watteau

The National Association of Realtors' Fuzzy Math

Another idea for a NAR "Bankruptcy Estimate Calculator".

It works with check boxes.

1. Listen to your realtor. Check.

2. Read NAR info. Check.

3. Let your realtor advise you on a loan. Check.

4. Pay a hefty fee for these services. Check.

5. Receive the approximate date of your bankruptcy.

If NAR was an a person, and an investment counselor, he would be in jail.

The National Association of Realtors' Fuzzy Math

NAR should update their calculator to "how much money can you lose if you buy now", put in a 6,1% depreciation on a house, plus mortgage costs, plus purchase and sales costs (after all, realtor costs strangely don't show up here. Does that mean, that realtors got so shameful of their work that they now work for free)?

Are We Having a Housing Crisis Déjà Vu?

Typo correction (I had a truly long day)

Paragraph three should read:

It (bread) cost so much, that you could not carry the money for it in your pocket any longer.

Are We Having a Housing Crisis Déjà Vu?

Just one detail to get the idea about how wrong the idea of this article is:

How much, do you think, did a loaf of break cost in Germany around 1930?

Answer: several million marks. It cost so much, that you could not carry the bread to the baker any more in your pocket. The money to buy bread weighed more than the bread it bought. Prices rose on an hourly basis.

In the USA the crisis was much more muted, but if you look at the jobless rates, or know the images Walker Evans shot during the depression...

So don't give us such little thought-out notations.

Are We Having a Housing Crisis Déjà Vu?

Why do some authors always grab for a cliche, and not for some cliche, for the biggest cliche available?

To compare the correction of a bubble to the deep, economic crisis following 1929 is just putting two crises next to each other without looking at them more closely.

1929, eleven years after the disastrous end of World War I (which had never let go in Europe since the war ended), with political unrest, right wing parties snatching power in several European countries, a crazy boom on the stock exchange, the lack of many regulations and market stabilizers on one side...

... a correction of crazy prices on the other side. Of course, spending comes down a little, as houses ceased to work as ATMs.

This article has no substance. But it still has an importance. If more and more of this kind get published, they could help create a hysteria of economical fear.

Just a few years ago, the hot air rushed out of the .com bubble. Billions of dollars got destroyed? Billions of dollars? Nonsense. That money never existed but in the books.

Another thought: after building new homes like crazy, that market had to come down. I mean, how many homes does America need? At this very moment, the next emerging market is already building, and the next bubble will come.

It's all a very natural process.

ARM Bailout Unfair to Responsible Borrowers

PS: to the posters who consider this bailout not a bailout: don't you think the rate freeze will cost the mortgage companies money? Just because they might be giving in to government pressure, that doesn't mean it is the best solution or them.

And how do you think those costs will be paid for? Exactly. If you, one day, need a loan for your next house, you will be paying for those, who bought a house without being able to afford it.

Not that I have any pity with mortgage companies. Many will crash anyway. But how about those, who acted reasonable? Who balanced their investments?

This bailout plan not only hurts prospective buyers, who will have to pay artificially upheld prices, it will also hurt reasonable companies, who relied on contracts they made, and which are suddenly not worth the paper they were printed on.

ARM Bailout Unfair to Responsible Borrowers

The bailout only subsidizes the overblown housing prices. It is like helping companies cooking the books. It stems itself against the natural flow of the market. Compare the bailout with a blood clot. When will the stroke come? Shouldn't the government get some exercise in financial responsibility instead?

Thanks to Mr. Bush, Mr. Greenspan, and other economic crash pilots, making unreasonable decisions is rewarded, being financially reasonable, punished.

What bailout comes next? Car owners, who can't make their payments? How about a shopping-bailout after Christmas?

It is the ground of any healthy society to punish unreasonable behavior (or at least to not support it) and further reasonable behavior. Mr. Bush is turning the tables on reason. Unfortunately, we all will have to suffer the consequences, even when the Bush government will only be a spotted chapter in the history books.