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Unfolding Nature Shop: Unfolding Nature: Being in the Implicate Order

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Re: Is the housing crisis taboo? [Re: Shins]
    #12908345 -

It wasn't just me who made a shit load of money.  Lots of people made money, including all the workers who were employed and whose wages were higher.  And all the retirees who cashed out.  Rising real estate prices were not and are not the fucking problem.  The problem is rising government prices.  Because the government doesn't produce anything.  And the banking problem has not one thing to do with real estate prices.  It has to do with assholes NOT REPAYING THE MONEY THEY BORROWED!  Do you guys not realize that if the assholes were making their mortgage payments there would be neither a banking nor a housing crisis?  No matter what the price of real estate was?


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Re: Is the housing crisis taboo? [Re: Phred]
    #12909850 -

Phred said:
Again, your near-neurotic compulsion to blame everything on the Fed is blinding you to the obvious.

I honestly do not know how to explain things any more simply than I have done already. Let me try again, this time typing really slowly...

It doesn't matter how much you had to pay to borrow the money you use to purchase an investment vehicle, as long as that vehicle returns more in profit than you spent to borrow the money. This is the whole concept of leverage or "buying on margin".

See my example of a house bought for $250,000 and sold for $300,000 a year later. It doesn't matter if it is a house, a stock, a mutual fund, a contract for pork bellies, a bar of bullion, a classic car.... whatever. If you can sell it for $50,000 more than you paid for it, then it makes financial sense to spend ten or twenty or even thirty or forty grand to borrow enough money to make the deal.

Yes... of course with interest rates running at 5% you will get to keep more of that $50,000 than if you had to borrow the money at 10%, but the fact remains you still made a shit ton of money  by borrowing. You don't think to yourself... "Gee... interest rates are so high that I can only make thirty grand in a year without having to put up a dime of my own money. I better wait till the rates drop so I can make forty grand in a year without having to put up a dime of my own money."

Or maybe you, Mr. Al, do think like that. I can assure you rational investors don't.







Phred


Your argument is a straw man.  If all currency is created by debt in the amount of the principal how do you pay the interest?  Good investment does not create new money! it simply allows one to acquire a larger pool of money out of the total.

Low interest rates allow for more people who wouldn't normally be able to qualify for loans be able to, which inflates prices.

so called "rational investors" were saying there was no problem with the economy and everything was fine.

At one time "rational" people though the world was flat.


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http://yourlogicalfallacyis.com/

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Re: Is the housing crisis taboo? [Re: zappaisgod]
    #12909898 -

zappaisgod said:
It wasn't just me who made a shit load of money.  Lots of people made money, including all the workers who were employed and whose wages were higher.  And all the retirees who cashed out.  Rising real estate prices were not and are not the fucking problem.  The problem is rising government prices.  Because the government doesn't produce anything.  And the banking problem has not one thing to do with real estate prices.  It has to do with assholes NOT REPAYING THE MONEY THEY BORROWED!  Do you guys not realize that if the assholes were making their mortgage payments there would be neither a banking nor a housing crisis?  No matter what the price of real estate was?


Yes and now that temporary artificial boom has ended, lucky for the children who will experience the opposite.

Do you realize that the ability of people to get mortgages and make payments is affected by the fed? No, you don't seem to.

do you realize that rising "government prices" affect housing prices? debt is money the more debt/money the more people can spend money on houses.



I don't know where you get off calling ANYONE and bum or an asshole.  You have admitted you got rich by flipping houses - you are a bum!

That is not real work or production!  You took advantage of the housing boom and got rich from the presence of easy credit. 

You are one big Hypoctrite zappa  and your fallacious rhetoric to defend your Bum-ness is getting tired and desperate.


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http://yourlogicalfallacyis.com/

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Re: Is the housing crisis taboo? [Re: Shins]
    #12910587 -

He didn't flip houses; he built them. I'm sure he physically produced more in a year during the housing boom than most of us have in our lives.

