Glen Beck wants a piece of Obama :P

[Silverhandorder]

http://www.youtube.com/watch?v=ca_aOvZPh-g

I don't really trust Beck without verifying what he says. It seems in the meantime he is having a genuine turn around. This is one of those gems he has been turning out lately.

[Justinian]

http://www.youtube.com/watch?v=ca_aOvZPh-g

I don't really trust Beck without verifying what he says. It seems in the meantime he is having a genuine turn around. This is one of those gems he has been turning out lately.

Glenn Beck has been kicking ass lately, man. Have you checked out Freedom Watch yet? I'm watching episode 5 now.

[Cintare]

That is high quality television. I used to watch Glenn Beck sometimes but had no idea how popular his show was.

[Drool111]

tl;dw

[Hitom]

In other words, WW III By 2018.

[Kay Rica]

Great video.

[jordanleroux]

I approve of this threads homosexual innuendo in the title.

[Spineless_DoO]

While I understand Beck is an entertainer and NOT a factual news agent in any way he does make some solid points that I do give him credit for when they occur. Unfortunatly Beck is often all over the place on almost any issue he brings up. One week he is a constitutionalist, the next he is something else. Like all entertainers they work off a raitings panel. They do not decide what to say and when to say it. Again its entertainment. It is good however to see Beck and the brains behind his operation taking a more direct factual approach to the show for once. I only wonder how long it will last.

[Rourke]

As a guy in the tree service, I can speak on the housing crunch affecting our workload, and peoples willingness to spend money. It's definetely tougher than usual, but not as bad as people would like us to believe.

Most people who are affected seem to be the people in IT type jobs, or people in large corps. Layoffs are a big worry for these people.

Living in MA, i can say this also, as my wife and I have been house shopping for a while now.

Things got WAY out of control with home prices. Here at least. After 9/11 a real glut started on homes, and people started jacking up home prices on EVERYTHING.
What was once a 120K hometurned into a 200K home almost overnight in my area. It was, and kinda still is bad. Most people were buying homes for twice what the homes were worth.

Banks were offering huge loans to everyone, myself included with no money down. Given that MOST people doesn't have money pouring out their ass, it's no wonder things have finally calmed down now that reality has set in.

You don't buy a 1945 2 bedroom, 900 sq foot crack shack for 230K, and think you're gonna make a profit, lol.

If you buy a house with little or no money down, you can figure about $1000 for every 100K you borrow. So a 200K house is going to be AT LEAST $2000 a month! THAT'S A HUGE MONEY.

People need to let things settle back down to what houses SHOULD be at. Not what they WANT them to be at. Greed is the theme of this country lately imo.
Anyways, off to work.

[losinglife]

I will let you know how the pgh region is at the end of May, but watching my sister and some friends go thru it... prices still havnt dropped enough here either.

[Slade Trillgon]

I do not disagree with the graphs and what is shown. The situation we are in is just blows my mind. How no one wants to take any responsibility. Citizens (upper, middle, lower class), big/middle/little/non-profits businesses, and the government.

We are the first generation to make less then our parents.

The past two generations decided to play Donald Trump and speculate on the real estate market and double house prices in 10+ years.

I saw this happening, when I was in high school in the early 90's, and was wondering how long it would last. Much of the middle class, which is probably the largest and most diverse in the developed world, got greedy and assisted in breaking the market. Now they are the ones crying the loudest against any government help.

I wonder why?

I guess it has to do with the fact that they already own their houses and do not really have to worry about it. At worst they break even. That is unless they did not get more greedy and take loans against their equity, for the boat, the vacation house, the new addition that cost 10 thousand dollars that would "add" 50 thousand dollars to the price of the house :(


Slade

[jonyak]

As a guy in the tree service, I can speak on the housing crunch affecting our workload, and peoples willingness to spend money. It's definetely tougher than usual, but not as bad as people would like us to believe.

Most people who are affected seem to be the people in IT type jobs, or people in large corps. Layoffs are a big worry for these people.

Living in MA, i can say this also, as my wife and I have been house shopping for a while now.

Things got WAY out of control with home prices. Here at least. After 9/11 a real glut started on homes, and people started jacking up home prices on EVERYTHING.
What was once a 120K hometurned into a 200K home almost overnight in my area. It was, and kinda still is bad. Most people were buying homes for twice what the homes were worth.

Banks were offering huge loans to everyone, myself included with no money down. Given that MOST people doesn't have money pouring out their ass, it's no wonder things have finally calmed down now that reality has set in.

You don't buy a 1945 2 bedroom, 900 sq foot crack shack for 230K, and think you're gonna make a profit, lol.

If you buy a house with little or no money down, you can figure about $1000 for every 100K you borrow. So a 200K house is going to be AT LEAST $2000 a month! THAT'S A HUGE MONEY.

People need to let things settle back down to what houses SHOULD be at. Not what they WANT them to be at. Greed is the theme of this country lately imo.
Anyways, off to work.

I recently bought a house in ottawa this last year.

It cost me about 210k... for a house that in all normal sense should have cost about 150k. I am now quite worried about selling it for any kind of profit.

I plan on putting about 50k into in upgrades and reno's before selling and I will probably only break even.

The one good thing it has on it is 4 acres of land, and is close to the main city but still in the country, and they are building a 4 lane highway that will make the commute half as long. this will make it worth slightly more money.

what really gets me is my brother is buying a 500 sq foot condo in downtown toronto and its going to cost him over 300k.. thats just rediculous, for what amounts to a one bedroom apartment. but I guess building equity is better than throwing you money away on rent.

[Slade Trillgon]

I guess building equity is better than throwing you money away on rent.


There in lies a major problem. We have already proven that not everyone can own a home in the current greedy fucking system we have. So we force people to loose their money on rent or destroy their lives when they decide to try and buy a severely overpriced house :bang:


Slade

[Silverhandorder]

I guess building equity is better than throwing you money away on rent.

Actually that is not the case all the time. If you can pay lower rent the difference that you save you can reinvest and make more savings this way. It is virtually impossible to build equity on a home that is loosing value.

[holychicken]

We have already proven that not everyone can own a home in the current greedy fucking system we have.
While I agree that it is true that not everyone can afford a house, we haven't proven that. The system didn't collapse because people who couldn't afford any house were getting loans. The system collapsed because way too many people were getting loans that they could not afford and the financial institutions were hiding the risks of insuring and backing these loans with fancy math and complicated credit derivative schemes.

[jonyak]

Actually that is not the case all the time. If you can pay lower rent the difference that you save you can reinvest and make more savings this way. It is virtually impossible to build equity on a home that is loosing value.

I disagree.

You can save to buy a house, but the whole time you are also throwing away a portion of that money on rent. so in reality you end up spending ALOT more money over time, than you would if you got a 0% down mortgage and started building up your equity right away. This way you are not only not throwing away rent AND putting that same amount into a savings account, you are building equity that can be used to borrow against or used in the future to upgrade the house you are currently in.

Until you have lived on your own for a number of years and been paying rent/own a car/ pay bills, you are not really qualified to make any statement on this.

Unless your home is losing a huge amount of value, you will still be building equity, and as long as you hold onto it long enough it will always gain value. it is one of the best investments a person can make.

[Justinian]

building equity is better than throwing you money away on rent.

