But my comment was based on the moronic comment about banks requiring 20%. That is simply false unless he’s referencing the fact that you need PMI on conventional loans over 80%. That’s been true for at least 30 years.

It’s false and incorrect statements like in that article that give people incorrect opinions on what’s going on out there. There was a subsequent article on credit cards I didn’t even bother to read because I didn’t trust the source. I’d rather have no information than incorrect information.

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OK. Last time I used the commie insult people took me seriously, so this time I’ll make it known right away, I’m kidding. For some reason, I get a big laugh out of the commie tag. But maybe I’m the only one that finds it humorous? As ridiculous as my above rant is, I don’t see it as being much different from a democrat attacking a republican or vice versa. Maybe that’s why it seems funny to me. If you ask me, the government is here to serve self and special interests. Why would any individual side with any part of government? That seems masochistic to me.

Supply is limited. In the Reagan years we had a Cold War of us against them. It resulted in protectionism. Do you remember in those years it was a debate about wheat? Supply was literally reduced to tangible commodities.

Currencies are being tested by the Euro. It is new, supposedly broader based economically, and stable. The dollar is stable. China and Russia, not so much, as of yet, and it’s China that’s throwing dollars around while asking for a new international currency.

China has a billion people to keep busy. You don’t want a billion people with nothing to do except looking for something to eat. China will come to the table and work a solution for their goods to have a market.

In my opinion the financial markets will continue to contract. Buyers will buy what they can afford. That means Chinese goods at fair market prices. That means exporting high quality United States products.

In my opinion consumers will buy value.

In my opinion, as well as I know people are extremely gullible, I think people this time will see credit for the evil that it is. I know it’s naive. I know that people today are buying town houses for $100K more than they are worth. I know people will rush out to buy GM inventory at those “reduced” prices., but I have Hope.

I’d say that the question of whether we will experience inflation of deflation going forward is the first consideration one should work through before making any housing decisions. If you’re getting ready to commit to the largest expenditure of your life, or looking to sell it, one should understand what will most likely happen to the value of that asset and your income stream in the future. ;-) By the way, nice pics!

“I’ve met Larry Craig, and you, One Eye, are no Larry Craig.”

There may be some devaluation of the dollar eventually, but the same logic that says there won’t be a lot of domestic inflation holds for the relative valuation of the currency as well. Dollars are getting scarce as the “money” , i.e. credit, supply contracts. And with a huge percentage of the world’s debt denominated in dollars debtors will continue to require them in order to pay. Again, we can’t print them fast enough to counter the falling supply, so the net effect is stability or deflation, both at home and in international currency markets. Eventually there may be another reserve currency, but there’s quite a backlog of transactions denominated in dollars that will take years to unwind. And even then the sheer size of the U.S. economy and our military presence will always lead to some level of preference for the dollar.

I think much of supply side theory misses the mark. Economics doesn’t simplify well for mass consumption. One approach that does work well is to follow a dollar through the system as various factors change- taxes, interest rates, other specific incentives/dis-incentives, watching changes in velocity and where the funds tend to pool up. Freeing up or facilitating demand always works. Expecting demand to magically appear has limited success, as is the case now. In terms of housing markets, the credit is available (although restricted by new collateral evaluations and down payment requirements) but everyone misses that the buyers are largely tapped out, up to their gills in debt and apprehension.

I’d be with you if I just didn’t live through one of the coldest winters/springs in my life.

If you’d stop telling people you’re a Senator and tapping your foot in the can these things wouldn’t happen to you Scotsman. ;-)

Just to be sure I understand where you/re coming from in #21, won’t the currency market eventually resolve the problem of our collateral based monetary bubble and it’s collapse? If we can’t pay in real goods and services, won’t our currency eventually decline to match the value of the debt? I think that’s the position of Roubini’s think tank, isn’t it? The end of the dollar as the world reserve currency? We still have enough trees and ink to print the money needed to pay that debt don’t we? With global warming not only will our climate match that of central america, so will our currency. Our inability to pay the debt will solve itself as the dollar and the debt payable in dollars both become devalued. Without question, our relative standard of living will decrease as our ability to borrow declines. But if we don’t produce sufficient goods and services to justify our level of consumption, isn’t that the right result?

