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A bubble doesn't require lowered lending standards. It doesn't even require mal-investment.
Your definition is simply false.
lol No it is not false. And yes it does involve lowering lending standards. That was the cause of the dot com bubble and the housing bubble.
Quote:
Originally Posted by michiganmoon
Please note that I am not saying we are in fact in a bubble, but that we could be.
Either way you are wrong.
Quote:
Originally Posted by michiganmoon
Definition of a housing bubble:
A housing bubble is a run-up in housing prices fueled by demand, speculation and exuberance. Housing bubbles usually start with an increase in demand, in the face of limited supply, which takes a relatively extended period to replenish and increase. Speculators enter the market, further driving up demand. At some point, demand decreases or stagnates at the same time supply increases, resulting in a sharp drop in prices — and the bubble bursts.
lmao I already specified why you are wrong when I answered THAT EXACT SAME STATEMENT.
Again One more time. Lets see if you actually respond to what I posted.
The artificially increased demand causes prices to rise since supply cannot keep up. The demand is caused by the lowering of standards which paves the way for the easy lending and mal investment. Not "exuberant" investment or speculation, but mal investment.
Quote:
Originally Posted by michiganmoon
Has there been a run up in housing prices? Yes. Nationwide yes, but look at San Francisco for an example where the bubble could pop:
Do many areas of the country have limited supply? Yes. Supply is actually expected to decrease.
Could Demand Decrease? Yes. Wage increases are not keeping up with real estate increases. Young couples are more and more saying that they can't afford a home.
So, not using your fake definition. But using the real definition, how is it so absurd to think we could be entering bubble territory. We have had rising prices with limited supply. We have an increase in speculators. We also have signs that demand could potentially start falling soon.
None of this garbage has anything to do with a bubble. Your definition is amateurish and juvenile.
Explain to everyone here why an example in one small area of America means we are going to have a housing bubble?
Feb 2019
Home values are rising at the slowest rate in more than six years https://www.cnbc.com/2019/02/05/home...six-years.html
Mar 2019
Home prices are rising at the slowest pace in more than 6 years
And in San Francisco, where the typical home costs well over $1 million, the annual price increase was 1.8 percent in January, down from a 10.2 percent increase a year earlier.
Are housing prices rising faster than wages? Yes Where is the artificial demand that caused people to get into houses they couldn't afford and therefore cause them to loose their house? No
Last edited by Loveshiscountry; 08-02-2019 at 09:28 PM..
lol No it is not false. And yes it does involve lowering lending standards. That was the cause of the dot com bubble and the housing bubble.
I've provided three definitions - literally the first three definitions I've found - all three say your definition is wrong.
Either:
(1) Admit you made a mistake and invented a definition that isn't real.
Or...
(2) Provide a link to a reputable website that includes a definition that matches your definition. I've provided three links to definitions, all of which say your definition is wrong.
Once we settle upon a definition we can actually discuss this topic properly, but you are refusing to have an honest discussion by using a definition that isn't real or at least one that you refuse to corroborate.
Why is it that hard to have an honest discussion for you on this topic?
Last edited by michiganmoon; 08-03-2019 at 07:07 AM..
Bush's mission to get 5.5 million low income minorities mortgages when they would not otherwise qualify for them.
Mobilizing the Private Sector: America's Homeownership Challenge
- Establish a national goal of at least 5.5 million new minority homeowners before the end of the decade.
- Challenge the private sector real estate and mortgage finance industries to dramatically increase their efforts to reduce the barriers to homeownership faced by minority families and to work with the nonprofit sector in a concerted effort to achieve this goal through national and local partnerships.
- Convene a White House Conference on Increasing Minority Homeownership, to highlight the homeownership barriers faced by minorities and develop proposed solutions.
