jcd11235 0 #76 February 20, 2008 QuoteThis is a self correcting problem, and I think we'd be better off swallowing the pain now rather than prolonging it. That's the attitude that should have prevailed instead of lowering interest rates to unrealistic levels in order to delay an inevitable economic slowdown. QuoteThis sounds exactly like the housing boom/bust. Sold at inflated prices, lots of people rushing in to make a buck without experience in the purchase/sale of assets with intangible value. Exactly the same, except there very little in the way of intangibles in the housing market, and there is a huge amount of collective experience in the housing market. So really, there very little similarity at all between the two situations.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
Gawain 0 #77 February 21, 2008 QuoteQuoteQuoteQuote Entirely to market being unregulated? Huh?????? Uh, yes. In a nutshell, the mortgage industry is largely unregulated. That is not true. The Banking industry is heavily regulated. I said mortgage, not banking. Go read my whole post. I explained it as thoroughly as I care to. Mortgage companuies are acting like banks, but not regulated like banks. Who has been posting all those losses over defaulted loans? Hmmm...that would be banks. Follow the money. The mortgage broker transacted a deal. The bank was willing to loan the money, the buyer was willing to borrow the money. The government should not be lifting a finger to help anyone. The banks have it within their power to restructure their loans, re-issue bonds, and adjust their balance sheets accordingly. The buyers that are willing to tighten their belts can meet new terms. The banks don't want the home foreclosed on, as they cannot lend as much money if the foreclosure assets are too strong. Government oversight is not the answer. The private sector gang saw this coming, and the shrewd businessmen sold their stakes long ago...So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
Gawain 0 #78 February 21, 2008 QuoteQuoteThis is a self correcting problem, and I think we'd be better off swallowing the pain now rather than prolonging it. That's the attitude that should have prevailed instead of lowering interest rates to unrealistic levels in order to delay an inevitable economic slowdown. The interest rate cuts were to avert the 9/11 economic blowback. It worked, and the FED put the brakes on by raising rates. They did however, raise them too fast, and too much in my opinion. They focused too much on inflation.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
kelpdiver 2 #79 February 21, 2008 Quote QuoteThis sounds exactly like the housing boom/bust. Sold at inflated prices, lots of people rushing in to make a buck without experience in the purchase/sale of assets with intangible value. Exactly the same, except there very little in the way of intangibles in the housing market, and there is a huge amount of collective experience in the housing market. So really, there very little similarity at all between the two situations. Huge collective experience? Nope - the first time buyers and first time flippers have the same experience as before (none). The thousands of small mortgage brokers that rushed in to a hot market have just as little experience before (none). And the millions of part time real estate agents who rushed in had just as much experience as before (none). The collective experience in the real estate market was less than a decade. There's nothing intangible about housing prices? Then why is it $1700/mo for me to rent what would cost 750k to buy. Or why does it drop to 450k if I shift 5 miles? And why is it only 150k in most of the country? And the price can vary substantially in the same location for subtle differences in paint, staging and curb appeal. How do you determine the value of a house? You sell it. Until then, you're only guessing. The reason people took on stupid mortgages and banks would lend it was no different than the greater fool principle during the dot com era. It was always assumed the next guy would pay 20% more. Quote Share this post Link to post Share on other sites
kallend 2,150 #80 February 21, 2008 Quote The government should not be lifting a finger to help anyone. The banks have it within their power to restructure their loans, re-issue bonds, and adjust their balance sheets accordingly. ... Gulp - I agree with you. Unfortunately the rest of the economy is being dragged down by the housing problems so even people (like me) with no involvement are seeing undesirable fallout.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
lawrocket 3 #81 February 21, 2008 Quoteeven people (like me) with no involvement are seeing undesirable fallout. Like what? My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
kallend 2,150 #82 February 21, 2008 QuoteQuoteeven people (like me) with no involvement are seeing undesirable fallout. Like what? Look around.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
