What is Digg?50 Comments
- edstate, on 11/07/2009, -6/+41Yes! They should've just let it tank and get it over with. But nooooo. They had to steal billions and billions from us taxpayers, filter it through a fat bureaucracy, and give it to idiots who didn't behave, or even think. Now the FHA is sporting a ridiculous amount of new loans, Freddie and Fanny are now ***** LANDLORDS because nobody can understand the fact that HOUSING IS NOT A RIGHT. Government likes it because it gets them property tax monies (and if you think that's not really the reason for the bailout cycle here, you're kidding yourself). But all this "propping" up of various industries is economic folly. It is absolutely irresponsible, and it's going to ruin us.
***** enough already. - Animan351, on 11/08/2009, -2/+27I may be greedy, but I hope housing tanks bad. I'll be looking to buy in the next couple years and it would be nice if the overinflated costs of a house continue to drop.
- smemily, on 11/08/2009, -0/+22Housing HAD to crash in some areas - I was living in St. George Utah 3 years ago and with a median family income of some $40,000, the median house price was over $400,000. In other words, the median family wasn't anywhere near close to affording the median house - the people who could afford the median homes were move-ins. Retirees. The cheapest non-mobile homes on the market were over $120,000 - for an 800 sq foot townhouse with HOA. Want your own lot and your own walls? $200,000.
Even worse most of the good paying local jobs were in construction - which means the economy was growth-based. As soon as it stops growing disproportionately to other communities, construction stops, jobs are lost, and people are really *****.
When I was there I could see it wasn't sustainable. It was OBVIOUS. You cannot sustain an economy that's based on 10% year on year growth. You can love it while it's booming but no town anywhere will keep up that growth consistently. No surprise they are well above the national foreclosure rate now.
http://www.mainstreetbusinessjournal.com/articlevi ...
Actually that's making me think, housing there for a few years was almost like an MLM scheme. The prices and the profits depended on continuous growth in the market of buyers, and that CANNOT continue indefinitely. You will run out of buyers eventually. - milsorgn, on 11/07/2009, -3/+18oh noes our consumption based economy is going ***** up... again!
- dystra, on 11/08/2009, -0/+11I wish the tuition bubble would burst.
- GraceMolloy, on 11/08/2009, -0/+10it probably can tank the economy again. But if you do actually have some money to spend at the moment, it's a buyers market. I know I would have a much harder time buying a house right now if things were like they were 3 years ago.
So at least as far as I'm concerned. Thank you ***** economy. I love my new house. - catalysis, on 11/08/2009, -3/+13The housing bubble was caused by speculators. ARM loans are just a convenient scapegoat, because they were naturally the first to default after the bubble burst and speculators stopped buying. The fundamental problem with the housing market is still the same. Wages have not increased in a decade and the average price of a home is at least 5x the median salary and much worse in some places.
- jrm125, on 11/08/2009, -3/+13Probably.
We're so *****. - insomniacal, on 11/08/2009, -3/+10No worry, China's got plenty more money to lend us.
- Confdence, on 11/08/2009, -0/+7Government spending and policy is the only thing that is saving GDP right now. The 1st time home buyer tax credit, 0% interest rates and monetary policy used by the Fed to inject money into the markets won't last forever. There are only 2 possible outcomes either we stimulate everything for as long as possible until the dollar is used better as firewood or we pull back the reigns and cause the inflated demand to crash.
There is a shadow inventory held up by banks that would flood demand, commercial real estate problems are looming, the dollar will soon be dropped as the reserve currency, banks are still participating in risky behavior like nothing happened and unemployment will continue to erode confidence and spending.
I think there is a second leg down coming both from the housing market and equity markets. I don't think that the propping up in markets by the government will be able to convince people that all is well, the Recession is over and get people over borrowing and over spending again. I'm not sure on the timing of the next leg down, but it is coming. - RobertL, on 11/08/2009, -0/+5You're right on in this assessment Confidence. I'm confirming the commercial debacle via conversations with friends in the banking industry. One of whom is going to be unemployed very soon because of the commercial debacle you mention.