The rest of this is perhaps even farther off topic and probably should be taken to the Open Thread, but Scotsman, without throwing out political lables, what do you think of supply side theory? I tend to think it has limited value for reasons I won’t go into in detail. In general, I fear that as often as not a large influx of capital just chases hot financial markets rather than funding valuable and creative business ventures. The securities markets were as responsible for the real estate bubble as anything else. That’s why the investment banks were sucked into the financial black hole along with the commercial banks and the GSE’s. And the claimed success of supply side during the Reagan administration can as easily be attributed to huge keynsian deficit spending as to supply side tax policy.

It is global.

Obama in a very short year of campaign and being in office has brought the United States into a new direction. He hit my biggest two objections to government subsidies; the auto industry, which has been out and out government welfare, and Health Care, which has been an insurance industry cash cow for way too long.

I always think it’s funny when people blame the unions or the EPA for the demise of the auto industry. The gas combustion engine has been obsolete for thirty years, but we keep churning it out. That’s a ramble for another time.

The AIDS epidemic should have taken health care out of the hands of the insurance industry for public safety, but that would have lowered the costs of health care and given a tool to fight the epidemic by researching for a cure, rather than a treatment. Pharmaceutical companies gained great momentum in that era of lost opportunity and we are still paying that price.

George Bush gave money to banks. He gave it because he created a mess. Banks black mailed the global economy and Obama finished paying the ransom, then turned his attention elsewhere. Banks and George Bush are the villains there. The Republican party is the villain for allowing the subsidy.

Republicans always want to give money to businesses, Democrats always want to give money to public programs. It’s all the same game. It’s make work projects that keep money circulating. It’s the same money and the same people who end up with it.

Creating jobs is the only thing we need to concentrate on. With a wage base, asset value can be established, Those things that the medium wage can afford will have value. Housing is included in that formula.

It is global and this will apply on a global basis.

No, now is not similar to the 1930’s. The causes are different, the context is different, and the “solutions” employed are playing out in a different environment. The only thing that is the same are the calls for fiscal stimulus. Unfortunately, Keynes is dead, his theories are flawed, and the proposed solutions won’t work.
That’s 0 for 3.

What the inflationists and stimulus crowd miss is that the nature of our money supply has slowly changed over the last 50 years and no longer fits the tidy fractional banking/hard currency model. The concept of velocity remains valid, as do the basic definitions of inflation and deflation. But what passes for money these days is very different from 50, let alone 80 years ago. But old ideas die hard.

Today, credit and money are essentially the same. And public credit is controlled not by the FED or the government, but by the size of the collateral base- the value of all assets in public and private hands that can serve as collateral. Given this, when we have an asset bubble, the money supply grows. And when that collateral shrinks, as in the current housing crisis, the monetary base shrinks with it. While the FED may pump trillions into the economy, that “pump” is dwarfed by the contraction of the real monetary base- available credit.

We won’t experience inflation because the supporting asset bubble will not be coming back, and that bubble exceeded everything the FED or government can do. But the debt is real and will remain, a mis-allocation of capital and a drain on the economy, both through the required increase in taxes and interest. The deflating bubble exceeds by a factor of 4-5 the total GNP of the country, while the government runs “inflationary” deficits that are a fraction of GNP. Let’s not even mention the global nature of the problem. This economy will continue to contract into a black hole until only real productive assets are left, and then bump along on the bottom for years and years.

Yeah, so what?! He got me drunk at the White House Correspondent’s Dinner, told me he was Maria Bartiromo, and took advantage of me. Damm beer goggles.

I love these guys who think there are only Democrats and Republicans, and if you dislike a member of one party then you must love the other.

Well, I did catch Scotsman making out with Karl Rove in a supply closet, but that’s probably just because of Rovey’s rugged good looks ;^)

I do find it amusing that when I called “talksense” out @ 14, he immediately changed the subject.

You, sir (or madam) need to turn off the Left Wing Outrage Radio and come out into the sun.

Here’s a quote from FDR’s treasury secretary Henry Morgenthau, Jr. testifying before the House Ways and Means Committee in May of 1939:

We are spending more money than we have ever spent before and it does not work. I want to see this country prosperous. I want to see people get a job. We have never made good on our promises. I say after eight years of this administration we have just as much unemployment as when we started and an enormous debt to boot.

But whatever. I’m sure that dude probably didn’t know what he was talking about.

If you look at the 1930s the situation we’re in now is very similar. Banking institutions have gone unregulated and essentially bankrupted themselves. Roosevelt, a fiscal conservative (yes, he was), poured dollars into the US economy from 1934-37 and the economy turned around…in 1937 he went back to a balanced budget approach, and pushed the US into another recession…after seeing the economy contract sharply he reversed course and growth in the US resumed.
The spending the US made during WW2 was essentially what pulled this country out of the great depression….spending which amounts to about $10T in today’s dollars.

