I hope you break your ankle in the moral hazard, Ben

Fuck you, Ben Bernanke. You too, Alan. In fact, frogging fuck the whole fucking Federal reserve and all its past and future associates. Way to punish the prudent with another interest rate cut, jams-for-brains.

But the first fuck, I guess, really belongs to California. Fuck California for being chock full of cheap-ass, overpriced, shoddily stacked together pieces of shit houses that cost approximately one million US fucking dollars. Only a drooling, “but math is hard!” whining, grade-A moron would pay one million dollars for that shack, if he wanted to live in it. Fortunately for you, you criminal seller who wants to retire on the back of some poor dumb working stiff for doing nothing but owning an object for two fucking years, California is also chock full of morons.

“Duh, yeah George, I can pay twenty times my annual household income for a broken-down one-bedroom in the sticks. The payment is only $500!”

You know why it’s so cheap, asshat? No, really, did you ever stop to think for just one nanosecond that it’s kind of wierd to have an installment payment that is thousands of times smaller than a loan you’re trying to pay off in thirty years? Did you ever wonder what the actual payment would be if you were actually trying to pay it off? You didn’t. I KNOW you didn’t, because if you had, you would have gone “holy shit, that’s three times what I could rent this crapshack for!” and dropped the loan docs like a bunch of radioactive turnips.
But no, you went interst-only, adjustable rate, stated income. And you lived happily ever after…

(Let me take a little break to send hearty fucks over to the asshole California speculators who spilled over like locusts into the neighboring states. Why Idaho, for frog’s sweet sake? Hey Californians, you ruined lives by driving up home prices way beyond what a normal non-Californian makes and way beyond what the local economies can support. They hate you out there)

… until your payment adjusted to five times what it would have been had you started with a 30-year fixed and you have to sell. But you can’t sell, because you’re underwater. And you can’t refinance, because the asshole criminals in the whoring lending industry finally tightened lending standards (on fear of federal prosecution) and all of a frogging sudden you have to be able to afford the thing you’re financing. Which you can’t. And you can’t make the payments, and they changed the bankruptcy laws, and if the bank helps you out with the short sale you’ll owe twenty grand or so in taxes on the forgiven debt.

And I’m sorry for you morons, really I am. Math is hard. Your lenders had a fiduciary obligation to you that they opposed head-on. Greenspan saw it and kept interest rates low to ease the hangover from the stock bubble, but we’re all going to pay for it now.

Unless… maybe Ben can save the day with MORE INTEREST RATE CUTS! Tell you what, “Helicopter,” it’s not the rate that is keeping me from buying that house down the street. It’s the fucking fact that it’s overpriced by a fucking factor of two and depreciating!!!

And here’s the self-pitying core pf this pitting: houses are depreciating, and so are my savings. Down the fucking drain. You are inflating away the debt of Americans and George’s “spend and spend” conservative America, Ben, and you are inflating away every penny that I put into savings and retirement accounts rather than drooling out over some asshole house. I saved diligently, thinking “some day, sanity will return to the housing market, and on that day, I will be able to settle down and be part of a neighborhood and maybe have a family.” That day is a lot farther off now that my savings are worth shit.

Author! Author! Bravo! Bravissimo!

Get with the program. Everyone knows that the sure-fire cure for problems caused by an excess of cheap money is even more cheap money.

I heartily endorse this pitting.

I hope everyone has a strong stomach, because next year inflation is going to take us for a wild ride.

Yeah, what with the massive dose of liquidity caused by plummeting housing prices…what?

Other than that, yeah, I shouldn’t be punished by other’s imprudences, especially if it means a greater chance housing will increase to 4X a reasonable rate in places I actually want to live.

I thought California homes were having some sort of fire sale?

Now’s your chance to get in on the ground floor!

Nothing to add but applause.

<CLAP, CLAP, CLAP!!!>

House prices will fall along with the dollar until there is again some semblance of parity between rents and mortgage payments. But so far, wages haven’t kept up with rising prices, and the 2-3% number thrown around nowadays is poppycock. What is it based on, now, anyway? TVs and cell phones? Not food, energy, or housing, that’s for sure. And yeah, liquidity in the lending markets, I think, tends to speed inflation along.

