America’s housing system still has not been properly reformed

Post by afarrell » Thu, Aug 18, 2016, 7:28 PM UTC

formula1 wrote: post #68

jessaustin wrote: post #65

Earlier quoted context omitted.

When these institutions were first created no one imagined the harm they would inevitably cause. Now that they exist they can't be killed, because they help some people. Like a lot of things, really.

Thats not entirely true. England has had a number of economic scandals before the US recieved their independence. There is also certainly a president of "too big to fail" to the point that the king was invested [0]. [0] https://en.m.wikipedia.org/wiki/South_Sea_Company

Post by soperj » Thu, Aug 18, 2016, 7:41 PM UTC

chollida1 wrote: post #69

soperj wrote: post #40

Earlier quoted context omitted.

Pretty much everyone is saying that interest rates are going up in the US and are going to go up soon. Alan Greenspan just came out today saying people are going to be surprised how quickly they go up.

> Pretty much everyone is saying that interest rates are going up in the US and are going to go up soon. I wouldn't say that. According to Bloomberg's interest rate predictor the probability of a hike before the end of the year, ie the definition of soon, is less than 50%. Even if you go out to the end of 2017 you still only get to 67% probability of a fed hike. And 67% is a far cry from "pretty much everyone". And e…

Post by woodandsteel » Thu, Aug 18, 2016, 7:46 PM UTC

topspin wrote: post #11

formula1 wrote: post #2

To sum it up, despite there being regulations on CDOs the real problem still exists. That problem is that loans are easy to get the gov stamp. Thos makes it easy for new home owners to get loans. And this makes it easy for sales people to sell the loans. Much of this opinion article is based on an other article [0] which seems less doom and gloom and more about the shift to a majority of state sponsored loans. This i…

This in itself its own issue in that capitalism isn't doing what it should be when everything is subsidized by the gov. Thus $500k 800 sq ft bungalows. You show me a chronic bubble and I'll show you a 'market' riven with subsidies, tax incentives, government secured debt and pencil whipping regulators. Healthcare, education, housing.... Yet when the bubble pops and the too-big-to-fails have to be 'recapitalized' all…

Post by woodandsteel » Thu, Aug 18, 2016, 7:51 PM UTC

mcnees287 wrote: post #26

cylinder wrote: post #16

The fact that we were not able to ban mortgage securitization after the crisis is appalling. IMO this is the root of the problems. Make banks hold their loans on their balance sheets! I also think the point about banks having capital buffers is laughable and not logical. It's like claiming we've solved chronic migraines because we have a stash of Tylenol. The cause has not been eliminated. And let's say there's a cri…

It sounds like a reasonable theory on its face. However, the outcome of this is likely that banks will stop making loans all together. If they were to offer mortgages at all, it certainly would not be a 30 year fixed rate product. It's not correct to say that banks can sell off all of their risk through securitization. They do in fact retain some of the risk. Though most has been transferred. The buffer is (in theory…

Post by jacobn » Thu, Aug 18, 2016, 7:54 PM UTC

soperj wrote: post #40

chollida1 wrote: post #4

I'd agree that the US housing and derivatives markets are in a much better position than in 2007-2008. Atleast people who are getting mortgages now have some form of documentation, and risk manages are being asked to do their jobs. The crisis now is that, and this is just my opinion, low rates are here to stay. with the amount of money in the system, people are being priced out of homes and as time goes on the amount…

Pretty much everyone is saying that interest rates are going up in the US and are going to go up soon. Alan Greenspan just came out today saying people are going to be surprised how quickly they go up.