real estate rants, ramblings, and questions

NEW -> Contingent Buyer Assistance Program
<p>LOL. I have memories of setting up a trap at the end of the hallway at the age of 10. Not only was my private range indoors and air-conditioned, I could recycle the BB's!</p>

<p>I dunno which is more redneck, my doing that or my mom putting up with it.</p>

<p>Who broke the BBS software? </p>
 
<p>I do not know what is up with the forums. zovall has been generous with the moderator capability but even if I had the ability to fix it the techless knowledge I have wouldn't be able to fix it.</p>

<p>Regardless of the redneckness if you had that airgun recycling the BB's would be out of the question. I wish my mom would have let me do that inside. Maybe it was because even then my dad gave me an airgun that was more powerful than the Red Rider. </p>
 
<i>"The actions the fed took so far were liquidity injections & tweaking the discount rate, I don't know if your displeasure is stricly for these measures, or if you are also referring to likely future measures."</i><p>


Janet - I am displeased with the existence of the federal reserve, not just it's actions. This probably sounds extreme, but I would have to quote The Constitution and the ammendment giving the Treasury Dept. the sole responsibility for printing and coining money, and I would have to give historical reference, to back up my position and sound halfway reasonable.<p>


I have never been invovlved in the mortgage business nor may I claim to any more than a slight and mostly ignorant knowledge on the subject. I have no problem with the mortgage industry making any type of loan they want. Caveat Emptor. I do think it immoral for the taxpayers and citizens of the US to subsidize the large institutional banks through mandated interest rates, fractional reserve banking, and money creation through debt. My speculation is that without a fractional reserve banking system, extreme mortgages and offloading sketchy paper would be much subdued.
 
<em>>>I do think it immoral for the taxpayers and citizens of the US to subsidize the large institutional banks through mandated interest rates, fractional reserve banking, and money creation through debt. My speculation is that without a fractional reserve banking system, extreme mortgages and offloading sketchy paper would be much subdued.</em>





I'm assuming, then, that Alan Greenspan is not one of your heros.





With respect to subsidizing banks, I'm not sure I'll call it immoral, but certainly annoying. That said, IIRC (and I may not), part of the reason for the federal reserve is to avoid large swings in the market. For better or worse, our society is a very interdependent one, such that a hurricane in the gulf can effect the cost of construction materials in San Francisco.





Would you recommend a return to the gold or silver standard?
 
I ask that question honestly, not to be a provacateur (believe it or not). W/o the fed reserve, or the gold/silver standard, what else can you use as a benchmark?





{I also believe that the statement above just revealed my total ignorance of the subject.}
 
Eva - Actually I think your statement to be a result of astute perception. Yes, I think the only honest monetary system and tht only monetary system which does not steal from the majority to enrich the powerful is a precious metal standard.<p>


I think Alan Greenspan was either one of the US's greatest fools or greatest liars. Back when Greespan was an Ayn Rand groupie, he wrote a dissertation on the importance of a gold standard. When asked about two years ago, if he still believed what her wrote in his dissertation on the gold standard, he said yes.<p>


I have not been able to figure out what IIRC stands for. At first I thought it had something to do with The Irvine Company, but now I realize it does not.<p.


Yes, the existance of the fed is predicated on the idea that it will avoid large swings in the overall economy. My opinion is that in actuality all the fed does is put off the inevitable, thereby making the swings larger.
 
<p>Ask anyone who works with electronics... If you create a severe enough phase shift somewhere in a negative feedback loop, the loop will eventually turn positive and oscillate out of control. Looking at economic charts which go back 50+ years, the system does look increasingly unstable. Until Magic 8-balls get better, the forward-looking economic data just isn't good enough to accurately set rates in a central fashion. The phase shift which induces the instability is in this data.</p>

<p>I reckon inflation targeting is like driving by looking in the rear view mirror. We haven't hit anything yet, so full steam ahead! </p>
 
Well, whomever wished that we should live in interesting times looks like he/she will get his/her wish granted.





Thanks for the explanation Awgee. I appreciate your help in adding to my understanding.





Also, "IIRC" = "If I recall correctly."
 
<p>Tanta has a <a target="_blank" href="http://calculatedrisk.blogspot.com/2007/08/sunday-morning-reflections.html">pleasant read</a> up this morning.</p>

<p><em>"Some people simply will not behave the way theory says they will. As a risk manager in a financial instutition, I have always had some trouble dealing with this group. As a person, of course, I have always sought them out first in bars and parties"</em></p>
 
<p>One person who got me to think outside the box was <a href="http://www.parida.com/">Pierre Rinfret</a>. He was a highly educated and very successful economist. I didn't agree with everything he said but I respected him for being a straight shooter who gave his opinion without fluff. He has a great and personal take on <a href="http://www.parida.com/aghistory.html">Alan Greenspan</a>, <a href="http://www.parida.com/ab.html">Arthur Burns</a> and <a href="http://www.parida.com/mf.html">Milton Friedman</a>. I wish he was still here today because I would love his take on Helionanke. You can also check out the list of people he wrote about <a href="http://www.parida.com/people.html">here</a>.</p>

<p>I am curious to hear the comments from the IHBr's. </p>
 
<p>This has "awgee" written all over it:</p>



<em>From 1945 until 1991 (when I retired) the Federal Reserve published many critical statistics which proved on examination to be incredibly incorrect. That included such things as the growth of the money supply, the level of capacity utilization in the U.S., the industrial production index, the timing of a business cycle etc. </em>

<em>They made constant and frequent errors in a highly esoteric but vital statistical computations known as "seasonal analysis". </em>

<em>Their data on money supply was so wrong it created the recession of 1960. In June, 1960 they printed and published statistics that the money supply was growing at an annual rate of more than 12 percent. The Fed threw on the brakes, created a recession and one year later revised the data to show there was no such growth! It was the result of their statistical imagination! </em>

<em>In 1987 under the tutelage of Alan Greenspan they raised the discount rate three times in two months, drove the Dow Jones down by 25 percent and created the panic of 1987. They reversed their policy but the damage had been done. </em>

>
 
<p>E-loan's <a target="_blank" href="https://www.eloan.com/s/affordability/calc_afford?sid=r8Fbn9zbLhuC9f2SEvEtSEEhnEU&user=&mcode=">home affordability calc</a> is trying to cram me into a 50% back-end DTI. Could I actually get that loan? </p>

<p>I have no business spending more than 3x my salary, and this thing is telling me that I can afford 5.5x (roughly). WTF?</p>
 
<p>Ahh, <a target="_blank" href="http://www.bankrate.com/brm/calc/newhouse/calculator.asp">Bankrate</a> gets it right.</p>

<p>(Yes, I'm bored...)</p>
 
Just another question for which I truly have no answer. Why do you suppose housing bulls read this blog? I am curious. If you are a housing bull and care to contribute, you would have my appreciation with no recrimination on my part.
 
<p>I hope you don't mean me!</p>

<p>I like to think I'm somewhere in the middle.</p>

<p>I know too much about the mortgage situation to be optimistic.</p>

<p>I am also in the middle politically - as I believe many people are.</p>

<p>You know, fiscally conservative, but socially liberal (after checking Wikipedia - I'm not sure that there is a good label for me!).</p>

<p>I think we folk in the middle are not generally catered-to.</p>
 
Janet - No, I did not mean you, and I had no one in particular in mind. I just have alot of questions about real estate, mortgages, and all the folks involved, and this seems to be a wonderful enviornment in which to ask those questions.
 
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