Comments on: Housing’s Humpty Dumpty moment

By: unbrainwashed

unbrainwashed — Sat, 30 Jan 2010 01:33:35 +0000

Fact is, people who REALLY run America are great con artists and globaliztion is their tool for transfering wealth from the rest of the world to the USA. Surely you’ve heard of the old scam of inflating house values, getting a big fat mortgage based on the inflated value, using the money on yourself and then letting the lender get stuck with the loss. Who do you think is buying up the bonds issued by fannie mae and freddie mac and FHA??? It’s European pension plans, the governments of Japan and China as well as many individuals who invest in Bond mutual funds; all of that foreign money pours into the USA into the hands of the americans who take out the mortgages. They then spend the money within the USA on crap and pay taxes spent on weapons all of which funnel money to the guys who are facilitating the inflated house values. It’s really quite obvious once you think about it a little bit.

By: Ghandiolfini

Ghandiolfini — Fri, 29 Jan 2010 10:48:04 +0000

I have been grappling with this one for a long time. It is so easy to blame the mortgage holder/consumer/taxpayer. Most mortgages should be in infancy, which means the interest component must be much higher than the capital component, at low rates what is the problem ?

Something else triggered the global meltdown, what ?

Was it traders that could not close out positions, and how could this happen ?

By: Butch_from_PA

Butch_from_PA — Fri, 29 Jan 2010 01:13:58 +0000

Wasn’t this the situation back in Germany that brought rise to Hitler and his ideas to take back the country?

Until there is a civil revolution of sorts we will be mired in a depressive and oppressive society – weak kneed by all the uncertainty and too passive to take back control.

There comes a point though where the human psyche gets cornered to far and it will spring back with a vengeance.

We are very close at hand. History will repeat itself – even as it did back in the 13th century.

The question is – what will be the new order. Those that are currently ruthelessly opportunistic cannot hide since we have 7 years of their records. Some will be too arrogant to not get out while they can. This is good.

By: HBC

HBC — Fri, 29 Jan 2010 00:11:16 +0000

Come on, Jim. Stability in housing is about as distant a goal as it is “a goal” of current TBTF policy-makers. The concept of diluting mortgages in negative trillionaire CDOs is what’s really undoable without a lot of tears at the top, among those who only goal is Not Getting Caught.

Humpty Dumpty wasn’t just about metaphorical toothpaste you can’t squeeze back into the tube. It was also about values for things being whatever the dominant culture meant them to mean, reality be damned.

Like housing values, concept of ownership and, finally, the myth that borrowers taking mortgages were to blame for the rampant craze of leveraging them umpteen times over by those powerst that be whom we’re supposed to believe actually knew what they were doing, but – never hold them accountable for doing what they did.

I see all the King’s horsemen going, off with their heads, that stability may reign once more.

By: forecasts

forecasts — Thu, 28 Jan 2010 23:04:56 +0000

yr2009,

Agreed – the government actions you mention (tax policies, bank bailouts, Fannie) all intentionally distort the market and have made housing costs far higher than they would otherwise be. This is true of the past and remains true today.

All of policies that you mention drive up demand. If the goal was truly affordable housing (as is sometimes suggested), basic economics would suggest stimulating the supply side to produce more homes.

By: fred5407

fred5407 — Thu, 28 Jan 2010 22:31:52 +0000

I do not see housing as a bright spot on the financial scene. People will shy away from long term loans, because they cannot see long term prosperity. People will buy distressed properties for rentals, or if they can pay it off over a 5 to 7 year period. It will take several years before before the trust in Government and the economy will come back.

By: yr2009

yr2009 — Thu, 28 Jan 2010 22:26:28 +0000

forecasts,

Good point, except the market isn’t really working perfectly, yet, because home-ownership is heavily subsidized through negative taxation, various incentives, Fannie & Freddie, and last but not least: the bailout of the banks, and the weird accounting rules that came with it.
It’s like pumping air into an exploded balloon.

By: jborrow

jborrow — Thu, 28 Jan 2010 22:14:36 +0000

All the King’s horses and all the King’s men/
have been busy propping up housing again/
but sometime this year/
and perhaps none too soon/
Humpty will fall/
face down in his spoon!

(happy housing)

By: forecasts

forecasts — Thu, 28 Jan 2010 21:56:16 +0000

This IS the housing recovery. The time of crisis was 1999 to 2006. What is happening now is good and healthy. Lower house prices are good, the same way lower food costs and lower medical costs are good. Housing is a basic human necessity.

I cannot, for the life of me, understand why the government is intentionally trying to drive up housing prices.

Higher housing prices mean a lower standard of living for Americans as they are forced to allocate more of their incomes into a basic necessity rather than into the good things in life.

The market is working perfectly now. People (who are owners), just don’t like what it’s telling them. Let prices fall. If the government needs to throw money at something, try investing in education, new technologies, or almost anything else.

By: yr2009

yr2009 — Thu, 28 Jan 2010 21:14:28 +0000

Once again, James hit the nail on its head.
If i remember correctly, the initial idea behind the massive public funds poured to support the housing market was that a broad economic recovery would start from a recovery in the housing market.
It didn’t happen, and it’s less likely to happen now.
So, what’s next?