I be able to expect them NOT to rig the system to reward my being ass-raped and then hand a jar of Vaseline to my attacker? Am I being ridiculously naive here?
In any voluntary transaction, there are always at least two parties involved --a buyer and seller-- whose actions (ethical or otherwise) will affect the outcome. And when it comes to most mortgage transactions, there often is as many as 5 directly interested parties:
(1) MBS-NAAVLP retail broker/lender (sub-contractor),
(2) realtwhore (acting as seller's agent),
(3) hit-the-number appraiser,
(4) seller,
and lastly, (5) the buyer.
Add to that 3 additional parties that --while not directly involved in any particular RE transaction-- largely determine how the macro-liquidity game is rigged, and in whose favor:
(1) rate-manipulating, bubble-blowing Fed,
(2) MBS investors and foreign central banksters (who front NAAVLP money to retail lenders),
(3) complicit and/or asleep-at-the-wheel Congress & state government.
Consider your average American. Consider your own brother or sister. Do you think think bro/sis really has the financial prowess and intellect to single-handedly defeat a game systematically rigged over decades to favor all the other parties against them? When all the "experts" are using huge marketing budgets, FUD, blatantly manipulated data and government backing that "proves" what a sweet deal the American Dreamâ„¢ is vs. "being priced out forever", what chance does s/he stand on her own? I mean, you're the only one saying otherwise, and your opinions don't count because you're a lowly JBR, right?
Let's be realistic. I'm always rooting for David, but when he's facing 7 Goliaths and God's taking a siesta, his odds don't look so good.
Come to think of it, should I be responsible for policing my own neighborhood, too? Or running my own court system and jails? Have we grown so jaded about being being raped by the very pols and "regulators" (supposedly elected to serve our interests and uphold the law) that we've forgotten WHY they're supposed to be there in the first place?
I forget --aside from lining their own pockets, what exactly is the purpose of government again?
Just wondering aloud...
HARM
#housing