I think the commercial real estate problems (about 2 trillion dollars worth... they will be announced after the new year) are going to push up interest rates so the 5% stuff they talk about in the article will soon be history.
Right now, if you force banks to require 20% down and charge 8% interest you force the average value of a home in this country to $100k or less. That's another 50% dive in home values and when that happens you're going to see a new round of foreclosures. Foreclosures caused by homeowners walking away from their mortgages because they owe twice as much as their home is worth. Why keep paying those huge payments. Now you can rent or purchase another home at half what it costs now. - voisine, on 11/08/2009, -2/+7No, no, it doesn't work that way. Bailouts and stimulus prolong and slow down the correction. The fact is economic mistakes were made. Too many resources were poured into housing due to all the easy money pumped in to stimulate us out of the '00-'01 nasdaq crash. No amount of government intervention can make that fact go away. The sooner the market is permitted to liquidate the bad investment, the sooner we can get back to a stable economy. This is what the people who *predicted* the housing crash back in '05 and '06 are saying now. In 1921 we had a huge market crash, the government did nothing and we were over it in 18 months. After the *smaller* crash in '29 the government did everything it could to intervene and we didn't recover for a decade and a half.
- runchummey, on 11/08/2009, -1/+6Guess what?
I have a friend in real estate here in L.A. that is Asian. He tells me that Asians are buying properties by the packages throughout the US. They consider property a good buy now compared to prices in their countries.
So some of that foreign debt is coming back into the US after all, propping up RE prices. - sinurgy, on 11/08/2009, -0/+5ProTip: If you can't sell your house, it's because you're asking too much for it.
- Technopundit, on 11/09/2009, -0/+4What are we going to do when those Chinese buy up all the real estate and take it to China?
- edstate, on 11/08/2009, -0/+4"The fundamental problem with the housing market.. wages have not increased in a decade and the average price of a home is at least 5x the median salary and much worse in some places"
This should be plastered in every every city and every town town in the US. This is the only point that matters. Housing, all-in, should be between 20% and 30% of a persons' NET income. And our GOVERNMENT is pushing people to go way, way beyond this limit. Which is absolutely insane. - craftylefty18, on 11/08/2009, -0/+4Posting on an internet site makes one an expert on politics and the economy.
- jarrisondiggs, on 11/08/2009, -0/+3This is why i invested in a box under an overpass. Location. Location. Location!
- rignopolis, on 11/08/2009, -0/+3Wow, someone on Digg who actually knows what they're talking about. Pretty rare these days.
- carlosos, on 11/08/2009, -0/+3It is always fun when I see people that bought a house for $250K and a year later want $350K because they want to make a profit and pay off all their debts.
- runchummey, on 11/08/2009, -1/+4Wait until they factor in the failing commercial real estate market and those sour loans come to light. This is a real crisis brewing for the banking industry under the radar.
Don't hear much about that from the MSM, do ya? - sangjmoon, on 11/08/2009, -2/+4The housing market was artificially pumped up by giving people who normally don't qualify for home loans those loans. It came as no surprise that these loans turned out to be worth less than the investment vehicles that packaged them traded at. The current crisis is a correction to the overinflated value of loans that never should have been allowed in the first place. Current attempts of the government to "help" the housing market try to print money to replace the money supply evaporation caused by this correction. The only way this can avoid being another bubble is if the underlying true value of the housing sector catches up with the printed money before the negative side effects of printing money become too severe. With unemployment breaching 10% and credit still being relatively tight with the government not really helping with its attempts to "help" us, the long term negative impact of the government's strategy look like to be with us for years at least.
- carlosos, on 11/08/2009, -0/+2When the sun comes from the side than he has solar heating!
- Catchpen, on 11/08/2009, -0/+2Along with other influences yes.
- rignopolis, on 11/08/2009, -0/+2It'll tank right along with massive inflation. If you can afford a 20% rate on that mortgage, it might work out.
