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Real Estate Socialism
Submitted by Ramsey Su via Acting-Man blog,
Ownership Can Be Ephemeral
Deflation is upon us. There is excess capacity in everything far in excess of demand. Every Central Bank in the world is devaluing its currency. The US alone added over $4 trillion to the Fed’s balance sheet. Abe has been going hog wild in Japan during the last two years. Euroland is finally joining us with a “me too” QE. Under these circumstances, it should be a no-brainer that any asset such as gold, cows, oil and real estate should hold value better than paper money. Real estate has utility value. It provides shelter. Taking out a mortgage is even better, borrowing at today’s dollars only to repay it with future dollars that are likely to be worth a lot less.
Before we run out and buy all the real estate we can, there is a question. Who determines how real real estate is?
The Opus Hong Kong building, designed by the Pritzker Prize-winning architect Frank Gehry. It is home to one of Asia’s priciest condos. According to a Times of India report, the buyer paid $9,773 a sqft for the 6,200 sqft apartment, on the eighth floor of the 12-story building. Total price: HK$470 million (approx. $61 million).
Photo credit: AFP
Once upon a time, there were the Navajos, the Cherokees and a number of other tribes occupying the land that became the real estate that we now own. In 1947, the United Nations created a real estate subdivision called Israel even though there were other people living there already, and this involuntary ownership transfer is still ongoing. At the present time, I wonder how real real estate is in Ukraine, Crimea, Iraq, Afghanistan and many other places. I am not trying to condemn anyone for acts of the past, present, and certainly the future, I am just stating that real estate is nothing more than a right to ownership as long as you can hold it.
Geopolitical issues are not the only factors that determine real estate ownership. Each level of government also affects your rights to real estate within their jurisdiction. Domestic policies and economic conditions not only determine value but rights to enjoyment.
For example, what is a condo? Just rights to air space. All those high priced condo co-ops in Manhattan are nothing more than air space. In outrageously expensive cities like Hong Kong, you do not even own a fractional interest in the land under the air space, it is a land lease. Say your air space is on the 26th floor, I would like to see how you get there if the elevator is not working. In other words, you are totally relying on your government to protect not only your right to ownership but to provide the essentials for your right of enjoyment.
Mortgage Delinquencies in the US
Before I digress too far, my point is that current conditions are such that we need to examine how real owning real estate is in the US. Allow me to elaborate.
Who owns your house? If you have a mortgage, it means you have pledged your ownership in exchange for a loan. In other words, you only own the rights of possession until you pay off the loan, pretty much like a car loan. The lender owns your house. This was not an issue before when it was a free market. Today, there is only one lender, the Federal Government, operating under the names of Freddie, Fannie, FHA and VA. These agencies are now competing against each other to provide the easiest low cost financing, just like the sub-prime lenders ten years ago.
So how healthy is the mortgage market? Headlines may mislead the uninformed that delinquencies are in the past and real estate is well on its recovery path. That is not remotely true. Take a look at the following historical delinquency chart from the St Louis Fed. While we may be off the highs after the sub-prime crisis, we are not even midway to the historical ranges prior to sub-prime.
Delinquency rates on single family mortgages, via St. Louis Ferderal Reserve Research – click to enlarge.
With sound underwriting standards, delinquencies should only occur under extenuating circumstances. As was the case prior to the sub-prime loans, the delinquency rate was typically below 2%, and only spiked up a percent or two during recessions. Actual foreclosures were seldom above 1%. We are still far from that today, 8 years after the crash.
Contrary to what you may have heard, the current underwriting standards as dictated by the government agencies are not tight but irresponsibly lenient. Using common sense, how logical is it to lend money to households with >50% debt to income ratios, using only 3% down and probably very little by way of reserves for that rainy day? One missed paycheck would send these borrowers over the edge.
Real Estate Socialism
What is wrong with this picture? As the market has witnessed since 2007, the Government could dictate the conditions of real estate ownership, even when it was not the lender. Today, it is in full control. What would this government do when the defaults return? There will be forbearance, credit counseling, tax credits, tax forgiveness, refinancing, principal reduction, anything but foreclosures. In other words, real estate ownership may become a subsidy, or some form of government housing. Would debt servicing be based on one’s ability to pay? May be the principal will be adjusted based on market conditions? What type of real estate market is that?
At the same time, it is the Federal Reserve that determines what is too high or too low. Three rounds of QEs during the last 7 years have kept prices up, offsetting the free market efforts to correct imbalances of supply exceeding demand. Going forward, if prices are pressured lower, the Fed may be out of ammo. If price pressure is in an upward direction, the Fed may decide to raise rates. What do I really own, when it is the government that determines the value of my asset?
Real estate ownership as an investment is even more challenging. During the last few years, Wall Street has been actively buying up single family houses under REO-to-rental models. Apartment construction has also outpaced single family construction. If economic conditions were to deteriorate, not only would real estate rentals suffer from high vacancy losses, the likelihood is great that local politics could impact rights of ownership. In this scenario, changes to eviction laws may be the most likely outcome. How would you like it if you had tenants who are not paying rent, but whom you cannot evict? If economic conditions improve, before the landlords have time to cheer about raising rents, rent control may come into the picture. It should take very little effort for small time local politicians to drum up anti-Blackstone (or Wall Street 1%ers) sentiments in return for political gains.
In conclusion, I believe the fundamental problem with real estate is cost. The average household, whether renters or homeowners, is allocating too much of its income to housing. As a result, public policies are likely to continue in the direction of more subsidies, such the Federal Reserve’s manipulation of long term rates, and more regulations, such as eviction and foreclosure prevention, and rent controls. Real estate, could become a lot less “real” in the foreseeable future.
A bunch of early 20th century socialist real estate planners
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Could somebody please load the Teleprompter with “Go fuck yourself, San Diego!” ;-)
Looney
I'm in a glass case of emotion.
The Fed is supporting government overspending by printing money and buying most of the debt
and the Fed is propping up the stock market with the PPT by printing money.
So why don't they print some more money and buy the rest of the housing market
that they don't already own through their QE3 purchases of MBSs and rent housing at
a big discount to anyone who needs it. The size of the discounts could work like Obamacare,
based on income. Problem solved.
Much of the debt is Treasuries; backed by the full faith and credit of the U.S. government. And so at least the interest must be paid. The ultimate payer is the taxpayer, the basic "asset" owned by the government.
Having stated the theory of how it is supposed to work; it is clear that we have passed the point of doing this in practical terms. So a debt jubilee is eventually in the cards.
The only debt jubilee we're likely to see is a dollar collapse followed by some kinda 'reset'. These banksters are not gonna just set their slaves free.
Yes, clearly we can resolve all these perverse market distortions with more intervention. Genius!
An "Econ" professor at UCSD said (sometime between 2000-2005) that the gas prices were high because the real estate prices are so high.
Dipshit didn't hear about how petrodollars financed bank liquidity for these commercial&investment hybrid banks so they can sell counterfeit backed subprime teaser rate mortgage to flippers to rob people in need of shelter with.
My roots are in San Diego- and it scares me how robotically STUPID a lot of people there are. This is in the white burbs, not the ghetto. It seems like the collective IQ goes up in the ghettos when you leave the burbs in California until someone opens their mouth.
House values were up 300% what they were in the 90's and the wages didn't go up. It was always a boring simple military town with either retired or active military who had to live off of supressed wages. Back in the day it was Navy (remember Top Gun?) Now it's the Marines.
The funnier part, you can tell whose democrat in San Diego by the amount of stupiditiy that they spew. Ie. "the techies are pushing up the housing prices" (uh- only if techies are realtors), The other group of democrats in San Diego are the white transplants, hipsters if you will. The native simpletons of San Diego are not hipsters btw. The carpet bagging demofarts are the ones who say, "we deserve to pay for parking because San Diego is an expensive town" (#1. it wasn't always THAT expensive and #2. the pay for parking idiocy is new thanks to deregualtion socialism.)