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Re: Is the housing crisis taboo? [Re: Shins]
    #12911006 -

Quote:
Your argument is a straw man.  If all currency is created by debt in the amount of the principal how do you pay the interest?  Good investment does not create new money! it simply allows one to acquire a larger pool of money out of the total.


It is not a straw man at all. If I understand your less than crystal clear phrasing, you seem to be objecting to my ignoring in my example the fact that $50,000 buys less a year later than it did at the beginning, due to inflation and the increase in the cost of living. What has that to do with the undeniable fact that if you can make a profit of thirty or forty K in a year without using a dime of your own, you have made a good investment?

More to the point, how does it invalidate the fact - and yes, Shins, it is a fact - that whether it cost you ten grand to borrow the money for a year or twenty grand, you still made a very tidy profit?

Quote:
Low interest rates allow for more people who wouldn't normally be able to qualify for loans be able to, which inflates prices.


But you are ignoring the far larger paradigm shift in this mess than interest rates. Normally, what holds people back from buying a house isn't that they can't afford the monthly payment, it's that they can't come up with the many tens of thousands of dollars cash up front for the down payment. I swear I am not making this up. The amount of people who become qualified for a mortgage when the monthly payment size drops from say $1500 a month to $1300 a month pales in comparison to the vastly greater amount of people who become qualified when the down payment requirement drops from 20% to 5%. Or - in many cases during the last bubble - zero per cent.

Quote:
so called "rational investors" were saying there was no problem with the economy and everything was fine.


Some were saying that. Some weren't. But that is beside the point. It is possible to increase one's wealth with the proper investment strategy regardless of the state of the economy.




Phred


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Re: Is the housing crisis taboo? [Re: Shins]
    #12911206 -

Shins said:
zappaisgod said:
It wasn't just me who made a shit load of money.  Lots of people made money, including all the workers who were employed and whose wages were higher.  And all the retirees who cashed out.  Rising real estate prices were not and are not the fucking problem.  The problem is rising government prices.  Because the government doesn't produce anything.  And the banking problem has not one thing to do with real estate prices.  It has to do with assholes NOT REPAYING THE MONEY THEY BORROWED!  Do you guys not realize that if the assholes were making their mortgage payments there would be neither a banking nor a housing crisis?  No matter what the price of real estate was?


Yes and now that temporary artificial boom has ended, lucky for the children who will experience the opposite.


There have always been business cycles in housing.  Always.  I have been through a few.  I realize that your immensely truncated experience doesn't allow you much perspective but there will be another housing boom.  There always is.
Quote:
 

Do you realize that the ability of people to get mortgages and make payments is affected by the fed? No, you don't seem to.


Because it is by and large irrelevant.  People were able to afford houses when the fed rate and mortgage rates were astronomical.  They were able to buy houses when the fed rates and mortgage rates were low.  Housing prices rose and fell under both conditions.  There were booms and busts under both conditions. 
Quote:
do you realize that rising "government prices" affect housing prices? debt is money the more debt/money the more people can spend money on houses.


I suspect that demand might play a part.  Don't you?  If you suddenly by government fiat increase the pool of potential buyers you impact the market price far more than you do by tinkering with the Fed Funds rate, which often trails the mortgage rates.  How do you explain that?
Quote:




I don't know where you get off calling ANYONE and bum or an asshole.  You have admitted you got rich by flipping houses - you are a bum!


Um, no.  I added value to the houses and sold them to willing buyers.  I don't believe any house I ever had anything to do with has ever been in foreclosure  Anybody who borrows money and doesn't pay it back is a bum and an asshole.
Quote:
 

That is not real work or production!  You took advantage of the housing boom and got rich from the presence of easy credit.



:rofl2:  My sweaty balls say otherwise.  Too bad you were too dumb to take advantage yourself.  Perhaps that's why the whine.  You have time.  Maybe someday you, too, will be able to make some money.
Quote:
You are one big Hypoctrite zappa  and your fallacious rhetoric to defend your Bum-ness is getting tired and desperate.