- Kate1240, on 11/08/2009, -0/+2yeah, but do you have heat? :)
- Barackalypse, on 11/08/2009, -0/+2You might want to stop praying to the Government:
"New single-family home sales fell 3.6 percent " (in September)
http://news.yahoo.com/s/nm/20091028/bs_nm/us_usa_e ... - Berkana, on 11/08/2009, -2/+4A "weak housing market" means fewer people are borrowing money to buy homes, and since our entire monetary system is based on people *borrowing money into existence* (fractional reserve banking), this means our money supply will continue to contract as existing debtors pay off their debts without new debtors borrowing more money into circulation. Monetary contractions ALWAYS lead to recessions, and prolonged severe contractions become depressions. See this for background:
Money as Debt II
http://digg.com/business_finance/Money_As_Debt_II_ ...
The solution is not to get more people to borrow money; the solution is to take the power to issue money away from the banks (who issue check-book money and credit when money is borrowed to buy homes and cars), where the amount of money in circulation depends on fickle things like how likely consumers are to borrow, and return it to the government, which is the only entity that should have the power to issue money. Commercial banks presently issue 95% of the money we have in circulation, and they do so for their own profit, issuing it only as debt that accrues interest. (The last 5% is issued as Federal Reserve notes--your cash and coins--used to buy Treasury bonds, indebting the Government for which you pay the interest by your income tax.) Money should only be issued to meet the needs of commerce; any issuance of money beyond that just causes inflation. (Concomitantly, the government should not spend money on things it does not have the political will to raise taxes to fund, such as long term wars and nation building.) - brad3378, on 11/08/2009, -1/+3If there's one thing to learn about how the government spends money, it is that a crisis (real or perceived) makes it easier to justify deficit spending to the voting public. The 9/11 tragedy made it easier to justify war spending and the financial crisis made it easier for the republicans to justify their 2008 economic stimulus checks and for the dems to justify their own stimulus package. Now that the Republicans are complaining about high unemployment, they are only making it easier for the Democrats to justify spending even more money in an attempt to save jobs!
If the Republicans quit complaining about the latest crisis, the Democrats wouldn't be able to justify spending money to make the problem go away. If the Republicans really wanted to see government spending decrease, they would play along nicely. When people like Glenn Beck blow ***** out of proportion, they are just creating another perceived crisis for the Dems to "fix" with more tax money.
The Republicans are in an awkward spot.
If they don't criticize the Democrats, they could lose even more political power. If they do criticize the Dems, they risk encouraging the Dems to increase deficit spending (something they are guilty of themselves). They are basically damned if they do, and damned if they don't. - Kate1240, on 11/08/2009, -0/+1Supply and demand..
- inactive, on 11/08/2009, -1/+2Digg.com...where FACTS get buried.
- jpartridge, on 11/08/2009, -3/+4Your memory is a little backwards there, bagdouche.
- BigIguana, on 11/08/2009, -1/+2Its interesting that they are making the assumption that the economy has recovered so it can tank again. Digg me down but I dont see a real recovery before 2012.
- undervalued, on 11/08/2009, -2/+3The economy is diving a tank, unfortunately it seems to have driven off a pier.
- Technopundit, on 11/09/2009, -0/+1We're screwed.
- gkiltz, on 11/08/2009, -0/+1Housing?
Possible, but unlikely.
Housing has still not fallen to it's historic ratio to income. Especially on the rental side.
What's dangerous right now is this:
The economy is still too weak to sustain $3/gal prices at the pump.
Wall Street is "Gaming" the oil markets again, even as demand remains soft
If oil prices get too high, we'll be right back where we were a year ago.
Housing will line it's prices up to the new economy once a period of stability is reached on oil.
These wild gyrations mean that families and businesses have to stash away cash, and free up credit in order to cover that unpredictability in oil prices.
If we can get oil to stabilize, at least within a certain fairly narrow range, then people and small businesses can predict expenses, and can think long term.