This argument always gets my goat. People need to live somewhere - if you don't plan on being in an area for thirty years and don't feel like dealing with transaction costs and selling the home later, why buy a mortgage? Real estate agents used propaganda, plainly put, to convince an entire generation that owning a home was your ticket to easy street - don't worry about saving, finding the cheapest means to do things, etc. Just buy! It'll always go up. (see: Nasdaq bubble) Saying that people are pissing away money on rent is the biggest economic myth of our time - it's like saying they're pissing away money on food or gasoline.

Actually that is not the case all the time. If you can pay lower rent the difference that you save you can reinvest and make more savings this way. It is virtually impossible to build equity on a home that is loosing value.

This.

While I agree that it is true that not everyone can afford a house, we haven't proven that. The system didn't collapse because people who couldn't afford any house were getting loans. The system collapsed because way too many people were getting loans that they could not afford and the financial institutions were hiding the risks of insuring and backing these loans with fancy math and complicated credit derivative schemes.

And how were they able to get away with all of this, including having cheap money to give out and not being held hostage by the angry consumers (FDIC....)? It's a rhetorical. The answer is government.

I disagree.

You can save to buy a house, but the whole time you are also throwing away a portion of that money on rent. so in reality you end up spending ALOT more money over time, than you would if you got a 0% down mortgage and started building up your equity right away. This way you are not only not throwing away rent AND putting that same amount into a savings account, you are building equity that can be used to borrow against or used in the future to upgrade the house you are currently in.

Until you have lived on your own for a number of years and been paying rent/own a car/ pay bills, you are not really qualified to make any statement on this.

Unless your home is losing a huge amount of value, you will still be building equity, and as long as you hold onto it long enough it will always gain value. it is one of the best investments a person can make.

Are you a mortgage broker or something? Seriously, jonyak, just when I think you can't be more wrong and pigshit ignorant, you keep me honest!

People need to live somewhere. Being nailed down to the same area for 30 years (if I get a 30 year fixed) is not exactly my cup of tea, being so young. Additionally, I recognize that the only reason for the ARMs and so forth is speculation. I also recognize that the housing market was a bubble, pure and simple. Housing prices have historically risen exactly along with the CPI - in other words, you're building "equity", but all that really means is that the house is appreciating generally in proportion with the rest of the costs of living. What does this mean? It means that houses are a consumption for the wealthy, not an investment for the poor. Rent cheap, save your money, and invest it productively rather than throwing it away on real estate. You act like there are no maintenance costs, taxes, and utility, etc, bills. Why "invest" in a property where you're getting maybe a 5% return (in real terms) over thirty years when you could just as easily invest in China, Singapore, foreign currencies, oil, gold, etc, and easily make over 10% annually on dividends alone, not even counting the appreciation!

It's only since 2000 that there was an enormous spike in housing prices away from the CPI. That's also around the same time that the Fed made money free.

You're an idiot, jonyak. You're living in a bubble. You bought a house and now you're fucked. Don't try to convince anyone that it's a good investment.

[holychicken]

And how were they able to get away with all of this, including having cheap money to give out and not being held hostage by the angry consumers (FDIC....)? It's a rhetorical. The answer is government.
They got greedy and invested in things that they didn't understand because they were promised it was safe and they were promised buttloads of cash. The government had very little to do with that. Seriously, blaming the government for financial institutions taking huge unknown risks is missing the mark a little.

[Killuminati]

While I understand Beck is an entertainer and NOT a factual news agent in any way he does make some solid points that I do give him credit for when they occur. Unfortunatly Beck is often all over the place on almost any issue he brings up. One week he is a constitutionalist, the next he is something else. Like all entertainers they work off a raitings panel. They do not decide what to say and when to say it. Again its entertainment. It is good however to see Beck and the brains behind his operation taking a more direct factual approach to the show for once. I only wonder how long it will last.

thanks, captain obvious!


They got greedy and invested in things that they didn't understand because they were promised it was safe and they were promised buttloads of cash. The government had very little to do with that. Seriously, blaming the government for financial institutions taking huge unknown risks is missing the mark a little.

yup, they only lowered the interest rates as low as possible to accomodate them.

[Justinian]

They got greedy and invested in things that they didn't understand because they were promised it was safe and they were promised buttloads of cash. The government had very little to do with that. Seriously, blaming the government for financial institutions taking huge unknown risks is missing the mark a little.

The government insures all deposits through the FDIC. You understand this, yes?

Okay. Let's say we're back in the pre-bubble time. Let's pretend there's no FDIC for a moment. Say you're a customer at a bank that's widely becoming known through such things as consumer reports, the local news, etc., as a bank that gives out very risky mortgages.

Let's say the interest rate you're being paid for your loan to the bank (i.e. your deposit) isn't nearly enough to entice you to go for the same kind of risks that the bank executives are willing to take. Let's say you take your money out and put it into another, more conservative bank as a result.

Let's say a whole group of people like you do the same thing. Then, the bank making the risky loans, repackaging them, etc, would have no choice but to cut back. The problem is stopped before it snowballs out of control. Some smaller regions may be affected, but no where near what has occurred.

Let's say all of this sounds, if not true, then at least reasonable to you. The FDIC is a creature of the federal government. If it weren't for them lulling the consumers into a false sense of security (we'll always get our money back, so who cares?!), the banks would have been held by the balls that are their deposits/interest rates.

The FDIC is just one more reason why the government is totally and completely responsible for this becoming as large a problem as it has become.

[StainlessSteelRat]

I disagree.

You can save to buy a house, but the whole time you are also throwing away a portion of that money on rent. so in reality you end up spending ALOT more money over time, than you would if you got a 0% down mortgage and started building up your equity right away. This way you are not only not throwing away rent AND putting that same amount into a savings account, you are building equity that can be used to borrow against or used in the future to upgrade the house you are currently in.

Until you have lived on your own for a number of years and been paying rent/own a car/ pay bills, you are not really qualified to make any statement on this.

Unless your home is losing a huge amount of value, you will still be building equity, and as long as you hold onto it long enough it will always gain value. it is one of the best investments a person can make.

In a normal market (as opposed to an inflated market), this is true. The problem now is that the prices are so high that building equity in a home is not actually generating value.

If you buy a home for 500k but it's only worth 250k; by the time you earn 50% equity, you really haven't earned any equity because w/o a housing bubble, you can't sell it for more than 250k.

So, in this instance, you are better of renting for less and investing the difference between rent and 500k mortgage payment.

As long as the bubble persists, you are safe. And if you flip the house within the bubble, you win. However, when the bubble bursts, as just happened, you are fucked. Now the gov't is trying to maintain the bubble. This is not sound economics. Why maintain a bubble? Why maintain artificially high prices? It's a doomed, lose-lose policy.

[holychicken]

And how were they able to get away with all of this, including having cheap money to give out and not being held hostage by the angry consumers (FDIC....)? It's a rhetorical. The answer is government.
They got greedy and invested in things that they didn't understand because they were promised it was safe and they were promised buttloads of cash. The government had very little to do with that. Seriously, blaming the government for financial institutions taking huge unknown risks is missing the mark a little.

Are you a mortgage broker or something? Seriously, jonyak, just when I think you can't be more wrong and pigshit ignorant, you keep me honest!