I was kind of hoping for more of an argument. Doesn’t anyone think I’m a pissant pedant? A gesticulating jerkscrapple?

Not a jerkscrapple. But this situation isn’t exactly new. It’s kind of hard to understand why you pinned your hope on savings for the last few years. My read is that you kept your money out of higher risk vehicles since you have been waiting for the axe to fall for years. Now you are angry that there is no justice and that after everything, actually saving your money is still a lousy deal. It’s not the folks who can’t do math’s fault that your portfolio isn’t diverse or risky enough to achieve your dreams.

I don’t disagree with you that there is a huge mess, especially in California. I just bought an apartment in Manhattan; you have my sympathy. I’m sorry things aren’t working out for you. But at the same time, the writing has been on the wall for ages. How are your securities? Are you diversified internationally? It sounds like you are reasonably knowledgeable, so why haven’t you put this knowledge to better use?

Your read is mostly right, Maeglin, except that I am pretty aggressive with retirement allocation. Though even diversification can’t match what the housing market did here, with 20% year-over-year growth on a highly leveraged investment.

I’m bitter for two reasons: First, I’m much too cowardly to do the same with a down payment. At some point I really do want to follow in your footsteps and own a place. I’d like a garden that my landlady can’t butcher and a payment she can’t raise. But I don’t want to own in California. It’s crowded and dirty and its raccoons poop out brain-eating parasites. I’m looking for jobs elsewhere, and it’s galling to see the rise in housing prices in the mountain states I’d like to live (also disheartening to find such limited demand for quantum mechanics.)

But thanks for the good wishes. And thanks everyone else for the kind words.

I do have sympathy for those who cannot afford to buy a house, but I don’t think the government is to blame for that. If one wishes to buy a house in the nicest place in the world (in my opinion), of course there’s going to be a premium involved.

The economy of the United States doesn’t revolve around homebuyers in California, believe it or not.

You don’t think the government is responsible for the banking deregulations of 1999 that enabled fly-by-nights to offer the exotic loans that are now exploding? The same loans that enabled buyers to bid up the prices of houses to astronomical levels? How is the government not responsible for its current monetary policy that basically says “to hell with inflation?”

California homebuyers ought not be the center of the economy. But buyers in expensive markets *are *near the center of a looming economic crisis.

Actually, the one part of your rant I agree with is calling California chock-full of morons who sought out the exotic loans. I think a lot of lenders were stupid to offer loans to unqualified individuals. I think the government has an obligation to stop unfair business practices, but if business and customer come to an unwise agreement, then they’ve made their own bed. The government should only step in to the extent that the larger economy is threatened, they shouldn’t be held to account for the poor business decisions of others.

Are you arguing that the inflation numbers are poppycock?

What part of the CPI do you disagree with? Current numbers:

CPI +2.8% in Sep 2007, % Chg. Year Ago
Real GDP +3.9% in 2007Q3, Comp. Ann. Rate of Chg.
IP +0.1% in Sep 2007, % Chg.
10-Yr. Treas. Rate 4.48% on 2007-10-31
US/Euro FX Rate 1.444 on 2007-11-01
Japan/US FX Rate 114.87 on 2007-11-01
Civ. Unemploy. Rate 4.7% in Oct 2007

Who was holding a gun to the head of the foolish borrowers?

I agree, this is not a government regulation problem but a stupid buyer problem.

The problem with that is the people that are rejected for having bad credit due to their socioeconomic status will complain about the greed of the banks and how they can’t find a place to live because they just can’t find a bank to finance a mortgage, and millions of sympathetic people throughout the nation will rise as one to give banks the chop. So the banks are damned if they do and damned if they don’t.

Boo! Hiss! Boo! And you were doing so well. Government politicians and business tycoons partnering through the brokership of lobbyists is not “deregulation”. The only thing deregulated was the safeguards against coercion — the very stuff that should stay in place while frivolous regulations are removed.

To be fair, math is hard.

Errr… why do I feel like I’m the one being the libertarian here, and you’re… not? I’m not following where the coercion is happening. Banks are coercing homebuyers to take loans? Consumers are coercing banks to give out those loans? Please help.