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Cultural Imperial posted:I think Krugman and Summers have a much better idea, that is to implement negative interest rates. Also Krugman and Summers are neoliberal policy pushing assholes, however intelligent and awarded they might be.
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Nov 30, 2013 07:18
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Lexicon posted:[citation plz]
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Nov 30, 2013 07:52
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Cultural Imperial posted:I'm not trying to defend summers but you should read Krugman's nytimes column. He says some things on social issues that I'd agree with, in that respect he is fairly left leaning compared to the main stream. When you get down to what his actual solutions are they all pretty much boil down to, "throw money at the banks + Wall St. and hope some of it trickles down to Main St". IOW Reganomics with Keynesian logic/language as a academic smoke screen for justification that'll go over well in a op-ed from the Atlantic/Economist/WSJ/<insert neoliberal policy pushing rag here> for the "socially liberal/financially conservative" crowd. Good lord, he actually agreed with Summers that "improved financial regulation isn't necessarily a good thing" because it "may discourage irresponsible investment". That he agrees with Summers about anything should have your BS-o-meter pegged in the red zone, Summers is that big of a dick, but to agree on something like that is actually sickening to me. All the poo poo that has gone down with MBS/CDS + MERS + robosigning + the credit rating agencies clearly shows the need for improved regulation and LOTS of it. The only people who will deny that are either ignorant of all that poo poo (IOW the public at large) or neoliberal assholes. I know Krugman isn't ignorant and he certainly isn't stupid so neoliberal rear end in a top hat it most definitely is.
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Dec 1, 2013 01:30
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Cultural Imperial posted:<bunch of Krugman quotes> edit:I don't know enough on them to intelligently comment. Sorry. \/\/\/\/\/\/\/ PC LOAD LETTER fucked around with this message at 19:10 on Dec 2, 2013 |
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Dec 1, 2013 07:49
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mik posted:they have a Price/GDP analysis which doesn't look too out of line Anyways as near as I can tell home prices have been going up most everywhere at ridiculous rates far exceeding the rate of inflation which is a sure sign of a bubble or boom.
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Jan 12, 2014 01:14
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Lexicon posted:Say what you will about Seattle, but it's an economic powerhouse. There are a ton of people in the Puget Sound area who are extraordinarily well paid. Remember, even the nice areas can bubble and burst. I saw mansions in the most posh of areas while I lived in CA gain and then lose millions of dollars in value over a span of several years. blah_blah posted:and the Seattle housing market already deflated much more during 2007-2009 than Vancouver. PC LOAD LETTER fucked around with this message at 01:34 on Jan 12, 2014 |
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Jan 12, 2014 01:28
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Baronjutter posted:Why are so many huge long-term construction projects still starting up?
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Feb 2, 2014 01:47
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Kalenn Istarion posted:Not necessarily. There's lots of money that comes here to buy houses without going to the trouble of immigrating.
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Feb 12, 2014 01:44
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Throatwarbler posted:Once everyone who wants a house has one, house prices will come down.
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Feb 13, 2014 06:51
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Rime posted:I find rural BC properties to be a good barometer overall in the province, and this month saw a massive correction in the market.
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Feb 18, 2014 23:54
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cowofwar posted:A house isn't an asset until you own it and you don't own it until the mortgage is paid off. The only reliable way to make a home into a asset is to rent it (and actually get some one to pay that rent) for more than the cost of the PITI + up keep. Its helps to think of it the same way you would a car: even after the loan is paid off the car still requires a constant influx of cash to keep it running for gas and up keep so you can use it. This doesn't mean that it isn't sensible to pay off a car, especially with the way car prices keep rising, but its still a liability even when paid off. Its just less of a financially burdensome one. *that is the main reason I'm so pessimistic about buying older homes. New ones have their issues, but I've seen (and lived in) so many financial disasters disguised as older homes that I've become extremely cynical about buying one and view the sellers/RE agents as something like a used car salesman but worse.
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Mar 7, 2014 06:45
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The T in PITI is for tax. edit: Principle, Interest, Tax, and Insurance. PC LOAD LETTER fucked around with this message at 08:16 on Mar 7, 2014 |
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Mar 7, 2014 08:14
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Mr. Wynand posted:You know it's been about a year since prices stopped rising IIRC. That doesn't mean things won't collapse at the first sign of trouble (like a major euro collapse or Russia doing something insane), but until that happens it's not exactly crazy to describe what is currently happening as a "soft landing".
