Boomers cant afford they houses. boo hoo

Discussion in 'General Discussion' started by internetman, Jun 17, 2019.

  1. Sigmapolis

    Sigmapolis Well-Known Member
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    I think you are kind of a lovable crank, @ArgentCy, sort of in the Ron Paul mold, but many of your posts remind me of this lovely David Romer quote...

    "Everything reminds Milton Friedman of the money supply. Everything reminds me of sex, but I don't put that in my textbooks."

    Your point about using monetary policy to fight against rising real interest rates temporarily and how easy credit leads to "mal-investment" in nonproductive assets in the Von Mises sense is well-met, however. I just think the market catches up with you eventually, which you seem to agree with. The Fed ran easy credit in the 1990s and early 2000s, pumped up a stock market and housing market bubble in the process in the name of boosting the economy, and the whole thing caught up with them circa 2008. I am sure you would say we are in a similar cycle now -- re-pumping the bubbles and engendering an even harsher reckoning.
     
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  2. SpokaneCY

    SpokaneCY Well-Known Member
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    Interesting idea for a separate thread - compare and contrast our last financial crisis with current markets...
     
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  3. ArgentCy

    ArgentCy Well-Known Member
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    Real Estate is not a liquid asset. Probably one of the most illiquid assets and therefore it also has one of the longest cycles. This isn't a new credit cycle but the completion of a much longer cycle. It's the same cycle just unraveling more strands of the system that were used to build the bridge.

    To expand, 2008 saw some of the first serious structural flaws develop. The FED was able to stabilize the system with huge credit influx and interest rate manipulations. They aren't, however, able to fix the structural flaws.
     
  4. Sigmapolis

    Sigmapolis Well-Known Member
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    That would probably be a Cave thread.

    People in there ***** about there being any math involved, so I am just repeating their wishes.

    Things are “frothy,” however.
     
  5. Gunnerclone

    Gunnerclone Well-Known Member

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    You can’t. We’re at a point where every financial crisis will be something new that (outside of a tiny few people as in the last crisis that run up to it almost by accident) couldn’t be predicted. It’s hidden until it comes out.
     
  6. SpokaneCY

    SpokaneCY Well-Known Member
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    That's why I'm no longer welcome within 500 feet of an elementary school.
     
  7. Sigmapolis

    Sigmapolis Well-Known Member
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    There are some parallels. We are still over-leveraged as a society in housing.
     
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  8. cyputz

    cyputz Active Member

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    Well, ... this boomer is waiting to see recent movements. And buy additional nicer homes. I will be ready.
     
  9. I-stateTheTruth

    I-stateTheTruth Well-Known Member

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    I'm just outside of "boomer" designation. And I'm about to pay off my mortgage.

    And I know how to use the word "their".
     
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  10. AlaCyclone

    AlaCyclone Active Member

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    #250 AlaCyclone, Jun 20, 2019
    Last edited: Jun 20, 2019
    Totally agree about the Spanish! I took it in High School (in Florida) and @ Iowa State. Muy util! The other class that I took that was Particularly practical was High School Typing! Just knowing how to type without having to hunt and peck has made work life so much easier over the years. As for my B.S. From Iowa State, my History Major was at least interesting to study!
     
  11. Doc

    Doc Comrade Laski
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    We get it already, boomers.
     
  12. internetman

    internetman Well-Known Member

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    good 4 u. most boomers only no the word "mine"
     
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  13. internetman

    internetman Well-Known Member

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    #253 internetman, Jun 21, 2019
    Last edited: Jun 21, 2019
    i have editted this joke it was too awesome for this .com. i will use it on the stage insteed.
     
  14. I-stateTheTruth

    I-stateTheTruth Well-Known Member

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    You seem to want to categorize an entire generation as d***s so I'll just go ahead and say that I think you mean "know".

    That said, I understand how the housing market in many areas of the country is really complicating things for younger members of our society.
     
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  15. CascadeClone

    CascadeClone Well-Known Member

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    There was a great Economist article circa 2006 talking about the housing bubble, and it reviewed historical bubbles in different countries. Basically it found that on average it took 5-10 years to recover housing bubbles, due to the illiquid nature of the asset class, as well as the political aspects of throwing people out of homes, making sure banks didn't collapse each other, etc.

    Unfortunately, I think we are doing the same again, since the fundamental causes haven't changed. Although I worry more about student loan debt. The fundamentals of that are really screwed up, with all kinds of perverse incentives and unintended consequences. Someone is going to get elected by giving that all away, and I am going to end up paying for it.
     
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  16. Sigmapolis

    Sigmapolis Well-Known Member
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    #256 Sigmapolis, Jun 21, 2019
    Last edited: Jun 21, 2019
    The moral hazard of student loan forgiveness is rankly unjust, to me.

    (1.) I did college on a Moneyball plan -- JUCO to start, took 21 credit hours, went to Iowa State and lived at home (a cheap school when I could have went elsewhere) worked hard on applying for scholarships and assistantships, and made it through both undergraduate and graduate school without any debt, and it felt good to do it when I finished.

    (2.) Then... turned around and paid off my wife's debts from undergraduate and medical school right before we got married with the rainy day fund I built up my first five years of working. I do not know the exact number, but it was close to $200,000. So I managed to do college on the cheap and pay off about as large of a loan bill as one can.

    Yes, she is a doctor and has a high income expectation in the future, but her income (as a full-time student) was $0 per year when the transaction took place. I paid it.

    How does our society respond?

    People who did not make as good of decisions or be as disciplined about working and managing their finances get a nice, fat bailout from the taxpayer.

    I guess I should have bought more hookers and blow and been less prudent.

    The outcome is the same.
     
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  17. xr4ticlone

    xr4ticlone Well-Known Member

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    Disagree...it's always going to be something stupid that makes no real sense.

    People quitting their jobs & 'day trading' stocks that can't balance a checkbook
    Tens of millions thrown at anything with a .com behind it
    Loaning money to anyone who can fog a mirror for...houses.
    $2 Trillion in loans for college majors that provide no employment opportunities to anyone who wants to go to college.

    We've built an economy on loaning money on everything, where everything has to go right to see a return...and we live in a world where it's all but guaranteed that everything isn't going to "go right".

    The truth is economics & finance are not well understood by 85% of Americans...even many in those fields. Worse, it's become a big game where nothing is real, and if you're ok with screwing people & not paying your bills it'll benefit you.

    The neighbors who ran up big debts & went broke in the 80's due to overspending, over leverage, and poor management are better off than my folks who lived within their means, worked 2 & 3 jobs, and saved diligently.

    My problem is I can't live like that. I pay my bills, live within my means, and don't want to be highly leveraged. I like not having to worry about who I run into on the street...or that no one is looking for me.
     
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  18. BCClone

    BCClone Well-Known Member

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    Sig, you have to look back on paying off the wife’s loans before marriage and shudder just a bit don’t you? If she would have filed for divorce in a year or two or worse got cold feet and not gotten married, that would have hurt. I did something similar, but much smaller, and now realize how dumb that was. We are still married so it was ok, but still not a wise move.
     
  19. Sigmapolis

    Sigmapolis Well-Known Member
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    I wuv her so much, though.
     
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  20. KnappShack

    KnappShack Well-Known Member

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    Dude. Nothing but Loan Sharks and Mafia in your area?
     

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