My what a touchy little Paulbot you are.  Really, figure the world out and get to work.  Whining about reality won't get you anywhere.  Do you think that because I built fancy houses for rich people I am somehow corrupt?  Perhaps only row houses are appropriate?  Have you morphed into Hippiechick?


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Re: Is the housing crisis taboo? [Re: zappaisgod]
    #12911224 -

Fuck it.  I can't stand the animosity.  I'm going to chuck it all and farm organic vegetables.


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Re: Is the housing crisis taboo? [Re: zappaisgod]
    #12911247 -

zappaisgod said:
And the banking problem has not one thing to do with real estate prices.  It has to do with assholes NOT REPAYING THE MONEY THEY BORROWED!  Do you guys not realize that if the assholes were making their mortgage payments there would be neither a banking nor a housing crisis?  No matter what the price of real estate was?


:imslow:

Do you honestly not understand that lending money has risks? Like the risk of not being payed back?:nut:

You build houses and don't even know how real estate works. If the "bums" don't pay their mortgage, the bank can foreclose and sell the house on the open market. Except they would lose money if they did that because prices are much lower than they were a few years ago.

The problem is that houses were overvalued(for various reasons), and now many people have negative equity. Yeah it was dumb to borrow $500,000 to buy a house that is now worth $300,000, and equally dumb to lend that $500,000. Both the borrower and lender deserve to take a bath, not get a bailout. Oh but if only those assholes would pay more than the house is worth like good little debt slaves.:rolleyes:


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Re: Is the housing crisis taboo? [Re: zappaisgod]
    #12911451 -

zappaisgod said:
Fuck it.  I can't stand the animosity.  I'm going to chuck it all and farm organic vegetables.



You might be a little too old to take up farming. I suggest social work.:lol:


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"Don't believe everything you think". -Anom.

" All that lives was born to die"-Anom.

With much wisdom comes much sorrow,
The more knowledge, the more grief.
Ecclesiastes circa 350 BC

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Re: Is the housing crisis taboo? [Re: zappaisgod]
    #12911599 -

zappaisgod said:
Quote:
Do you think that because I built fancy houses for rich people I am somehow corrupt?  Perhaps only row houses are appropriate?  Have you morphed into Hippiechick?


No, that was not me!  I don't think it is wrong or hypocritical to flip houses, even houses in foreclosure.  I'm just not crazy about mansions.

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Re: Is the housing crisis taboo? [Re: ArmFromTheAbyss]
    #12912075 -

ArmFromTheAbyss said:
zappaisgod said:
And the banking problem has not one thing to do with real estate prices.  It has to do with assholes NOT REPAYING THE MONEY THEY BORROWED!  Do you guys not realize that if the assholes were making their mortgage payments there would be neither a banking nor a housing crisis?  No matter what the price of real estate was?


:imslow:

Do you honestly not understand that lending money has risks? Like the risk of not being payed back?:nut:


Of course it has risk.  I can assure you that I certainly was firmly against lending money to bums.  Unfortunately I was not able to restrict my investment activities to only prudent lenders because the government forced me to subsidize borrowing by bums that no one in their right mind would ever lend to.  At gun point.

Do you not understand that the government, through fannie and freddie, removed the risk factor for banks and transferred it to the taxpayer for the sole purpose of enabling bums to buy property?  The government increased the risk factor to far higher than the market itself ever would have tolerated just because they wanted to be good guys.  Sheesh.
Quote:
You build houses and don't even know how real estate works. If the "bums" don't pay their mortgage, the bank can foreclose and sell the house on the open market. Except they would lose money if they did that because prices are much lower than they were a few years ago.