People need to live somewhere. Being nailed down to the same area for 30 years (if I get a 30 year fixed) is not exactly my cup of tea, being so young. Additionally, I recognize that the only reason for the ARMs and so forth is speculation. I also recognize that the housing market was a bubble, pure and simple. Housing prices have historically risen exactly along with the CPI - in other words, you're building "equity", but all that really means is that the house is appreciating generally in proportion with the rest of the costs of living. What does this mean? It means that houses are a consumption for the wealthy, not an investment for the poor. Rent cheap, save your money, and invest it productively rather than throwing it away on real estate. You act like there are no maintenance costs, taxes, and utility, etc, bills. Why "invest" in a property where you're getting maybe a 5% return (in real terms) over thirty years when you could just as easily invest in China, Singapore, foreign currencies, oil, gold, etc, and easily make over 10% annually on dividends alone, not even counting the appreciation!
Easily make over 10%? LOL. When betting on a bubble you can. Most of the successful investors (read: people like Warren Buffet) expect 6-7%. 5% on a house is a GOOD and usually very safe investment. But you also aren't counting the money you are getting 0 return on. 5% on a big invest (relatively, for most people) is way better than 0% on a slightly smaller amount of money.

Not to mention once you have reached 100% equity, you are in the clear and are basically only paying the taxes and maintenance.

Seriously, if renting were a better investment than buying, why do so many people own and then rent properties out?

I am not saying there is no case in which renting is better than buying, but buying a home is generally a very sound investment.

[Ziegler]

You're an idiot, jonyak. You're living in a bubble. You bought a house and now you're fucked. Don't try to convince anyone that it's a good investment.


Hmm..not a good investment? well I guess it isnt...since I paid it off and dont have a mortage or rent hanging over my head anymore.

Otherwise I do agree with what you said. But buying a house isnt about an investment, it's about owning the place where you reside. Unfortunately, businesses no longer desire to have someone work for them for 10, 20 and especially not 30 years, so it is alot harder for a normal person to buy their residence and plan on living there for their life or even working their entire career with one company.

[Justinian]

Easily make over 10%? LOL. When betting on a bubble you can. Most of the successful investors (read: people like Warren Buffet) expect 6-7%. 5% on a house is a GOOD and usually very safe investment. But you also aren't counting the money you are getting 0 return on. 5% on a big invest (relatively, for most people) is way better than 0% on a slightly smaller amount of money.

http://data.cnbc.com/quotes/hte

Disregarding the one-year change as foreign stocks have been hammered by a temporarily strong USD, check out the dividend yield on that company. And it's a solid company in terms of p/e, p/b, etc (I did a little research on it a while back).

See that? Dividend yield 12.20%? And it's capable of being worth over $20/share when oil prices inevitably go back up due to dollar inflation (read: not a bubble; sound economic theory). Thanks for playing. That's just one example, and that's in fucking Canada of all places.

Take a look at what people renting out their homes are making right now. It's somewhere in the range of 1-2% (nationally) before maintenance. I'm too lazy to find the report where I read that, but you can google it I guess.

Not to mention once you have reached 100% equity, you are in the clear and are basically only paying the taxes and maintenance.

This is why housing used to be an investment. If you plan on living there into your golden years, then yes, the investment is that after thirty years you begin paying rent to yourself, and you tear up your mortgage.

Seriously, if renting were a better investment than buying, why do so many people own and then rent properties out?

It once was that owning a house and renting it out could produce a steady stream of income. It was kinda like owning gold or another hard commodity because it stayed so in line with the CPI. Right now, however, due to government intervention, the price system is completely whacked. Owning a home and renting it, if you bought the house in the last decade or so, is very likely producing a negative equity stream right now. The house that I'm renting right now is making 1% on their investment before maintenance. Which means they're making <0% in real terms.

I am not saying there is no case in which renting is better than buying, but buying a home is generally a very sound investment.

Right now, renting is always better than buying. The exception that proves the rule is when you can go to the highly distressed markets like Arizona, Nevada, California, Florida, Ohio, etc, and buy up the land/houses for pennies on the dollar and sit and wait until it can be used more productively (let's hope the houses get knocked down and factories start going up!)

[jonyak]

This argument always gets my goat. People need to live somewhere - if you don't plan on being in an area for thirty years and don't feel like dealing with transaction costs and selling the home later, why buy a mortgage? Real estate agents used propaganda, plainly put, to convince an entire generation that owning a home was your ticket to easy street - don't worry about saving, finding the cheapest means to do things, etc. Just buy! It'll always go up. (see: Nasdaq bubble) Saying that people are pissing away money on rent is the biggest economic myth of our time - it's like saying they're pissing away money on food or gasoline.



This.



And how were they able to get away with all of this, including having cheap money to give out and not being held hostage by the angry consumers (FDIC....)? It's a rhetorical. The answer is government.



Are you a mortgage broker or something? Seriously, jonyak, just when I think you can't be more wrong and pigshit ignorant, you keep me honest!

People need to live somewhere. Being nailed down to the same area for 30 years (if I get a 30 year fixed) is not exactly my cup of tea, being so young. Additionally, I recognize that the only reason for the ARMs and so forth is speculation. I also recognize that the housing market was a bubble, pure and simple. Housing prices have historically risen exactly along with the CPI - in other words, you're building "equity", but all that really means is that the house is appreciating generally in proportion with the rest of the costs of living. What does this mean? It means that houses are a consumption for the wealthy, not an investment for the poor. Rent cheap, save your money, and invest it productively rather than throwing it away on real estate. You act like there are no maintenance costs, taxes, and utility, etc, bills. Why "invest" in a property where you're getting maybe a 5% return (in real terms) over thirty years when you could just as easily invest in China, Singapore, foreign currencies, oil, gold, etc, and easily make over 10% annually on dividends alone, not even counting the appreciation!

It's only since 2000 that there was an enormous spike in housing prices away from the CPI. That's also around the same time that the Fed made money free.

You're an idiot, jonyak. You're living in a bubble. You bought a house and now you're fucked. Don't try to convince anyone that it's a good investment.

Ok, do you own a property?

You do not need to be tied down for 30 years... you obviously know nothing abotu mortgages.

you have a 5 year mortgage deal, after that you do one of a few things.

pay off the mortgage...

sell the house for the same amount you bought it for and pay off the mortgage.

Sell the house for more than you bought it for and pay of the mortgage.

remortgage the house.

If you sell the house for the same price, you get all that money you paid into it back. less interest.

If you sell it for more, you profit.

if you remortgage you continue to build equity.

if you pay it off, you own your own house and property.

The only place houses are going down in price seems to be in the states. They are still going up around me.

and even if they drop out.. so what. I have a house I can still pay for and own. I don't plan on moving anywhere in the next while.

I am sorry you think I am an idiot for buying a house and property. I think you're an idiot for throwing your money away on rent, making someone else money, paying there mortgage.

PS: I pay less for my mortgage and other expenses than I ever did for rent.

grow up a little and you will understand these things.

[Sharuk]

While I understand Beck is an entertainer and NOT a factual news agent in any way he does make some solid points that I do give him credit for when they occur. Unfortunatly Beck is often all over the place on almost any issue he brings up. One week he is a constitutionalist, the next he is something else. Like all entertainers they work off a raitings panel. They do not decide what to say and when to say it. Again its entertainment. It is good however to see Beck and the brains behind his operation taking a more direct factual approach to the show for once. I only wonder how long it will last.

uhhh

Do ever watch the Show?

