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Bill Gross Explains Why The Housing Ponzi Must Go On..

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In his latest letter, Pimco's Bill Gross explains why neither he, nor his fund, are some bloodthirsty vampire squid, monopolizing the bond market: all he wants is the greater social good, which can only be perpetuated by endless government subsidizes of the housing ponzi.

Bill Gross Explains Why The Housing Ponzi Must Go On, Or Else Society, Nevermind Pimco, Will Suffer

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Interesting, thanks for posting. Provision of shelter too important to leave to the private market. Whodathunkit?

Can someone explain the "K street" / "Que street" joke please?

Good job they don't leave food to the private market or we'd all be starving to death.. <_<

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Basically if bond yields went up to 7%.. Mr. Gross' fund would take one hell of a hammer blow. Although in fairness to him, bond funds would be quite attractive to new investors and pension funds if they were yielding 7%.

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The private sector should provide everything.

The state is not there to provide anything other than the the defence of the realm, the framwork for private enterprise to flourish, the law and run the economy.

The problem with the UK is it believes it can provide good healthcare - it cannot. Good education - it cannot. Good housing - it cannot.

Not so long ago the state thought it could provide steel, cars, telecommunications, gas, electricity, water, rail blah blah blah What a hash it made too.

The public sector need reminding they are the servant of the private sector whose taxes pay for their employment.

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The private sector should provide everything.

The state is not there to provide anything other than the the defence of the realm, the framwork for private enterprise to flourish, the law and run the economy.

The problem with the UK is it believes it can provide good healthcare - it cannot. Good education - it cannot. Good housing - it cannot.

Not so long ago the state thought it could provide steel, cars, telecommunications, gas, electricity, water, rail blah blah blah What a hash it made too.

The public sector need reminding they are the servant of the private sector whose taxes pay for their employment.

Agree with a smaller government but I would think education should be in the government list. The fact that the government could not run the school properly is a different issue because countries like Singapore, HK, Korea schools are state run and works ok. I suspect that 'human right' thing has a negative influence on the quality of education in general.

Healthcare is a more tricky one - US privatized healthcare is pretty bad for maybe half of the population. General health care in HK, Singapore seemed pretty good although specialise care could be prohibitively expensive for many people.

As for Mr Gross - I advocate a stamp duty on secondary bond market transaction to fund housing and I hope Mr Gross will support that for the 'social good'.

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"Ponzi must go on so I and my mates can get rich and bugger anyone else" says banker in fear of losses.

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Basically if bond yields went up to 7%.. Mr. Gross' fund would take one hell of a hammer blow.

Yep.

Although in fairness to him, bond funds would be quite attractive to new investors and pension funds if they were yielding 7%.

Not against 20% inflation!

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The private sector should provide everything.

The state is not there to provide anything other than the the defence of the realm, the framwork for private enterprise to flourish, the law and run the economy.

The problem with the UK is it believes it can provide good healthcare - it cannot. Good education - it cannot. Good housing - it cannot.

Not so long ago the state thought it could provide steel, cars, telecommunications, gas, electricity, water, rail blah blah blah What a hash it made too.

The public sector need reminding they are the servant of the private sector whose taxes pay for their employment.

The public sector are the masters and they always have been.

You can tell this by the way they order you around all the time.

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If, as he implies, providing shelter is a basic need that can't be left to private organization, how is the solution to nationalize the lending activity in order to boost shelter-providing private persons' balance sheet? He should advocate for nationalization of houses, not lenders...

Edited by Richelieu

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Isn't a ponzi scheme, by nature, doomed to failure, when it becomes unsustainable ?

I guess it's always unsustainable but it actually fails when the people in it realise this en masse.

hence the constant deflation talk that's spewed out by shills in the hope of prolonging the scheme.

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The private sector should provide everything.

The state is not there to provide anything other than the the defence of the realm, the framwork for private enterprise to flourish, the law and run the economy.

The problem with the UK is it believes it can provide good healthcare - it cannot. Good education - it cannot. Good housing - it cannot.

Not so long ago the state thought it could provide steel, cars, telecommunications, gas, electricity, water, rail blah blah blah What a hash it made too.

The public sector need reminding they are the servant of the private sector whose taxes pay for their employment.

Err… no.

The problem with the private sector providing everything is that it invariably acts in the interests of a few rather than with the needs of many.

Yes, private education may produce better results but this is due to the resources (money) available to them, the curriculum is still controlled by government. Farm out all education to the private sector and those who cannot afford the fees for the top schools suffer as a result. Poor education and lack of basic skills can only result in a population that is poorer (both intellectually and financially) Where to spend the money? Education or policing? This is the choice which is there, as without all children being educated to a minimum level, resentment and unrest will brew.

And with a private education system how would the curriculum be governed? Allowing schools to write and police their own only serves to help those with a vested interest to exploit those minds most vulnerable. This can already be seen whereby faith schools assess their own RE lessons, leading to students who reject science in favour of religious doctrine (I realise that may be a tiny majority but it’s the thin end of the wedge and a scary one at that.)

