housing market

[Vinster]

Ok...I'm the one drinking the kool-aid...and the right is the best.

You have convinced me.....

"MISSION ACCOMPLISHED"

This is exactly why the country is in the ****ter. Both sides are incompetent, If the Republicans had all right the answes ther would be no Democratic party and if the Democrats had all the right answers there would be know Republican party.

[AStudent]

This is exactly why the country is in the ****ter. Both sides are incompetent, If the Republicans had all right the answes ther would be no Democratic party and if the Democrats had all the right answers there would be know Republican party.

I agree with you, although I have heard more willingness to work together from the democrats, if it's true or not I'm not sure.

[Six]

I agree with you, although I have heard more willingness to work together from the democrats, if it's true or not I'm not sure.

It's not.

Of course its not.

[ga-hvac-tech]

If people lose their homes, like what happened in 2008 they can't have jobs or hold them. You can't get a job without a permanent address, the economy and job growth are closely tied to the housing market. If the housing market goes up so will employment.

I would give a Better response but I'm on break at work

Nothing personal student... however:

This is observational economics... rather than historical economics.

The difference is: The first is what someone sees and WANTS to believe... the latter is what history says has worked repeatedly for decades, generations, centuries, even Milena...

So which one would a smart person believe?

(Hint... when discussing anything about money... one must have the self discipline to leave their hope and greed and fear... in other words ALL feelings at the door of their office... or they will not make wise decisions).

[Space Racer]

Let's say you are a one-man country. You live on a very small island you own in the North Pacific. Other people live on the island, but they are residents, not citizens. They live by your rules. Some of them work for you.

You make a living by building widgets and selling them to small companies in various Pacific Rim nations. You import the raw materials. You borrow money from Singapore from time to time to keep your operation running smoothly. You make a profit after expenses of 10%. You plow half of your profit back into the company. You put the other half in the bank.

You have started your own small bank. You take deposits from and make loans to the residents of your island. This is the bank where you put your own money.

You started your bank with a $100,000 deposit. This is money you generated from your business. This is real money.

Now let's say you go into the computer and add a zero to the 100,000, making it 1,000,000. Have you increased your wealth? No. You have injected $900,000 of phony money. You have devalued your currency.

You have made yourself appear to be wealthier than you are. You have taken the first step in building a house of cards.

You are a Bernanke.

Can you get wealthy this way? Yes, of course. You can loan more money and collect more interest. You can invest your bank profits in assets that appreciate in value.

Not only that, you can help your residents buy nice houses.

But what else happens to the residents? Over a period of time, prices go up and buying power goes down. Their money is now only worth one tenth of what it was before the injection. So are their retirement accounts. Soon, all their money goes to food and clothing. They have nothing left to pay the mortgage with.

If your intention was to help your residents buy nice houses in which to live out their lives, you have accomplished the exact opposite.

They would have been better off renting from you.

[Six]

Ok...I'm the one drinking the kool-aid...and the right is the best.

You have convinced me.....

"MISSION ACCOMPLISHED"

Awesome Astudent.

The first step towards recovery is admitting your a raging leftist lunatic.

And I DID get the sarcasm in your post. My advice remains. How much time are you going to waste in the throws of moral relativism and misinformation ?

[ga-hvac-tech]

Let's say you are a one-man country. You live on a very small island you own in the North Pacific. Other people live on the island, but they are residents, not citizens. They live by your rules. Some of them work for you.

You make a living by building widgets and selling them to small companies in various Pacific Rim nations. You import the raw materials. You borrow money from Singapore from time to time to keep your operation running smoothly. You make a profit after expenses of 10%. You plow half of your profit back into the company. You put the other half in the bank.

You have started your own small bank. You take deposits from and make loans to the residents of your island. This is the bank where you put your own money.

You started your bank with a $100,000 deposit. This is money you generated from your business. This is real money.

Now let's say you go into the computer and add a zero to the 100,000, making it 1,000,000. Have you increased your wealth? No. You have injected $900,000 of phony money. You have devalued your currency.

You have made yourself appear to be wealthier than you are. You have taken the first step in building a house of cards.

You are a Bernanke.