[Jezrith]

Seriously, blaming the government for financial institutions taking huge unknown risks is missing the mark a little.

Actually it's really not. Without an incredibly irresponsible monetary policy none of this could have happened. That does not remove the blame from any other actor in this tragic comedy, but it does give the government a starring role...

[StainlessSteelRat]

They got greedy and invested in things that they didn't understand because they were promised it was safe and they were promised buttloads of cash. The government had very little to do with that. Seriously, blaming the government for financial institutions taking huge unknown risks is missing the mark a little.

Corps exist to make money. Gov't via the Federal Reserve provided investment institutions w/ an extremely low cost source of funds. Greed or not, without this neverending source of low cost loans, the corps would not have taken the same risks.

Additionally, w/ regards to housing, Freddie and Fannie were required to buy up mortgages left and right by the gov't which reduced the risk even further.

Did corporate 'greed' play a role? Of course. But that is what corporations are supposed to do; find ways to make money for their investors. Government, however, controlled and implemented the system within which the corps were playing. They built and monitor the playground; you can't blame the kids for playing in it.

[Killuminati]

Actually it's really not. Without an incredibly irresponsible monetary policy none of this could have happened. That does not remove the blame from any other actor in this tragic comedy, but it does give the government a starring role...

Seriously, how hard headed do you have to be....greed is a given when it comes to human behavior. The government enacting a loose monetary policy for most of the 90s. Which effectively kept interest rates at a depressed level allowed for this to happen. The fact is we know these investor's greed allowed for this to happen, except the mechanism which allowed them to abuse the market is what caused this.

[Justinian]

PS: I pay less for my mortgage and other expenses than I ever did for rent.

grow up a little and you will understand these things.

This is literally in impossibility. You consistently make yourself look like a jackass on these forums, jonyak. Maybe it's time to cut your losses and get back to overpaying for your shitty house.

[Killuminati]

idiots that got ARMs got what was coming to them...lol

[jonyak]

This is literally in impossibility. You consistently make yourself look like a jackass on these forums, jonyak. Maybe it's time to cut your losses and get back to overpaying for your shitty house.

haha...

how so?

I paid 1500 on rent for a house.

I now pay 1100 for my mortgage and 200 for my insurance.

thats less.

My house is not shitty. I love it. I own it. what do you own?

you continually make yourself look like an arrogant asshole on this forum, when in reality you are just an ignorant child. Thats ok and I usualy don't call you on it.

If you want to have a real discussion come back when you are a bit more mature and know how to discuss in a civil manner, without calling people idiots. like adults do.

[StainlessSteelRat]

PS: I pay less for my mortgage and other expenses than I ever did for rent.

Then you probably paid a reasonable price for your home. Congrats. Your personal situation is anecdotal however. When did you buy? When (if at all) did the bubble hit Canada?

Today, you can rent a nicer place for less money than the mortgage on a piece of crap. Rents are in line w/ CPI; housing prices are not. If you can't rent a house for more than the costs of owning it, it's a bad investment; whether you plan on living there or not. The only way it's not a bad investment is if you know that housing prices will continue to rise and this is what everyone has been lead to believe and this is what the gov't is trying to artificially maintain.

[jonyak]

Then you probably paid a reasonable price for your home.

When did you buy? When (if at all) did the bubble hit Canada?

Today, you can rent a nicer place for less money than the mortgage on a piece of crap. Rents are in line w/ CPI; housing prices are not. If you can't rent a house for more than the costs of owning it, it's a bad investment; whether you plan on living there or not. The only way it's not a bad investment is if you know that housing prices will continue to rise and this is what everyone has been lead to believe and this is what the gov't is trying to artificially maintain.

I bought over a year ago.

houses are still rising in cost around my area.

I bought my house on 4 acres of land for 210k... when every other house that is comparable is around 300k.

now it needs a bit of work, but I am handy and will work on it over the years, to make it worth 300k.

rent in ottawa is horrible. you pay over a thousand most times for a single bedroom apartment. 1500 for the house I rented was a ludicrous deal. most are 2000+.

I still think buying a house is a much greater investment than some.

You want to know a great investment? Vintage guitars. I currently own 2 and they have almost doubled in how much I can sell them for over 15 years. its crazy.

[holychicken]

http://data.cnbc.com/quotes/hte

Disregarding the one-year change as foreign stocks have been hammered by a temporarily strong USD, check out the dividend yield on that company. And it's a solid company in terms of p/e, p/b, etc (I did a little research on it a while back).

See that? Dividend yield 12.20%? And it's capable of being worth over $20/share when oil prices inevitably go back up due to dollar inflation (read: not a bubble; sound economic theory). Thanks for playing. That's just one example, and that's in fucking Canada of all places.
Disregarding the fact that it lost 82% in 3 months, it was a good invest. LMFAO!

I didn't ask if you could find an investment that would give you 10% over a short period of time. Look at what you linked to, in 3 months you could have lost 81% of your investment. 81%. Sure, you can get 10% in the short run fairly easily, but you have to be up on everything to make sure you don't end up sticking with that stock too long. Keeping that up IS NOT easy.

Take a look at what people renting out their homes are making right now. It's somewhere in the range of 1-2% (nationally) before maintenance. I'm too lazy to find the report where I read that, but you can google it I guess.
Investments are risky. Again, I am not saying there is never a case where it makes more sense to rent than buy, as there most certainly are and now would most likely be one of those times.

This is why housing used to be an investment. If you plan on living there into your golden years, then yes, the investment is that after thirty years you begin paying rent to yourself, and you tear up your mortgage.
Historically, houses double in value every decade. The amount of land never goes up and while the number of people do. Obviously in a housing market where houses are losing value, this is not true, but the general trend does make it a worthy investment. So you are right, if you are moving every 2 years or so, buying a house makes no sense. But if you plan on sticking around for a few (I think understand standard conditions), I think it is something like only like 4 years, where you break even in value on purchasing a home vs paying 80% of that on rent. Remember, every dollar spent on rent has 0 return. 0. None. It is money that is thrown away. I know you have other money to work with, but the money spent on rent is just gone.

Right now, renting is always better than buying. The exception that proves the rule is when you can go to the highly distressed markets like Arizona, Nevada, California, Florida, Ohio, etc, and buy up the land/houses for pennies on the dollar and sit and wait until it can be used more productively (let's hope the houses get knocked down and factories start going up!)
There are more exceptions to your rule. There are still places where the price of homes is increasing. Remember, population continues to grow while the amount of land does not. But for the short term, I definitely agree with you, renting is generally better than buying at this point.

[StainlessSteelRat]

I bought over a year ago.

houses are still rising in cost around my area.

So the bubble might have never affected your area.

I bought my house on 4 acres of land for 210k... when every other house that is comparable is around 300k.

now it needs a bit of work, but I am handy and will work on it over the years, to make it worth 300k.

So it's not comparable to the 300k houses or it is? And btw, normally, you can ballpark a mortgage at 900/mo per 100k borrowed. You must have put up a large down payment.

rent in ottawa is horrible. you pay over a thousand most times for a single bedroom apartment. 1500 for the house I rented was a ludicrous deal. most are 2000+.