San Diego is the physical replica of paradise in the U.S. and the people were sooooooo STUPID there that I CHOSE to leave. The NATIVES can't afford to go back to their home towns- the smart ones just go to visit.
San Francisco was the exact opposite in politics and same in stupidity, even with the techies there.
Like nobody knows of anything to talk about but real estate. NADA. Not vitamin tips, not stories about touring the world, no sense of humor---for "paradise" I couldn't find a more dull group. There was absolutely NO way I could think of going through the trouble just to afford an ARM there to just have shelter. Ugh!
Nah, better you than me.
Housing prices are where they are because of three things: 1. The size of the market of qualified buyers, 2. the interest rate on home loans, and, 3. Down payment requirements. It takes two things to be able to buy a home: a downpayment and monthly cash to make payments. Unless more and higher paying jobs are created we have pretty much run through our pool of qualified buyers. If the monthly cash stays the same then the borrower can borrow more with lower rates and can borrow less with higher rates. When lower rates lead to price increases then down payments must increase. I have seen prices go from the lows of 2008 to peaks higher than before the meltdown in my area, all because the Fed wanted to increase asset prices to make sure banks didn't implode from making stupid loans. As the market reaches equilibrium and starts slowing (January sales were down 40% in my area and down 60% in more rural areas) the Fed wants to once again reuce downpayment requirements to keep the housing market going. Great, until we get a repeat of 2008! Don't these fuckers ever learn? They are so deep in market manipulation and it will come back to bite them. I hope they all own overseas escape estates as has been written abut in ZH, becasue there are going to be a lot of angry people if the wealth divide keeps growing or if it implodes, and sure as shit there will not be a middle road.
Snoopy.
You are correct i have been in san diego for over 30 years. The people are literally insane and transplants are making it worse. All this while the older crew is pushed out. Really cool old school people here.
Another leaving paradise and headed far south. Like South america south.
RIPS
Yeah, miss a tax payment and see how real your estate is. Serfdom until the end!
Exactly. ALL property is owned by the gov't, even those of us who have paid off our mortgages. Miss a property tax payment, and your real landlord will come with SWAT teams and guns.
Depending on the jurisdiction, it can take years to get rid of educated residential squatters. Commercial tenants are another matter entirely.
That is because y'all aren't insiders/elites who have this kind of title for your land:
http://en.wikipedia.org/wiki/Allodial_title
And yes they exist, but they are never for sale.
Regards,
Cooter
This site is saying you can actually get this in Nevada, apparently.
Someone put up some real estate tax data from Zillow, indicating massive delinquencies in the New York City area.
Anyone have national data on that, and how can that square with falling mortgage delinquencies?
"they" don't count a bunch of mortgage deliquencies. tax delinquencies are a matter of public record.
Printing money and bailing out corrupt banks/insurers/corporations in the short run makes things more valuable, and in the long run worthless, up to and including people's lives.
Humanity always pushes things to the point where the innocent must die - bunch of dumb monkeys that we are.
Subsidies should be stopped. They only help the real estate owners at the expense of the tax-payers.
You mean subsidies like school taxes? In my jurisdictions, only land owners pay that in the form of property taxes. Most of the retirement and low income crowd don't pay. They just get to vote in school referendum for MOAR free shit ad naseum without ever having to pay for it.
Representation without Taxation
When it comes to real estate now, I see two big problems;
1) Banks and governments get to use mark to fantasy accounting, YOU DON'T.
2) There is no protection now because real rules of laws and contracts have been destroyed - MBS are unconsitutional, PERIOD.
Taxes are a problem too. I had a township in NJ raise my property taxes by 50% YOY out of the blue in the last recession. That was a big wakeup call for me in 2009.
precisely why it is good to know everyone in your lovcal munipalities. They tried it with me once on a couple properties. I had several sales reciepts from properties that sold around me and was in their face very quickly to call them on their bullshit. My taxes have actually been going down on most properties.
My theory is that in most cases, your neighbors (that's all these people are really) want to live in peace just like you.
Right, this was in an semi-urban market. I've moved since and am in the process of selling all of my urban holdings. If you can't touch it, you don't own it.
Real estate in the US is so fucked up. I wouldn't touch RE as an investment.
what a great post! all too true! real estate is just another tool to manipulate and choose winners and losers. like a big fucking breaker bar! billions in the lurch! nucking futtso shit mon, ha...
That Hong Kong tower is an eye-sore. And it's falling apart.
it was designd by Frank LLoyd WONG!
Exactly why I'm selling everything RE I own that's not nailed down. Use the proceed to pay off debts on the counter-cyclical stuff, and put the rest into other more tangible things. If you think RE is a hard asset... I've seen property taxes go up 50% in one year on a project in NJ. Thank God that was on a non-recourse loan that the bank had to eat.
So, what are these "tangible things" that can withstand deflation?
He doesnt tell, so it must be gold?
Speaking of real estate, it looks like Apple is going to build a new global command center in Arizona which seems like a waste of resources since its NSA parent company just built one.
.
Yeah, but the Apple command center will operate in da Cloud, man...
Gonna be so kewl...
Listen
If Jamie and Lloyd can be fooled again , we the muppets shame on you twice or words not to the same effect.
Hope i 've made myself clear regarding all this. s/c
Condos are sky coffins.
<p>In California's coastal cities, most owners could not remotely afford to buy the property that they own, and a lot of people only become homeowners when their parents pass on. Just as with college tuition, the solution is always to talk the young ones into taking on massive debt.</p>
"the Government could dictate the conditions of real estate ownership, even when it was not the lender. Today, it is in full control. "
Well yes, completely. News?
what give with the 20+ on S & P
DCB, BITCHEZ!
Purchasing a home for the purpose of renting it out generates a nice return for the small investor, but only if property rights are sacrosanct. I could imagine that someday in the relatively near future, the govt may allow giant corporations that own huge real estate holdings to lobby laws that make home ownership for primary residences, and rentals, much more expensive thus more citizens become renters. It would be something other than property taxes. I wonder what's in the works now. I own a rental that is really a great deal for me and, for now, my tenants who treat the place well and pay on time. Its always a concern knowing that big money is buying large real estate portfolios.
Owebama gave a clue when he tried to rescind the 529's tax deduction. That's how they'll do it. Satan's drunken helper, Boehner, will get on the TeeVee and say Owebama can't be reasoned with, regarding the budget. Thus, he was 'forced' to do it. On the verge of tears, like his thumbs are in a vise, he will hand it all over to the Corporations, who will still get their tax deductions.
A boy named Su. "The trouble with being rich is that it costs so goddamn much".
Who's in the pic – isn’t that Freddie Mercury to the left?
The guy on the left was a Stone Cold Killah. He's the only one who survived that photo.
The guy on the right got a climber's pick in the head. They didn't have nail guns then.
Real Estate has been socialism since the defrauded subprime investors were robbed of their due foreclosures which were handed over to the failed lying junkie bankers by some ugly politicians.
According to this link, the part of the GDP which is Finance and Real Estate TOGETHER is 72.5% of the total GDP in 2013.
They separated Finance and Real estate in recent years. Back in the day, they just combined the two and in 1987, this part of the GDP was only 17%.
The GDP is "so high".... so we can be the Triffin Paradox and let the Federal Reserve print even MORE dollars!
A trillion dollars that would've deflated our economy between 2000 and 2010 are in South and Central America btw courtesy of the 1%, if you can't figure out how obvious it is by their policies.
We've got subsidized blockbusting, gentrification (I don't know if eminent domain was paid to the former residents)....a shoddy city government whose pensions are tied up with JP Morgan on interest rate swaps... and ugly neighborhoods with tax breaks just for flippers!
Los Angeles is an exciting town. There's crime everytime you blink and the landlords want PREMIUM! IT's fucking hilarious, just because a few people in Tinseltown made money in entertainment (It's nothing like the 80's)--- they think EVERYONE has that kind of money. They never heard of skew or deviation. NEither did Santa Barbara's realtors and landlords.
