Appraisers' Free Forum

And, it is really so obvious. If you don't fix the problem it will continue to cause problems.

http://seekingalpha.com/article/171549-charlie-gasparino-another-crash-has-to-happen-again?source=email

As you pointed out during your conversation, these guys have been bailed out several times before, and that the risk-taking grew-exponentially-each time as a result. So where does that leave us today? Have we at last cured what ails us, or are we going to be reading another Gasparino book about a future Wall Street disaster that we could have prevented?

Charlie Gasparino: I don’t know when it’s going to happen, but if history is any guide, it has to happen again–the “it” being another financial crash. Of course, it won’t happen tomorrow or next week, or maybe not even two years from now. But when the memory of 2008 wears off, and mark my words it will wear off, excessive risk taking will be back in a form that evades all these alleged regulatory controls that have been established. Regulation can never cure the disease of excessive risk. (emphasis added)

My favorite:

How anyone considering themselves to be a capitalist can support this arrangement is beyond me.

Or, maybe this...

But what you will also find in my book, which I guarantee is absent from most of the others, is the root cause of the risk taking, which I believe begins and ends with the policy makers. (emphasis added)

And, then there is this:

Interesting graphs.

http://seekingalpha.com/article/170526-property-values-set-to-fall-43-from-current-depressed-levels?source=email

It takes very little imagination to see the world of real estate prices vaporizing without government support. If that support was lost, values would crash down faster than a big rock dropped into a shallow puddle.

So, I'm not so sure we should be celebrating this:

http://appraisers.freeforums.org/house-passes-tax-credit-extension-expansion-t5589.html

While the federal government has deep pockets, at some point the persons who take out the mortgages will have to pay them.

But, of course, there is always moderating comment. This from ostrichhater:

that trend line in the image above should actually be inflation. Long term that is what housing will track. So the real questions becomes, does inflation rise or does housing fall until the lines converge? Most likely a bit of both.

Steve Owen wrote:My favorite:

How anyone considering themselves to be a capitalist can support this arrangement is beyond me.

I have to wonder what in our capitalistic system has anything to do with moral choices or even choices that are good for the rest of the country? I thought the rule was "the big fish eat little fish" or "greed is good."

A capitalist, by definition, is profit driven and not concerned with society at large. Capitalists take the short view. Government's job is to take the long view; make and enforce policies which channel the capitalist's energy to benefit the nation. This is walking the tightrope; too much constaint damages capitalism's incentive to produce, too little concentrates wealth and can lead to social unrest. The difficulty is that government often also takes the short view with an eye to the next election cycle. This often leads to dogmatic policies which pander to "core" constituents. God forbid a President "flip-flop" on a policy decision in reaction to current events.

Edd Gillespie wrote:I have to wonder what in our capitalistic system has anything to do with moral choices or even choices that are good for the rest of the country?

Correct capitalist choices are always good for the country. The capitalist who make the right choice gets the most business and profit. That is why consumers have a plethora of choices in our system. Each capitalist is just looking out for him or herself, the result is a horn of plenty and opportunities for everyone. That is why so many people are trying to get in... unlike Cuba, where so many people are trying to get out.

If you want to see what happens when government tries to regulate a capitalist's choices, you need look no further than the screwed-up banking and real estate markets.

Steve Owen wrote:Each capitalist is just looking out for him or herself, the result is a horn of plenty and opportunities for everyone.

No offense but that sounds hopelessly naive and is simply not accurate. Are you familiar with the history of the industrial revolution?

I am very familiar with the history of the Industrial Revolution. A primary thing to look at is the way the Robber Barons took advantage of the REGULATIONS of the time and turned government to their favor; the resulting government response was more regulation and less freedom for everyone. On the other hand, largely because of people like Ford, Westinghouse, Edison, DuPont, etc., etc., we enjoy millions of consumer choices, vast opportunities, and a standard of living unlike any the world has seen before.

Look at the big view of history. When our ancestors adopted farming, wealth and lifestyles began to increase. They did so up until the adoption of urban living, and then, basically stagnated. Just before the United States was founded, the total GDP of the entire world was very similar to what it had been 1,000 years earlier. Then, Adam Smith wrote his book. The result was an explosion of wealth creation like none the world had ever seen. We are all the beneficiaries. Along the way, others tried different things (the Soviet Union, for example) and each time, the result was impoverishment of the people at the expense of wealth and power concentrated in the hands of a few. IMHO, anyone who cannot see this is truly blind (and naive).