Comments on: Depression economics explained: Speculative Bubbles

By: Rayne

Rayne — Tue, 14 Oct 2008 04:01:22 +0000

First sign was earlier than that. I couldn’t buy a house in the 250K/2500 sq ft range in 2002, ended up buying not one but two lots between 2002 and 2004 as it would have been cheaper to build a new house than buy a too-small older home and renovate to my spec.

But there weren’t more people in our area; this is Michigan, which has been hemorrhaging jobs for what seems like forever. Why the tight market? Cheap money that made it too easy for under-collateralized people to get into the home-buying market.

By: eCAHNomics

eCAHNomics — Mon, 13 Oct 2008 21:34:34 +0000

One of the first financial bubbles was around tulip bulbs in the 1500’s

Um, if you’d have bothered read your own link, the tulip mania was in 1637. And the 1500s aren’t possessive, they’re plural.

By: PraedorAtrebates

PraedorAtrebates — Mon, 13 Oct 2008 19:39:39 +0000

Let’s hand the economy (prices, etc) to a computer program. It could allow some freedom based on irrational demand but by having no stupid/crazy emotions and no greed, it could be a steady hand. It could be coded specifically to quash any bubbles as they start to arise.

By: tjbs

tjbs — Mon, 13 Oct 2008 19:18:20 +0000

Consider that when we buy items the value decreases with age, i.e. cars, boats most tangibles.
Levittowners sold for $ 9,900. back around the fifties after the last legal constitutional war.( This was with $100.00 down, so when the right that screams you cannot finance 99% they are wrong as usual.)
Now the same house sells for $220,000. on a 1/6 acre.
Who makes out ?
Real Estate Brokers selling and reselling @ 6%
Banks collecting 2 1/2 times the cost of the house, over and over, in mortgage payments
Government with inflated real estate transfer taxs and enlarged property tax receipts.

Who gets the shaft - the kids.

By: rwcole

rwcole — Mon, 13 Oct 2008 19:09:12 +0000

DOW now up nearly 700 points

By: rwcole

rwcole — Mon, 13 Oct 2008 19:08:00 +0000

Dunno either- although the city of Atlanta is 66% african american.

Dekalb county is 39% white

Fulton county is 51% white

Looks like good Obama territory.

By: dakine01

dakine01 — Mon, 13 Oct 2008 19:03:41 +0000

Phoenix Woman up at the Mothership The 2012 campaign has begun

By: Adelwolf

Adelwolf — Mon, 13 Oct 2008 19:01:46 +0000

Thank you so much for this. I appear to have been born without an economic bone in my body, so my understanding of The Shit We’re In has been shakey at best. Now I’m starting to feel like I get it.

Please, bring out the next installment quick!

By: Raven

Raven — Mon, 13 Oct 2008 18:59:01 +0000

Atlanta maybe, Athens fer sure. . .the REAL Georgia, I dunno.

By: rwcole

rwcole — Mon, 13 Oct 2008 18:56:21 +0000

All of these market models rely on the “steady state” hypothesis- that for every set of variables there is a value in the dependant variable that brings every thing into balance- same idea is in “environmental science” with the concept of “the correct number of wolves” concepts.

At any rate, when lenders artificially enable higher purchases- prices go higher- and eventually they go beyond what the artificial enablement can support- and the “steady state” is not so steady anymore.

I once had an economics professor announce that he was leaving the profession cause he determined that “steady states” were bullshit.