kallend 2,150 #83 February 21, 2008 Quote>You mean, one that hasn't YET made anyone sick? Yep. Any inspection/certification/quality program can miss things. The good ones don't miss much. >I think even you would have a hard time becoming self-sufficient in >food AND holding a job as an engineer. Fortunately, Amy has a rigging business that she operates out of the house, so she's home most of the time! But in any case, I have no desire to be self-sufficient. During the summer when we are growing a lot we get at most 30% of our food from our garden/trees, mainly citrus, avocado, beans, peas, tomatoes, broccoli, squash and peppers. A few melons. Now if I could just figure out what to do with all those vietnamese guavas . . . Unfortunately, the lessons of history are that the free market is not capable of policing itself satisfactorily in issues relating to food, pollution, worker safety, and other issues that led to the creation of government agencies like FDA, OSHA, EPA..., all of which originated from egregious abuses.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
billvon 3,120 #84 February 21, 2008 >Unfortunately, the lessons of history are that the free market is not >capable of policing itself satisfactorily in issues relating to food, pollution, >worker safety, and other issues that led to the creation of government >agencies like FDA, OSHA, EPA..., all of which originated from egregious >abuses. Several issues here. First off, pollution (specifically air pollution) is not really related to food safety. You can choose to buy different food; you cannot choose to breathe different air. So I'll shelve that one for now. Also, workers are under more coercion than shoppers. Going to a different store, or buying a different brand, is an order of magnitude easier than quitting your job over unsafe conditions. So I wills shelve that one as well. On to food - It occurs to me that the most egregious abuses in food safety have not come about due to people wanting to buy cheap tainted food - they came about because people didn't know what they were buying. If you could set up a supermarket such that tainted food sat in one section, and safe food sat in another, the problem would disappear overnight with no governmental involvement whatsoever. That, practically, is hard to accomplish. But we could certainly start moving in that direction. ISO certification for food producers/distributors, combined with independent certifying organizations, would go a long way towards ensuring food safety for people who want it. Want very safe food? Get the Consumers Reports certified Angus. Want a reasonably safe hamburger? Get a USDA certfied cut. Want a cheap steak? Get Fred's Fillets, but cook it well. Quote Share this post Link to post Share on other sites
Gawain 0 #85 February 21, 2008 QuoteUnfortunately, the lessons of history are that the free market is not capable of policing itself satisfactorily in issues relating to food, pollution, worker safety, and other issues that led to the creation of government agencies like FDA, OSHA, EPA..., all of which originated from egregious abuses. Correct, and yet with their existence, problems are still encountered. People have grown too accustomed to having sh*t done for them. Everyone knows that thoroughly cooking meat eliminates just about every common potential problem. Everyone knows that borrowing too much money will hurt you financially in the end. The risks to not heeding the warnings are health and wealth. Such has been the reality for centuries. Oversight does not change the reality. What we need now, is a new book of matches to light a new fire of ideals... -- The solution to many problems can be found within us, amongst us. -- Learning responsible behavior means that certain values must be taught, from a young age. -- Learning lessons from bad decisions must be allowed (pain is mandatory, misery is optional). From these alone, every single one of us can take a responsible step that would ensure good stewardship of everything from finances to oil to healthcare...ad infinitum. From these alone, collaborative, not restrictive, steps move ideas and personal responsibility forward. In the end, government is not the answer. If government is given the power to provide it, then they also have the power to take it away. The problem is, that "it" is not theirs to begin with. "It" is ours, and ours alone.So I try and I scream and I beg and I sigh Just to prove I'm alive, and it's alright 'Cause tonight there's a way I'll make light of my treacherous life Make light! Quote Share this post Link to post Share on other sites
lawrocket 3 #86 February 21, 2008 QuoteQuoteQuoteeven people (like me) with no involvement are seeing undesirable fallout. Like what? Look around. Like lower property values? Unles syou are planning to refinance and tak eout some dough, unimportant. You sell your house without much gain, and you buy another place for a steal. Problems? For some. For others, opportunity. People aren't priced out anymore. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
kallend 2,150 #87 February 21, 2008 QuoteQuoteQuoteQuoteeven people (like me) with no involvement are seeing undesirable fallout. Like what? Look around. Like lower property values? Unles syou are planning to refinance and tak eout some dough, unimportant. You sell your house without much gain, and you buy another place for a steal. Problems? For some. For others, opportunity. People aren't priced out anymore. You are taking a very narrow view. The housing problems are dragging down many other sectors of the economy.... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
jcd11235 0 #88 February 21, 2008 QuoteThe interest rate cuts were to avert the 9/11 economic blowback. It worked, and the FED put the brakes on by raising rates. Apparently it didn't work. It only delayed the inevitable, possibly making it worse than it needed to be.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