Someone already set a relatively new nice apartment complex on fire. It's burned down. The crime rate is so high and the LAPD are a bunch of out of shape bums sitting at the Larchmont Noah's Bagel shop while the town ensues in chaos. As long as nobody has an agenda and they can't make money off of you (add latino gene)- you could probably get away with anything you want. Beware, although the price went up- the traffic is STILL a nightmare.
Complain all you want, when the weather high to low range is 50-70 degrees for MOST OF THE YEAR, people are gonna wanna be there. Not to mention no heating and cooling bills. I've been all over this country and it is a fact, So Cali cannot be beat for culture, beauty, diversity, climate, and women. People will always pay a premium.
SoCal is great if you have enough wealth to isolate yourself from the third world barrios/ghettos, the traffic, and the crime. Plan on an exit strategy because it will get ugly real fast if there is a major earthquake or if the water from up north stops flowing.
Unlike your East Coast utopias when the annual hyped snow blizzard forecast empties out your grocery stores in an hour?
Addis Ababa has the same conditions, except that 1. there is more sunshine , 2. the women are more beautiful, 3. the real estate and taxes are much lower.
"t is a fact, So Cali cannot be beat"
No water
Japan's radioactive waste
Liberals
Undocumented Democrats
You couldn't pay me to live in CA.
Says a rube who probably has never been to anywhere in California but Disneyland and believes that molehills are mountains.
..
Believe it...it's beautiful out here. 70 degrees and sunny today again....how was your day? And how are your crumbling East Coast and rusting Midwest cities and towns treating you lately?
Stalin Lenin and Trotsky- now there's a pack of zeros.
BTW is that statue of Lenin still in Fremont (Seattle) or did some NUTJOB finally grow some balls and laso that thing, tie to bumper and dislodge, drag around the neighborhood??
Was Lenin responsible or rather can we say that those who took over after his murder were the real rats.
He was a co-conspirator. Here's what Churchill had to say about him.
Strong illumination? Churchill speak for joodum? I wonder who put the words in the fockers mouth?
Lenin (kosher), along with his sidekick Trotsky (Real name Lev Bronstein) were behind the slaughter of over 60 million White Christians, including the Russian Royal family(Kosher style in the basement) as they removed the monarchy and replaced it with communism. The Bolshevik communist takeover was financed by the kosher banker in NYC Jacob Schiff. Of the roughly 400 communist staff, over 360 were jews. The British Intelligence Report of 1918 identified who was behind it, and noted the crimes that were committed. The rats in the above picture had the same Talmudic playbook.
Stalin was kosher?
Mao was kosher?
Pol Pot was kosher?
Stalin, doesn't matter because the Soviet Union was still controlled by the juice. For example, Lazar Kaganovich, one of Stalin's sidekicks, lead the holocaust of over 10 million in Ukraine. Kaganovich was kosher. Also, read about the rest on the staff:
True, but hundreds of years from now their names will still be mentioned,,, our names,,, well,,,, not so much.
I was there a few months back, Lenin hadn't been toppled.
From Navajos to UN to Ukraine in three sentences....
WTF?
It must be time for me to leave ZH again... I am expecting too much.
Money itself is now owned by government. The price of everything denominated in dollars is influenced by .gov now.
Nobody owns anything that can be taken for non payment of taxes. Gov, whether local or national owns it all.
paper game ,,,no low cost housing for retail buyers just more debt.
http://www.bloomberg.com/news/articles/2015-01-07/angelo-gordon-seeks-cash-from-jpmorgan-clients-for-bad-mortgages
Prices on soured mortgages made prior to the 2008 housing crash have jumped in recent years as investment firms including Lone Star Funds, Oak Hill Advisors and One William Street Capital Management targeted the debt seeking higher returns than those available on other fixed-income investments. The supply remains “favorable” for investors, with about $40 billion available annually to buy over the next few years, according to a report last month by Compass Point Research and Trading.
Major banks and government-backed mortgage companies Fannie Mae and Freddie Mac are increasingly motivated sellers, according to the Angelo Gordon document. Banks accelerated sales of defaulted mortgages last year to avoid the costs of holding the debt, along with the Department of Housing and Urban Development, which sought to shore up the finances of the Federal Housing Administration.
HUD SalesValues of non-performing mortgages climbed about 10 percent over the past year, according to the Dec. 10 report by Compass Point analyst Fred Small. HUD, for instance, sold $2.1 billion of loans for 70.4 percent of the estimated value of the properties in September, compared with less than 50 percent in a 2012 auction.
Socialism is communism's fiscal ambush on capitalism. A republic can thwart this, a democracy cannot.
Socialism isn't as bad as communism? Bullcrap. Communism exhibits failure immediately. Socialism gives the illusion of success for 2-3 generations before it collapses - it's addicting.
Sure, signs of ill fiscal health manifest immediately in socialism, but the footsoldiers tell the people the signs are short term issues, then they revise the measures of the numbers to hide failure, like gaming the unemployment number, or deficit, or inflation measure.
Both socialism and un-regulated free markets are utopian fantasises.
Bankers have demonstrated why un-regulated free markets are a utopian fantasy.
We de-regulated banks and trusted bankers and they rigged every market they could.
We removed the 1930s legislation designed to prevent another 1929 and they did it again in 2008.
We can thank the bankers for reminding us of the necessity of legislation and why it was enacted in the first place.
There is lots of financial regulation because bankers are incompetent, unscrupulous and entirely without morals.
The 'free money' FED created the roaring 20's bubble, not banking regulation. The depression followed after only about 15-20 years of the FED's creation. Tulip bulb mania, 300 years before, same thing (Bank of Amsterdam). South Sea bubble(Bank of England), similar timing. The regulations are just a smoke screen to make it appear the 'bought and paid for' politicians are on our side.
At least the old school lefties looked as if they would eat a childs still beating heart. Today the sensitive PC approach is beyond disturbing.
Get over it ZH... Take a step back and understand the big picture of the last two centuries, about how capitalism has played out :
1° We had naked capitalism early on based on colonial economies. Marx called it out for what it was in Das Kapital but had no solution to the problem except "dictatorship of proletariat" which was worse than the disease he had correctly diagnosed.
2° Colonial capitalism fed on the "nationalist" thread spawned WW1 and WW2 and, in the aftermath, the US economy became the beacon of Oligarchy unbridled capitalism during great Gatsby age, all fed by oil and motor car, steel and railways, until it exploded in 1929 exuberance and liquidity crisis.
3° Keynes built the Sate+ Oligarchy balance of demand side capitalism. It got morphed in BW into a unilateralist USD hegemony after WW2 victory of US financial mantra.
4° Then in the trauma of Cod war stalemate the MIC was born along with big oil using fount of US cum Arabian "cheap energy" wealth. It led to the new debt printing of Dear Henry's petrodollar model. It required that Arab wealth be recycled back to first world in form of debt. It fed welfare state salaried inflation until 1979 crisis.
Reagan/Thatcher cured it by dumping the salaried class welfare state model and pumping the debt (from the creditor (oil + Japan + Young asian tigers) into WS asset bubble). With cheap oil and then NWO, they killed rival Marxist model of USSR and Maoism.
Now the field was clear for Oligarchy financial FIRE asset model fed on steroids.
The statist monopoly model had been replaced by the global Oligarchy capitalist model. Reagan had outfoxed Marx and Mao by creating something just as toxic, modelled on Rome or Habsburg Spain.
But it was all fed on debt and then on more debt, when NWO created, in "unilateralist massive military supremacy", the hubristic outsourcing model
CHINDIA became the new creditor slave labour surrogates completing the Arab fount to feed first world consumption all on debt, more debt to raise high the roof beams of Capitalist FIRE economy by the ZIRP carpenter Greenspan; son of Ayn Rand!
In the course of two score years the US oligarchy had created a monopolist, despotic empire to out-size the Marxist dream of statist monopoly. Capitalism had become the new avatar of Marxist type monopoly economic control on a global scale ! The sealed one carriage train of Leninist bacterial disease had transmuted into derivative credit toxic cake baked in WS !