Yeah, what's your point?  They are going to lose some money.  No shit.  We already know that.  What does that have to do with the government forcing me to lend money to bums?
Quote:
The problem is that houses were overvalued(for various reasons), and now many people have negative equity. Yeah it was dumb to borrow $500,000 to buy a house that is now worth $300,000, and equally dumb to lend that $500,000. Both the borrower and lender deserve to take a bath, not get a bailout. Oh but if only those assholes would pay more than the house is worth like good little debt slaves.:rolleyes:


Another one with the bailout bullshit.  The bank bailouts have mostly been repaid already.  It was sound investment by the government.  Unlike Fannie and Freddie, who we will never get made whole on.  Or GM or Chrysler, in my opinion.


I have never advocated that anyone should ever pay one nickel more for a piece of property than they can get it for.

A lot of the people have negative equity not because they paid too much for their house but because the refied on speculative equity and took the cash to buy other shit.  Not repaying their loans?  Bums.


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Re: Is the housing crisis taboo? [Re: HippieChick8]
    #12912084 -

HippieChick8 said:
zappaisgod said:
Quote:
Do you think that because I built fancy houses for rich people I am somehow corrupt?  Perhaps only row houses are appropriate?  Have you morphed into Hippiechick?


No, that was not me!  I don't think it is wrong or hypocritical to flip houses, even houses in foreclosure.  I'm just not crazy about mansions.


I'm not crazy about mansions either but I'm not a moralistic douche who goes around telling other people what they should want.  Nor am I one of these phony cunts:

http://cdn.ihatethemedia.com/wp-content/uploads/al-gore-montecito-newspaper-ad.jpg
http://wonkette.com/413811/this-is-literally-thomas-friedmans-house


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Re: Is the housing crisis taboo? [Re: zappaisgod]
    #12914167 -

Quote:
The government increased the risk factor to far higher than the market itself ever would have tolerated just because they wanted to be good guys.


they did it to stimulate the economy. the government or corporations are never good guys. never

and the houses were over evaluated though. the housing market was overevaluated everywhere, people are often complaining about it here. some houses can be quite normal and be around 200 000. alot of people doubled their house value with normal houses that they bought before.

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Re: Is the housing crisis taboo? [Re: communeart]
    #12914260 -

communeart said:
Quote:
The government increased the risk factor to far higher than the market itself ever would have tolerated just because they wanted to be good guys.


they did it to stimulate the economy.



stimulate the economy by buying bad debt.... you should explain how that works


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California Has Legalized Child Prostitution

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Re: Is the housing crisis taboo? [Re: zappaisgod]
    #12914713 -

zappaisgod said:
Quote:
I'm not crazy about mansions either but I'm not a moralistic douche who goes around telling other people what they should want.


Good for you.  You do realize that all company advertising consists of telling other people what they should want?  Why am I not allowed to tell people to be more "conservative" in their buying habits?  Why is it so horrible for me to preach restraint while the advertising is preaching excess?

So All Gore and Thomas Friedman live in mansions.  I think Friedman's is particularly excessive.  I live in a 3 bedroom, one bathroom house with a small eat-in kitchen, living room, and small rec room.  We heat with an antique wood burning stove and cool with 2 window unit air conditioners.  We have no garbage or carport but we do have 2 barns and a shed.  My husband built it out of recycled materials in the 1980s and it cost about $2000 dollars.  It still not totally finished, but we're getting there.

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Re: Is the housing crisis taboo? [Re: hitch hiker]
    #12917140 -

No jobs.
No way to pay the mortgage.
Even the making homes affordable plan will not help the economy due to the fact that the lender will (not) allow
you to pay your mortgage on unemployment.
I guess the banks are not afraid to foreclose,as a matter of fact it would be to their advantage.
This is the sad reality of the banks not allowing a proposed plan by the Fed to work.
Yet the Fed keeps bankrolling the lenders and the lenders
keep taking the real estate back.

What does the lender gain?
About 100,000 grand or more in intrest/$175,000 house on a 4 or 5 year loan before the bottom fell out in year 6.
So the lender gets bailed out by the Fed plus 100 grand and the house back for resale at no loss plus the ability to resale a house.
The real winners were the flippers,construction companies,and realitors,or underwriters
Sounds like a great plan I wish I would have thought of it.