jcd11235 0 #89 February 21, 2008 QuoteHuge collective experience? Nope…The collective experience in the real estate market was less than a decade. Perhaps you weren't aware, but the housing market has been around in this country for many decades, offering a vast amount of historical data pertaining to market reactions to various stimuli. That is huge collective experience. The tech industry of the 90s did not have such historical data or collective experience available. QuoteThere's nothing intangible about housing prices? Then why is it $1700/mo for me to rent what would cost 750k to buy. Or why does it drop to 450k if I shift 5 miles? And why is it only 150k in most of the country? Location does indeed affect housing prices, but it does so in a predictable manner. No investor expects the same building to cost the same on New York's Fifth Avenue as it would cost in Salena, Kansas. QuoteAnd the price can vary substantially in the same location for subtle differences in paint, staging and curb appeal. Such subtle differences have subtle price effects. QuoteHow do you determine the value of a house? You sell it. Until then, you're only guessing. This is true of anything in the market, from a Hershey's chocolate bar to a multi-national company like General Motors. Nothing has a market value greater than what someone in the market is willing to pay. Too low interest rates drastically increased demand in the real estate market. When interest rates were raised again, it reduced demand, but also increased supply, as so many people began to try to sell houses they could no longer afford, and speculative investors tried selling their holdings without buying additional real estate.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kelpdiver 2 #90 February 21, 2008 Sheesh - just about every statement you make here is wrong. It's nearly a perfect post. QuoteQuoteHuge collective experience? Nope…The collective experience in the real estate market was less than a decade. Perhaps you weren't aware, but the housing market has been around in this country for many decades, offering a vast amount of historical data pertaining to market reactions to various stimuli. That is huge collective experience. The tech industry of the 90s did not have such historical data or collective experience available. In every mania, they always say it's different this time. And they're always wrong. There was nothing unusual about the tech bust. Like every other mania, people's bad traits (lazyness, greed) drive us to a bad outcome. Then our fears forces us to grossly retreat from the sector, depressing it for a while. And as I pointed out, and you dodged ineptly, the people in the housing business are largely neophytes, esp during a boom. The "housing market" is a concept, not a living conscious entity. Quote QuoteHow do you determine the value of a house? You sell it. Until then, you're only guessing. This is true of anything in the market, from a Hershey's chocolate bar to a multi-national company like General Motors. Nothing has a market value greater than what someone in the market is willing to pay. No, the price of a chocolate bar is pretty easily known. Same for other commodities like gold, oil, and grain. Prices vary over time, but your gold is going to sell for the same as lawrocket's gold. Whenever inequalities form, someone rushes in to exploit and the inbalance collapses. Houses are not nearly so transparent. Quote Share this post Link to post Share on other sites
mnealtx 0 #91 February 21, 2008 QuoteQuote Sorry, but as a believer in personal responsibility I do not accept your rationale. Should we all be personally responsible for testing our food for e-coli, salmonella, listeria, or prion contamination? Nope - but you ARE responsible for cooking it well enough to kill those bacteria.Mike I love you, Shannon and Jim. POPS 9708 , SCR 14706 Quote Share this post Link to post Share on other sites
jcd11235 0 #92 February 21, 2008 QuoteIn every mania, they always say it's different this time. And they're always wrong. There was nothing unusual about the tech bust. Except that it involved a new industry without a significant amount of historical data that could be used to help make predictions, a point you conveniently ignore. Quotethe people in the housing business are largely neophytes, esp during a boom. I'm not, nor have I ever been referring to individual investors and buyers having knowledge of the history of the housing market. If I were, you would have a valid point. The members of the economy at large, collectively, had a substantial amount of knowledge about how the housing market reacts to stimuli such as (too) low interest rates. Economists criticized the Fed when the rates were being continually lowered, warning of the problems it would cause. The Fed ignored the criticisms and warnings. Greenspan has since said that their were political pressures keeping the Fed from raising the rates. The "housing market" is a concept, not a living conscious entity. QuoteNo, the price of a chocolate bar is pretty easily known. Same for other commodities like gold, oil, and grain. That's right. What are people willing to pay right now. If Hershey decided to raise the price of a chocolate bar to $20 would it be worth $20? The value of the dollar hasn't dropped that far, yet. Consumers would overwhelmingly, by way of not