Miscellaneous And Off Topic Subjects

[Da Geezer]

Hoss. We probably are not going to agree about the housing bust, but 20% or so of the market would and did affect the price of housing dramatically. When you introduce a whole new set of buyers to the market, folks who have little money, credit, or income, that is a dramatic increase in demand. ARMs were not much more than 19% of the total mortgage universe, but they were up to 80% of the sub-prime market. ARMs just delayed the bust, but they were another method of drawing in unqualified borrowers.

Unqualified borrowers is the key. Taken together with the government's policy of purchasing these mortgages, a system developed where neither the borrower nor the lender had any skin in the game. This affected housing prices in an upward direction. As I have said, if the banks and finance companies had been required to keep the paper they generated, there would have been no bust, because there would have been few loans given to unqualified buyers. When the government gives away "free money" one can expect corruption. Fannie and Freddie didn't care that they were losing money because they were achieving some "Social Justice" (which I define as taking money from the productive and giving it to the non-productive).

[Wild Hoss]

Hoss. We probably are not going to agree about the housing bust, but 20% or so of the market would and did affect the price of housing dramatically. When you introduce a whole new set of buyers to the market, folks who have little money, credit, or income, that is a dramatic increase in demand. ARMs were not much more than 19% of the total mortgage universe, but they were up to 80% of the sub-prime market. ARMs just delayed the bust, but they were another method of drawing in unqualified borrowers.

Unqualified borrowers is the key. Taken together with the government's policy of purchasing these mortgages, a system developed where neither the borrower nor the lender had any skin in the game. This affected housing prices in an upward direction. As I have said, if the banks and finance companies had been required to keep the paper they generated, there would have been no bust, because there would have been few loans given to unqualified buyers. When the government gives away "free money" one can expect corruption. Fannie and Freddie didn't care that they were losing money because they were achieving some "Social Justice" (which I define as taking money from the productive and giving it to the non-productive).

EDIT: Meh....nobody agrees on these details, so moving on.

The relevant point to a now-lost discussion on jobs was the housing crisis is a huge part of the collapse of the job market after 2008, and why it hasn't recovered. I think we're agreed there.

How we get those jobs back...we don't. Not in dramatic fashion anyway.

[Wild Hoss]

Hoss said:


No question. And Hack makes a valid point that corporations are allowed to keep money overseas while individuals are not. Changing the marginal US corporate rate to 15% would fix the problem over time, but I fear that the politicians will try to use force to accomplish it quickly. US corporate income is taxed by the locality where it is generated, but, I believe, the tax paid becomes a credit against the US taxes when repatriated back to the US. A more palatable solution to our progressive friends may be to not allow this credit at all (coupled with a lower rate).

I don't care a great deal about corp taxes....they aren't paying much anyway. This is why we should incentivize the return of holdings, with hopes they'll invest it here and we can glean some general benefit, but get it back on income tax and capital gains. The top suits may want to send their company's money overseas, but they want to live here.

[hack]

IMO the securitizing of mortgages was a sog factor. Banks figured out how to get the reward without the risks.

[edindetroit]

sog factor?

[Wild Hoss]

Special Operations Group.

Rambo held the notes.

[hack]

sig, I meant -- as in significant.

[Ghengis Jon]

I don't care a great deal about corp taxes....they aren't paying much anyway. This is why we should incentivize the return of holdings, with hopes they'll invest it here and we can glean some general benefit, but get it back on income tax and capital gains. The top suits may want to send their company's money overseas, but they want to live here.

Here's the incentive. Institute a one time "Tax Evader Cash Reclaimation Surcharge". If your off shore holdings exceed X% of your gross income as of December 31st, you are taxed 40% of the off shore holding value.

That would bring some money home.

[Dr. Strangelove]

Just saw where another pro sports franchise has successfully blackmailed a city into giving it a new stadium; this time it's the Texas Rangers.

http://www.fieldofschemes.com/2016/05/25/11120/arlington-council-unanimously-okays-rangers-stadium-vote-unveils-worst-faq-ever/

[froot loops]

It sounds like more of a bribe than blackmail.

[WingsFan]

George W Bush owed the Rangers


In 1991, the team convinced local voters to approve a tax increase that helped build a new $191 million stadium. The city of Arlington used eminent domain to acquire the property from hundreds of private owners, claiming the stadium was a "public use" just like highways, schools, and government buildings.
Several property owners were lowballed, and court decisions increased their final take. The compensation for one 13-acre plot was increased from $877,000 to $5 million, for example. The city, not the team, was held responsible for making the larger payments.

The stadium clearly benefitted the Rangers' owners more than anyone else. Bush turned his initial $600,000 investment into $15 million when the team was sold in 1999. But it has produced little of the promised economic benefit to Arlington, and there has never been a real "public use" factor aside from baseball fans' paying their money to see games.

[Hannibal]

To be fair, the "public good" aspect of a sports team being in the area is probably impossible to measure specifically.

[Wild Hoss]

To be fair, the "public good" aspect of a sports team being in the area is probably impossible to measure specifically.

That should tell us something.

[Dr. Strangelove]

[youtube]r93R4A3ttuA[/youtube]

[Mike]

That's great.