I'm not too familiar w/ the area, but is the area strapped for (developable) land? This will result in low supply and higher demand/prices.

Just to give you some perspective, I was house shopping a bit this past weekend and almost every single house I looked at was valued at 50% of the last sale price.

[StainlessSteelRat]

Historically, houses double in value every decade.

Can you cite this? Because this contradicts the information given by Beck. House values were relatively flat up until 2000 or so when the bubble hit.

[Justinian]

haha...

how so?

I paid 1500 on rent for a house.

I now pay 1100 for my mortgage and 200 for my insurance.

thats less.

My house is not shitty. I love it. I own it. what do you own?


I'm only arrogant because I'm 23 years old, and yet I'm much, much smarter than you are. I look down on you. You're old and have consistently proven yourself to be a sheep who follows the party-line orthodoxy on all matters economics-related. You are the problem.

I bought over a year ago.

houses are still rising in cost around my area.

I bought my house on 4 acres of land for 210k... when every other house that is comparable is around 300k.

now it needs a bit of work, but I am handy and will work on it over the years, to make it worth 300k.

rent in ottawa is horrible. you pay over a thousand most times for a single bedroom apartment. 1500 for the house I rented was a ludicrous deal. most are 2000+.

I still think buying a house is a much greater investment than some.

You want to know a great investment? Vintage guitars. I currently own 2 and they have almost doubled in how much I can sell them for over 15 years. its crazy.

You could've opened up a margin account with a brokerage firm and done something so much more productive than buying a very expensive consumer good. That's why you're an idiot. Houses are not an investment just like renting is not an investment. It's a living expense - and it's nothing more.

Also, nice consistency throughout your posts (see the bold). You love your house and it's "nice", but only nice to you. That's why you got it for so cheap, I imagine. You're saving what, $200/mo compared to renting in a (probably) nicer area and not being bothered with taxes, maintenance, etc? You're going to sink how much of your time and money into maintenance over the next year? How about in taxes? How much do you make per hour at work? How many hours will you spend doing upkeep on your consumer good? Does it really come out being cheaper and less stressful? Really?

Being me precludes me from being as stupid as you. It has nothing to do with age.

[holychicken]

Corps exist to make money. Gov't via the Federal Reserve provided investment institutions w/ an extremely low cost source of funds. Greed or not, without this neverending source of low cost loans, the corps would not have taken the same risks.

Additionally, w/ regards to housing, Freddie and Fannie were required to buy up mortgages left and right by the gov't which reduced the risk even further.

Did corporate 'greed' play a role? Of course. But that is what corporations are supposed to do; find ways to make money for their investors. Government, however, controlled and implemented the system within which the corps were playing. They built and monitor the playground; you can't blame the kids for playing in it.
I am not denying the involvement of the government in this whole mess. However, these companies that had traditionally been built on sound investment practices got greedy and abandoned their tried and true methods of safely making money for what amounted to nothing more than complicated and fancy bookkeeping.

[Silverhandorder]

I am not denying the involvement of the government in this whole mess. However, these companies that had traditionally been built on sound investment practices got greedy and abandoned their tried and true methods of safely making money for what amounted to nothing more than complicated and fancy bookkeeping.

Most of the banks failing now rose up over a period of 10 years from being small local chains. What do you think WAMU stands for? So the government put in a lever that allowed small banks to grow at rapid rate.

[Jezrith]

haha...

how so?

I paid 1500 on rent for a house.

I now pay 1100 for my mortgage and 200 for my insurance.

thats less.


It's easy to pay less on a mortgage when you have less house. Also what are your taxes, and are you paying a PMI? I don't know the market in Canuckistan, but down here you can definitely get more house renting than you can buying for the same dollar. I was looking at buying a couple of years ago, and it just didn't make sense. Right now I rent a 2000 sqf duplex/apartment (old Victorian house with an upstairs and downstairs apartment, large fenced in yard, own garage, vaulted ceilings beautiful hardwood floors, excellent neighborhood) for $850 but but my monthly payment (PMI, Mortgage, Insurance, Property taxes) on a $200,000 home in the same neighborhood that was 400 sqf smaller would have been around $1700 a month. It would have taken way longer than 5 years to make up the difference in equity. So yeah, it really depends on the market you live in, but renting is not always just throwing your money away.

[Justinian]

Disregarding the fact that it lost 82% in 3 months, it was a good invest. LMFAO!

I didn't ask if you could find an investment that would give you 10% over a short period of time. Look at what you linked to, in 3 months you could have lost 81% of your investment. 81%. Sure, you can get 10% in the short run fairly easily, but you have to be up on everything to make sure you don't end up sticking with that stock too long. Keeping that up IS NOT easy.

I'm not talking about get-rich quick schemes. It's a good company based in a good sector and it's still growing. Despite its nominal loss of 81% over three months, it's still paying a 12% dividend. Look at where oil prices/that company's price is capable of going when oil is $140/barrel again, and you have a pretty sound investment for the future. I'm not talking about timing; I'm talking about economics.



Historically, houses double in value every decade. The amount of land never goes up and while the number of people do. Obviously in a housing market where houses are losing value, this is not true, but the general trend does make it a worthy investment. So you are right, if you are moving every 2 years or so, buying a house makes no sense. But if you plan on sticking around for a few (I think understand standard conditions), I think it is something like only like 4 years, where you break even in value on purchasing a home vs paying 80% of that on rent. Remember, every dollar spent on rent has 0 return. 0. None. It is money that is thrown away. I know you have other money to work with, but the money spent on rent is just gone.

The return on your rent is not having to bother with any of the other costs associated with home-ownership. The other return on your rent is the fact that you get a roof over your head. Housing is a consumer good. Why do I have to keep repeating this? If the prices stay in line with the CPI, it's a consumer good.

There are more exceptions to your rule. There are still places where the price of homes is increasing. Remember, population continues to grow while the amount of land does not. But for the short term, I definitely agree with you, renting is generally better than buying at this point.

Exactly. I'm not making a hard and fast rule, I'm just pointing out that in most markets, housing is way overheated.

[jonyak]

So it's not comparable to the 300k houses or it is? And btw, normally, you can ballpark a mortgage at 900/mo per 100k borrowed. You must have put up a large down payment.



I'm not too familiar w/ the area, but is the area strapped for (developable) land? This will result in low supply and higher demand/prices.

Just to give you some perspective, I was house shopping a bit this past weekend and almost every single house I looked at was valued at 50% of the last sale price.

It is, But I bought just outside the city, so the price was substantially lower.

Yes there is very little remainign land around the city that is allowed to be built on.

[jonyak]

I'm only arrogant because I'm 23 years old, and yet I'm much, much smarter than you are. I look down on you. You're old and have consistently proven yourself to be a sheep who follows the party-line orthodoxy on all matters economics-related. You are the problem.



You think you, are. we all thought we knew everything when we were 23. you really act your age well.

I enjoy doing the upkeep. its a relaxing way to spend my time.

the house is in good condition, its just dated.

I moved from the city center to the outskirts because I wanted to. I hated living in the city on a postage stamp size lot, paying out the ass for the priveledge to be near it all.

[Shads]

"The market wants .."


Lol that guy is such a clueless fuck.

