Comments on: Housing Shortage Set to Hit 35 Million in 2050

By: ross violich

ross violich — Tue, 06 Apr 2010 09:20:14 +0000

something worth a look ….

history repeating itself here?

http://docs.google.com/viewer?a=v&q=cache:sslW1Hp-Gs8J:www.tjsullivanla.com/Resources/hc021506.pdf+housing+shortage+california&hl=en&gl=au&pid=bl&srcid=ADGEESjXjzMQx92KH1MvKe_9sst7CGH1Nmn9VbLRRxhxWhHXmhoumPZaigRdT21cYOk7Y7-04EUBitCueR9YFUet59Y3YjVnGzjbjvQtk0fDk65CKCY_V3oLKPs1k1saGlWrq6uPA8c_&sig=AHIEtbSdA6U4frjTJfUJJflQdBflTscvDg

regards

rossv

By: cb

cb — Sun, 04 Apr 2010 03:21:30 +0000

GB – True, and I am just imagining such a scenario. Savers are pulling out their money, but the banks still have all their loans/assets, that keep generating income for them from the loans they make. So, the question is whether they could still make more loans and even increase their profits? An affirmative answer, under current rules, would seem absurd, but not if you imagine one or two changes to the rules, such as:
- Banks sourcing their funds from the lender of last resort: the central banks, one of the foundational purposes for which they were created.
- The cental banks, in turn, will print the required funds up, as needed. And there is little new in that.

By: GB

GB — Sat, 03 Apr 2010 00:14:58 +0000

Just to clarify, what I meant was if people bandied together and started to threaten to pull their savings out the banks unless they acted more conservatively then that would be 1000 times more effective than regulation.

By: GB

GB — Sat, 03 Apr 2010 00:08:22 +0000

cb, it makes you wonder if they are still writing off bad loans. The new wave of resets coming up may never become public so it may seem that everything is ok

Banks are only the middleman in the equation. One of their main roles is to check the borrowers credit worthiness because its easier for them to do it as an entity than each individual person seeking the information. The borrower gains because he only has to visit one bank instead of searching for 20 different individuals to borrow from. So if you take the bank out of the equation, whats left is people lending to people. I think people need to re-learn that and demand better protection for their money.

By: cb

cb — Fri, 02 Apr 2010 03:16:56 +0000

All very good points, GB. The only thing I can think of that could upset the apple cart would be if the powers that be continued to fiddle with the very nature of the fractional reserve system. They are already allowing banks to hide their losses by allowing them to mark their assets to model, rather than marking them to market, by allowing them to keep their losses and dodgy assets in off-balance sheet accounts, etc, which effectively allows many a broken bank to continue trading while insolvent. Having crossed the Rubikon, what is to stop the cartels from doing away with the remaining rules and abolish reserve requirements altogether? Or even permit the total disregard of bad debts, so that banks will only book profits, while bad debts are simply wiped off their balace sheets?

We always guage risk, form expectations and make financial decisions by reference to the prevailing rules and laws that have bearing on a given matter, and that is how it has to be. However, where the powers that be have an interest and at the same time have the power to change the rule book, then we must keep this in mind also, that even if you play the game right and make all the right calls, the goal posts can be shifted after the fact, and all your goals can be disallowed. Of course, that will risk public outrage, but that is nothing new to the gangsters and banksters who are more than willing to deal with it, just as long as they can live off your labour and take the better part of people’s money.

By: GB

GB — Fri, 02 Apr 2010 00:45:20 +0000

cb – i watched the Keiser article

I believe the future of banking will go back to being conservative and the banks power will fade. When I was younger it was hard to get a loan even for a few thousand dollars to buy a beaten up Torana but over the last decade or so getting a loan was as easy as buying milk.

I know banks create money but in the end someone’s money is lent and that money becomes someone’s through their asset sale. Enough people lose their savings then they may lose faith in the banks and therefore force the banks to be more conservative to attract funds.

By: Sandra

Sandra — Thu, 01 Apr 2010 13:48:07 +0000

yep – there are still many fools around – only too happy to buy your overpriced property…

By: Nick

Nick — Thu, 01 Apr 2010 03:34:59 +0000

RB…I am in the process of selling the remainder. Some are currently on the market and some will be come June 30. I hope the spin on MSM continues until that time as most will loyally believe all the hype come hell or high water. For me, that’s a good thing.

By: RB

RB — Thu, 01 Apr 2010 02:41:43 +0000

Nick
Why did you only sell a potion of your portfolio “I have sold a portion of that portfolio over the past 18 months” if you are sure prices are going to continue to fall and not recover? “You are assuming that it will only go down temporarily!”

By: Nick

Nick — Thu, 01 Apr 2010 01:07:27 +0000

RB….firstly my home goes for no price. It’s my home not a commodity.
As for my investment properties, I have sold a portion of that portfolio over the past 18 months. That same property cannot be sold today for the price I got for it. (but the gold I bought with the proceeds has). The same properties I sold, are valued at less today. So does that make me a genius or a betting man? Nope on both accounts. As for buying property again when it falls? Why? You are assuming that it will only go down temporarily! Is it a sin to be a free thinker? One who is not led by the crowd and propaganda?
If people can’t afford R/E today, what on earth makes you think they can afford the same houses 10 years from now when they are supposedly worth $1 million plus? Wages would have to increase proportionately just to break even. What industry can handle that kind of wage increase in 10 years?
In addition to that, the added expense of land rates, insurance etc will make that house unsustainable. This of course ignores and interest rate increase. Remember, in the 80’s when interest rates were 18% plus, housing was affordable. Today when interest rates are the lowest in 40 years it’s barely affordable. So double the price and increase the interest???
I know of many elderly citizens who bought their homes I their younger years, paid them off and though they would die there. Unfortunately, the “boom times” came, their land rates etc. quadrupled and they had to sell up and leave as they could not afford to live in their own homes. So in 10 years time, how many of the baby boomers will be moving to Alice Springs for their twilight years because they are retiring with no savings and their homes (and all the associated expenses) will cost a king’s ransom???