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The Shock of Sweden's Housing Market Is Hitting the Country's Currency

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Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#411

Post by pimmen »

staticelf wrote: post #366
pimmen wrote: post #339

Earlier quoted context omitted.

So, could you explain why the housing prices fell in the 90s when we took in more refugees than ever before? And why they rose considerably when immigration slowed down in the mid 2000s? Because, for some reason you're convinced immigration is the main cause of rising housing prices and that the two clearly correlates, even though you can only back that up with stats that are about a decade old, any older than that a…

I don't really have any data from the 90s and I wasn't very old back then so I cannot really say anything about it. And stop putting words into my mouth. I wrote that I believe immigration is the main cause of the most extreme increases not the main cause of rising housing prices in general. The difference is that the number of people Sweden has recieved is so much larger 2013-2016 so basically every system we had fa…

Fair enough, I’ll stop putting words in your mouth.

SiemperVernes supplied stats that showed that the correlation goes from weak to non-existant when you look at the past three decades, despite the fact that the early 90s was record years of immigration. You said the correlation was clear and that you think it’s the main cause of rising housing prices, why do you think that? Is it only because of news stories that the local governments had a hard time finding places to rent out? You don’t base it on data?

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#412

Post by boznz »

littlestymaar wrote: post #377
rileyphone wrote: post #341

Earlier quoted context omitted.

Via being backed to some tangible good, eg gold.

Or bitcoin ! Wait, this is ridiculous we have like two centuries showing us that commodity currency is a failure in an industrial economy.

Groan.. I think we need a version of Godwin's law for bitcoin

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#413

Post by littlestymaar »

vasilipupkin wrote: post #400
redtexture wrote: post #398

Earlier quoted context omitted.

Ah, no. The moment the company gets money, is when it sells the stock. After that, unless the company sells more stock, or buys and re-sells its stock, it receives zero more capital financing dollars, unless it undertakes other financing activity, such as the sale of bonds. There is no indirect means to receive money, except for profit, and that it is not related to stock. Profit is ultimately the primary means for c…

Sorry, you are missing the point. A liquid secondary market is what enables the company to go public in the first place. There would be no initial sale of stock without it at all. In addition, liquid secondary market enables the company to incentivize its employees and undertake other financing activities, as well as gives value to its remaining treasury stock.

> A liquid secondary market is what enables the company to go public in the first place.

Dividends enable the company to go public. The secondary market makes the stock liquid, which is convenient but not mandatory.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#414

Post by bzbarsky »

mbesto wrote: post #406
bzbarsky wrote: post #401

Earlier quoted context omitted.

You don't get to keep the whole $2M. That's the point.

Uh what? If I have a house and I sell it for $2M cash and then I buy a house for $1.6M, I now have $400k in cash and $1.6M in assets.

If you sell a house for $2M cash and have to pay capital gains taxes, and then buy a house for $1.6M, you do not have $400k in cash afterward.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#415

Post by littlestymaar »

novalis78 wrote: post #402
littlestymaar wrote: post #377

Earlier quoted context omitted.

Or bitcoin ! Wait, this is ridiculous we have like two centuries showing us that commodity currency is a failure in an industrial economy.

I would not be so fast in that conclusion. There is actually research that indicates that the opposite might be true: http://saifedean.com/Saifedean%20Ammous%20The%20Bitcoin%20St... A slowdown a la Thiel due to fundamentally flawed monetary policies.

Thanks for the paper, but having skimmed through I don't think the word research is appropriate for this, it's more of a compilation of autrian propaganda than anything else.

Gold standard failed, no matter what libertarians like to fantasize about it.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#416

Post by simonbarker87 »

mercutio2 wrote: post #386
simonbarker87 wrote: post #353

Earlier quoted context omitted.

I’m amazed that the US charge capital gains on primary residence sales - in the UK we have Private Residence Relief which means you pay no capital gains from the sale of your primary residence, so long as you meet some requirements that are very easy to meet and I would say 99% of owner occupiers meet.

99% of American home owners also qualify for full capital gains relief. Gains greater than 500k are extremely rare outside of certain overly restrictively zoned areas.

Ah, ok

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#417

Post by littlestymaar »

dredmorbius wrote: post #382
littlestymaar wrote: post #373

Earlier quoted context omitted.

