Greenspan contradicts Dave & Co., says increasing debt OK

[alchemize]

Greenspan says U.S. household debt not troubling
But Dave the unemployed Georgian told me the US consumer is drowning in debt? Who is this stupid Greenspan with his monopoly rich-man games of debt versus income ratios?😕:|

On a more serious note, my fiscally conservative reccomendation is not to take on more debt based on increased household equity unless you are prepared for an (unlikely - unless you live in CA) real estate market correction.

 

[ElFenix]

the ratio of net worth to income was currently higher than its long-run average because household assets were rising as well.

"So long as financial intermediation continues to expand, both household debt and assets are likely to rise faster than income," he said, but added that did not necessarily imply a heavier debt burden.

there's the important part.

 

[SuperTool]

Originally posted by: alchemize
Greenspan says U.S. household debt not troubling
But Dave the unemployed Georgian told me the US consumer is drowning in debt? Who is this stupid Greenspan with his monopoly rich-man games of debt versus income ratios?😕:|

On a more serious note, my fiscally conservative reccomendation is not to take on more debt based on increased household equity unless you are prepared for an (unlikely - unless you live in CA) real estate market correction.

How do you expect the real estate values to be sustained as incomes fall? The people are paying the mortgages from their incomes.

 

[alchemize]

Incomes are falling? I didn't get that memo. Or are you going to go theoretical-political on me?

Even with incomes flat, real estate increases, hence increasing assets. Why does real estate increase? People recognize real estate as a tangible investment with limited resources. Good ole fashioned supply and demand.

 

[xxxxxJohnGaltxxxxx]

🙂 Perfect title...well-done, sir.

 

[alchemize]

Originally posted by: xxxxxJohnGaltxxxxx
🙂 Perfect title...well-done, sir.

Can you guess who my mentor was? Actually, now that I think about it, it should have said:

"Greenspan contradicts Dave & Co., says we can have as much debt as we want, stop paying bills." or something along those lines.

 

[Gonad the Barbarian]

Uh, I have to think those with the most household debt have few assets that appreciate. And what houshold assets appreciate? Everything I own (except maybe some jewelry and collectibles) depreciates. Ah, looks like I need to go into debt to buy a house and ride the appreciation out fo the debt. Sounds like a plan to me.

 

[xxxxxJohnGaltxxxxx]

Originally posted by: alchemize

Originally posted by: xxxxxJohnGaltxxxxx
🙂 Perfect title...well-done, sir.

Can you guess who my mentor was? Actually, now that I think about it, it should have said:

"Greenspan contradicts Dave & Co., says we can have as much debt as we want, stop paying bills." or something along those lines.

I'm not worthy 🙂

 

[alchemize]

Originally posted by: Gonad the Barbarian
Uh, I have to think those with the most household debt have few assets to appreciate. And what houshold assets appreciate? Everything I own (except maybe some jewelry and collectibles) depreciates. Ah, looks like I need to go into debt to buy a house and ride the apreciation out fo the debt. Sounds like a plan to me.

Uh, maybe not gotten into debt in the first place? Easier said than done 😉, I didn't have any debt until I got married (imagine that).

But you cannot buy a house until you get your debt enough in order to make the monthly payments. Owning a house is an excellent way of getting out of debt, if you are able to roughly keep your mortgage payments the same as your rent payments.

 

[SuperTool]

Originally posted by: alchemize
Incomes are falling? I didn't get that memo. Or are you going to go theoretical-political on me?

Even with incomes flat, real estate increases, hence increasing assets. Why does real estate increase? People recognize real estate as a tangible investment with limited resources. Good ole fashioned supply and demand.

Incomes are falling wrt to real estate values. I don't think real estate appreciation can be sustained faster than household's are taking on debt, unless incomes rise accordingly.
I don't care how good an investment real estate is. The incomes are what pays the mortgage, so if incomes don't rise, the real estate appreciation can't be sustained. It's supply and demand, you are right, and if the average income can't pay the mortgage, the demand is going to be lower.

 

[dmcowen674]

Originally posted by: alchemize
Incomes are falling? I didn't get that memo. Or are you going to go theoretical-political on me?

Even with incomes flat, real estate increases, hence increasing assets. Why does real estate increase? People recognize real estate as a tangible investment with limited resources. Good ole fashioned supply and demand.