And then the bubble burst all based on debt. Marx's prediction applies to capitalist monopoly strangulation. Commnunism was his solution but when that failed US capitalism proved his intial prediction totally valid.
The irony of history! The wheel of his predictions had come a full circle inspite of the defeat of his preferred solutiion.
And now we are in inverted totaliarianism; aka oligarchs run the despotic state; all fed on runaway capitalist debt in a structurally fractured world.
We now have the worst of both worlds along with the NEW corrupted paradigm of peak fossil fuel, the polluted fount of our post industrial world.
Going back to reform by invisible handed Utopian logic the WS/FED tool of oligarchy, is a fool's dream. It'll take more than an Austrian fool's paradise dream to reset capitalism.
That world has now ended and we'll never go back to the old model.
Life always moves on to something new that has still to be invented.
A new paradigm born in global pain. And to create this model we need more than just sheer cynicism fed on broken dreams of yesteryear.
Fight club needs a new mission statement.
Gave you an up arrow and the system simultaneously gave you 3x down arrows.
You upset someone?
Much of this is good narrative, but the ending is wrong - way wrong. Oligarchy is a symptom, not a form of rule. It is caused by socialism. Totally natural.
We are dying of democracy and socialism, just like South Africa. The mob of benefits-drunk voters is voting for bigger and bigger liars to continue the benefits scams.
-------------------------------
Unbacked credit IMMEDIATELY begins to destroy the purchasing power of those working for their money as soon as the day it is spent. It guarantees to make a bad situation worse for everyone because it both
a) creates inflation (they admit this) which worsens the earning position of those not receiving gov't funds, and
b) at the same time it usurps the private sector by creating the appearance of private GDP growth.
Unbacked credit DOES NOT create private GDP growth, it destroys the private GDP because the private sector changes it's behavior to capture the government-printed and government-borrowed money. Innovation FALLS. Socialism grows. The left is empowered by trickery.
It rewards only the current politicians in power, fools the ignorant, rewards those lying about it working, and the liberal leadership knows it is a failing idea by studying history or by doing the math. Even Keynes - their hero - cited money printing will destroy a society and never advocated borrowing money for welfare.
Don't agree, just look at history :
The cardinal rule in society is the power construct : either feudal, decentralised oligarchy or state centralised power. That has been the evolution of society since the city states of ancient Greece.
The latter model goes imperial when its predatory mantra becomes expansionist; like ancient Rome or Alexander before it (a transient period which destroyed the city states of Greece).
So there are basically two forms of government in the western thread : feudal/decentalised or statist, centralised monarchy/republic.
Now each power construct to survive needs a cultural or knowledge meme. We have now the Enlightenment's rationalist meme based on science which has replaced the creationist christian meme since the twin US/French revolutions.
Keep in mind the knowledge meme has always been subservient to the power meme. The powerful use knowledge as a tool to spread the wealth to the people or to concentrate it for the elites; depending on where the power pendulum swings.
What we see today is the reversion of the social minded welfare state post WW2, to the elitist 1% oligarchy meme since Nam war and rise of MIC/Oil global oligarchy.
That's what the US empire has morphed into.
Talking about socialism today is basically a negation of the realisation that this wealth inequality is a cancer to the republic.
If you talk about socialism being the problem you've not understood the morph of Us society.
Choose your model sincerely but don't fool yourself.
The credit today is being created by the Oligarchy feudals for the oligarchy feudals. Period.
Socialist hand out is just the crumbs for the slaves to appease social violence.
You can call it decentralized oligarchy and not be incorrect in describing symptoms. The form of government is democracy. And going back to Polybius it always fails if the voters can vote on benefits. Once that happens, you need liars to run the government, and they start lying about EVERYTHING because that's what liars do:
Need examples?
"Most of the stuff (the banks did) that got us into trouble was perfectly legal"
"we don't have a domestic spying program"
"stimulus will revive the economy""
"austerity doesn't work""
"rights are unique to different groups of people"
"benghazi was a riot about an anti-muslim video"
"the irs didn't bully conservatives"
"conservatives hate the poor"
"conservatives hate women"
"conservatives hate homosexuals"
"if you like your health plan, you can keep it"
"I never met my Uncle"
.... the republicans are lying too - about the fiscal underpinnings for all this.
Your descriptions of the past are compelling, but they just don't capture "right now" accurately.
What the liberals are executing on us is "Your capitalist system of collateralized loans is failing us, so we're switching over to our system of uncollateralized loans that the friendly gov't officials have graciously provided to us from their good hearts." These subsidized gov't loans are collateralized by good hearts, I guess - the good hearts that didn't prosecute the bankers who caused the meltdown by engaging in black letter fraud violations which had been routinely prosecuted by prior presidents.
Here is a more specific dynamics breakdown, standard democratic mob behavior - short term greed:
a) the voters in a democracy keep asking for more and more free stuff, tax cuts, and stock market pumping after the SCOTUS stops strictly enforcing the Constitution
b) and the policitians begin to do so.
c) Then as the private economy gets damaged by the resulting subsidies, the business men try to get as much as the goverment-funded business as they can - to stay afloat.
d) The remaining, struggling, government-toady businesses - now in bed with politicians - are cited to be the problem with the failure of the socialists' goals.
Leftist politicians gladly blame the businessmen for making it fail so they don't look responsible, and they coerce the desired reaction - hate for the least responsible actors: Business men trying to survive like fish in a shrinking pool of water.
You are misinformed if you think our corporated owned two party system creates candidates that offer anything but lip service to social needs. That ship has sailed.
All your little soundbites are just that. Propaganda that is useful for convincing the impressionable that they still have any control at all of the inverted totalitarian government.
http://www.counterpunch.org/2015/01/07/the-death-of-american-democracy/
"little soundbites" are BIG lies - you claiming them to be small by decree indicates you are well aware of what they mean.
Once you cite that lies mean nothing - then you have just exposed you will lie on this thread because lying means nothing to you, it is a means to an ends. Lying is EVERYTHING, spooz. If yout don't care if the leaders deceive us, you are willing to deceive us as well.
I've done my homework - read the book, it not only expose the lies you recite of who is in control - it proves you actually know you aren't telling the truth here. Chapters 4 and 5, The Columbo Deduction. Columbo could tell what decievers knew by what truths they avoided.
You just dodged a big lie pattern and showed us all what you are fully aware of - lying democrat leaders who are the same ones decrying the corporations. The con men are pointing at the same bogey men as you are.
http://www.amazon.com/Atlas-Shouts-Modern-Patriot-Action/dp/1458217566/r...
I suggest reading a little more before claiming you've "done your homework". Your kind of thinking, by misinformed members of the shrinking middle class, is what gives the wealthy oligarchs cover as they loot our economy and inequality grows.
What exactly is all this "more free stuff" that you speak of? Food stamps for people who are no longer able to earn a living wage and put food on the table because our system has been handed over to globalist corporate interests who are more interested in making us global worker units? Medicaid, the substandard healthcare system for those who can't afford to participate in the crony capitalist health insurance run system?
Its obvious to many today that a Corporate elite controls our political system, and that we have little choice in voting for the lesser of two evils, neither of which are interested in addressing social needs. The growing inequality in our country and the lies told about our economic situation, in regards to the shrinking middle class, are symptoms of it. We all become "marginal groups" in their eyes as we enter a new feudal system where the majority will be part of a peasant class and human rights will be ignored. We see it in the creeping police state, the growing surveillance, the war on whistleblowers, the propaganda spewed by the mainstream media and the shutting down of dissent.
This goes against the vision of our founding fathers and the writers of our Constitution, who saw democratic participation as an essential part of our freedoms.
Here you confirm your dishonesty that I initially expected you to exhibit: "founding fathers.....who saw democratic participation as an essential part of our freedoms."
You either willfully lied, or are incredibly ignorant. I don't think you're stupid because you can write sentences nicely, so the first answer is the best.