[StainlessSteelRat]

I am not denying the involvement of the government in this whole mess. However, these companies that had traditionally been built on sound investment practices got greedy and abandoned their tried and true methods of safely making money for what amounted to nothing more than complicated and fancy bookkeeping.

No, I think they used the same tried and true methods of analyzing risk and based on the extremely low cost, they took the risk associated w/ those investments.

Now, they turned out to be wrong and should fail. No one is going to bail me out if I buy stock and the company goes bankrupt.

Interesting anecdote I heard yesterday: the founder/CEO of AIG was run out of the company by Spitzer as AG of New York. With him went 40 years of sound business practice.

[holychicken]

I'm not talking about get-rich quick schemes. It's a good company based in a good sector and it's still growing. Despite its nominal loss of 81% over three months, it's still paying a 12% dividend. Look at where oil prices/that company's price is capable of going when oil is $140/barrel again, and you have a pretty sound investment for the future. I'm not talking about timing; I'm talking about economics.
12% on the investment that has lost 81% of its value. So if you bought it at it at the beginning of this year, you would be getting, what, less than half a percent back on your initial investment in dividends? Not to mention the 81% of your invest that is LOST. So you actually would have lost a butt-ton of money in the company.

It's a risky investment that you have to stay on top of constantly to make sure you don't get stuck in this 81% loss of value. Which makes it not easy, at all.

The return on your rent is not having to bother with any of the other costs associated with home-ownership. The other return on your rent is the fact that you get a roof over your head. Housing is a consumer good. Why do I have to keep repeating this? If the prices stay in line with the CPI, it's a consumer good.
That's not called a return, that is called a savings.

Exactly. I'm not making a hard and fast rule, I'm just pointing out that in most markets, housing is way overheated.
If this is your point, I entirely agree. It is a big risk to buy a house right now in most markets.

No, I think they used the same tried and true methods of analyzing risk and based on the extremely low cost, they took the risk associated w/ those investments.
No, they didn't. A lot of these fancy credit derivatives/default swaps/etc are all relatively new ways of hedging risks.

Now, they turned out to be wrong and should fail. No one is going to bail me out if I buy stock and the company goes bankrupt.
Whether or not they should fail I am honestly not sure.

Interesting anecdote I heard yesterday: the founder/CEO of AIG was run out of the company by Spitzer as AG of New York. With him went 40 years of sound business practice.
It's funny how you say they used the same practices and then in the same post try to blame Spitzer for making the company use less sound business practices.

[Justinian]

That's not called a return, that is called a savings.

The return comes with the savings. Like your argument about rents - what property do you know of with a 12% return on rent? I'm ignoring the principle which is bound to change over time. I'm not talking about timing it to make sure you're on top of it. I'm talking about knowing what a good sector is, knowing what a good company is, and investing for the long-term. I can guarantee you that the time horizon for actual returns on an investment such as this one is a hell of a lot smaller than for an "investment property", minus bubble conditions.

[Vessol]

Been watching Glenn Beck on and off since 2006. It's been interesting watching him turn into a Libertarian since around last June.

[jonyak]

IMO, alot of the posters here worship money too much.

I have chosen the fact that I will never be rich, don't really want to be. I am only here for a short period of time and I choose to have fun, accomplish other things than chase the almighty dollar all my life.

You can't take it with you when you die.

[Silverhandorder]

IMO, alot of the posters here worship money too much.

I have chosen the fact that I will never be rich, don't really want to be. I am only here for a short period of time and I choose to have fun, accomplish other things than chase the almighty dollar all my life.

You can't take it with you when you die.

Funny you seem to vote the other way :rolleyes:.

[jonyak]

Funny you seem to vote the other way :rolleyes:.

funny, you seem to know how I vote.

[StainlessSteelRat]

No, they didn't. A lot of these fancy credit derivatives/default swaps/etc are all relatively new ways of hedging risks.

Yes, new ways but you can't really believe that no risk analysis was done? The variables were simply skewed by the gov't intervention.


Whether or not they should fail I am honestly not sure.

While I'm inclined to believe that it will hurt, a lot, I'm pretty sure we would recover; I'm much less sure we can recover from bailout/stimulus.

It's funny how you say they used the same practices and then in the same post try to blame Spitzer for making the company use less sound business practices.

First, it was an anecdote. Who knows what the guy would have done; he wasn't there anymore. Second, I'm not blaming Spitzer for making the company do anything. I'm simply pointing out another aspect of gov't interference in the market and the fact that Spitzer is an ass which I think everyone already knew.

btw - 10-12% returns on market investments was pretty normal up until the .com bubble burst and returned to that point up until the housing bubble burst. So, sure, this past year, you were losing. But, if instead of buying an overpriced house, you had invested, you would have had significant returns. Most mortgages are 30 years. What's the 30 year return on that stock? I'm sure most stocks and certainly most funds are up over the last 30 years considering the DOW is up several thousand.

Dec-1979 $839 at close.
March 25, 2009. $7749.81 at close.

Now, I'm sure there are some variants here regarding what is being measured and inflation but I'm not doing the math. :P The picture is sufficiently painted I think.

[Vessol]

Pretty interesting piece of Glenn Beck too, with Penn too.

http://www.youtube.com/watch?v=NGjlQ1a7X_Y

[Silverhandorder]

funny, you seem to know how I vote.

Give me enough credit, we discussed issues here many times.

If money don't matter to you why do you vote to take money away from people to give to others?

[jonyak]

Give me enough credit, we discussed issues here many times.

If money don't matter to you why do you vote to take money away from people to give to others?

because it doesn't matter to me.

[Vessol]

because it doesn't matter to me.

No matter how much you don't care about money, it still affects your life greatly. If you don't care about a stable economy, why don't you move to Somalia?

[Justinian]

No matter how much you don't care about money, it still affects your life greatly. If you don't care about a stable economy, why don't you move to Somalia?

Leave jonyak alone. He's resigned to his fate of being a chump his whole life.

[holychicken]

The return comes with the savings. Like your argument about rents - what property do you know of with a 12% return on rent? I'm ignoring the principle which is bound to change over time. I'm not talking about timing it to make sure you're on top of it. I'm talking about knowing what a good sector is, knowing what a good company is, and investing for the long-term. I can guarantee you that the time horizon for actual returns on an investment such as this one is a hell of a lot smaller than for an "investment property", minus bubble conditions.
I am not arguing that renting is going to give you a 12% RoR. I made that statement about renting when i was under the impression that you were arguing that owning property was never a good investment and renting was always better.

I am simply talking about renting vs owning when it comes to personal wealth. Rent returns no money. The savings, again, is not a return. It is something that you then have to invest. So you are comparing two investments, one that returns 0% and one that returns 10+% (if you work at it and know what you are doing) to 1 investment that tends to be safe and is certainly easy (as far as the investment side of it goes), accounting for the same amount of initial investment.

[Killuminati]

IMO, alot of the posters here worship money too much.

I have chosen the fact that I will never be rich, don't really want to be. I am only here for a short period of time and I choose to have fun, accomplish other things than chase the almighty dollar all my life.

You can't take it with you when you die.

yet, while you proclaim you aren't after money you still want the rich to pay for everything.

[holychicken]

Yes, new ways but you can't really believe that no risk analysis was done? The variables were simply skewed by the gov't intervention.
I didn't say no risk analysis was done. What I said is that they abandoned the tried and true methods.