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Mar 16, 2014 11:00
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EvilJoven posted:It's obvious now that our banks and government are going to allow the housing market inflate so bad and everyone If the Canadian Housing Bubble follows the pattern of the American one then they're either going to keep doubling down or wallow in denial until it all blows up. By then the people responsible hope to either be out of office or will try to point fingers and muddy the waters to prevent reform and by so doing keep their monied friends with their sinecures safe and ready for them when they do leave office. I don't think they have a lot of room left to double down with anymore as far as rate cuts go. A .5% reduction on a mortgage rate isn't that big of a deal when you're dealing with a principal that is 5-10x your yearly income. Especially when the rate is already fairly low.
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Mar 28, 2014 05:04
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Lexicon posted:Austin is a place which I'm very bullish about over the next decade or two. And with American price:rent and price:income ratios generally sane Nothing to be bullish about that area at all. Or anywhere really in the US IMO. Yea its the Canadian Housing Bubble thread but I keep seeing comments along the lines of 'wow sucks to be Canada right now but the US is fine!' and the latter part of that statement just isn't true. Unfortunately right now US housing on average is more expensive on a monthly payment basis than it was during the peak of the US bubble.  IMO the US bubble never had a chance to finish popping and has been largely reinflated though I expect it start popping again soon if it hasn't already.
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Apr 2, 2014 16:18
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Lexicon posted:stupidly low locked-in interest rate for 25 years and mortgage interest deductibility puts it vastly, vastly ahead of the calculus in any Canadian city. And that's without even factoring in the stupidly lower cost of living in the USA. FWIW I think the Canadian bubble sounds worse than the US bubble does right now. Maybe even back in the US circa 2006-7. But the situation is pretty bad all around. Glasshouses and all of that.
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Apr 2, 2014 17:25
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Lexicon posted:I meant in terms of inflation actually. Inflation benefits debtors and hurts creditors.
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Apr 17, 2014 06:53
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Lexicon posted:True, but that's more or less a given in a higher-inflation scenario. It would be demanded....However, food, vehicles, consumer goods, clothing, etc have never been cheaper in percentage-of-earnings terms....The oft-cited point is that "real wages are stagnant". Stagnant, not dropping. Remember that is how things have played out in the US and so far Canada seems to be following the US's shoes here. There is no reason at all to believe that employers/govt. will suddenly decide to do the right thing. Especially the Canadian govt. They did after all help form and currently still try and sustain the housing bubble. No govt. that is competent and interested in the well being of its citizens would do that. The cost of everything else has risen so much that it has far outstripped what savings have been made on those items. So you what if you spend effectively half (or whatever) for a shirt now vs what you paid in the 70's if the cost of college has more than doubled? One costs perhaps 10's of dollars, the other can cost you 10's of thousands of dollars. Vehicles certainly haven't become cheaper though. Even if wages 'only' stagnate everyone becomes poorer if the cost of living steadily increases. Which it has.
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Apr 17, 2014 21:48
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I figured as much but quick googling wasn't giving me a good source (that and I'm lazy) for Canadian wages over time so I just went with showing how under his favorable 'wages are stagnating not dropping in real value over time' scenario the situation is still hosed.
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Apr 18, 2014 03:08
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Cultural Imperial posted:So before anyone starts asserting that it's a good idea to curb asset bubbles with monetary policy, take a look at what's happened to Sweden's attempt to curb their housing bubble by raising interest rates: The thing you have to understand is that bubbles/booms are inherently unstable and will in the end always blow up. You can't predict the exact cause or exactly when it will happen but it -will- happen. The best a govt. can hope to do if it finds that it has inadvertently (unlikely, they usually require regulators to 'look away' to form in modern economies) allowed a financial bubble/boom to form is to pop it early. If they don't pop it early it just keeps getting bigger and bigger and when it finally does pop on its own the situation is that much worse. That is why any good regulator and/or central bank interested in the well being of its citizens is going to 'take away the punch bowl' just after the party gets started.
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Apr 21, 2014 00:35
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Yeah RE sales are seasonal. They'll always drop in winter/fall and pick up or peak in spring/summer. While the US bubble bust was going full bore the media would always present this seasonal uptick as signs of a recovery and 'green shoots'. Then they'd bring on the occasional expert who'd give them more bad news and the talking heads would say 'oh you're so negative' before switching to the next story.
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Apr 25, 2014 11:01
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tagesschau posted:When and where has this ever happened without nominal decreases and the spec money fleeing? He is saying much of the same stuff the politicans, 'experts', and economists said about the US housing bubble when it started to peak/stagnate and look how that turned out. The truth is the bubble is too drat big now to deflate with a minimum of mess. As others have noted its effectively propping up the whole Canadian economy at this point. When it blows you're going to get a self reinforcing recession that could easily go on for several years. Depending on how aggressive the Canadian govt. is at price propping and can kicking you may get a US-ish housing echo boom though.
