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Thread: Greenspan on housing bubble

  1. #1
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    Greenspan on housing bubble

    http://news.moneycentral.msn.com/pro...828&ID=5068146


    Apparently people did nto get the poiint with his last statements on the housing bubble, so he has had to switch to some slightly stronger language. I predict that people will still not get the point (after all, it is just too horrible to contemplate), so he will have to keep using stronger and stronger language until he has to resort to getting up there and starting his speech with "HEY XXXXXX".

    Half the population will later talk abotu the housing bubble as some kind of unforseeable act of god.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

  2. #2
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    I'm actually hoping it "pops" soon. Good time to buy.

  3. #3
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    Quote Originally Posted by GreenMtnBoy
    I'm actually hoping it "pops" soon. Good time to buy.
    As long as you can afford the outrageous interest rates that will inevitably come with that many defaults, or pay in cash, it would be an excellent time to buy.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

  4. #4
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    You know, with all the bubbles I keep hearing about, I get the feeling that the wondrous US Economy is built on foam!

  5. #5
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    Two big asset bubbles in 10 years, little in the way of retirement saving for many people ( at least not tied to their homes now). Massive debt loads of the government and people. With much of the GDP driven by flipping dollars back and forther ( ie Enron).
    So yes the US economy is built on foam.
    Admittedly, the concept of the Straussian text is one susceptible to intellectual mischief in the form of wild claims about the esoteric meaning of texts, not to mention rather off-putting for anyone who doesn’t like know-it-all elites.
    Orthodox Judaism, not to mention other religions: there is a small number of men who know the detailed truth; the masses are told what they need to know and no more

  6. #6
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    Quote Originally Posted by lord tammerlain
    Two big asset bubbles in 10 years, little in the way of retirement saving for many people ( at least not tied to their homes now). Massive debt loads of the government and people. With much of the GDP driven by flipping dollars back and forther ( ie Enron).
    So yes the US economy is built on foam.
    Not foam, just massive debt and completely unsupportable consumer confidence. Massive debt as a foundation for your economy is far more like a large stone....tied to your feet....in the middle of the ocean...than foam.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

  7. #7
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    Greed and XXXXXX, thats how you get a housing bubble.

    The Fed. Releasing more funds (printing money and having the presses overheat) will slow the economic meltdown if not fix it. If you can't lower the price of a home, deflate the dollar to a point where the market can recover.

    The problem is; those on fixed incomes and the new minimum wage law recipient's will be living off dog food.

    How could the Fed. have thought housing would not burst? People can't role over houses they could never afford forever. At some point the even the interest only loans would become unachievable for the market.

  8. #8
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    Quote Originally Posted by richbrmly View Post
    Greed and XXXXXX, thats how you get a housing bubble.

    The Fed. Releasing more funds (printing money and having the presses overheat) will slow the economic meltdown if not fix it. If you can't lower the price of a home, deflate the dollar to a point where the market can recover.

    The problem is; those on fixed incomes and the new minimum wage law recipient's will be living off dog food.

    How could the Fed. have thought housing would not burst? People can't role over houses they could never afford forever. At some point the even the interest only loans would become unachievable for the market.
    Extending credit to bail out a segment of the economy that is in trouble because of bad debt is about the stupidest thing I have ever heard. It is a good temporary measure that will give the financially savvy a chance to get out and dump the problem on those who are not as knowledgeable about economic matters. In the end that is pretty much all it can possibly do. This has not even hit the derivatives market yet. It will…it HAS to, it just isn’t there yet.
    If ye love wealth greater than liberty, the tranquility of servitude greater than the animating contest for freedom, go home from us in peace. We seek not your counsel, nor your arms. Crouch down and lick the hand that feeds you; May your chains set lightly upon you, and may posterity forget that ye were our countrymen. —Samuel Adams

  9. #9
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    I believe there is such a high percentage of our population that will be damaged by the housing issue, that the Fed. will indeed damage the value of the dollar to accommodate the over priced houses on the market. If you think about it, its the Obi Wan Canobi ("Our only hope": Stars Wars) of the mortgage industry. The more financial institutions that claim bankruptcy directly means there are dollars in the economy that will never be redeemed to the Fed. This alone would deflate the dollar but this will not be enough to bounce housing into marketability. If housing stays unmarketable and people are forced into actually having to pay a note on their homes, the economic catastrophe will be one for the worlds history books. The scale of families living in homes they could never finance conventionally is massive. This is fine if housing where to continue its climb. But if at any point, housing stagnates, huge populations of home owners would be crushed when their respective special financing comes to term. When buying a home, it might be a good idea to see what the average income is for the area your buying. How many people in your area have the ability to come in behind you and carry the note? Looking at the average home costs in an area against the average incomes...Clearly one can see an issue that is not going away with out some painful readjusting. What does it mean in the end?? Fixed income people had better get used the the taste of cat food.

  10. #10
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    Damaging the value of the dollar to bail out X group is what the fed does, it's ALL the fed does. Wall Street wins, real estate investors win (except the suckers who get in the game too late), people who save money lose.

    But even the fed can't change economics, it can't keep interest rates down forever.
    He or she who supports a State organized in a military way – whether directly or indirectly – participates in sin. Each man takes part in the sin by contributing to the maintenance of the State by paying taxes.

    ~ Gandhi

  11. #11
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    There is one good side effect to crushing the dollar. U.S. Labor will begin to be competitive on the world market. But, it will be effectively slave labor if salaries don't adjust. Makes me wonder if it wasn't a plan all along. Bernaki printing over two trillion for housing? The circumstances do tend to make me wonder.

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