While I'm inclined to believe that it will hurt, a lot, I'm pretty sure we would recover; I'm much less sure we can recover from bailout/stimulus.
I think we would recover from either. . . the question is how low we would go with either.

First, it was an anecdote. Who knows what the guy would have done; he wasn't there anymore. Second, I'm not blaming Spitzer for making the company do anything. I'm simply pointing out another aspect of gov't interference in the market and the fact that Spitzer is an ass which I think everyone already knew.
So you think that the government shouldn't prosecute criminals (I know, he has not been convicted yet) because it might affect the economy? You can't

btw - 10-12% returns on market investments was pretty normal up until the .com bubble burst and returned to that point up until the housing bubble burst. So, sure, this past year, you were losing. But, if instead of buying an overpriced house, you had invested, you would have had significant returns. Most mortgages are 30 years. What's the 30 year return on that stock? I'm sure most stocks and certainly most funds are up over the last 30 years considering the DOW is up several thousand.
10-12 was normal DURING the dot com bubble, not up until it. 10-12 is something you can shoot for short term. Big-time, long-term investors usually get like 5-6%. The bigger the return the bigger the risk. So unless you are paying very close attention to your investments or know more than you should, you are not going to get sustained 10%.

Don't get me wrong. I am not arguing that there was no bubble. Certainly, buying a house a few years ago would have been a terrible investment and I am not even talking about buying strictly investment properties. What I am trying to do is show why, typically, if you don't plan on moving for a while, owning your home is almost always better than renting it.

The current system is all fucked up, so what I am saying DOES NOT apply to, nor is it intended to apply to, this moment in time.

Dec-1979 $839 at close.
March 25, 2009. $7749.81 at close.

Now, I'm sure there are some variants here regarding what is being measured and inflation but I'm not doing the math. :P The picture is sufficiently painted I think.[/QUOTE]

[Ziegler]

yet, while you proclaim you aren't after money you still want the rich to pay for everything.

I wanna know how he gets a degree in anthropology and engineering and is broke or not making money. (unless he just isnt working at all in his life)

[jonyak]

Leave jonyak alone. He's resigned to his fate of being a chump his whole life.

perspective is a funny thing.

[jonyak]

yet, while you proclaim you aren't after money you still want the rich to pay for everything.

I don't know where you got that from. nice strawman though.

[jonyak]

I wanna know how he gets a degree in anthropology and engineering and is broke or not making money. (unless he just isnt working at all in his life)

I don't know where you go the impression that I am broke.

[Vessol]

I don't know where you go the impression that I am broke.

Well if you don't care about money, then why don't you give it all away? You don't need that shit, you would be just as happy if you were broke.

[jonyak]

Well if you don't care about money, then why don't you give it all away? You don't need that shit, you would be just as happy if you were broke.

funny, I was just beginning to think the same thing.

I was happier when I was broke.

[Vessol]

funny, I was just beginning to think the same thing.

I was happier when I was broke.

Go for it man. Get rid of the place you live, get food from others, get rid of your computer, all of that useless stuff built and bought with money.

[Killuminati]

I don't know where you got that from. nice strawman though.

your welcome...

also, pretty much any post of yours advocates some sort of wealth redistribution.

[Shads]

I find it quite laughable that some people listen to actors when it comes to economics. Remember kids - having a diagram isn't an automatic proof you're right!

[jonyak]

Go for it man. Get rid of the place you live, get food from others, get rid of your computer, all of that useless stuff built and bought with money.

Actualy I have been seriously thinking of doing just this. excpet for the food from others.

Not really happy the way things are right now. Unfortunatley I am stuck, job, mortgage, school loans, car loans, wife, dog... the life trap.

[Justinian]

I find it quite laughable that some people listen to actors when it comes to economics. Remember kids - having a diagram isn't an automatic proof you're right!

nope, but knowing the economic theory underlying the actor's half-assed attempt at truth certainly lets you know how true it is!

[Vessol]

Actualy I have been seriously thinking of doing just this. excpet for the food from others.

Not really happy the way things are right now. Unfortunatley I am stuck, job, mortgage, school loans, car loans, wife, dog... the life trap.

Just say you're going for a walk and never return. Become a mountain-man.

[jonyak]

Just say you're going for a walk and never return. Become a mountain-man.

good idea.

unfortunatley no mountains near me.

[Ziegler]

IMO, alot of the posters here worship money too much.

I have chosen the fact that I will never be rich, don't really want to be. I am only here for a short period of time and I choose to have fun, accomplish other things than chase the almighty dollar all my life.

You can't take it with you when you die.

I don't know where you go the impression that I am broke.

oh...I get it...you're not broke, you're just not rich....sure thing.
funny, I was just beginning to think the same thing.

I was happier when I was broke.
I can send you my paypal account, I'd be glad to help you out.
Actualy I have been seriously thinking of doing just this. excpet for the food from others.

Not really happy the way things are right now. Unfortunatley I am stuck, job, mortgage, school loans, car loans, wife, dog... the life trap.

Remington 870 Wingmaster.....that sounds like your real solution.

[Killuminati]

I find it quite laughable that some people listen to actors when it comes to economics. Remember kids - having a diagram isn't an automatic proof you're right!

reminds me of those economic forecasters...I bet you're familiar with them.

[Sharuk]

I find it quite laughable that some people listen to actors when it comes to economics. Remember kids - having a diagram isn't an automatic proof you're right!

But he isnt an actor try watching the show

I have for 3 years, i know what he is like, and he isnt Acting

[jonyak]

oh...I get it...you're not broke, you're just not rich....sure thing.

I can send you my paypal account, I'd be glad to help you out.


Remington 870 Wingmaster.....that sounds like your real solution.

ya... middle class. got there myself.

I wouldn;t help out a single person on this board if they were starving beside me.

except with the remington you suggested.

[Hellsink]

http://www.youtube.com/watch?v=R3Ebo4UhloU

What can you say...Bring more retarded paranoid unstable people on screen Fox News!

We need some cheering up in these depressing times!

[Vessol]

http://www.youtube.com/watch?v=R3Ebo4UhloU

What can you say...Bring more retarded paranoid unstable people on screen Fox News!

We need some cheering up in these depressing times!

Watch moar MSNBC.

[Killuminati]

http://www.youtube.com/watch?v=R3Ebo4UhloU

What can you say...Bring more retarded paranoid unstable people on screen Fox News!

We need some cheering up in these depressing times!

that video...was hilarious

[StainlessSteelRat]

I didn't say no risk analysis was done. What I said is that they abandoned the tried and true methods.

I understand you. I just think that those methods were applied in some instances (maybe not all) but due to (for example) the low cost of money, the tried and true method spit out an "OK" on the new and unknown derivative investment.

Sure, the bandwagon investors probably jumped in the pool w/o checking for water. No doubt.

I think we would recover from either. . . the question is how low we would go with either.

I don't think that's a question at all. To me it's obvious that bailouts/stimulus = long term hurt.

So you think that the government shouldn't prosecute criminals (I know, he has not been convicted yet) because it might affect the economy? You can't

What do criminals have to do with this? Spitzer was on a witch hunt for power and fame. Hindsight is 20/20. There is a possibility that, had Spitzer not chased him out, AIG would not have bought into this system and would not be needing bailouts. Again, purely anecdotal/hypothetical/alternate reality musing.

