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View Diary: 60 Minutes Gets It (212 comments)

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  •  And what's wrong with housing prices dropping? (23+ / 0-)

    That has the effect of making homes affordable to the working class, whose real wages have been dropping since about 1974.

    If we wipe out the shady & fraudulent mortgages, and mark those properties to market, the effect will be to reset the home market at a level consistent with today's wage levels.

    As for "oh, my retirement!," that's what pensions and Social Security are supposed to be for.  Anyone who bought into the "house = retirement" scam and gets stuck on the downside of this situation can be made whole by some kind of additional government entitlement program designed to enable them to continue living in their house for the rest of their lives if they choose.  

    House = home.  

    House != ATM.  

    •  Hear hear! or Here here!... (9+ / 0-)

      And can we drop the prices of apartments while we're at it? In L.A. where every other building has a "For Rent" sign on it, a crappy, tiny one bedroom in a sleazy, disreputable neighbor is still going for $900 a month.

    •  Agree: It was a fucking bubble! (3+ / 0-)
      Recommended by:
      mojo workin, G2geek, dreamghost

      Why pump it up for it to explode all over again?

      Ideology is an excuse to ignore common sense.

      by Bush Bites on Sun Apr 03, 2011 at 06:44:54 PM PDT

      [ Parent ]

    •  The bubble ain't over till its over (6+ / 0-)

      Here's the Shiller index 1987 up through January of 2011:

      To come in line, real prices have to fall something like 50%, which can be a combination of actual prices drops and inflation.

      It's illogical that house prices can be out of the reach of the lion's share of the public. It only works with other people's money, and that has dried up.

      •  Yes! (0+ / 0-)

        And I think your 50% concept is about something significant, which is the whole two-income household model we've been dealing with for 40 years. Nothing has been gained by this but excess profits in the hands of ruthless bankers and their political flunkies. Children have been disadvantaged by not having a parent at home to take care of them, parents have been stressed to the breaking point, and the taxpayers have been nailed to make the bankers "whole." It's not working, and it needs to be adjusted in favor of the people who matter, not the machine that is financial abuse.

    •  Actually, your home being a good, may I say (6+ / 0-)

      conservative investment over 30 years was a good gamble for most people.

      You bought a house, you paid it down, and when you retired, you sold it, putting part of the profit to a smaller place, and the rest to supplement your SS.  It was actually the main source of savings for many working/middle class people.

      If you think that you can live off of SS, and better yet, that most people can find a job with a pension, you are dreaming.

      I, for one, refused to speculate in the stock market, because I think it's just gambling.  But I did invest my savings in real estate before the bubble burst.  I thought it would be low-yield, but pretty safe.  As did many people.  I didn't do it because I thought it was a get-rich-quick scheme, although I grant that there were many that saw it that way.

      I agree, I don't care if housing prices drop as long as it brought buyers back.  But in a lot of markets there are no buyers to be found at any price.  And that's due more to job insecurity than anything else.

      •  so you get old and sell your house: and then.... (5+ / 0-)

        .... where do you actually live?  

        Do you sell a house that's free & clear in exchange for the profit on the investment?   And how much profit is that?   And how long do you expect to be able to live on that profit?  

        Bluntly that comes down to gambling with your death date, by assuming you'll drop dead before the money runs out.  

        That's a disaster waiting to happen.

        There is no substitute for pensions or equivalent government entitlements.   And there is no substitute for progressive taxes to raise the money for the latter.   All else is gambling.  

        Engineers don't design physical infrastructure by gambling.  If they did, planes would fall out of the sky every day and bridges would collapse every week and electric & telecom grids would crash regularly.  

        I'll take engineers over gamblers any day of the week.  

    •  The banks need to share in the loss (3+ / 0-)
      Recommended by:
      Clues, Catte Nappe, Linda Wood

      Housing prices need to return to normal, pre-bubble, levels. That means an enormous loss of equity, probably the largest in history. But this equity was the result of the bubble and was never "real". This also means that houses are underwater, requiring an owner to show up at his closing with a large check. For many if not most owners that would be an impossibility.

      So here's the point. The housing bubble was an exercise in speculative nonsense. The investment banks made a killing off of using the massive, bogus equity created. Now the homeowner is stuck with the bill. This is wrong. The banks need to share in the loss. The shareholders,  the officers of the banks, and those who bought the securities backed by these mortgages need to share in the loss.

      I think that the mortgage documentation problem is real and that banks have no right to collect payments unless they have documentation with a real audit trail. But this is just a minor issue compared to the real, broad based loss of equity in homes, and the trail of horror for homeowners who can't afford mortgages written at the peak of the bubble. The banks created this stress by issuing irresponsible mortgages and then tanking the economy by these actions.

      We need a mechanism to write down mortgages. This will result in a necessary loss in value for securities that were backed by these mortgages. This is where the banks need to suffer. Part of that loss should compensated by the banks directly. The banks created the bubble and should take responsibility for their actions. This would result in a large scale transfer of wealth, from the upper 10% back to the middle class. This would be a very good thing and would be a big stimulus to the economy.

    •  There's a big difference (2+ / 0-)
      Recommended by:
      Linda Wood, emal

      between considering a house as the third leg of a retirement strategy and using it as an ATM.  It's very easy to look around at what's happening right now and provide an opinion that people who considered their house as part of their investment strategy bought into some kind of scam.  But that's not the truth.  The real estate bubble is a recent artifact.

      The people who have the most to lose are 50 or older.  These people made their investments at a time when the real estate bubble wasn't even a gleam in a bankster's eye, when computers had much less control over Wall St., and when your average working American wouldn't have dreamed of having some sort of investment portfolio.  We're talking 20-30 years ago when most working people had checking and savings accounts, a pension if they were lucky, SS, and a house.  They could expect that their house would increase in value because that's what had happened reliably since the 1940s.

      Then the corporations started stealing their pensions.  Then the banksters crashed the housing markets.  Now they're going after SS.  

      This was absolutely unpredictable 20-30 years ago, in the same way that the new outrages of 2040 will be absolutely unpredictable to you now.  What if you work your whole life, save your money, turn 60 and then find out, for example,  that giant corporations have declared that they own all the mineral rights in your state?    They turn everyone out of their homes and just take everything.  And then someone tells you that this was inevitable and you were a fool for not moving out before it all happened.  There you are, 60 years old and a refugee..and a fool, according to many.  Not wise, not prudent, you didn't see it coming.

      As for "oh your retirement!", well why didn't you save your money?  Why did you let them steal SS?  Why didn't you see the future?  It's really all your fault.

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