purchasing the Hershey's bar, let Hershey know that their chocolate bar is not worth $20. QuotePrices vary over time, but your gold is going to sell for the same as lawrocket's gold. If we sell at the exact same moment in time, in the same market. Otherwise, there are no guarantees that the price will be the same. The price changes with the dynamics of the market. Different markets and different periods of time can have different price volatilities. QuoteWhenever inequalities form, someone rushes in to exploit and the inbalance collapses. In theory, this is true. Of course, in theory there is no difference between theory and practice, but in practice there often is. QuoteHouses are not nearly so transparent. Since rarely are two identical houses in identical locations sold at the same point in time, it's not reasonable to expect to be able to predict exactly what each one will sell for. However, the housing market is typically one with pretty low volatility, so reasonably accurate estimates can be made regarding the value of a house. On the other hand, try coming up with a reasonably accurate value of Google's search algorithm. How does that value compare with the value of Yahoo's search algorithm? How do either of them compare to MSN's search algorithm? What about Baidu's search algorithm? How did eBay manage to overvalue Skype by nearly $1 billion? Do you think they would have overpaid by ~50% if they had purchased a piece of real estate?Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
kallend 2,150 #93 February 21, 2008 QuoteQuoteQuote Sorry, but as a believer in personal responsibility I do not accept your rationale. Should we all be personally responsible for testing our food for e-coli, salmonella, listeria, or prion contamination? Nope - but you ARE responsible for cooking it well enough to kill those bacteria. You cook lettuce in Texas?... The only sure way to survive a canopy collision is not to have one. Quote Share this post Link to post Share on other sites
lawrocket 3 #94 February 21, 2008 QuoteSince rarely are two identical houses in identical locations sold at the same point in time, Actually, never is there an identical location with a house. All property is unique. My wife is hotter than your wife. Quote Share this post Link to post Share on other sites
jcd11235 0 #95 February 21, 2008 QuoteActually, never is there an identical location with a house. All property is unique. Agreed. But location can be so similar that the differences are negligible. Think of two adjacent, non-corner lots in the suburbs. Location would not be expected to cause a significant difference in the market value.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
Zipp0 1 #96 February 21, 2008 Quote Want very safe food? Get the Consumers Reports certified Angus. Want a reasonably safe hamburger? Get a USDA certfied cut. Want a cheap steak? Get Fred's Fillets, but cook it well. Unfortunately Bill, much of this beef went to school lunch programs. It was fed to children, some of whom had 2 choices - eat what the school provided and trust that the government was doing its job, or eat nothing and go hungry. They just said this meat went out to 200 schools here in Pennsylvania. Were it not for a random investigation by the humane society, this meat would still be served to kids, maybe for years. We need more/better oversight, as I initially stated. -------------------------- Chuck Norris doesn't do push-ups, he pushes the Earth down. Quote Share this post Link to post Share on other sites
billvon 3,120 #97 February 21, 2008 >Nope - but you ARE responsible for cooking it well enough to kill those bacteria. Prions aren't bacteria and they aren't alive - and unfortunately cooking does not inactivate them. Quote Share this post Link to post Share on other sites
billvon 3,120 #98 February 21, 2008 >It was fed to children, some of whom had 2 choices - eat what the >school provided and trust that the government was doing its job, or eat >nothing and go hungry. Or bring an apple from home. Their choice. >We need more/better oversight, as I initially stated. I'd prefer an independent certifier, myself. They'd do a better job, and then parents can decide what sort of food they want served at the schools they are paying for. Want lower taxes? Get USDA certified beef. Want better food? Get CR-certified beef. Quote Share this post Link to post Share on other sites
jcd11235 0 #99 February 21, 2008 QuoteOr bring an apple from home. Their choice. Unfortunately, there are kids who don't get much more to eat than what is provided via their free school lunch. Admittedly, it's often the case of poor choices on the part of their parents, but I'm not sure punishing the kids further for those poor choices is the best solution. Where I went to high school, there were students with parents with incomes well into the six figure range (or more), as well as students from families so poor they couldn't even afford laundry detergent.Math tutoring available. Only $6! per hour! First lesson: Factorials! Quote Share this post Link to post Share on other sites
billvon 3,120 #100 February 21, 2008 >but I'm not sure punishing the kids further for those poor choices is the best solution. Not giving someone free stuff is not the equivalent of "punishing" them. (Unless, of course, you are currently punishing all the hunger charities you are not donating to.) Quote Share this post Link to post Share on other sites