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Jun 7, 2014 02:05
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peter banana posted:I can't believe MLS doesn't include days on market and price adjustments. What a crock of poo poo. Why? Because the banks and realtors got to juking the stats by pulling houses off and then putting them back on the market over and over again which reset days on market dates. They'd also reprice/reassess the property as needed. Its one of those open secrets that everyone in the US RE biz knows about but doesn't talk about publicly or even much in private.
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Sep 23, 2014 05:13
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Lexicon posted:I just mean: there could be a rule that listed properties are identified by their address. Therefore the politicians are against it. Or at least they 'look the other way' on the issue while somehow 'forgetting' to inform the public about any possible problems. Much of the reason why this stuff continues to go on is because the public at large is simply ignorant of both the problem of stat juking and how serious stat juking is in the long run to the health of the economy. Instead the media and politicians have been in non stop Buy! BUY!! BUY!!! mode for at least the last 5 yr in Canada IMO. In the US it started in the early 2000's and only let up for a while during the bust when the mantra became 'Green Shoots!!' for a few years before going right back into Buy! BUY!! BUY!!! mode. It really is incredible when you stop and think about it just how long these sorts of booms/bubbles can build up. And how soon people forget the last one. PC LOAD LETTER fucked around with this message at 08:24 on Sep 23, 2014 |
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Sep 23, 2014 08:19
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etalian posted:It's pretty much using the 30 percent rule without looking at things like after tax income or pre-existing debt load. Which is stupid but its by playing such dumb word games and being dishonest that they've been able to confuse and misinform people on how much they can afford.
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Sep 29, 2014 00:26
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Pervis posted:I think there was a dedicated thread for a long while, attempting to understand it, and talking a lot about the visible bits and pieces, like Countrywide, sub-prime mortgages, home equity lines of credit, rampant speculation and a bit about Fannie and Freddie being involved eventually. I don't recall seeing all that much of things like the intricacies and obfuscation of derivatives and the opaqueness (and complete lack of regulation) of the derivatives market (MBS, CDO, and CDS), MERS, the ratings agencies complete and intentional ineptness regarding ratings on MBS (our model says house prices never go down!). I can't find the links unfortunately but I did post lots in them.
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Oct 17, 2014 06:38
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If you build them properly its perfectly possible to reduce or nearly eliminate sound penetrating through walls and floors in a wooden structure. The problem is they most never build them properly and on top of that tend to take shortcuts during construction on these large condo projects. Particularly during a bubbley construction boom where they're in a hurry and quality is cut even more than 'normal'. I'd expect any 4+ story wooden structure to be falling apart within 30 yr given the crap I regularly saw, and still sometimes see, pulled during construction booms. That might actually be optimistic given how nasty the climate can get in Canada vs. southern CA or even many part of the northwest US.
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Nov 1, 2014 05:33
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LemonDrizzle posted:This isn't necessarily true as long as we remain in a low interest rate/high house price inflation environment because you accumulate significant equity due to price inflation over time, meaning that you can regularly remortgage to lower rates as your LTV decreases. But that environment is clearly unsustainable even over short time periods being that its an economic bubble while housing is multi decade debt so that isn't a viable or even reasonable 'investment' strategy. Plenty of people tried to do exactly what you're talking about during the US bubble BTW. It even became widespread 'investor' knowledge spread by RE agents and lenders to refi your troubles away. That panned out for almost no one. Even the ones where it did sorta pan out due to HAMP/HARP the people were able to keep the house but were 'house poor' with a modified loan that they could only just barely afford and was now a full recourse loan. LemonDrizzle posted:A lot of borrowers would have problems if we suddenly reverted to a moderate or high interest rate environment with low house price inflation, but I'm not sure that's at all likely to happen in the short-medium term.
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Nov 30, 2014 06:41
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LemonDrizzle posted:just that it can in principle reduce the burden of a mortgage over time LemonDrizzle posted:I also disagree with the idea that it is necessarily unsustainable... LemonDrizzle posted:It's not long ago, but I also don't see how historical averages are meaningful here given the changes that have occurred in central banks' philosophies since then, notably the widespread introduction of explicit inflation targets.
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Nov 30, 2014 10:49
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LemonDrizzle posted:with Japan being a case in point LemonDrizzle posted:<snip chart>
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Nov 30, 2014 11:32
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LemonDrizzle posted:Where did I mention the word 'successful'? We're talking about whether the current conditions of cheap credit and sustained house price inflation can persist, not whether any given situation constitutes a success LemonDrizzle posted:Second, yes some national housing markets have fallen back from their peaks but since the global average is increasing strongly, it follows that those markets are outliers.