- A substantial increase of at least $440 billion in the financial commitment made by the government-sponsored enterprises involved in the secondary mortgage market, specifically targeted toward the minority market;
- Twenty-five different local initiatives to be undertaken across the nation, geared toward eliminating the specific homeownership barriers faced by minority families in those communities;
- A commitment to raise $750 million in below-market-rate investments by 2007, which will work in collaboration with local homeownership initiatives and be targeted to heavily minority program areas;
- Pursuing strategic partnerships in 20 top housing markets between homebuilders, lenders, local officials, and community leaders to develop approaches that address the local challenges to building homes for minority families living in urban centers;
- Establishing of faith-based housing partnerships between the participants and at least 100 churches, mosques, synagogues, and other faith-based institutions;
- Aggressively developing new mortgage products so that conventional market alternatives are available to combat the predatory loan products that are disproportionately targeted to minorities;
- Creating new mortgage products to meet the unique needs of recent immigrants;
- Dramatically expanding financial education efforts for minorities, providing financial counseling to at least 380,000 minority families, and taking measures at the local level to reduce predatory lending; and
- Establishing multilingual, consumer-oriented internet Web sites designed to help minorities overcome barriers to homeownership, including creation of a central data bank of affordable housing programs made available to real estate agents when working with clients.
These were goals...a lot of which didn't happen. Every President in recent times has wanted to increase home ownership and most would agree that is a laudable goal. But to blame the housing crises on Bush is short-sighted. Perhaps you should look back at the previous administrations. Bush had raised concerns about Fanny and Freddie very early on and tried to rein them in. He moved aggressively in 2004 to regulate them and managed to actually got a bill through the Senate Banking and Finance Committee. Guess who squashed it? Sen Chris Dodd. By the way, who was running Fannie and Freddie during this time?
It's beginning to look that way. A couple of financial websites weigh in:
There are plenty of signs that the housing market has been in bubble territory. Most crashes occur only because an asset bubble has popped.
One sign of an asset bubble is that home prices have escalated. National median family home prices are 32% higher than inflation. That's similar to 2005, when they were 35% overvalued.
lol No it is not false. And yes it does involve lowering lending standards. That was the cause of the dot com bubble and the housing bubble.
Lower lending standards had nothing to do with the dot.com bubble.
The dot.com bubble was the result of irrational exuberance.
There were over 1 Million companies starting with the letter "i" as in iClothing, iGuitars, iFootwear, iKetchup, iMustard and the like. I say that in jest, but it was just like that.
Those people believed that Internet would instantly -- and that's the operand -- supplant Brick & Mortar.
No one bothered to read the marketing reports that said the GI Generation had absolutely no interest whatsoever of shopping on-line and that the Silent Generation saw no value in it.
Even Boomers, who were in their 40s at the time, were on the bubble (no pun intended).
Your typical dot.com was 5 Guys some of them college dropouts in a swanky office living large mired in $Billions in debt with $0 in investor and sales of nothing to paltry.
Some of the more intelligent and experienced investors re-evaluated these companies and correctly concluded that they were never going to turn a profit and that most would be collapsing soon, so they started selling off their stocks to get out while they were ahead and make a profit.
Then Joe McTrader who didn't have a clue about investing and would never have a clue about investing even if it was clue mating season and Joe McTrader smeared his body with clue musk and was in an open field full of horny clues singing the clue mating call and doing the clue mating dance panicked and started selling off and that was the end of that.
It was an excellent example of Great Moments in Bad Timing.
If the dot.com thing was 15-20 years later, the outcome would have been totally different, because by then the GI Generation was gone, the Silent Generation was irrelevant and the Boomers and Generation X and Y were all hot and bothered for it.
I've provided three definitions - literally the first three definitions I've found - all three say your definition is wrong.
You looked them up and have no knowledge on the subject which is why you deflect from what I posted.
Quote:
Originally Posted by michiganmoon
Either:
(1) Admit you made a mistake and invented a definition that isn't real.
Or...
(2) Provide a link to a reputable website that includes a definition that matches your definition. I've provided three links to definitions, all of which say your definition is wrong.
None of them say it's wrong. Not one. You don't understand the topic and that is why you are wrong.
Either:
(1) Admit you made a mistake and have little knowledge on this subject.
Or...
(2) Discuss my definition in an intelligent manner which disproves what I posted
Quote:
Originally Posted by michiganmoon
Once we settle upon a definition we can actually discuss this topic properly, but you are refusing to have an honest discussion by using a definition that isn't real or at least one that you refuse to corroborate.