Let's set the record straight for the readers, so they can see you are a fraud too:
No where did the founders desire democracy - it was a known, failing form of gov't at that time - notice they signed much of the Federalist Papers with "Polybius", who first documented democracy is a terrible form of gov't.
Honesty confirmation: Can you confirm what I wrote about Polybius and what he said about democracy?
If you don't, I will do so in a few hours, so everyone can see you are not an honest, factual debater. You are here to make noise and disrupt sensible dialogue.
Your kind of thinking comes straight out of the Trilateral Commission, sounds like stuff from a book they commissioned 40 years ago, "The Crisis of Democracy". These are the New World Order thinkers, who believe an authoritarian elite should be allowed to make decisions instead of voters. I really don't give a shit about what Polybius said, I'm more concerned about these guys undermining our democracy.
"On the one hand, the concept of Democracy is being wrongly redefined, equating its goals with capitalism; and substituting rule "of the people by the people" with rule by an authoritarian elite. The fact that rule has already transferred from the people to an authoritarian elite in a number of countries is unfortunately not in much doubt. But it is propagandist Orwellian doublethink to equate rule by an elite with democracy.
On the same elitist side (but taking a different tack) are the far right conservatives who have hi-jacked the anarchist-libertarian movement - and turned Libertarianism into an anti-government neoliberal Trojan Horse that favors a Corporate elite. This is also being used to attack Democracy and suppress public dissent. The neoliberal Libertarian claim that too much democracy threatens freedom really means that the laws and regulations of a democratic government, designed to protect the public interest, threaten the freedom of corporations to do whatever they like (regardless of the consequences on the public or the planet).
Neoliberal Libertarianism (which is an ideology that crosses party lines) is a Trojan Horse - that will inevitably favor those who are already rich and powerful over the general public. It is inherently elitist, not democratic."
http://www.truthliesdeceptioncoverups.info/2014/05/the-governability-of-...
You didn't acknowledge Obama's lies, you didn't acknowledge your quoted the founders 100% wrong, now you make up more crap to disrupt the dialogue here.
The Snowden and Assuange data dumps completely exposed their is no hidden connection going on between the government, the trilateral commission, the bilderbergs, the rothchilds or the nights of the templar.
And anyone can read ATLAS SHOUTS and see I don't stand for any of the crap you claim i stand for - 100% wrong again. Typical liberal. Making stuff up to create the appearance of real debate, while you are 100% aware of your trickery.
In Atlas Shouts, I devoted 2 Chapters to frauds like you, "The Columbo Deduction" shows how you simply change the topic every time the truth gets close t being told - then you exhibit 1 of 11 behaviors a knowing deciever uses to disrupt truthful inquiry. Yes, of course it is fact checked with articles from Psychology Today, Forbes, etc - practical articles about how to spot someone deceiving you.
You are totally tracking the behavior patterns of a knowing deceiver so far. 3 huge untruths so far (democracy, my advocacy's motivations, and oligarcy being a form of government, not a typical socialist sympton like Russia exhibits) and uninterested in Obama lying to us over and over. Your oppenents are uninformed, no matter how sane our logic and 100% accurate our facts.
Oh, I acknowledge Obama's lies alright. Both of the duopoly parties lie. That doesn't mean I'm willing to give up my right to vote to some authoritarian elites. As far as the founding fathers go, they believed in slavery too.
Who do you think should be allowed to vote? How would you separate those who are equipped to make decisions from those who are not? Would only the white, male property holders be eligible to vote, as the founding fathers preferred, or would you like to narrow the field even further?
YOU, my friend, are playing the part of the useful idiot here. I have no interest in your simple minded book, your intelligence obviously does not lie in communicating with the written word. Hope you didn't spend too much money publishing it. Atlas may be shouting, but it looks like nobody is listening.
Go back to your engineering, maybe you can be of some use there.
P.S. You may want to tell your verbose buddy Thomas L. Demmanne to use a spell checker if he wants to sound "erudite". He did give me a chuckle, though. Here's a snippet from his bombastic review of your book:
"It will serve the reader as a sieve for the more granular textures of conformational bias and cognative dissonance, leaving behind the larger shake that displays for the reader the Folly of complexities and the horrors of unintended consequences. "
Another deceptive tactic - you are a text book liberal, spooz: Find the weakest review I get and attack that as if it's the body of the supporting argument. Add that to your prior disingenuous displays, and we have the fingerprints of a fake debater:
- Said founders were in favor of democracy - totally wrong. Never apologized or retracted your claim, so you either willfully lied or you were incredibly stupid - in either case you don't want to admit it or talk about it any more.
- you mocked Polybius - who cites your advocacy - democracy - has a terrible record of madness. you don't care what polybius wrote. perfect - you proclaim your opinions trump written history to the point the west's first great historian is uninteresting to you.
- You proclaim because I cite democracy is terrible that I am against voting - another form of deceptive argument
- My book is "simple minded" - without even reading it you can tell!!! the comment of someone afraid to delve into details, so you deplore the whole book. first you dismissed Polybius - it's totally normal at this point that you dismiss all facts that expose your lies, or unlikely ignorance. To avoid the details and condemn the whole, is to confirm the whole is valid and un-assailable.
Here's what Spooz is hiding from you all, READERS, this is among the best reviewers comment:
"Quite the contrary, Mr. Lofgren uses an analytical approach to dissect the actual transactions, events, quotes, and actions of our modern politicians to deliver a stark forensic analysis of our dysfunctional government. We are invited, rather refreshingly, to put aside our biases and examine the contradictions used to manipulate the electorate - leaving a rather unsettling reality at our feet that our penchant for polarization has led to many of our current problems. And while we condemn radicalization across the globe as generally eroding our ability to live in peace, we are completely missing the point that radicalization here at home is the root cause of our political dysfunction. I applaud the extent to which the author lays this message bare, and the challenge it presents to us all to hold our leaders - and ourselves - accountable for honest discourse designed to serve not the common good, but the constitution constructed to provide for the common good."
Folks, you'll actually learn how to take on folks like Spooz and recognize they are fake debaters. They are totally aware they are just making noise.
http://www.amazon.com/Atlas-Shouts-Modern-Patriot-Action/dp/1458217566/r...
I'm sure the details would put me to sleep. And the "weakest" review that your buddies wrote was still five stars. Maybe a few of them should write a few more reviews and make it look like they are not just doing a favor for a friend.
You complain about the failure of democracy if the "mob of benefits-drunk voters" get to vote for benefits. What would you have the poor and disadvantaged do? Vote AGAINST their own best interests? I assumed you meant that they shouldn't be allowed to vote at all. As Charles Hughes Smith says in today's ZH post,
"Yes, 40 million Americans are on food stamps, 100 million are not even officially in the labor force, and perhaps as much as most Americans are receiving some sort of government assistance, but that doesn’t make it socialism. It makes it a failed capitalist system. Socialism is supposed to be about a society that cares, and that’s not what those US government handouts are about. They’re about keeping people quiet in a failed system.
..
Can you imagine what would happen in the US if the government pay-outs were halted? If there were no more foodstamps? The epic failure of the economic system would come to light in too many ways to mention. But one thing’s for sure, it would create one big mess of chaos and unrest that would sweep across the streets of the country like a tidal wave.
Nothing to do with socialism, that’s a political ideology, like capitalism is. There’s not much between them, once you put people first in either."
http://www.zerohedge.com/news/2015-02-03/it-socialism-or-just-failure
I see nothing in your posts that shows you have any sympathy for the poor and unemployed people who are struggling to get by in today's failed economy. I assume your book is equally ignorant of their pain.
If you hadn't lied and misled us repeatedly in prior posts, I might take you honestly, spoos.
Now you start getting factual and smug, and start the "you dont care about the poor" attack - another behavior of a deceiver, attack the inquirer about their dishonesty as uncaring.
You're well covered by Chapters 4 and 5, Spoos.
