Long-time Seattle Bubble commenter Eleua points out a particularly disturbing portion of the version of the bailout that the Senate is set to vote on tonight:
SEC. 112. COORDINATION WITH FOREIGN AUTHORITIES AND CENTRAL BANKS.
The Secretary shall coordinate, as appropriate, with foreign financial authorities and central banks to work toward the establishment of similar programs by such authorities and central banks. To the extent that such foreign financial authorities or banks hold troubled assets as a result of extending financing to financial institutions that have failed or defaulted on such financing, such troubled assets qualify for purchase under section 101.
In other words, it’s not enough that we throw hundreds of billions of dollars we don’t have at buying our own banks’ bad debt—if this version of the bailout passes, we’ll be pouring our children’s children’s children’s tax dollars into bad debt held all around the world.
Read more in depth analysis and details about this delightful new addition at Clearcut Bainbridge or at Market Ticker.
Then, call or fax our Senators to let them know how you feel about bailing out bad foreign debt.
Maria Cantwell:
Phone: (202) 224-3441
Fax: (202) 228-0514
Email Form
Patty Murray:
Phone: (202) 224-2621
Fax: (202) 224-0238
Email Form
Update: And it passes the Senate 74 to 25. Cantwell voted NO, while Murray voted YES, despite a grandstanding statement from her just one week ago (spotted by astute reader perfectfire) about working on reforms and not writing blank checks.
Categories: News
Tags: bailout, Eleua, government_meddling, politics
By Eleua on August 21st, 2008 at 10:48 AM · 232 Comments
Does the drop in home prices we have seen so far make the current real estate market affordable? Do prices that have dropped ten percent represent a great buying opportunity? Long-time Seattle Bubble regular Eleua takes on these questions and more with his “House Valuation Workshop,” using his native Bainbridge Island as a working example. Follow along by using home prices, rents, and incomes for your own neighborhood.
by Guest Poster Eleua
Original posted at Clearcut Bainbridge
At the Institute For Economic Reality, we are always trying to help people out of their self-imposed, colo-cranial economic impairments. Judging by the volume of chatter on how the real estate market is suddenly “affordable,” it would appear that we have our work cut out for us.
When home prices have gone up 150-200% in a decade, a 15% rollback isn’t exactly a buying opportunity. Keep in mind that during the run up, the “experts” all predicted that prices would not decline, but would level-off and allow incomes to catch up. When confronted with a slowdown, these same experts said that a 10-15% rollback would represent the “worst-case” scenario.
The delusion is understandable. Bainbridge Island is populated with Babyboomers, and Boomers have seen property prices increase for the bulk of their life. In fact, real estate is the one “investment” that Mouseketeers think they know well. The prospectus for a Boomer’s investment in real estate goes something like this:
Property prices have gone up, so they will continue. My real estate agent said this is the “bottom,” and I had better buy now or be priced out forever (they would never tell me something that is self-serving and against my interests).
Is there an objective metric to value a home? Should you jump all over a home that has been reduced in price $10,000, or wait for a better value?
(Click below to read the rest…)
[Read more →]
Categories: Features
Tags: Bainbridge, Eleua, overvalued, valuation