What one needs to understand about devaluing their currency is: When this happens it takes MORE of the currency to buy the same thing... this is called price inflation.

So the FED (at the request of the govt, or maybe on their own for selfish reasons... will discuss that in another post), prints more $$$ to keep the (phony) books working... What good does this do if it causes the price of living to go up? Before we answer this question... lets remember that price inflation has two serious downsides:

1) IT tends to destroy the value of savings... thus life becomes a bit closer to 'week to week'.... Yet there is a worse issue:
2) When we have price inflation... we also need wage inflation to catch up... However: This raises the average person into a higher income tax bracket... so they loose again.
(In GA's opinion, bumping folks into a higher tax bracket is the reason govts like price inflation... it is a hidden way to spread the power and wealth of polecats).

So tell me: Is printing endless $$$ the solution... or is it just a bandaid?

[ga-hvac-tech]

Ok...I'm the one drinking the kool-aid...and the right is the best.

You have convinced me.....

"MISSION ACCOMPLISHED"

So how does one teach another something they have yet to see? Especially when they are rebelling against listening.

It takes a wiser and smarter person to listen, than to argue.

[ga-hvac-tech]

I agree with you, although I have heard more willingness to work together from the democrats, if it's true or not I'm not sure.

What is the history of Dems working together...

Seems the research I read the Dems come along as smooth as a used car salesguy (gal)... and end up defaulting on their end of the deal.

[hearthman]

Real estate markets are extremely regional. Even within one metropolitan area you can have polar opposites depending upon the type of housing, economy, local factors, etc. National real estate numbers are virtually useless. It is more of the overall picture of housing starts and the types of that housing, re-sales, foreclosures, short sales, rental conversions, etc. AND look at mfg. For instance, about 75% of the factory built fireplace market was from the new construction channel/ 25% remodeling. While that ratio may hold, the gross numbers tell a story. Installing distributors of these products have all but folded up. The few suvivors are hanging on by a thread. My old region closed 4 offices and cut staff by about 90%. Not much of a recovery. Even the work they get is at cut-throat margins so their net profit margin is below 10% in many cases, which is inconsistent with business survival. The few trades who do new construction work are getting raped not only on their margins but then are beat into a pulp over free warranty and service even when it clearly is not the fault of the product or installer. Around here, the Realtors are having trouble posting all their listings and don't know where to start with so many listings for a buyer to choose from. My daughter's row home has been on the market since June at $30K short and still has yet for one single buyer to even look at it because there is such a glut in the supply. Her house is in great shape btw. So save your breath telling me real estate is recovering. To get anywhere near tolerable, they will have to sell off a massive inventory first. Also, since nobody can afford to maintain their homes, these homes being sold are loaded with defects resulting in an increase in litigation with sellers, Realtors and Home Inspectors. New home buyers are having to accept getting screwed on eating defects they cannot afford to fix. We have a LOT of really crappy, sick houses out there and that problem is really growning worse. You guys see how people cut corners instead of fixing it the right way and not buying premium add-ons and upgrades.

[AStudent]

So how does one teach another something they have yet to see? Especially when they are rebelling against listening.

It takes a wiser and smarter person to listen, than to argue.

Very true, and I am listening, but the whole idea of everything the other party does is wrong and everything my party does is right, is getting a little old.

[Gib's Son]

Very true, and I am listening, but the whole idea of everything the other party does is wrong and everything my party does is right, is getting a little old.

Ignore party lines and critically think through what that individual is saying, does, and how they live their life. Then, follow your conscience. There are feces on all sides of the sanitary waste pipe.

[ga-hvac-tech]

Very true, and I am listening, but the whole idea of everything the other party does is wrong and everything my party does is right, is getting a little old.

How about this:

Rather than DEM and GOP... or even Lib and Cons... lets try 'Historically it works' and 'Historically it does not work'; and lets define works as producing long term, lasting and predictable results that benefit the max number of folks evenly, not particularly equally--what I mean is: Rather than everyone gets $100... everyone gets a fair chance to EARN as much as they are willing to work for.
BTW: Need to sample LOTS of history, not just one or two examples; and over a long term rather than a short term.

Do you think this may be a better way to address solutions?