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where can I find this picture

Edited by hitch hiker (07/18/10 11:38 PM)

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Re: Is the housing crisis taboo? [Re: hitch hiker]
    #12918471 -

Quote:
About 100,000 grand or more in intrest/$175,000 house on a 4 or 5 year loan before the bottom fell out in year 6.
So the lender gets bailed out by the Fed plus 100 grand and the house back for resale at no loss plus the ability to resale a house.


Interesting numbers... $100k interest on a $175k loan?  Wow!

The banks, for the most part, take a hit on foreclosures.  They don't get back the money they loaned.  There was usually very little interest paid on the loan, as the bubble happened recently, not decades ago.  The house was over valued when the loan was made, so the bank is unable to recoup the difference in price; the housing market is dead, thus the bank if forced to auction the house well below its actual value.


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Just another spore in the wind.

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Re: Is the housing crisis taboo? [Re: Seuss]
    #12918609 -

Interesting numbers... $100k interest on a $175k loan?  Wow!

Interesting is right. By paying cash for my house I in effect put $150k in the bank which I'm enjoying now. Not to mention the interest I've earned on it in 10 years.


--------------------
"Don't believe everything you think". -Anom.

" All that lives was born to die"-Anom.

With much wisdom comes much sorrow,
The more knowledge, the more grief.
Ecclesiastes circa 350 BC

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Re: Is the housing crisis taboo? [Re: Seuss]
    #12919552 -

one needs to understand the interest only
loans that were offered ,and I am looking at my neighbors interest only loan figures right now.5 years of interest only loan payments @1200 a month,not very smart.
That comes to somewhere around 72,000..close enough.
Not 1 dime goes into equity it all goes into the pocket of the lender.
This type of loan was set up for flippers and my neighbor got caught trying to be smart.
No the banks do not loose anything,if they did find themselves loosing a dime then they would make the homes affordable plan work ,this is my point.
As for resale @ current market value,well the banks are sueing the owner for the difference.
These are all the smart people,well...(not as smart as Zpg)who got caught up in the four year flip.
This would be house number 7 in my neighborhood that was foreclosed on in the last 5 months.
These were people that could go on to pay the mortgage but no longer have jobs to do so.

Edited by hitch hiker (07/19/10 03:34 PM)

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Re: Is the housing crisis taboo? [Re: hitch hiker]
    #12919662 -

hitch hiker said:
one needs to understand the interest only
loans that were offered ,and I am looking at my neighbors interest only loan figures right now.5 years of interest only loan payments @1200 a month,not very smart.
That comes to somewhere around 72,000..close enough.
Not 1 dime goes into equity it all goes into the pocket of the lender.
This type of loan was set up for flippers and my neighbor got caught trying to be smart.
No the banks do not loose anything,if they did find themselves loosing a dime then they would make the homes affordable plan work ,this is my point.
As for resale @ current market value,well the banks are sueing the owner for the difference.
These are all the smart people,well...(not as smart as Zpg)who got caught up in the four year flip.
This would be house number 7 in my neighborhood that was foreclosed on in the last 5 months.
These were people that could go on to pay the mortgage but no longer have jobs to do so.


There have always been people who lose their jobs and can no longer afford their houses.  Always will be.  (I'm a little confused because you say in the same sentence that they can pay their mortgages and that they can't pay their mortgages) There have always been housing market fluctuations.  Always will be, especially localized.  There is nothing wrong with flipping houses.  Sometimes you get the beef, sometimes you get the horns.  There is nothing wrong with interest only loans or with banks making money.  That's why they're in business. 

Don't forget that every foreclosed house is an opportunity for a responsible borrower to get a great deal.  What's wrong with that?


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Unfolding Nature Shop: Unfolding Nature: Being in the Implicate Order

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