Rebirth of Reason

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Thursday, May 8, 2014 - 1:40pmSanction this postReply



I like the way you compared the housing bubble to the stock market.  If, as I think will happen, the stock market proves to be the next major bubble  - meaning that it too will have a day when it bursts, and then we will see the politicians doing the same dances - trying to prop up high prices.  It shares with the housing bubble the artificially low interest rates and the injection of large quantities of fiat money.

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Thursday, May 8, 2014 - 10:17pmSanction this postReply

So many people over leverage their assets into housing that have swallowed the mantra " houses always increase in value".  Because of artificially low interest rates and incentives they often buy a house that is 8-10x their gross annual salary.   This is madnessssssssss!  As a rule one should never spend more than 1.5-3x your gross on a house ever.  Also another rule I learned.  The rule of 90.   Subtract your age from 90 that is the MAXIMUM amount of your total assets that should ever be allocated to housing at any point in your life.   Sadly there are many people near retirement that have 70-90% of their assets in their home.  Some even still owe money on that house which has become a hard to sell non-liquid asset.

   Another consequence of the artifically low interest/buyers incentives...10% down, 5% down. Hell even 0% down.   If a person buys a house and is spending everything just to make payments if interest rates increase even 1% they are screwwwwwwweeed!

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Saturday, May 10, 2014 - 10:45pmSanction this postReply

A bubble is full of nothing.   


Just watched The Apartment with Jack Lemmon.  Set in NYC in 1960.   He earned 95 dollars a week and his huge apartment was 85 dollars a month.   He paid less than one weeks salary for his monthly rent in the city. My son said he wished.  The real measure of inflation as hidden taxation is the story of working harder and netting less.   Value proxies gamed and value bled from the nation.


Massively.  What species does this to its young?


In 1977 a year at Princeton for everything was maybe $5000/yr and was one of most expensive schools.


Starting salary out of college was comfortably more than full cost of four years.   Today's grads would need to find starting salaries of well over 250000/yr and more for same margin.  Not common.


The absolute greediest back climbing scum in the nation have clawed their way to power in DC  and are bleeding the nation ... have bled the nation...for all it is worth and then some.   Not satisfied with spending all there is they are and have been well into spending all there will be.


Chinese venture capital picking over the bottom of the tech barrel.  Tech breeds demand for tech...long shifting out of US.   End game here. USA is new  UK empire in long term decline for last 50 years.


Endemic inflation totally driven by government schemes, plural. Nation gutted.

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