> The present primary reliance on fractional reserve monetary is not a carved-in-stone requirement of financial systems, only the present norm. Their is no fractionnal reserve banking in the modern world anymore. And circa 2007, virtually nothing prevented the infinit expansion of credit, with the result we all know. If you want to learn more about these topics, the keen-krugman debate (more of a controversy than a c…

https://www.federalreserve.gov/pubs/feds/2010/201041/index.h... The St. Louis Fed tends to have the largest set of articles on economic policy, generally. Here are 632 results for "fractional reserve": https://encrypted.google.com/search?hl=en&q=site%3Astlouisfe... And limiting to 2010 and subesequently, 27. None declaring the concept dead. https://encrypted.google.com/search?q=site%3Astlouisfed.org+...

> And limiting to 2010

The second paper on the page is from 1968 …

In the US, there is no limit anymore on how much credit you can lend given the amount of reserve you have, the reserve requirement is on deposit not credit lent.

https://en.m.wikipedia.org/wiki/Reserve_requirement

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#418

Post by littlestymaar »

alexasmyths wrote: post #399
littlestymaar wrote: post #300

Earlier quoted context omitted.

> Either politicians are stupid, or more likely, they know that "homeowner policy" like this can make them and their other rich buddies even richer. It's not a malice vs idiocy situation, actually there is a third explaination : economy needs a growing money supply to work properly (and the money creation need to compensate the economic growth AND the reduction of money velocity[1]). But since the late seventies, mon…

"But since the late seventies, money creation is only possible through the banking system via credit." ? I don't know how the Kroner works, but usually a central bank issues currency into the market in exchange for some kind of asset - this is the primary mechanism for controlling interest rates. Yes, more credit is created through fractional reserver, but this is taken into account.

> more credit is created through fractional reserve

There is no such thing as fractionnal reserve credit in 2017, bank don't need reserve to lend, they need reserve to hold bank accounts for their customers.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#419

Post by staticelf »

pimmen wrote: post #411
staticelf wrote: post #366

Earlier quoted context omitted.

I don't really have any data from the 90s and I wasn't very old back then so I cannot really say anything about it. And stop putting words into my mouth. I wrote that I believe immigration is the main cause of the most extreme increases not the main cause of rising housing prices in general. The difference is that the number of people Sweden has recieved is so much larger 2013-2016 so basically every system we had fa…

Fair enough, I’ll stop putting words in your mouth. SiemperVernes supplied stats that showed that the correlation goes from weak to non-existant when you look at the past three decades, despite the fact that the early 90s was record years of immigration. You said the correlation was clear and that you think it’s the main cause of rising housing prices, why do you think that? Is it only because of news stories that th…

I would gladly base my thoughts on data but unfortunately when it comes to immigration the government doesn't really publish/store any data of any negative effects immigration could have.

I base my thoughts on the data that is available (which isn't much) and I still think it's different from the 90s because of the much higher number of people that came to Sweden in the last years. Basically no systems worked as you surely know and the government had to abort the whole situation because it became unreasonable even for them. And to my knowledge, Sweden didn't let immigrants jump queues nor buy apartments for them and their wives in the 90s.

For example regarding the lack of data, I am sure they know how many apartments they bought for immigrants but in order for me as a citizen to get that information I would probably have to request it from every single municipality which quickly becomes unreasonable.

Just think what you would have to do in order to base the thoughts on data:

I would have to request data from every municipality in the country regarding different factors that the immigration could have an effect on. Then I would probably take that data and compile it with other data that is basically impossible to get hold of and then have to compare it with the same data from the 90s. That is of course if every municipality even answers your request (they do not always do that, even if they must) and if they actually keep the records of the data. As with any topic that involves immigration in Sweden, statistics are simply not very often even recorded or stored.

Re: The Shock of Sweden's Housing Market Is Hitting the Country's Currency

#420

Post by mclightning »

staticelf wrote: post #24
alkonaut wrote: post #10

There are tons of things inflating house prices. The most important for Sweden are - Deduction of interest expenses from income tax. - Too long mortgages (100 years or more) means nominal prices are high which add to the risk - Historically big mortgages (90, 100 or even 110% of the cost could be financed - yes negativev down payments existed in the early 2000's). - Rent control of almost all flats, meaning no one wi…

Also to add to that, an extreme number of new people immigrating to Sweden, especially under 2014-2016 [1] (which is my personal belief that is the leading cause to the biggest increases in prices). Many municipalities also letting up to 25% of these new people jump ahead the queues leaving Swedes to be even more forced to buy an apartment instead of renting [2]. Also in Sweden for apartments, you don't own it. Most…

Oh really? Where can I get that %25 get ahead in the queue thing? I am an immigrant moved in 2014, and I had to buy an apartment. Because of the freaking long queues. I have never heard of that %25 thing.

Not the mention that residents register their kids at very early age to these rental queues, giving them a way ahead in these queues.

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