Until then, they can only react. - Technopundit, on 11/09/2009, -0/+1Whenever the Republicans get low on money, they spend four times more.
- imbobbyus, on 11/10/2009, -0/+1But when did the economy improve?
- regeya, on 11/12/2009, -0/+1Carter INHERITED an economy in shambles. Vietnam debt, tanking currency, etc. etc. etc. all happened BEFORE Carter was in office. Carter was a douche, yeah, but you can't blame everything on him.
Other than that...you're right, it's not a partisan issue. Personally, I think the REAL issue is that too many people seem to think the President is a dictator and is therefore responsible for everything wrong with the country... - allisonV12, on 11/09/2009, -0/+0ain't that the truth.
they're full ***** and I still cant believe people fall for it over and over. - Technopundit, on 11/09/2009, -1/+1Ya what are we gonna do when people "loose" their money? What are ya, stewped? Didn't you ever go to skool?
- arunforce, on 11/08/2009, -3/+3That's your opinion. It's not a fact that there is a "needed correction." The fact is that it WAS a recession and not a depression means a lot more about spending our way out of a depression. I don't think we are out of the woods just yet, but I think a lot of less worry is over the general mind of the population. Barack Obama "predicted" the housing crash too, doesn't mean that you have to take advice from him. I'm sure the signs were obvious to many, it was basically gambling.
There are PLENTY of market crashes, it's nothing new: http://leatherheadblog.com/2008/09/30/top-10-marke ...
You are trying to compare a average of -86% to -46% and think that somehow a nearly double loss should be made up faster? I fail to see the logic. Besides, you are comparing apples and oranges. We are talking about the HOUSING market, people would be out in the streets. Banks would fail when these mortgages aren't paid. People would loose their money that is in the bank. Banks wouldn't be able to make loans or repay the massive amounts of withdraws. Businesses of all sizes might start tanking, and the ones that need money wouldn't be able to secure funding to invest or expand, or pay for people's paychecks. People couldn't afford to put food on the table. And then you'd be one of those people standing in line expecting the government to come and help and feed you... If people's paycheck stop, people's spending stop.
The mindset for the Americans might change to NEVER TRUST A BANK, so people can't step in and start new banks. I don't think you grasp the full idea of this bailout. Then the government would have to allocate A LOT more than this bailout cost just to fund all loans and businesses, and unemployment checks, and FDIC tanked bank payments.
But then again, I'd put my money every time on the economists with the Ph.Ds at Washington rather than some random guy on digg. - BerateBirthers, on 11/08/2009, -2/+1Right-wing WHAAAAGBL gets buried. The housing market crashed because the right-wingers let their friends on Wall Street go unregulated. It's not going to happen again because Obama is now in charge.
- smashTasker, on 11/08/2009, -12/+10The economy will tank again if republicans ever get back in power. It happens every time if you just look at history.
- ctpatriot1970, on 11/08/2009, -7/+4Ok the last bubble was when the 3yr adjustables came due and hmmm when was that? so when will the 5yr adjustables come due? just hope the retail bubble doesnt burst at the same time... But hey we sould that the " community re-investment act" ask Barney Frank or Maxine waters...
- inactive, on 11/08/2009, -7/+1ahhhhh...the ignorance of children.
LEt's see....Carter gave us an economy in shambles. Reagan helped build it up. Didn't leave it so strong. Bush Sr. left it in shambles. Like Reagan, Clinton built it up (or really the internet did) and didn't leave it so strong. Bush Jr. built it up and didn't leave it so strong.
So...whre is the partisan trend here? - joculator, on 11/08/2009, -8/+2it's all a scam to pay for the war
- xwatermelon, on 11/08/2009, -6/+0You're so badass and all using the F word.
- inactive, on 11/08/2009, -8/+1I love how every idiot on Digg is apparently under the impression that the housing market crashed in all parts of the country.
MOST areas saw only a small drop in price. Certianly not a crash. Some, including where I live, saw business as usual with prices increasing at a reasonable pace. It was very few areas that saw it actually "crash"
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