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I didn't realize trading low housing prices for an over-leveraged federal reserve holding an excessively risky amount of mortgage debt was recovery.
No different than the USG owning GM stock where the price has to go above $50/share just for us to break even.
No different than than the USG giving loans to companies with bad financials and then losing the money when they go bankrupt.
It's the old adage...privatize profits and socialize losses.
The USG hands over money and takes the losers off other's hands.
They don't need to worry about the losses because taxpayers are on the hook to pay it all back.
No different than the USG owning GM stock where the price has to go above $50/share just for us to break even.
No different than than the USG giving loans to companies with bad financials and then losing the money when they go bankrupt.
It's the old adage...privatize profits and socialize losses.
The USG hands over money and takes the losers off other's hands.
They don't need to worry about the losses because taxpayers are on the hook to pay it all back.
Never mind about the 20 year recession (Japan anyone?) or double digit interest rates that it would take to unwind the Fed to 2008 levels.
This is why some basic finance classes need to be mandatory to graduate high school.
There is a limited amount of housing stock. We have a growing population as those people come of age and do better financially and get jobs those people's desire to own a home can drive up home prices.
So to me an increase of home prices represents workers doing better financially.
You seem to know a lot about the economy. So why do you think that home equity will dry up quickly?
Granted, I am not an economist and have a very simplistic understanding of the economy, but there are economic indicators that point to a positive economic future.
Thats the problem, "to you" that might be the case, but just because you say it doesn't make it true. Do you have any sources to back up the claim that "workers are doing better financially" as you say? To support that statement you would need to show me something that proves that average inflation adjusted incomes have gone up over the last two years, and I'm about 99% certain you cant, because I don't think they have. And with the fiscal cliff coming, there is a possibility that payroll tax cuts will be lost, so those incomes are likely to take about a 2% hit.
Cheer leading without facts is pretty misleading and dangerous.
There is a limited amount of housing stock. We have a growing population as those people come of age and do better financially and get jobs those people's desire to own a home can drive up home prices.
So to me an increase of home prices represents workers doing better financially.
You seem to know a lot about the economy. So why do you think that home equity will dry up quickly?
Its still near all time lows and at rock bottom interest rates. A house at 10% interest rates has lots of room to move up going to 9%, 8% and so on like a bond. Just pray the deficit hawks don't come home to roost because I just don't see much credit fuel otherwise. However anytime assets go up in price its stagflation and halts unlike wage inflation which tend to inflame the situation. If wages don't follow the housing increase it will be a short trip.
Quote:
Granted, I am not an economist and have a very simplistic understanding of the economy, but there are economic indicators that point to a positive economic future.
There is a limited amount of housing stock. We have a growing population as those people come of age and do better financially and get jobs those people's desire to own a home can drive up home prices.
So to me an increase of home prices represents workers doing better financially.
You seem to know a lot about the economy. So why do you think that home equity will dry up quickly?
Granted, I am not an economist and have a very simplistic understanding of the economy, but there are economic indicators that point to a positive economic future.
Quote:
Originally Posted by t206
Thats the problem, "to you" that might be the case, but just because you say it doesn't make it true. Do you have any sources to back up the claim that "workers are doing better financially" as you say? To support that statement you would need to show me something that proves that average inflation adjusted incomes have gone up over the last two years, and I'm about 99% certain you cant, because I don't think they have. And with the fiscal cliff coming, there is a possibility that payroll tax cuts will be lost, so those incomes are likely to take about a 2% hit.
Cheer leading without facts is pretty misleading and dangerous.
From June 2009 to June 2012, inflation-adjusted median household income fell 4.8 percent, to $50,964, according to a report by Sentier Research, a firm headed by two former Census Bureau officials.
That means we're only down 28.6% from when this all started back in 2006.
If you bought a home in 2006 or later ..you ain't cheering at this news.
Good point. I wouldn't start jumping for joy yet, let's see the actual number of home SALES! Thinking you can buy and buying are two different things. Harder to buy a home now since the days of easy credit are gone
Thats the problem, "to you" that might be the case, but just because you say it doesn't make it true. Do you have any sources to back up the claim that "workers are doing better financially" as you say? To support that statement you would need to show me something that proves that average inflation adjusted incomes have gone up over the last two years, and I'm about 99% certain you cant, because I don't think they have. And with the fiscal cliff coming, there is a possibility that payroll tax cuts will be lost, so those incomes are likely to take about a 2% hit.
Cheer leading without facts is pretty misleading and dangerous.
That's true, I already said to me. I didn't write that it was a fact, but I think more people are working. I don't thing incomes have increased. But home prices have declined, so they are more affordable for more people on that basis alone.
That's true, I already said to me. I didn't write that it was a fact, but I think more people are working. I don't thing incomes have increased. But home prices have declined, so they are more affordable for more people on that basis alone.
Why do you think home prices have increased?
Again, do you have something to back up the "more people working" stat? And is it just a raw number or a percentage of the work-ready population as compared to previous years?
Why I think housing prices are going up is irrelevant, but it wouldn't surprise me if it was because people are a bit more optimistic about the economy, but I do not share that optimism at all, so I just see it as a false rise in prices if that is what is really going on. There are far too many negative economic factors out there for my liking for people to be out there driving up housing prices.
Also, the artificially and dangerously low interest rates probably trick people into thinking "now is a good time to buy" because of the rates, but the question SHOULD be "is now really a good time to go into HUGE debt or make the largest investment I'll ever make in my life?" Probably not in my opinion.
The thought of President Mitt Romney taking credit for the recovery in the next 4 years would have been too painful to bear...which is why I'm glad the Flip-Flopper got his butt kicked back to Utah!
He's not ours. He's an East Coaster. You guys can keep him.
Its still near all time lows and at rock bottom interest rates. A house at 10% interest rates has lots of room to move up going to 9%, 8% and so on like a bond. Just pray the deficit hawks don't come home to roost because I just don't see much credit fuel otherwise. However anytime assets go up in price its stagflation and halts unlike wage inflation which tend to inflame the situation. If wages don't follow the housing increase it will be a short trip.
What I mean by the everything crumbles is that the economy is cyclical. There will probably be another recession eventually.
What merriment? The merriment is in what rising home prices represent, which is more people working, and feeling better about their economic situation.
The deficit hawks have been wrong for over four years now. When will their opinions be discredited. I know its coming right? Anybody can make that prediction.
Well, lets be clear housing prices are only up to their level in 2003. Housing prices have only grown modestly.
It is correct that if incomes don't increase then there will be no economic housing recovery.
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