awgee_IHB
New member
Here are a few questions, a few rants, and some nonsense that I want to get off my chest.<p>
lendingmaestro - Does the outflow of deposits from Countrywide Bank have any effect on Countrywide Finance's ability to make loans? Reserve requirements?<p>
On flippers - I resent the resentment toward flippers. Who is anyone else to say how one person should spend their money and/or credit? Some folk complain that flippers add nothing to the real estate market. So what? Since when did become a requirement to add value to a commodity in order to trade in that commodity. Is it immoral to trade a stock? I can not imagine somone can imagine they have added value to a stock as one trades it. I don't celebrate in in a flipper losing money on a transaction, nor do I feel burdened when a flipper makes some dough. I have never flipped a real estate property, not because I have anything against it. It just isn't my thing.<p>
On the present credit crunch - I find it incredulous that folks can say things like, there will always be mortgage money to lend, or the Fed can always fix a credit problem, or the credit problem is being blown out of proportion because subprime loans are only a small part of the overall economy, or a banking crisis is impossible because we are smarter now and there is the FDIC and the Fed and the (fill in the blank). When one understands where currency comes from, one knows the previous statements are relayed in complete and abject ignorance. Do the folk who spew such nonsense know the history of fiat currency in the world?<p>
Next, the federal reserve is not primarily concerned with inflation as helicopter Ben likes to pronounce. Central banks, including the federal reserve, are the source of all monetary inflation. Yes, all monetary inflation. Not price increases. Prices increases are not inflation, price increases are price increases and are the result of monetary inflation.<p>
Homes have not increased in value. Homes have increased in price. The value of a 3 bedroom, 2 bath, 1800 sq. ft. home was no different in 1980 than it is in 2007. I have heard it said that the present generation knows the price of everything and the value of nothing.<p>
When Cramer went on his rant, he expressed passionate concern for his broker buddies and expressed no concern for the folks losing their homes due to foreclosure. It is disingenuous for him to now backtrack and say he wants the Fed to lower rates so the little guy doesn't get hurt. I don't believe that for a second and based on his passionate outburst, I believe the opposite to be true.<p>
Lowering the Fed funds rate will not help folks who will lose their homes due to their ARMs adjusting. Trying to refi a property that is worth less than when the original loan was initiated is an exercise in futility. It is highly unlikely that home prices will reverse direction anytime soon if history is an accurate indicator. The only thing, and I mean <b>the only thing</b> lowering the Fed funds rate will do will be to increase the fees and commissions for the investment bankers as they find the next asset to inflate.<p>
Just as I have no resentment for flippers, I have little to no sympathy for those who overextended themselves to buy real estate. 99% of them knew exactly what they were doing and were trying to get in on the housing inflation boom. It was greed, pure and simple. Just because someone has a dream to owe on a mortgage does mean they can afford it nor are they owed that dream. There is nothing honorable about wanting to own your own home. It is just a want. I have been upside down on a mortage so I know how it feels, and the feeling is irrelevant to whether or not the overextended should be bailed out. There is no way to bail out anyone without costing those who save. The only way to bail out a person in trouble or an institution in trouble is to take from someone else. The most efficient and cost effective way to bail out the overextended mortgage debtors is to directly give them tax money or money printed by the Fed. But that would be perceived as immoral by the vast majority of the American people, ( as it is also perceived by me), so the Fed will lower rates or or find some other way to make it look like the Fed is doing something which is not obviously immoral. But, Fed intervention will only serve to steal from the majority through inflation and give to the rich and powerful, as always.<p>
Prices do not really increase, except in the case of specific commodities which become more rare. What looks like price increases are actually just currency devaluation. Ditto wages.<p>
On the profound saying, "They aren't making any more land." That is just plain stupid. There is a huge amount of land in this country and other countries and the fact that no more is being created is irrelevant to the price of land. The price of the land is determined by the cost to develop it and it's desireability.<p>
lendingmaestro - Does the outflow of deposits from Countrywide Bank have any effect on Countrywide Finance's ability to make loans? Reserve requirements?<p>
On flippers - I resent the resentment toward flippers. Who is anyone else to say how one person should spend their money and/or credit? Some folk complain that flippers add nothing to the real estate market. So what? Since when did become a requirement to add value to a commodity in order to trade in that commodity. Is it immoral to trade a stock? I can not imagine somone can imagine they have added value to a stock as one trades it. I don't celebrate in in a flipper losing money on a transaction, nor do I feel burdened when a flipper makes some dough. I have never flipped a real estate property, not because I have anything against it. It just isn't my thing.<p>
On the present credit crunch - I find it incredulous that folks can say things like, there will always be mortgage money to lend, or the Fed can always fix a credit problem, or the credit problem is being blown out of proportion because subprime loans are only a small part of the overall economy, or a banking crisis is impossible because we are smarter now and there is the FDIC and the Fed and the (fill in the blank). When one understands where currency comes from, one knows the previous statements are relayed in complete and abject ignorance. Do the folk who spew such nonsense know the history of fiat currency in the world?<p>
Next, the federal reserve is not primarily concerned with inflation as helicopter Ben likes to pronounce. Central banks, including the federal reserve, are the source of all monetary inflation. Yes, all monetary inflation. Not price increases. Prices increases are not inflation, price increases are price increases and are the result of monetary inflation.<p>
Homes have not increased in value. Homes have increased in price. The value of a 3 bedroom, 2 bath, 1800 sq. ft. home was no different in 1980 than it is in 2007. I have heard it said that the present generation knows the price of everything and the value of nothing.<p>
When Cramer went on his rant, he expressed passionate concern for his broker buddies and expressed no concern for the folks losing their homes due to foreclosure. It is disingenuous for him to now backtrack and say he wants the Fed to lower rates so the little guy doesn't get hurt. I don't believe that for a second and based on his passionate outburst, I believe the opposite to be true.<p>
Lowering the Fed funds rate will not help folks who will lose their homes due to their ARMs adjusting. Trying to refi a property that is worth less than when the original loan was initiated is an exercise in futility. It is highly unlikely that home prices will reverse direction anytime soon if history is an accurate indicator. The only thing, and I mean <b>the only thing</b> lowering the Fed funds rate will do will be to increase the fees and commissions for the investment bankers as they find the next asset to inflate.<p>
Just as I have no resentment for flippers, I have little to no sympathy for those who overextended themselves to buy real estate. 99% of them knew exactly what they were doing and were trying to get in on the housing inflation boom. It was greed, pure and simple. Just because someone has a dream to owe on a mortgage does mean they can afford it nor are they owed that dream. There is nothing honorable about wanting to own your own home. It is just a want. I have been upside down on a mortage so I know how it feels, and the feeling is irrelevant to whether or not the overextended should be bailed out. There is no way to bail out anyone without costing those who save. The only way to bail out a person in trouble or an institution in trouble is to take from someone else. The most efficient and cost effective way to bail out the overextended mortgage debtors is to directly give them tax money or money printed by the Fed. But that would be perceived as immoral by the vast majority of the American people, ( as it is also perceived by me), so the Fed will lower rates or or find some other way to make it look like the Fed is doing something which is not obviously immoral. But, Fed intervention will only serve to steal from the majority through inflation and give to the rich and powerful, as always.<p>
Prices do not really increase, except in the case of specific commodities which become more rare. What looks like price increases are actually just currency devaluation. Ditto wages.<p>
On the profound saying, "They aren't making any more land." That is just plain stupid. There is a huge amount of land in this country and other countries and the fact that no more is being created is irrelevant to the price of land. The price of the land is determined by the cost to develop it and it's desireability.<p>