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“A solution in search of a problem” is a low-rates phenomenon

thediff.co

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Re: “A solution in search of a problem” is a low-rates phenomenon

#81

Post by yamtaddle »

lazide wrote: post #44
xyzelement wrote: post #35

Earlier quoted context omitted.

// People are getting mortgage sized loans just to buy a family car I mean... That's insane hyperbole right? Below you are talking about $30k cars, in what universe does that approach "mortgage sized"?

Depending on your selection of ‘people’ it isn’t that odd - anyone financing a Tesla Model X for instance, is looking at $120k+ prices, and there are a LOT of them in many parts of the Bay Area.

To be fair, I don't think the people dropping $120k on a car are also in the market for $120k houses.

Now, trucks... I've seen some houses where the truck parked out front may well have rivaled the cost of the house. Of course rural-American housing in boring areas (no skiing or nice views or anything to draw tourists or vacation-homers) still being very cheap contributes to that kind of situation.

Re: “A solution in search of a problem” is a low-rates phenomenon

#82

Post by mym1990 »

wolfram74 wrote: post #79
mym1990 wrote: post #75

Earlier quoted context omitted.

Reduced incentives for what?

What's the point in generating value if it's all being captured by the capital holding class?

I generate value for my company in exchange for payment so I can put food on the table and not starve, seems to be a pretty good reason for me.

Re: “A solution in search of a problem” is a low-rates phenomenon

#84

Post by prottog »

FooBarBizBazz wrote: post #77
prottog wrote: post #66

Earlier quoted context omitted.

> why have long term interests declined over the past 500 years, accelerating in the past 50-100 years The cost of money (that is, interest) is based on two things: the time value of money, which is the concept that an amount of money is worth more now than the same amount of money later (above and beyond inflation); and the default risk, that you may not get back some or all of the money that you lent out. As the wo…

> the time value of money also decreased over time, as the quickening of the pace of technological advances meant that lenders could expect more returns over a shorter amount of time. Isn't this backwards? In a world where money has no time-value, a world where a dollar today is the same as a dollar tomorrow, and the same as a dollar five years from now, then, if there's no default risk, you can pay me back the same…

> In a world where everything changes rapidly and I might need money now, I'm going to demand a lot of interest before I'll lend you my cash. Because I'm incurring a lot of opportunity cost by parting with it.

My logic is that the market participants have the expectation that everything changes rapidly for the better; that is, advances in technology have a deflationary effect and therefore people are happy to lend at a lower interest rate, expecting the same number of dollars to buy more later.

Re: “A solution in search of a problem” is a low-rates phenomenon

#85

Post by kragen »

ipsi wrote: post #14
electroly wrote: post #8

Earlier quoted context omitted.

I had several Palm devices. As I recall there was a fairly long gap between the death of PDAs and the birth of smartphones. I certainly did not replace my Palm with a smartphone; I replaced it with nothing, and then years later I got a smartphone. Most of the things that are amazing about smartphones were not present on my Palm IIIe, FWIW.

> there was a fairly long gap between the death of PDAs and the birth of smartphones. Only if you define the birth of smartphones as starting with Android/iPhone. Palm released their own smartphones using the same OS as their PDAs (the Treo line) prior to that, and Microsoft had Windows Mobile plus a bundle of third-party manufacturers. Plus Blackberry had been around the whole time, too. Looking it up, it seems that…

also in the 02004-8 timeframe the danger hiptop was the hot smartphone

As aaronsw explained in December 02008 in http://www.aaronsw.com/weblog/forgottensidekick

> It’s been a frustrating year for us Sidekick users. It seems like every television show, periodical, and man in the street is raving about the amazing world-changing capabilities of the iPhone (and, to a lesser extent, the Google Phone). How having a device that can conveniently surf the Web, answer email, run third-party applications and fit in your pocket is as big a technological breakthrough as hovercars.

> Which is infuriating to those of us who have been using a superior device for the past five years.

Re: “A solution in search of a problem” is a low-rates phenomenon

#86

Post by PeterisP »

wolfram74 wrote: post #79
mym1990 wrote: post #75

Earlier quoted context omitted.

Reduced incentives for what?

What's the point in generating value if it's all being captured by the capital holding class?

The chance to become part of the capital holding class.

Re: “A solution in search of a problem” is a low-rates phenomenon

#87

Post by PaulHoule »

xyzelement wrote: post #35
mberning wrote: post #31

Earlier quoted context omitted.

Homes and cars are simply out of control. People are getting mortgage sized loans just to buy a family car. Something which will become worthless over 10 years of use. Getting a mortgage on a home is now a non-starter for a huge swath of the population. I suppose I can somewhat understand the price of homes going up. It's a durable item that, if reasonably maintained, has an unlimited useful life. A car on the other…

// People are getting mortgage sized loans just to buy a family car I mean... That's insane hyperbole right? Below you are talking about $30k cars, in what universe does that approach "mortgage sized"?

Funny I just was in line at my credit union and caught a look at their balance sheet.

In October they had $281,996,350 outstanding in auto loans compared to $462,003,191 in mortgage loans and $68,035,664 in HELOC.

Auto loans turned out to be bigger relative to mortgages than I expected but maybe my credit union writes a lot of auto loans.

Re: “A solution in search of a problem” is a low-rates phenomenon

#88

Post by Ekaros »

PaulHoule wrote: post #87
xyzelement wrote: post #35

Earlier quoted context omitted.

// People are getting mortgage sized loans just to buy a family car I mean... That's insane hyperbole right? Below you are talking about $30k cars, in what universe does that approach "mortgage sized"?

Funny I just was in line at my credit union and caught a look at their balance sheet. In October they had $281,996,350 outstanding in auto loans compared to $462,003,191 in mortgage loans and $68,035,664 in HELOC. Auto loans turned out to be bigger relative to mortgages than I expected but maybe my credit union writes a lot of auto loans.

And my understanding is that rates for car loans as they are potentially unsecured are much higher. So burden of carry is higher.

Re: “A solution in search of a problem” is a low-rates phenomenon

#89

Post by anthonybsd »

black_puppydog wrote: post #5

> [...] products that ultimately turned out to be dead ends, like the Palm Pilot [...] Huh? I never had a Pilot, but from everything I've read about it (and how people who did have one describe it) it was quite amazing, and arguably the predecessor of the smartphone, no? I get that the product line is dead, but the concept was very much viable...

Palm Pilot was a huge success both from a sales perspective and from "getting consumers comfortable with touch screen" perspective. The author of the article has a very poor choice of metaphors and examples which really obscures his point.

Re: “A solution in search of a problem” is a low-rates phenomenon

#90

Post by astrange »

wolfram74 wrote: post #79
mym1990 wrote: post #75

Earlier quoted context omitted.

Reduced incentives for what?

What's the point in generating value if it's all being captured by the capital holding class?

The capital holding class is “people with 401ks” and so includes you.
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