Once you gain the knowledge to discuss this issue we can actually discuss it properly but you are refusing to have an honest discussion because of the way you deflect and refuse to discuss my point.
Again. One more time in hopes you don't deflect and actually discuss what I've posted.
The artificially increased demand causes prices to rise since supply cannot keep up. The demand is caused by the lowering of standards which paves the way for the easy lending and mal investment. Not "exuberant" investment or speculation, but mal investment.
Again that goes into the specifics that you posted and clarified what you posted. That you don't understand that even though I've pointed it out time and time again is on you.
Quote:
Originally Posted by michiganmoon
Why is it that hard to have an honest discussion for you on this topic?
Because you haven't been honest. That's on you.
The artificially increased demand causes prices to rise since supply cannot keep up. The demand is caused by the lowering of standards which paves the way for the easy lending and mal investment. Not "exuberant" investment or speculation, but mal investment.
Last edited by Loveshiscountry; 08-03-2019 at 06:46 PM..
Lower lending standards had nothing to do with the dot.com bubble.
The dot.com bubble was the result of irrational exuberance.
That was a big part of it. The credit expansion was the mal investment. Some by companies, people who didn't qualify until standards were lowered.
Quote:
Originally Posted by Mircea
There were over 1 Million companies starting with the letter "i" as in iClothing, iGuitars, iFootwear, iKetchup, iMustard and the like. I say that in jest, but it was just like that.
Those people believed that Internet would instantly -- and that's the operand -- supplant Brick & Mortar.
No one bothered to read the marketing reports that said the GI Generation had absolutely no interest whatsoever of shopping on-line and that the Silent Generation saw no value in it.
Even Boomers, who were in their 40s at the time, were on the bubble (no pun intended).
Your typical dot.com was 5 Guys some of them college dropouts in a swanky office living large mired in $Billions in debt with $0 in investor and sales of nothing to paltry.
Some of the more intelligent and experienced investors re-evaluated these companies and correctly concluded that they were never going to turn a profit and that most would be collapsing soon, so they started selling off their stocks to get out while they were ahead and make a profit.
Then Joe McTrader who didn't have a clue about investing and would never have a clue about investing even if it was clue mating season and Joe McTrader smeared his body with clue musk and was in an open field full of horny clues singing the clue mating call and doing the clue mating dance panicked and started selling off and that was the end of that.
It was an excellent example of Great Moments in Bad Timing.
If the dot.com thing was 15-20 years later, the outcome would have been totally different, because by then the GI Generation was gone, the Silent Generation was irrelevant and the Boomers and Generation X and Y were all hot and bothered for it.
The pattern of new investment did not fit the pattern of consumer spending in that they didn’t translate into consumer demand for their products and services.
We saw the consequences of credit expansion, the encouragement it gives to high debt and dangerous leverage. That credit expansion was responsible for many companies operating with lower cash holdings relative to the scale of their economic activity.
The mal investment and over-consumption. The artificially lowering of interest rates. In a years time it went from 6.00 to 5.22. That is a lowering of standards.
Japan did it too cutting its discount rate from 1.75 percent to 0.5 percent.
Now Nobel Prize winning economist Robert Shiller is claiming that we are in a housing bubble. He correctly called the last housing bubble before it popped as well.
Quote:
Shiller says the housing market is in a bubble phase, not unlike 2005. That was the point the housing bubble was inflated, but yet to go parabolic. "It's like 2005 again," Shiller said. "San Francisco and L.A. are already slowing down." That's a "bad indicator," he said, as those markets have been going up for years.
Real-estate stocks are on fire, too. The Real Estate Select Sector ETF (XLRE) is up nearly 29% just this year, blowing away the S&P 500's 20% gain. And that doesn't even include the Real Estate Select Sector's market-beating yield of 2.8%. Real-estate stocks are just narrowly behind the Technology Select Sector SPDR ETF (XLK) as the top-performing sector of the year.
Yet, given the housing bubble isn't as "excited as it was" in the early 2000s, Shiller has been reluctant to publicly call it a bubble until now. And he thinks enough people remember the 2000's housing bubble so they recall "home prices really do fall." We're not "as exuberant now, so I'm not sure it's a repeat performance," he said.
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