Obama hasn’t even spent a fraction of that, and there are signs already that the economy is improving. His approach to dealing with this inherited crisis is right on the mark.

IMO, when it comes to government fiscal responsibility, Bush was like a crap sandwich. Unfortunately, Obama has so far been like an all-you-can-eat crap buffet.

Yeah, the last 8 years of pre-Obama were so wonderful…..
What galaxy have you been living in? The national debt has climbed to ASTRONOMICAL proportions, thanks to W. and his cronies. The GOP dares make the claim of fiscal conservancy? What a joke.

We’re 4+ months into the Obama presidency, and you’ve already written him off. Face it, you never intended to give him a chance to begin with. The economy is slowly but surely starting to turn around…….

Go rally with your NRA nutbags.

But this is progress, right? Little green shoots for us bitter renters here in the PNW.

Um, no.

It’s pedal-to-the-metal, off into the sunset at full speed, radio blaring, beer in hand, … until the checks bounce.

This is America- Barack’s gonna give me a house, and a hybrid car, full medical, cushy retirement, and a job that I don’t have to go to! And some mythical rich guy who clings to guns and religion, hates gays, and deserves to be punished is gonna pay for ALL of it!

My god, I love this country!!!!!

RIVERSTONE CONDOMINIUMS- Apartments to condo conversions in Bellevue 98 Units only sold Roughly 25 UNITS..

The WORD ON THE STREET: Project possibly IN FORECLOSURE…

Talked to someone over the weekend that was on a Rent-To-Own contract.. He was telling me couple of months ago he had trouble even figuring out where to send the money.. It also appears all the real estate agents picked up there permanent shop at the same time, that this person didn’t know where to send the check in.

This place was over the 2 year interest only period on there Original Project Loan.

However the West Coast all the way though about half-way though Oregon, maybe more LOOKS SO DARK..
Im thinking that Darkness is working its way to US…

15-25% Unemployment for Much of California…WOOOW.. Thats a pretty scary reality.

I was talking to a Friend from Boise Idaho- he was talking like pretty much everyone he knew was out of work.. then again maybe he wasn’t to far off course.

I think we discussed this here before, but that Bloomberg author doesn’t know what he’s talking about. Here’s a portion I responded to over at the Times:

“Mortgage lending has also been unusually tightfisted of late. Lenders are demanding a 20 percent deposit for home purchases and want impeccable credit ratings.”

Just further proof of how bad the press is in this country.

We’re going to listen to predictions from someone who doesn’t even understand the present day? LOL.

According the the “senior loan officer survey” from the Fed, Residential real estate credit conditions have continued to tighten over the last quarter

http://www.federalreserve.gov/boarddocs/SnLoanSurvey/200905/

Residential real estate lending. In the April survey, somewhat larger fractions of domestic respondents than in the January survey reported having tightened their lending standards on prime and nontraditional residential mortgages. About 50 percent of domestic respondents indicated that they had tightened their lending standards on prime mortgages over the previous three months, and about 65 percent of the 25 banks that originated nontraditional residential mortgage loans over the survey period reported having tightened their lending standards on such loans.

Curious, what is your source of information that contradicts this? Are you talking about FHA loans?

“For most homeowners, wealth building and retention may depend more on a diversified, inflation-indexed bond portfolio than on real estate.”

If only someone could have warned us and pointed us in that direction sooner… oh wait, someone did. Shiller… almost ten years ago…

http://cowles.econ.yale.edu/news/shiller/rjs_00-04-03_bw_grizzly.htm

See last paragraph of that article.

The USA will continue to live beyond it;s means until the world economic powers realize the USA has zero ability or intent to repay the debt it owes and finally eliminates the US dollar as a reserve currency. Stopping the USA from borrowing trillions of dollars in the same currency it supposedly will repay the debt is the only way to stop the death spiral the USA is in. Painful…yes but better than the USA collapsing under a mountain of debt and higher interest rates in 5 – 10 years.

“Mortgage lending has also been unusually tightfisted of late. Lenders are demanding a 20 percent deposit for home purchases and want impeccable credit ratings.”

Just further proof of how bad the press is in this country.

We’re going to listen to predictions from someone who doesn’t even understand the present day? LOL.

They gained a lot of credibility in my book.