That's right, wages are the highest ever from stocking shelves at Walmart for $6.50 an hour and flipping burgers at McD's which is the most Technilogical Manufacturing the U.S. has ever seen.

Yep and all those purple colored houses with 20 or more Mexicans piled into them, great value investment.

 

[Ferocious]

Actually the title is misleading.

Greespan implies increasing debt is not a problem because it is being offset by increased assets...namely home value.

Basic economics 101.

Only if Bush had taken such a course and understood it.

 

[Tom]

So long as financial intermediation continues to expand



What ?

 

[DealMonkey]

Originally posted by: alchemize
Greenspan says U.S. household debt not troubling
But Dave the unemployed Georgian told me the US consumer is drowning in debt? Who is this stupid Greenspan with his monopoly rich-man games of debt versus income ratios?😕:|

On a more serious note, my fiscally conservative reccomendation is not to take on more debt based on increased household equity unless you are prepared for an (unlikely - unless you live in CA) real estate market correction.

What makes you think CA is ready for a market correction on housing? Pundits have been predicting that for years and nada. Unless developers/builders crank-up production big time I don't really see the supply increasing sufficiently to offset the demand. Scary to think about though considering the single-family house I bought in SoCal less than a year ago has already appreciated about $90K based on neighborhood comps. :Q

 

[SuperTool]

Originally posted by: DealMonkey

Originally posted by: alchemize
Greenspan says U.S. household debt not troubling
But Dave the unemployed Georgian told me the US consumer is drowning in debt? Who is this stupid Greenspan with his monopoly rich-man games of debt versus income ratios?😕:|

On a more serious note, my fiscally conservative reccomendation is not to take on more debt based on increased household equity unless you are prepared for an (unlikely - unless you live in CA) real estate market correction.

What makes you think CA is ready for a market correction on housing? Pundits have been predicting that for years and nada. Unless developers/builders crank-up production big time I don't really see the supply increasing sufficiently to offset the demand. Scary to think about though considering the single-family house I bought in SoCal less than a year ago has already appreciated about $90K based on neighborhood comps. :Q

I am not buying a house in NorCal at these levels. Apartment rents have almost halved in silicon valley since the boom times when a studio went for $1300+, but the real estate values still have to go through the same correction, IMO.
Not sure about LA, but not big fan of traffic and smog.
I am gonna sit tight and wait for the higher interest rates to suppress demand and prices. No point buying now with the low interest rates driving up demand.

 

[alchemize]

Originally posted by: Ferocious
Actually the title is misleading.

Greespan implies increasing debt is not a problem because it is being offset by increased assets...namely home value.

Basic economics 101.

Only if Bush had taken such a course and understood it.

😉 You think my title is misleading? 😉

 

[alchemize]

Originally posted by: DealMonkey

Originally posted by: alchemize
Greenspan says U.S. household debt not troubling
But Dave the unemployed Georgian told me the US consumer is drowning in debt? Who is this stupid Greenspan with his monopoly rich-man games of debt versus income ratios?😕:|

On a more serious note, my fiscally conservative reccomendation is not to take on more debt based on increased household equity unless you are prepared for an (unlikely - unless you live in CA) real estate market correction.

What makes you think CA is ready for a market correction on housing? Pundits have been predicting that for years and nada. Unless developers/builders crank-up production big time I don't really see the supply increasing sufficiently to offset the demand. Scary to think about though considering the single-family house I bought in SoCal less than a year ago has already appreciated about $90K based on neighborhood comps. :Q

CA has depreciated rapidly in the past. Dunno if it will again in the future. Maybe New York will be the next one, who knows.

 

[alchemize]

Originally posted by: dmcowen674

Originally posted by: alchemize
Incomes are falling? I didn't get that memo. Or are you going to go theoretical-political on me?

Even with incomes flat, real estate increases, hence increasing assets. Why does real estate increase? People recognize real estate as a tangible investment with limited resources. Good ole fashioned supply and demand.

That's right, wages are the highest ever from stocking shelves at Walmart for $6.50 an hour and flipping burgers at McD's which is the most Technilogical Manufacturing the U.S. has ever seen.

Yep and all those purple colored houses with 20 or more Mexicans piled into them, great value investment.

good morning Dave was waiting for you! Greenspan is such an idiot, isn't he!