Tell us another lie or change the topic, Spooz, let's continue your show of deception: Tell us where deficit spending has recovered any economy in world history without a world war, I'll send you $50:
Keynesian stimulus was used in the
country _____ in the years ______,
during a __ recession/__ depression,
then the economy turned around within 2
years, and then produced ___ years
of lasting growth WITHOUT A WAR after this.
The increased tax revenue was enough to
pay off all the deficit the stimulushad created
within ______ years.
Oh, I see. No answers, just references to some obscure chapters in your "amazing" self published book. Interesting marketing technique, kind of like a paywall. And gotta laugh at you calling yourself an "intellectual' patriot. Your self esteem seems to be a little over the top, I think. Did your monkey at the typewriter friend Cool VP call you that?
And now we get to the fun part, where I get to educate you a bit. See, I'm a different sort of liberal, one you have probably never heard of. Not really a Keynesian of all, in fact I sometimes debate the Modern Monetary System folks who seem to worship the guy. MY solution is much more radical, and it involves major reform of monetary system.
I prefer something along the line of Irving Fisher's The Chicago Plan, full reserve banking along with debt free fiat issued by the Treasury to replace the endogenously created money issued by banks. Jeromir Benes and Michael Kumhof wrote a working paper "The Chicago Plan Revisited" for the IMF in 2012, looking at how a modern day version could work. My plan has a few unique twists, I suppose I could write a book too, but I won't waste my money or bother my friends to write reviews on Amazon.
It is similar, for the most part, to Kucinich's Monetary Reform Bill, HR 2990, from 2011, also known as The Need Act. Martin Wolf wrote in the Financial Times about his version of such a plan in 2012. I agree with Wolf that it should be fleshed out so it can be ready to be put into use before the next financial crisis happens, and there are some folks, like The American Monetary Institute, that are doing that.
"Our financial system is so unstable because the state first allowed it to create almost all the money in the economy and was then forced to insure it when performing that function. This is a giant hole at the heart of our market economies. It could be closed by separating the provision of money, rightly a function of the state, from the provision of finance, a function of the private sector.
This will not happen now. But remember the possibility. When the next crisis comes – and it surely will – we need to be ready."
http://www.ft.com/intl/cms/s/0/7f000b18-ca44-11e3-bb92-00144feabdc0.html...
P.S. Not going to bother with your little quiz. This isn't Kindergarten. And, of course, all the Austrian blather is just ideology too. Just theories, nothing to point at that has worked in the real world.
Of course you dodge "the little quiz" that shows stimulus has never succeeded.
and of course you imagine yourself a special kind of liberal - all liberals do this, Spooz. I estimate I had 5000 debates with liberals over 10 years, and most of them imagine they are special liberals that have the magic plan to fix the economy.
and none of them want to talk about the 100% record of their failure.
I can't even pay you $50 to talk the truth.
Instead you want to let the corrupt, lying leaders print money at will. That's a great idea!!! You're a shill, a con man, Spooz. Just like all the rest of them.
You are truly a legend in your own mind, lightweight. No substance, just a lot of noise.
Of course you couldn't have a real debate about economics, because of your limited resources. But if I had just read the legendary chapters 4 and 5 of your pathetic book (speaking of shills), I would know everything there is to know and more. laugh. out. loud.
P.S. In case you haven't noticed, MY plan HAS no record, so I have nothing to defend. The Chicago Plan has been pretty much ignored by the powers that be, probably because it would end the reign of the bankster economy.
I'm as much, if not more, opposed to the current system of propping up banks at the expense of the greater economy as you are. The difference is, the last thing I would do is throw the poor and disadvantaged under the bus.
P.P.S. A little more about my plan: The way to keep the corruption out of the money printing is to give it directly to the people, in the form of a Citizen's Dividend or Guaranteed Income, instead of washing it through banks. This would provide needed liquidity as it allows people to pay down debt and spend in the economy while the banking system implodes during the conversion. A side effect would be a huge reversal in the inequality trend.
Another false claim you've made - I'm a legend in my mind. It is a lie. In my mind, I've only presented facts of reality, and ideas of people much more well known than I. Keynes even impugns what is going on now, and Lenin.
I'm an investigative reporter and Atlas Shouts is a report on best practices, that's all. An engineering manual for the economy - what has worked repeatedly. what has not worked ever (stimulus). what has been lied about.
You're trying to "personalize" the attack as taught by Alinski, Spooz. Typical liberal. Do ANYTHING but talk truth.
No one knows if ANYTHING you write here is truthful, once it is evident you are making things up.
Investigative reporter, huh? Because you self published a book? Make me laugh with the continual undeserved self agrandizement.
You try your best to paint me as your definition of a "liberal", as if I have some sort of play book. You are one paranoid dude, to go along with your exaggerated sense of self importance. All evil liberulz belong in the same small basket in your tiny world.
Your version of "truth" comes from....where? Your limited selection of resources collected with much confirmation bias and tunnel vision.
In my book I note that the term "confirmational bias" is heavily used on liberal bloggers web pages - none on the others. It is a fingerprint of what you are reading.
You're a fraud, Spooz, you're just confirming the entire book.
The only fraud I see here is the guy that thinks spending money self publishing some lame book makes him an expert, an "investigative reporter". And talking like you have some sort of following makes you sound like a narcissist, living in this little bubble of self importance.
BTW, is your buddy Cool VP a liberal too? Cuz he used "conformational bias" in his review. These liberulz are hiding everywhere, it seems!
P.S. Most narcissists never seek treatment for their disorder (Narcissistic Personality Disorder) because they deny they have a problem. Just a little heads up, buddy, you show ALL the signs.
P.P.S. Your use of "best practices" is nothing but a engineering buzzword. Your limited grasp of economics does not put you in a place where you have anything to offer but tripe. Makes me wish Frederick Soddy were still alive; now there's a scientist who could attempt such a thing.
I can prove you know you are offering a deceptive accusation pretty quickly, with just one question.
The problem is easy to solve. The problem is, humans who know how to solve problems are entirely incapable of convincing others to take actions. Only those in control of the brainwashing studios (schools) and advertizing channels (mainstream media) can do that.
How could humans become so clueless? Easy! Even those in liberty-central were essentially authoritarian, due to generations of habituation to religion, the ultimate form of authoritarianism. And so, when they went to first grade, and first thing out of the box were taught the "pledge allegiance to the flag... with liberty and justice for all", the trap was sealed. Now "to pledge allegiance" (to a piece of cloth no less) is supposedly what constitutes "liberty and justice".
Uh, huh. To be a slave is liberty. How clear could this be? The first time I heard that nonsense recited (and translated to me) at age 5 or 6, I immediately noticed the absurdity. Sadly, if anyone else noticed, they didn't say. Clearly few do.
And so, no viable solution exists for human beings. Human beings are FINISHED. They have been rendered utterly incapacitated, because they have been rendered dumber than rocks. You think that's an exaggeration? It isn't. Humans are dumber than rocks. And a few are smarter. But on average, you guessed it.
And so, the fate of humans is sealed. The solutions are easy to identify. The solutions are easy to understand. The solutions are easy to implement. But nothing positive will be done, because today only about 1% of humanity can even imagine anything remotely like "individualism".
They bought the whole pile of nonsense, hook, line, sinker and anchor. And they'll go down with the ship, with or without the oligarchs. That's the only variable. And perhaps, depending on the details of how things play out, some infinitesimal number of individualists will find a way to survive the mass wipe out.
So, to answer the obvious question: Which system is the solution? Which system could save mankind? Which system could lead man to live long, prosper and enjoy the good life?
Hahaha. You see. Even the question is loaded, which assures at least 99% of brains are trapped by the question, even before answers are proposed.
Because, you see, the solution is "no system".
And humans are so brainwashed now, so completely habituated to being slaves, and being told what to think and do by "authority", that... NOBODY telling them what to do is simply... well... unthinkable.
And so make your peace with reality, then prepare for what you deserve. Just hope it happens to you fast, like a bullet through the brain from behind, because a great many people will suffer more than you can imagine before this era ends.