10-12 was normal DURING the dot com bubble, not up until it. 10-12 is something you can shoot for short term. Big-time, long-term investors usually get like 5-6%. The bigger the return the bigger the risk. So unless you are paying very close attention to your investments or know more than you should, you are not going to get sustained 10%.

Don't get me wrong. I am not arguing that there was no bubble. Certainly, buying a house a few years ago would have been a terrible investment and I am not even talking about buying strictly investment properties. What I am trying to do is show why, typically, if you don't plan on moving for a while, owning your home is almost always better than renting it.

The current system is all fucked up, so what I am saying DOES NOT apply to, nor is it intended to apply to, this moment in time.

Certainly. And I agree w/ that 100%. Although you could do better than 5-6 in the stock market. 5-6 was money markets. During the dot com bubble, you could do much better than 10-12 in the short term.

[Eyrothath]

Glenn Becks pants look a little bit tight imo....

[holychicken]

I understand you. I just think that those methods were applied in some instances (maybe not all) but due to (for example) the low cost of money, the tried and true method spit out an "OK" on the new and unknown derivative investment.

Sure, the bandwagon investors probably jumped in the pool w/o checking for water. No doubt.
But this is just patently untrue. The derivatives markets and credit default swaps were new ways of "mitigating" risk.

I don't think that's a question at all. To me it's obvious that bailouts/stimulus = long term hurt.
Well, its good for you that you are so steadfast in your beliefs, I guess.

What do criminals have to do with this? Spitzer was on a witch hunt for power and fame. Hindsight is 20/20. There is a possibility that, had Spitzer not chased him out, AIG would not have bought into this system and would not be needing bailouts. Again, purely anecdotal/hypothetical/alternate reality musing.
The fact of the matter is that charges were brought against this guy. It is hard to argue that government intervention in business is bad by using the prosecution of a suspected criminal.

Certainly. And I agree w/ that 100%. Although you could do better than 5-6 in the stock market. 5-6 was money markets. During the dot com bubble, you could do much better than 10-12 in the short term.
Sure, but 10-12 was normal. Which is what we were talking about.

[Shads]

nope, but knowing the economic theory underlying the actor's half-assed attempt at truth certainly lets you know how true it is!

What underlying economic theory? The guy says that house prices should be lower because "the market wants it". A bubble did burst, but claiming that prices should be at a certain level just because they were at that level over a long period is pretty much absurd, stupid and contrary to the laws of supply and demand. The guy seems to have no clue about increases in productivity and real income, population growth, etc.

That little comedy show proves nothing but the host's ignorance of the economics processes underlying the current crisis.

[Justinian]

What underlying economic theory? The guy says that house prices should be lower because "the market wants it". A bubble did burst, but claiming that prices should be at a certain level just because they were at that level over a long period is pretty much absurd, stupid and contrary to the laws of supply and demand. The guy seems to have no clue about increases in productivity and real income, population growth, etc.

That little comedy show proves nothing but the host's ignorance of the economics processes underlying the current crisis.

Says the half-assed Keynesian.

[Paganini]

Haven't read any of this thread but I rofl'd hard when I saw his graph's Y axis was has 3 different increments for 5 different changes. ( it goes +20 +20 +30 +40 +30)

[Hitom]

I understand you. I just think that those methods were applied in some instances (maybe not all) but due to (for example) the low cost of money, the tried and true method spit out an "OK" on the new and unknown derivative investment.

Sure, the bandwagon investors probably jumped in the pool w/o checking for water. No doubt.


Hi Stain! Grats on the phantom award!

[Silverhandorder]

Haven't read any of this thread but I rofl'd hard when I saw his graph's Y axis was has 3 different increments for 5 different changes. ( it goes +20 +20 +30 +40 +30)

You do realize that made the biggest peak look smaller then it is if he would have had it in increments of +20.

[Paganini]

You do realize that made the biggest peak look smaller then it is if he would have had it in increments of +20.

But it made the difference between pre/post WW2 seem much smaller than reality, also because he changed the increment on the X axis as well.

Yes, you're right the 2006 peak would have looked bigger but the overall trend of increasing prices would have stood out more.

[Dirty l3um]

But it made the difference between pre/post WW2 seem much smaller than reality, also because he changed the increment on the X axis as well.

Yes, you're right the 2006 peak would have looked bigger but the overall trend of increasing prices would have stood out more.

a slow gradual trend, making the massive increase due to inflation in recent years much more obvious....

[StainlessSteelRat]

But this is just patently untrue. The derivatives markets and credit default swaps were new ways of "mitigating" risk.

Explain that. I was not aware that these investments were risk mitigators. I must be missing something.

Well, its good for you that you are so steadfast in your beliefs, I guess.

I'm part Irish, comes w/ the territory.

The fact of the matter is that charges were brought against this guy. It is hard to argue that government intervention in business is bad by using the prosecution of a suspected criminal.

Yeah, not my intent.

[StainlessSteelRat]

Hi Stain! Grats on the phantom award!

??

[StainlessSteelRat]

What underlying economic theory? The guy says that house prices should be lower because "the market wants it". A bubble did burst, but claiming that prices should be at a certain level just because they were at that level over a long period is pretty much absurd, stupid and contrary to the laws of supply and demand. The guy seems to have no clue about increases in productivity and real income, population growth, etc.

That little comedy show proves nothing but the host's ignorance of the economics processes underlying the current crisis.

wow, you missed the point. He's not saying the prices should come back down 'just because' that's where they always were. He's saying that the gov't should not interfere and 'arrest' the price decline but allow the market to stabilize where it should which would probably be right around 100.

[Rourke]

People use homes as a source of profit. Or, at least hope to. Which is what fucked a TON of people over in MA. I have to admit, I am glad they got fucked over.
People were buying homes, putting in 10K of upgrades, and trying to flip the house for a 100K profit.

I was in a neighborhood today, and a homeonwer told me his neighbor has lost over 100K in equity since he bought the house for over 500K a year ago.

What really pisses me off are all these fucktards that can't read a contract, and can't judge a good deal, from a bad deal. (IE: "OMG..I didn't know what adjustable rates were!!! I can't re-fi on this 300K ranch I bought, and now people are trying to take it!! I needz bailoutz!!" "UNFAIR!!!!!"

The way I see it is, this big housing crash would not of been so bad if SO MANY morons didn't buy houses when EVERYONE knew how fucking overpriced they all were, and hope that they would somehow trick some other sap into buying the house for another extra 100K, which is what tons of people were doing.

So ha-fucking-HA. You lose. L2invest.

We as Americans have gotten SO greedy imo, it's pathetic. People think they can cut off a HUGE piece of the Money Pie so easily now without WORK.

Homes should be a thing you buy to LIVE in, not flip to make profits. Sorry, but it's true. Not profits like people were seeing 3 years ago at least.

I can say without a DOUBT, my wife and I are VERY happy we still rent, and held off on buying the house we almost bought. We would of lost our shirts, and been uber-fucked.

[Incanam]

Did he really say the Fed was tampering with the economy before 1910? Wasn't it created in 1912?

Didn't the Depression start after the term of Calvin "business of america is business" Collidge?

Knowledge would be greatly appreciated...