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So, what would you advise policy makers to do?
They should do nothing. They've done enough damage. Why don't they just let the market work? Why can't we just let housing prices go down? In California, housing prices got to like five or 10 times median household incomes—it was insane. Even though prices have dropped 20 percent, housing is still ridiculously priced. Prices need to come down. It's interesting: Initially, Fannie and Freddie's mission was to help houses be affordable. Now, their mission is to keep housing prices expensive.
This guy makes so much sense and he predicted exactly the condition we are in - 3 + years ago.
Like when a kid gets a fever...the first reaction is to start shoving aspirin down his throat, right? Well, the fever is there for a reason...namely, to kill whatever bug is making him sick. Stop the normal reaction to infection, and the kid just stays sick longer.
Same thing...housing market failed because of over regulation...now we want even more regulation to fix the over regulation? Yup, let's keep shoving aspirin down that kids throat, cause if the fever goes away, he must not be sick, right?
Like when a kid gets a fever...the first reaction is to start shoving aspirin down his throat, right? Well, the fever is there for a reason...namely, to kill whatever bug is making him sick. Stop the normal reaction to infection, and the kid just stays sick longer.
Aspirin is contra-indicated in children, particularly young children, in every circumstance because of the small but dire risk of Reye Syndrome. Aspirin should never be given to children except under a doctor's specific instruction. Symptomatic fever-reducers such as Children's versions of Tylenol or Advil do not inhibit the body's production of macrophages or antibodies, which are the things that actually fight an invader. Treatment of a low-grade fever may cause minor disruptions to other beneficial responses, but as a rule of thumb, a child's fever of 102 or above should be treated, and of 101-102 depending on severity of discomfort.
Quote:
Originally Posted by dunkel25
Same thing...housing market failed because of over regulation...now we want even more regulation to fix the over regulation? Yup, let's keep shoving aspirin down that kids throat, cause if the fever goes away, he must not be sick, right?
The housing market did not fail. Credit markets were undercut by the cascading effects of bad paper that primarily originated in mortgage markets. Over-regulation did not exist and hence played no role at all. By far the largest sources of the mortgage paper that ultimately failed were unregulated private brokers and barely regulated bank affiliates operating through primarily self-regulating investment banks. Lack of appropriate oversight and transparency along with a blind unwillingness to act against excess among those who did have regulatory authority were signficant contributing causes of the crisis.
It hasnt already crashed? Misleading title. You mean crash further.
Depending upon area house values should not be more than 2.5X (Midwest) to 3.5X (CA / NE) avg family income. Pretty much no matter what, If it is past 3.5X it is not long term sustainable.
Depending upon area house values should not be more than 2.5X (Midwest) to 3.5X (CA / NE) avg family income. Pretty much no matter what, If it is past 3.5X it is not long term sustainable.
I assume you mean the ratio between some measure of median home value and median household income, but does it mean that if the ratio exceeds 3.5, the problem could be solved by quickly building more low-income housing?
I agree with him wholeheartedly. We have to grit our teeth and take our medicine.
We've been the ones benefiting from this economic heyday we've had--not our grandkids. It's not fair to make them pay the bill for it long after we're gone.
>I assume you mean the ratio between some measure of median home value and median household income, but does it mean that if the ratio exceeds 3.5, the problem could be solved by quickly building more low-income housing?<
???????wha??????? Did I mention subsidized housing? There is already an oversupply of housing.
If you want to take the "market" approach, that is a perfectly valid approach, but they need to make the processing MUCH faster if they do. 2 years processing time from pre-foreclosure to resale drags the economy for too long a period of time. The economy needs to turn and put this mess behind it.
I know many on these boards dont care because they are self employed and have uber amounts of gold hoarded. Singling noone specific out, some sick POS's on these boards are almost cheering the economy down just so they can say I told you so.
Knock yourself out. Don't expect a lot of company.
Quote:
Originally Posted by bbkaren
We've been the ones benefiting from this economic heyday we've had--not our grandkids. It's not fair to make them pay the bill for it long after we're gone.
We're still paying for the Civil War, you know. And for WWI and WWII. Seems to be an American tradition, really...
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