And (being generous here), the 1% who make a serious effort to see and understand reality, and take rational actions. Good luck. Because you're gonna need it.
BTW, if those 0.1% who survive, if any survive, do not make a firm, intransigent decision to eliminate brutes (human predators) quickly and at all costs, they too will suffer the same fate. If you want to pin the demise of mankind on one mistake, you might as well pin it on the unwillingness of honest, ethical, productive, benevolent human beings to eliminate the human predators who are their nemesis and greatest enemy. They have been defeated by that enemy again and again, and will always be defeated by that enemy if they do not defend themselves against their prime enemy.
For the few humans who survive to survive very long or very well, they need to eliminate all "authority". Either eliminate "authority" from their consciousness (do not ever in any way acknowledge or accept the concept of "authority"), or eliminate those who claim "authority" from reality (via bullets, swords, guillotines, rocks or whatever it takes, and without delay).
HonestANN you need to take a walk to Bengladesh to understand the problem.
Thats human reality and the scale of the phuck up is so huge that your individualistic logic just won't impinge on reality.
You are a creature of Robinson Crusoe's island or Vulcania from Captain Nemo's tale.
Your rationalism is not of this real world.
ABSOLUTELY CORRECT. That's pretty much what I said. And this collective "alternative" to individualism? I refuse it, I won't choose it, I won't accept it, I won't support it... and you can't pin it on me.
Nonetheless, that's the way it is. I also evade it and make my own way... even though I started out only a tiny step above Bangladesh. I grew up where we had to go out doors to an outhouse at 3am if we had to poo. Beware the deadly snakes. So, yeah, I know what life can be.
And BTW, individuals and tiny groups of collaborative individuals can and have lived perfectly well on this planet without this great "society" people love so much. So I (or we) happily say, "to each his own". You live in your Bangladesh (coming soon to the USSA, and already there intellectually to a great degree), and the few of us who do know how to live as individuals will live on our figurative and sometimes literal islands in the middle of the south pacific. Personally, I'm loving it. But not as much as I'll love leaving this planet, when that day comes.
"Then in the trauma of Cod war..."
Yes, yes. Who can forget the cod war?... So sad, so devestating, so smelly.
Who benefits from higher housing COSTS? Only realtors (scumbags) and the bankers (scumbags) do.
Everyone else benefits from low housing prices, both buyers and sellers, but especially property tax payers).
The gov. also benefits in higher tax bills. I just had my house 'tax' value get raised this year. There is no way I could sell it for that. The closest sale I've seen, nearby, was about 2/3rd's the price. I've watched several sellers give up and pull theirs off the market. They still get to pay the higher taxes.
the subprime mortgage market has been changed to officially make the taxpayer the guarantor of the mortgage through the mortgage insurance program. in the long ago past(80s-90s) mortgage insurance was a small premium added to fha and va loans to cover the 20% loan to value gap. it was essentially paid for by the consumer with a lower interest rate on fha and va loans. you could end the insurance premium when your house appraised at 80% of the loan value. it was a good deal for all.
what blew up the real estate bubble was a pattern of crowd source corruption not always planned, but a pervasive conspiracy to boost the selling price of homes. it began with the ridiculous assertion by wall street that quants had figured out how to take all the risk out of the market. they thought that if they could bury the risk in a portfolio of good assets the risk would disappear and the banks didn't have to hold the risk on their books at all so they loosened the underwriting for home loans. again, they thought they got rid of risk by starting these off balance sheets finance companies whose sole purpose was to churn motgage paper up the food chain.
ironically, the kickoff to the whole real estate bubble was the end of the capital gains tax on owner occupied real estate in 1997 which coincided with the last of the baby boomers upward mobility. the real estate market found itself awash in money to invest. so, innocently enough, the real estate market began to reflect this new money with escalating "values". when this combined with systemic corruption from the appraisers to the likes of lloyd the squid and angelo subprime mozilo the bubble blew up and popped when the 2% downside risk assessment turned into 100% of some mbs'.
today, mortgage insurance is very expensive and you are stuck with it for a minimum of 12 years no matter what the value of your property is. a buyer has to pay the insurance to get a mortgage with 3.5% down payment or any other loan to value ratio, even an 80% loan(to take advantage of the low interest rates for the buyer and secure the balance sheet for fannie and freddie)
in any case, your analysis and projection of real estate on a global basis is historically wrong. it is not by accident that the social, political and economic systems of all big .govs has been virtually the same through history. how is it that japan and china came up with the same organization as the west. the west believes the origins are from egypt through the greeks and romans the east has no similar delusion. in other words man is the same all over the world, therefore, have the same motivations. the idea and formation of a "moneyed" middle class is a huge change in the peasant world. that means it is an outlier if it is not replicable and sustainable so a return to the mean is likely.
equilibrium in this case means a return to a fuedal world where the poor to the merchant own nothing, including where they live and the land they farm, where the merchant is the proprietor of the state store and the aristocracy own everything including you. your entire life will be rented so your net pay will be less than zero(credit).
Sorry that was on the wrong thread.
One of the biggest threats to real estate ownership today is Agenda 21 from the 1992 Rio Earth Sumit.
They brought us the Trans Texas Corridor, the SPP Biodiversity Map http://www.agenda21course.com/biodiversity-map/
and sustainable urban development groups, ICLEI, operating at the local level to eliminate peon land ownership.
http://www.whatisagenda21.net/
To create a loan, property is usually hypothecated on a double entry ledger.
Because private credit money uses land and property, then that ASSET CLASS is always pushed.
Because land/housing is pushed, its value relative to other wealth means is too high.
For example, all of the land and housing in the State of New York, exceeds the value of all industry in the U.S.
Imagine this: Two people are bidding to buy a apartment complex. Each person knows how much rental income the apartment makes. Both prospective debtors then enter into a bidding war to buy the apartment.
Who wins the bet? New debtor who is willing to take on the most banker debt.
Banker then creates credit loan from nothing and attaches the property as collateral. New Debtor then raises rents on tenants as far as market will bear.
Note the outputs of this scheme: Bidding up of price was vectored to banker. Bidding up of price caused tenants to be charged maximum.
How about taxes in this scheme? If land taxes are low, then government does not get land rents and instead banker gets capitalized. Government does not get land rents, and hence cannot reflux the taxes into the commons.
It always boils down to the money system and the nature of private credit. If you don’t tax land, then rental costs will be vectored toward banker. And it is important to note that the bidding up of costs don’t affect banker too much as the returning credit mostly decrements principle on his ledger. He really works for the usury. This scheme has a very negative impact on prices that are driven up unnecessarily. It turns humanity into hamsters running on a wheel unnecessarily.
Inputs to land that improve its value should be captured, as was well explained by Henry George.
For example, in the rail road baron era, said railroad tycoons got free land. Townspeople input their labor energy and improved the town, but the baron capitalized on the land value increase. These barons then tried to take over the country.
Without taxing land value increase, then we end up with regressive income taxes and corporations shielding income and all kinds of other perverse effects.
The only real legitimate tax is land tax, and we don’t even do that right. Credit as money i.e. banker corporations must be restrained with land value taxes. Even with a wealth money system like Sovereign money, land value rents have to be captured.
As people vector their output into banker’s ledger, and then vector more of their output into various payroll taxes, there is not enough left over to trade with their fellows.
Think about it. If you cannot trade your output with others, they cannot trade with you.
Money, especially private banker money, is anything but a neutral veil.
Considering the division of space in order to create our seeming separate worlds in this larger world-space is quite an interesting exercise.
What is truly separate afterall?
Real estate is a perfect example of a principal I coined called: the more affordable they try to make something the more expensive it gets.
It's not a new concept. If you try to distort the home loan market through affordable housing initiatives you will create excess demand that eliminates the need for developers to be efficient, and urban planners to be realiztic, and ultimately drives housing costs up.
Same for education the more you try to make the costs offordable the less the costs will matter and the more expensive it will get.