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Nov 30, 2014 12:44
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LemonDrizzle posted:I used the example of Japan to demonstrate that it is possible for cheap credit and ultralow central bank base rates to be maintained for multiple decades LemonDrizzle posted:We can't know how long the world's other major central banks will continue ZIRPing but since the eurozone's staring down the barrel of a deflationary crisis and nobody really has problems with high inflation at the moment, it doesn't seem like there's going to be significant inflationary pressure in the near future. LemonDrizzle posted:I'm also not at all sure where you get the idea that "all or nearly all of the EU" has seen a major house price crash; it's simply not true. Again, look at the charts in that paper I linked.
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Nov 30, 2014 16:22
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LemonDrizzle posted:1) For current over-borrowers to get out OK and have their debt burden fall over time, house price inflation must continue and credit must remain cheap 2 is highly questionable at best and Japan is a special case. Historically nations haven't been able to keep interest rates very low for long. There is no reason to believe that situation has changed. 3 your charts give good evidence for but your linked article suggests those prices have risen due to reasons other than low interest rates ('Ricardo might've been right'). Much of that inflation occurred when rates were higher than they were now too. LemonDrizzle posted:As for your notion that most european housing markets have crashed...You are either wrong or using a very unusual definition of "crash". If you want to deny a crash happened at all in the EU or US I don't think we'll be able to come to agreement on much of anything.
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Nov 30, 2014 23:34
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I have been though. You keep changing or adding new things to your original argument plus some of your descriptions are...not good. Also crashes that aren't spectacular are still crashes. Declines of ~50% or even ~40% are unusual historically.
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Dec 1, 2014 01:12
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LemonDrizzle posted:Bullshit. My argument has been consistent throughout;...when did I deny that the US market crashed? You didn't say the US bust didn't happen but you did characterize it has an outlier to be ignored as evidence against your claim. You have presented information to back up what you're arguing but you're not responding to my criticism of that information. You just keep waving around Japan + the previously linked study. LemonDrizzle posted:I think it's ridiculous to use the same term for what happened in Ireland (50% fall in real prices, no recovery) as that for the UK (~15% fall in real prices, rebounding almost instantaneously to around pre-crisis levels).
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Dec 1, 2014 16:22
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They're referring to the stock market and the economy though. A crash in real estate is different because prices are sticky on the down slope and tend to hold up far longer than other markets, usually playing out over several years.
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Dec 2, 2014 00:55
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LemonDrizzle posted:Yes events in housing markets often play out more slowly than those in stock markets, but the issue here is the magnitude of the fall.... perhaps you should do the same rather than just making assertions. Zandi defines 10% declines count as a crash in the housing market. Interestingly at least some people at the FDIC define it as a 15% decline instead. Googling more lead to this: quote:Among stock market experts, there is a consensus that a 10 percent decline in a major index is a correction while a 20 percent decline is more significant: a crash or a bear market, depending on the time involved. For the macro economy, there is also agreed-upon terminology. For example, a recession means two consecutive quarters of declining gross domestic product. I had no idea that was the situation with such basic things as word definitions even among economists. This is really stupid. :/
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Dec 2, 2014 03:11
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Do reverse mortgages exist yet in Canada? Those are huge now in the US as a way for retirees to have some money and have seen a huge increase in use since around 2008-2009. They were apparently around before then in the US but they weren't so common. I hadn't even heard of them until the early 2000's and it was in a 'lookit dis poo poo hahaaha' sort of context. Banks started really pushing them when the bust really got going because that was when it finally became clear to them that the bust wasn't going away and they became desperate for more money. Lots of unscrupulous poo poo going on with them for a while now but nothing will probably be done about it.
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Dec 8, 2014 00:15
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/\/\/\ Yup. In a perfect world if everyone did what they were supposed to and were properly informed of the risks and there wasn't any scammers around reverse mortgages could be a legit option. In the real world where none of that is true they don't make much sense for nearly all the population and they probably do more to enable scammers who prey on the elderly than to help any of them. The few where it would make sense wouldn't be ill served by doing the above (downsize + rent) at all, particularly if it was in a decent retirement community like Leisure World. Personally I believe if something does more harm than good and the instances where it can do good are at least a bit niche than that thing shouldn't be allowed so I don't like reverse mortgages at all.
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Dec 8, 2014 01:54
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Hal_2005 posted:I'd also suggest D&D do a hard 180 pivot towards focusing less on Communist and more co-educating on both financial literacy and regional geopolitical/socioeconomic information sharing.  The lack of personal and familial economic options is a big part of the reason why D&D swings Left IMO. Nitpick: To say D&D is Communist or focused on Communism is hyperbolic. LF was more like that. D&D on the whole would be better described as: 'Socialist for the Needs, Capitalist for the Wants'.
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Dec 16, 2014 05:33
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