I’m not suggesting the education system is perfect in any respect but we live in the real world and I for one would prefer that money is spent trying to educate everyone universally, rather than quell the issues that arise from an unequal society. And this is before the added value is apparent from an educated populace in terms of innovation and wellbeing.

As for Healthcare, again I’d agree that private healthcare is superior but ignoring those most vulnerable in society by pricing them out of the care they need is not the way forward. One of the greatest achievements of the NHS is the reduction of infant mortality rates from 1 in 20 to 1 in 200. My sister recently gave birth and the after care she received was amazing, from check ups to support networks for breast feeding. None of which she would have been able to afford in a private health system. Are you suggesting that poor people’s babies deserve a higher chance of death than those who can afford the extra aftercare?

Whether the NHS as a specific entity is wasteful, economic or even working in its present state is a completely separate question, but to suggest that leaving healthcare completely up to the private sector is unthinking.

As for good housing, well that’s tricky, the fact that some modern developers find it hard to offload their stock onto councils/housing associations; as they don’t meet the minimum criteria for acceptable living space suggests that perhaps leaving it all down to the private sector results in purely a rush for profit by the developers, with no regard for the wellbeing of those who are left holding the mortgage on the tiny ‘slavebox’ they’ve ‘bought’. Yes this may be down to limited space to build on, but then if we remove all government control on the housing sector it might be tricky to “Protect Rural England” quite so stringently.

Edited by down the tubes

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Err… no.

The problem with the private sector providing everything is that it invariably acts in the interests of a few rather than with the needs of many.

And the state doesn't?

:lol::lol::lol::lol:

Hows life paying 60% banker tax treating you?

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And the state doesn't?

:lol::lol::lol::lol:

Hows life paying 60% banker tax treating you?

....Sh1t.

No argument here, I don't advocate state intervention in everything. Personally I believe that if the banks wanted to play big fat cat capitalists, then that's fine. But they should have taken the consequences of when they failed.

My point was mainly to do with education and health care.

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Bill was one of the few "experts" who saw the great housing bust coming a couple of years or more before it happened. He is 100% correct in recognising the reality of HPI dependience in the US and the UK. We are defined by our ability to inflate the housing market for our ecnomic well being.

There is only one way to break the additction: go Japanese for a generation.

IMO this is the option the Fed (not Bernanke) are taking in allowing the bond market to deflate and hoping enough jobs will be lost to curb demand which will in turn drop prices faster than a cat in a dustbin.

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Bill was one of the few "experts" who saw the great housing bust coming a couple of years or more before it happened. He is 100% correct in recognising the reality of HPI dependience in the US and the UK. We are defined by our ability to inflate the housing market for our ecnomic well being.

There is only one way to break the additction: go Japanese for a generation.

IMO this is the option the Fed (not Bernanke) are taking in allowing the bond market to deflate and hoping enough jobs will be lost to curb demand which will in turn drop prices faster than a cat in a dustbin.

Perhaps "bill" is looking for a bigger idiot, knowing he's fluffed it?

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Bill was one of the few "experts" who saw the great housing bust coming a couple of years or more before it happened. He is 100% correct in recognising the reality of HPI dependience in the US and the UK. We are defined by our ability to inflate the housing market for our ecnomic well being.

There is only one way to break the additction: go Japanese for a generation.

IMO this is the option the Fed (not Bernanke) are taking in allowing the bond market to deflate and hoping enough jobs will be lost to curb demand which will in turn drop prices faster than a cat in a dustbin.

Always find it strange that you are looking for a "Hero".

What elixir does BG have - that you can't knock up in your own front room?

I'm not suggesting you have a complex or anything.

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The public sector need reminding they are the servant of the private sector whose taxes pay for their employment.

The public sector need reminding they are servants of the people, as do the Government. The people need to realise that active politics is more than an X in a box every 5 years.

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While some of you point to the frothy-mouthed Denningers and Schiffs (it's not fair / only total destruction of the over-leveraged will do / support US manufacturing but don't whatever you do buy into the GM IPO), Gross is actually on the ball regarding real-economik. He is probably closer to the political consensus than those who want to see the bad people punished, trashing the economy for a generation. The taxpayer will absorb the reset over the medium term.

It's beyond rational economics now, we're talking raw, naked and brutish politics. Moral hazard? Cry to someone who gives a fxxx.

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The public sector need reminding they are servants of the people, as do the Government. The people need to realise that active politics is more than an X in a box every 5 years.

Under current system, there isn't enough sanction for public sector to behave like the 'servant of the people'. If you see how government departments introducing changes (e.g. HMRC), they are behaving more like Lords than servants. Active politics isn't going to change that as most public sectors are monopoly in what they do and monopolies behaves like....monopolies..

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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