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« Bending slowly towards justice | Main | Fear the fish. Or don't. »

Jan 28, 2008

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jimcaserta

The source of Bubba's quote that imagines people who think mortgages are unavailable...someone selling mortgages.

Jim Rosenberg

The part I don't understand is this: "And when I pointed out that the mortgage money was still available, despite the false claim in the linked article."

What false claim in the linked article. State the false claim. It's very simple and everyone's watching. Defend your position: state the published text you are claiming is false. There is no wiggle room. What's the false claim, Bob? State it.

Bubba

The claim was the impression that the words provided. It was not done accidentally. It was done in spite of the facts of the available credit.

Of course, you may want to argue that "verifying income" constitutes "making it more difficult" for those with good credit to get mortgages.

The statement is just another line of misrepresentation to which we've constantly been exposed throughout the whole process, including just about every one of these threads here.

Bubba

"The source of Bubba's quote that imagines people who think mortgages are unavailable...someone selling mortgages."

Yeah, one of those evil, selfish realtors who opposed the one percent real estate transfer tax that so many folks thought was such a nifty idea earlier.

We know what that was all about, don't we?

Jim Rosenberg

"The claim was the impression that the words provided."

I figured.

Bubba

"I figured."

Anything to justify your non-existent point, it seems.

jimcaserta

I might only be an engineer, but I thought realtors sold houses, while mortgage brokers sell mortgages. Ask a realtor if it has become harder to get a mortgage. Ask them if housing sales have slowed. 2/3 of jumbo loans in the first half of 2007 were either interest only or negative amortization. Norris presents the domino effect in both directions in housing - rising prices lead to more sales, falling prices lead to less.

Is the mortgage market in hysterics now, or was it hysterically optimistic over the past few years? Waking up to reality is not hysteria, but the taming of hysteria.

Dave Ribar

Baghdad Bubba:

In 2004, the Atlanta Fed published a balanced article describing some of the risks of household debt. The article makes the point that debt levels rose during the early 2000s (in many previous recessions, consumers had retrenched). It also makes the point that we just don't know how high debt levels can go before they become a problem. It's important to note though that the article was written when housing prices were still trending up, that is, when the housing bubble was still supporting expanding debt.

A more recent article by an economist at the Kansas City Fed points out that changes in consumer savings/borrowing patterns have been associated with some recessions but not all. It concludes that "large adjustments in the personal saving rate could pose short-term cyclical problems if the adjustments occurred sharply." However, it's bigger conclusion is that worries about high levels of debt may be overblown. Again, this article was written before the current housing slowdown.

Finally, Case et al. in a 2005 Advances in Macroeconomics article find that changes in housing wealth have important effects on household consumption (effects that are larger than stock market effects).

Dave Ribar

Baghdad Bubba:

You had written "Specifically, what points of Wesbury's linked analysis are wrong?"

Wesbury wrote that "fourth-quarter real GDP probably grew at only a 1.5% annual rate."

Well, figures regarding 4th quarter GDP show that growth fell to an anemic 0.6%.

The Bureau of Economic Analysis reports that "The deceleration in real GDP growth in the fourth quarter primarily reflected a downturn in inventory investment and decelerations in exports, in PCE, and in federal government spending." But Wesbury argued that export growth would keep things buoyant and that housing wouldn't hurt PCE.

Roch101

"But Wesbury argued that export growth would keep things buoyant and that housing wouldn't hurt PCE." -- Dave

Yeah, buy Wesbury's flaw was that he was ignorant of this economic influence.

Ed Cone

That's why it's number one on the list.

Dave Ribar

Baghdad Bubba is now dabbling in ed-cone-nomics!

Bubba

(sigh)

Less intellectual integrity, more circle jerk.

Par for the course here.

Are you people done yet?

Ed Cone

April 7, 2003: ""The Americans are not there. They're not in Baghdad. There are no troops there. Never. They're not at all."

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