Tuesday, November 2, 2010

A bit lacking in specification but some interesting ideas

On the reality of depressions; Bernankes folly

"The attempt to protect home prices was not born out of a desire to help you. The best thing that could happen for the housing market, from an individual consumer perspective, is for prices to collapse back to where they're affordable and rates to normalize so that one has a reasonable expectation of flat rates in the future. This would leave you with easy affordability - today and tomorrow. Yes, I know people say that this would be "terrible" for people who looked at housing as an "investment." But housing isn't an investment, and no amount of trying to make it such will work out well in the end. Housing is a consumer durable good. It is consumed over time, as anyone who has owned a house knows - you either continue to put in to your house or it falls apart - literally."

Posted by bellwether @ 09:48 AM (1246 views)
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8 thoughts on “A bit lacking in specification but some interesting ideas

  • The US housing market was stable for several decades, until they succumbed to a British style speculative frenzy. House prices only ever gently rose in line with inflation and people only bought homes to live in. The average American was happy renting until they had saved a deposit (usually early 30s). Economists were happy with this status quo because the millions of educated young people in rented accommodation allowed for more mobility of the work force. When the dust settles, they will probably go back to the old plodding market and we will all, consequently, be safer and better off.

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  • Seems reasonable to me.

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  • I agree with every single thing in that article. It just depresses me that it’s pretty much in direct opposition with everything that the monetary authorities are doing right now.

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  • general congreve says:

    The only winners in a rising housing market are the astute speculator who plays the game and gets out in time and the older generation cashing out near the top to downsize. For everyone else, including the chattering classes boasting about how much their house is worth, it’s a losing game.

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  • very true gc

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  • Well at least Obama definetly isnt a Keynesian 😉

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  • general congreve says:

    @7 – Brilliant find. Dumbass Yanks! This is why they’re f4cked!

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  • 5. general congreve said…

    The only winners in a rising housing market are the astute speculator who plays the game and gets out in time and the older generation cashing out near the top to downsize. For everyone else, including the chattering classes boasting about how much their house is worth,

    Fairly accurate prognosis, but it’s still millions of beneficiaries who wouldn’t give up a penny of their investment gains easily. – they ‘earned’ it by being astute (in their heads, of course).The jury is out….still looks bleak for Gens X&Y, to me

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