There should be a separate set of lending rates for real estate. Sounds kooky at first but really it's a fundamentally different kind of asset.
There are, right?
Germany Falls into Recession
141–150 of 203 posts
Re: Germany Falls into Recession
#142Earlier quoted context omitted.
I had a brief interaction with a real estate agent a few months back and he told me they really have trouble selling houses now at those interest rates. The run on housing apparently has dialed back significantly. He also mentioned that he thinks in around 5 and 10 years time the market might be flooded with houses people bought at low interest rates because they will not be able to pay their mortgage at these new in…
10 years is a long time. This prediction requires two things to happen: interest rates never decline in that period and wages of the owners stay the same. Given the inverse relationship between the two, I don't see that happening. Even modest 3% wage growth over 10 years is an increase of 34%, 4% pushes that to 50%. Since the mortgage is fixed, these wage gains don't even need to be "real" (positive when inflation ad…
>Lots of people were burned in 2014-now by assuming the housing market was going to "collapse any minute now" then watching the exact opposite happen. It's as if they thought 2008 was some kind of regular occurrence and not a black swan event.
To be fair to those people, the extra low interest rates of 2014-2022 were the historical black swan event which everyone expected to last a couple of years at most and not a decade, but the banks left the money printer running for too long and now we're facing the inflation fallout.
Rates were never in history so low as post 2008. Why would any sane person expect them to last so long?
Re: Germany Falls into Recession
#143Earlier quoted context omitted.
> the shut down of nuclear power thanks to the Greens The decision to shut down our nuclear reactors came from a conservative government, where the greens were in the opposition. The prices have not been rising due to the shutdown of our nuclear plants, but due to price gauging by electrical companies, and due to russia falling away as a cheap gas supplier. Nuclear only made up 5% of our energy production 2023 and 11…
> The decision to shut down our nuclear reactors came from a conservative government, where the greens were in the opposition. Wrong. The nuclear phase-out original came from SPD/Greens: > https://de.wikipedia.org/wiki/Atomkonsens > The prices have not been rising due to the shutdown of our nuclear plants, but due to price gauging by electrical companies, and due to russia falling away as a cheap gas supplier. They h…
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Re: Germany Falls into Recession
#144Earlier quoted context omitted.
The US is not getting poorer nor is inflation still out of control
> The US is not getting poorer then why am I being asked to bail out a generation's college loans? then why is food bank use at an all time high? then why are more six-figure earners reporting to be living paycheck-to-paycheck? then why is personal credit card debt at an all time high?
> then why am I being asked to bail out a generation's college loans?
Wouldn't that fit perfectly with the comment you're responding to? Because the money is there. In fact I'd expect us to be bailing people out as we get richer. Less govern
> then why is food bank use at an all time high?
Food insecurity is no where near an all time high. https://www.ers.usda.gov/topics/food-nutrition-assistance/fo...
So perhaps there are just more people! (Anything can be an "all time high" or "record X" if you ignore this fact). Or local trust in food banks has risen. Or food banks have more money now to hand out more food.
> then why are more six-figure earners reporting to be living paycheck-to-paycheck?
Because the popular report you're citing here, sponsored by lending service LendingClub, includes buying groceries on a credit card as "living paycheck to paycheck" even if you're paying it off each month and only doing it for the points.
> then why is personal credit card debt at an all time high?
Because there are more people! Or are you actually talking about debt as a percent of income which is a more realistic stat? Because people spend less on their debt now than almost ever. https://fred.stlouisfed.org/series/TDSP
Re: Germany Falls into Recession
#145Earlier quoted context omitted.
> A while back someone unironically described Germany's nuclear power policy as "the single most catastrophic decision ever made by any government in peacetime". German here. Accurate description if you ask me. It's one of the dumbest and most irrational decisions ever made in energy politics. It's completely inexcusable.
Devil's advocate: It was completely irrational, but how much difference did it actually make?
Right. I should have mentioned that Germany should have decided to ramp up investments in nuclear power as well. A long time ago. My bad.
Re: Germany Falls into Recession
#146We need new terminology to distinguish between macroeconomic recessions and living standard recessions. Traditionally, those two things are more or less intertwined, so the term "recession" carries connotations of both. With the steady increase of economic inequality, the link between the two meanings becomes less and less firm. The median living standard in Germany has been in free fall for 20 years. By that criteri…
> The median living standard in Germany has been in free fall for 20 years.
??
Re: Germany Falls into Recession
#147Earlier quoted context omitted.
Doesn't the US do the same with states instead of countries?
To what extent does each state run its own economy? The EU does not have centralised taxes or a centralised economic policy, but it does have a single currency. It's possible a single currency also requires more centralised financial/economic policies.
There is really just the US economy. We would not say that Pennsylvania is in recession but New York is not.
The major difference between states is tax rates. Labor, transacting, anything else economically is practically transparent and frictionless.
Re: Germany Falls into Recession
#148Earlier quoted context omitted.
There is a good deal of misinformation, astro turfing, and I think also nerdy love for fancy toys. And there is also the problematic trend of the right wing to demonize environment- and green politics. It seems it has reached a level of conspiracy theories now.
Is nuclear not green?
The tinfoil hat theory is this: Nuclear is expensive and takes forever to build. Right now there is a lot of effort and money pushing for renewable energy sources, and it has been immensely successful at proving its viability. Certain groups make a lot of money off fossil fuels, and even though they know that will eventually end, every year they can delay that end is billions in their pocket.
The push for "we shouldn't do renewables, because they can't do the job, so we should invest in nuclear" is about taking the wind out of renewable's sails. Even if we turn around today and start building a hundred nuclear plants all over the world, it will take decades for them to come online and start displacing fossil fuel energy production, meaning a long delay until fossil fuels stop putting billions into the pockets of certain people. They do this because even at the half assed effort we have now, renewable power generation is increasing by tens of terawatts per year in germany alone.
This is why the same people who DGAF about all the carbon we release into the atmosphere and all the pollution we dump into rivers suddenly "care" about "windmills kill birds", why conservative states like Florida, with ample sun, continue to push for laws that screw over home solar.
Nuclear is mostly carbon neutral energy, which is great, but if we wanted to solve climate change with nuclear energy, we needed to start building it in the 70s, when all the pushback happened. Unlike most other situations, the second best time to build nuclear is not today. Maybe it will be good to have it in the mix in the future, but we can't let it distract us from the renewable energy sources that have the potential to decarbonize our world before even the first new nuclear plant could come online.
It also might not even be cost competitive anyway.
Re: Germany Falls into Recession
#149Earlier quoted context omitted.
Right and their ideology is to build more solar and wind. Which, even when factoring in the cost of batteries, is cheaper than nuclear or almost any other form of energy. https://ourworldindata.org/cheap-renewables-growth
All true. In hindsight though I wish the political debate had considered climate change more seriously in plans how to phase out coal and nuclear.
Solar and Wind power was completely blocked up by conservative governments all over the globe for the past 50 years. Consider Reagan, who removed solar panels from the roof of the white house just a few years after they were installed and not long after multiple oil supply crises in the 70s. Even if the solar panels being installed in the first place was only symbolic, removing them was also purposefully symbolic.
America at least had a great chance to invest in nuclear energy and completely end dependence on the middle east for it's energy, but it chose Reagan instead.
Re: Germany Falls into Recession
#150Earlier quoted context omitted.
The balance on an existing loan doesn’t increase with inflation, though.
Yes, but the interest payments on mortgages with variable rates had doubled. Now some people basically are paying interest only without paying off their principal amount.
<2% of US homes are on variable rate mortgages.