I am out of the real estate market. I just sold that real estate on Friday. The banker teller had no idea what to do with that check and then we had to the 22 year old chick bank manager come out and not know anything either. I asked for 5000K in cash, but no, I was told that I could only have $100 dollars even though my bank account balance was well above $100 dollars. They had no idea what to do with me. NO, you can't have your own money in fiat cash but if you do your transaction in digital form then it is OK I found out. You simply can not have cash.
I can only take $500 per day from the ATM and it will shut me down afterwords. My money seems to be THEIR money. I want 50K in cash but no: You have fill out IRS paperwork sir and then order that cash. I knew that but why? I was told it was policy to protect the safety of the bank and myself. Like a Credit Default Swap? Anyone who has been around ZH for while knows how preposterous of a statement that was. What? I barely kept a straight face.
I do not want what money I do have in the bank account period. The 23 year old told me, "You know that you are taking a risk by having that much cash on hand because someone could steal it." I had no idea what to say other than to ask if he knew who John Corzine is. His answer was no. Never heard of that guy. Sounds about right.
Then he asked why I need so much cash anyway. What? I was steady and I asked why he cared. It was for my own safety he said. Oh, THAT is why you care? I could not go any further and he gave me a receipt where he circled all of the terms. I had to let it go because really it was outrageous. Then the guy forget to give me my lousy $100 and told my to have a good day. I had to ask if I could have the $100 that I withdrew because he forgot all about it. I didn't. Then the guy told me that he already gave me the $100 dollars. I told that idiot that no you gave this receipt and I produced it. I did not get $100 dollars but rather a doposit reciept. Holy fuck was I ever patient and I didn't make a scene but I was getting pretty angry.
I was mad and it is not good to make me mad. Nothing good happens when I am mad. I do not like being mad. I prefer having a few jokes with some friends and a laugh. I really wanted grab that kid by the nape of his neck and smash his face on the counter about 40 times but I did not do so because that will not help anyone and won't solve any problems. I think my blood pressure was somewhere around 500 over 300. I still stayed calm.
I have just been going the ATM and withdrawing $500 a day. Whatever.
I used to withdraw cash a couple times a week to hide it from my then wife, since I knew a couple years ahead of time it would end. Used to buy silver using the credit card, which was a great way to hide assets since the fiat was "spent".
I had lots of prep time before the inevitable separation and divorce and did what I could to appear to be a broke deadbeat, but....She didn't take anything from me anyway other than the TV (don't want or need it and have done great without) and the dog (miss that yappy bitch).
So now I'm stuck with several thousands in cash that if I try to deposit into the bank they will think I'm a drug dealer and call the cops. LOL.
What the fuck happened to my country?
That is about the size of it.
A few thousand in cash is hardly a problem. Go buy a vintage guitar or something, say a Gibson j45 from anytime previous to the 1970s, and your cash will be converted into something that can't be printed or manufactured and has endless demand (by every Americana/Country guitar player in the world). Govt. can't tax it or take it or even know about it.
Dear Ramsey su,
You need to rethink a few things......
"Who owns your house? If you have a mortgage, it means you have pledged your ownership in exchange for a loan. In other words, you only own the rights of possession until you pay off the loan, pretty much like a car loan. The lender owns your house. This was not an issue before when it was a free market."It doesn't matter if you "own" your house or not.
You still do NOT "OWN" it.
Think I'm wrong? Then try not paying your real-estate tax, then you'll find out who really "owns" things.
"Owning" your home has nothing to do with a "free" market.
It has everything to do with
"Generational Servitude"
We are already a Socialist Country...
Pull your "Socialist Security Card out of your Wallet.
A Mortgage simply means that you are serving 2 Masters.....The Bank & the State.
>MORTGAGE<
Mort = Death
Gage = Pledge =Death Pledge
--------------------------------------------------
"What would this government do when the defaults return?"
Haven't you read "Creature from Jekyll Island" Ramsy?? Look up the chapter called:
"A Pessimistic Scenario" Page 547
(printed 1994)
By "owning" (your word)
You essentially have the right to pick the paint for the walls & floor coverings.
Everything else requires a PERMIT!
I realize that I may be coming off like a D--K But, when is everyone (most) going to wake up? I mean "we" don't own our homes, "we" don't own our cars.....
(look at your car title, the State of your residence is the owner. Your simply permitted to operate it and required to pay a yearly license plate TAX)
Our money is fake and only has value because we have to pay our taxes in it.
Maybe this link will wake a few Zero Hedgers up
https://www.youtube.com/watch?v=Xbp6umQT58A&feature=related
P.S. get yourself some "world Money"
Gold & Silver are accepted as payment in every country around the world.
Get rid of your American Express Card & those debt notes in your wallet (Not Money)
Silly Debt Slave :)
Until Next Time!
I wonder how much an average house would cost if they had to be purchased in full?
Many believe the BS story that interest is only around 4%. That translates to about 100% over 30 years.
Making big purchases based on the monthly cost instead of the item's overall price is a sucker's game.
Harry,
I like your thinking....I was just telling my friend this the other day.
In order for you to "save" $10,000 from a pay check. You end up having to make around $14,000 GROSS > before taxes.
So a $100,000 home will cost you $140,000 NET
(One Payment >No Mortgage)
That SAME home at 4% will cost around $171,869.51 NET Over 30 years (rounded up) $252,000 (Gross income)
Thats not including:
Realestate Tax - PMI (My tax is $5,500 a year - Currently)
(They Were $7,200 >fought them)
Home Owners Insurance $1,000 per year $1,400 Gross Income
Maintence
Heat - Electric
Water / Garbage
Real Estate Tax($5,000) over 30 years $150,000 Net Payments
BUT, you have to Actually make $210,000 GROSS BEFORE TAX INCOME.
Average home takes anywhere between 6-12 months to build (a professional builder)
On Average %20 of the Home is Material %80 is Labor Lets add this up: House Payments 30 years 4% (GROSS) $252,000 Home Owners Insurance >30 years " $ 42,000 Real Estate Tax ($5,000)> 30 years $210,000 (GROSS INCOME) $504,000NOT Including all the other necessities that go into a Home like Water, Furniture, Lawn Maintenance, Electric Etc........
The AMERICAN DREAM.....because you have to be Asleep to believe it!
https://www.youtube.com/watch?v=acLW1vFO-2Q
You got it, man. The whole housing market is one big sucker's racket intended to trap buyers in debt and tax payments for decades.
Let's not forget the ass raping in realtors and mortgage company fees. Not a single person involved in the deal is incentivized to get a buyer a lower price. EVERYONE wants to screw the buyer as hard as possible.
This huge burden is put in easy reach with all sorts of tricks to obscure truth, manipulate markets, and saddle the buyer for as much and as long as possible. It's a govt-banker-realtor sponsored racket.
If the govt doesn't keep real estate prices escalating, they lose out on tax revenue needed to pay pensions for their human mushroom farm. The mortgage companies want to make a mint over the term of your loan--and they do so even with low interest rates. Finally, the realtor is going to give your nuts a good hard squeeze before you wake up to the millstone you've just happily put around your neck. But, all these shitbags will tell you, the interest is tax deductible! Yippie.
If people had to pay cash houses would be 60% cheaper. Property taxes shouldn't even exist. Humans have a natural right to property ownership just as they have a natural right to speak their mind. Imposing a tax on a 'right' means it's not a right but an occupancy 'priviledge' granted by the state--that can be controlled or taken at the state's will. This is fascism and should be eliminated at any cost.
The only way I'd own property in the US is by paying cash, and then I would expect the property to provide some sort of return. Either rental property earning considerable revenue, or bug-out compound to provide security, privacy, food and fuel. Unfortunately, properties haven't been able to accommodate these parameters for the last ten years or so (not where I've lived, anyway). For those that might argue this point--consider that taxes in many municipalities are going to climb sharply over the next decade to cover all sorts of obligations. It's not just the fed that's over-extended. So your rental property might look good now, but when taxes quadruple and tax rates on rental income are raised, it won't be so appealing.
I even address your playbook comment, you're mainstream leftist.