 

[DealMonkey]

Originally posted by: alchemize
😉 You think my title is misleading? 😉

What is Dave & Co's official position on increasing debt? Also, who's the "Co" in Dave & Co? 😉

 

[alchemize]

Originally posted by: DealMonkey

Originally posted by: alchemize
😉 You think my title is misleading? 😉

What is Dave & Co's official position on increasing debt? Also, who's the "Co" in Dave & Co? 😉

See above for Dave's well thought out position involving mexican's and purple houses.

want to join Dave & Co? To this point, he really is without peer 😉

 

[SuperTool]

Originally posted by: alchemize

Originally posted by: dmcowen674

Originally posted by: alchemize
Incomes are falling? I didn't get that memo. Or are you going to go theoretical-political on me?

Even with incomes flat, real estate increases, hence increasing assets. Why does real estate increase? People recognize real estate as a tangible investment with limited resources. Good ole fashioned supply and demand.

That's right, wages are the highest ever from stocking shelves at Walmart for $6.50 an hour and flipping burgers at McD's which is the most Technilogical Manufacturing the U.S. has ever seen.

Yep and all those purple colored houses with 20 or more Mexicans piled into them, great value investment.

good morning Dave was waiting for you! Greenspan is such an idiot, isn't he!

Why is it you rightwingers ignore every Greenspan warning on the deficits, but grasp to any straw he throws you when it fits your agenda?

 

[KK]

Originally posted by: dmcowen674

Originally posted by: alchemize
Incomes are falling? I didn't get that memo. Or are you going to go theoretical-political on me?

Even with incomes flat, real estate increases, hence increasing assets. Why does real estate increase? People recognize real estate as a tangible investment with limited resources. Good ole fashioned supply and demand.

That's right, wages are the highest ever from stocking shelves at Walmart for $6.50 an hour and flipping burgers at McD's which is the most Technilogical Manufacturing the U.S. has ever seen.

Yep and all those purple colored houses with 20 or more Mexicans piled into them, great value investment.

Well hell, let's just raise the min. wage up to $20/hour. That'll fix the first problem. Now evicting those mexicans could be alittle tougher.

KK

 

[Gonad the Barbarian]

Originally posted by: alchemize

Originally posted by: Gonad the Barbarian
Uh, I have to think those with the most household debt have few assets to appreciate. And what houshold assets appreciate? Everything I own (except maybe some jewelry and collectibles) depreciates. Ah, looks like I need to go into debt to buy a house and ride the apreciation out fo the debt. Sounds like a plan to me.

Uh, maybe not gotten into debt in the first place? Easier said than done 😉, I didn't have any debt until I got married (imagine that).

But you cannot buy a house until you get your debt enough in order to make the monthly payments. Owning a house is an excellent way of getting out of debt, if you are able to roughly keep your mortgage payments the same as your rent payments.

I am pretty much debt free, I'm just looking at this from the perspective of those many who aren't. There is another problem I missed until looking back over this situation though, how can people in debt afford to get out of debt and buy a house if property values are rising faster than income?

 

[dirtboy]

Originally posted by: DealMonkey

What makes you think CA is ready for a market correction on housing? Pundits have been predicting that for years and nada. Unless developers/builders crank-up production big time I don't really see the supply increasing sufficiently to offset the demand. Scary to think about though considering the single-family house I bought in SoCal less than a year ago has already appreciated about $90K based on neighborhood comps. :Q

It makes me laugh every time I hear someone say the house values are going to drop in CA soon. There is no correction people! Just because the stock market dropped value, doesn't mean housing will.

 

[rahvin]

Originally posted by: SuperTool

Originally posted by: alchemize

Originally posted by: dmcowen674

Originally posted by: alchemize
Incomes are falling? I didn't get that memo. Or are you going to go theoretical-political on me?

Even with incomes flat, real estate increases, hence increasing assets. Why does real estate increase? People recognize real estate as a tangible investment with limited resources. Good ole fashioned supply and demand.

That's right, wages are the highest ever from stocking shelves at Walmart for $6.50 an hour and flipping burgers at McD's which is the most Technilogical Manufacturing the U.S. has ever seen.

Yep and all those purple colored houses with 20 or more Mexicans piled into them, great value investment.

good morning Dave was waiting for you! Greenspan is such an idiot, isn't he!

Why is it you rightwingers ignore every Greenspan warning on the deficits, but grasp to any straw he throws you when it fits your agenda?

Because the Demlicans and Republicrats are essentially the same, just appealing to different special interests.