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California Dreamin' (Homeless Crisis)

#11
Syne Offline
(Mar 11, 2018 02:58 PM)confused2 Wrote:
Syne Wrote:That's pretty much how it went down in the US housing bubble. Except the lower qualifications for loan approvals was actually mandated by government regulation. Banks here weren't doing that until the government pressured them. And since the government was to blame, the US taxpayer bailed them out too.

From https://en.wikipedia.org/wiki/Fannie_Mae..._late_2007:-

"Then in 2003–2004, the subprime mortgage crisis began.[35] The market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization conduits, typically operated by investment banks."

Clearly there are two sides to every story and we may well (as intended) never know the truth.
Due to the governmental pressure to make under-qualified loans, that was the only viable way to try to secure the investment value of such loans. GSEs had an implicit guarantee against security value loss:

Fannie, however, became a private corporation, chartered by Congress and with a direct line of credit to the US Treasury. It was its nature as a Government Sponsored Enterprise (GSE) that provided the 'implied guarantee' for their borrowing.
- https://en.wikipedia.org/wiki/Fannie_Mae...nt_support

IOW, since Government Sponsored Enterprises could make under-qualified loans with little implicit risk of loss, the only way other lenders could compete was to use MBS to defray their risk and make those same under-qualified loans more secure as investments. Government demanded under-qualified loans, gave GSEs the impression of guaranteed insulation against risk (real or not, they did get bailed out), and forced all other lenders to compete in a market where government thus held a thumb on the scales.
The free market did the only thing it's designed to do...compete. The government creating an uneven playing field warped the usual incentives.
(Mar 11, 2018 04:40 PM)Secular Sanity Wrote:
(Mar 11, 2018 02:57 AM)Syne Wrote: Again, not watching dozens of videos, especially if you don't have the wherewithal to make your own arguments.

There’s no shortcuts to understanding complicated situations, sweetie.  If you want to pop off and sound like a big shot, watch the videos and read the links.  
Economics is not complicated, once you actually understand it. You're still playing the "I sound smart because I reference someone else" game. If you've actually learned anything, you should be capable of synthesizing arguments yourself. If not, you're just pretending.
Quote:Commodity Future Modernization Act of 2000 (wikipedia.org)

"Martin Lowy argued that America’s housing bubble couldn’t have inflated to dangerous proportions without massive inflows from Europe.

The crisis was built in just three years: 2004 through 2006. If no new financing sources had been added to the housing market after 2003, nothing extraordinary would have happened even if house prices had declined.

What made those three years extraordinary was the influx of foreign money into securitized mortgage-based products. That inflow enabled mortgage money to be advanced to people who couldn’t repay it.

Foreign money knows little about the domestic market and therefore relies on local banks, governments, or rating agencies. Investment banks seized on that weakness of the foreign money to use weaknesses in the system to promote badly underwritten mortgage products and pass them off as money-good."
Wrong.

Here's the real story, in brief: In 1995, using the powers of the presidency, Bill Clinton turned the 1977 Community Reinvestment Act into an aggressive program that basically forced banks to lend money to "underserved" communities. That meant those with low incomes who couldn't necessarily repay a loan.

Meanwhile, his Department of Housing and Urban Development got involved in a big way.

Jack Cashill, writing for the American Thinker, notes: "HUD, which Congress had made the regulator of Fannie Mae and Freddie Mac in 1992, began to pressure these agencies to set numerical goals for affordable housing, even if that meant buying subprime mortgages. The media cheered the agencies on."

Under HUD Secretary Andrew Cuomo, the agency became particularly aggressive, in 2000 making a goal of over $1 trillion in new loans to low-income minority households. Fannie Mae and Freddie Mac were told to make at least half of their loans to low- and moderate-income borrowers, mainly minorities.

Banks suddenly found that regulators had the power to refuse their branch expansions or reject a merger if they weren't making enough loans to otherwise unqualified minority borrowers. So they played along. They made the loans, and Freddie and Fannie bought the loans right back. It was like a game of musical chairs, and the Fed kept the game going in the early 2000s by cutting interest rates.
- https://www.investors.com/politics/edito...al-crisis/

Notice how your source just found something that also happened in 2000 to blame, even though it doesn't explain why banks would even need "to promote badly underwritten mortgage products" in the first place. More investment doesn't make lenders suddenly take on under-qualified and less secure loans.
Quote:The Real Cause of Americas Housing Bubble was Foreign Money

But shortly after, Chinese investors started pouring in and the prices continued to rise. 

There was this little program that was created in 1990.  We offered up citizenship through this EB-5 Immigrant Investor Program, providing a method for eligible Immigrant Investors to become lawful permanent residents, but there was some shady shit here, as well.  There were a few loopholes in it and the amount of jobs that it was supposed to create never actually took place.

Chinese customers quickly became the silver lining in, not only America’s real estate market, but also, Canada’s, Australia’s, etc. As the prices climb along with rent and property taxes, California residents are being forced out.

China’s Millionaire Migration

Chinese pouring over $110 billion into US real estate

There's a lot more to the story but so little time.  Maybe next time, when Syne catches up.  Big Grin

Nope. That doesn't fly either. Foreign investment didn't cause the housing prices to significantly rise. $110 billion doesn't even put a scratch in accounting for the $9 trillion lost in the housing market.
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#12
Secular Sanity Offline
(Mar 11, 2018 09:34 PM)Syne Wrote: Nope. That doesn't fly either. Foreign investment didn't cause the housing prices to significantly rise. $110 billion doesn't even put a scratch in accounting for the $9 trillion lost in the housing market.

What I’m saying is that California has received a lot attention from Chinese investors. That’s one of the reasons why we bounced back so fast. During the foreclosures they could afford to make all cash offers and scooped up quite a bit, which has contributed to the rise in rent and the overall market.

Watch the videos, Syne. God, you’re so stubborn.
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#13
Syne Offline
(Mar 11, 2018 10:59 PM)Secular Sanity Wrote:
(Mar 11, 2018 09:34 PM)Syne Wrote: Nope. That doesn't fly either. Foreign investment didn't cause the housing prices to significantly rise. $110 billion doesn't even put a scratch in accounting for the $9 trillion lost in the housing market.

What I’m saying is that California has received a lot attention from Chinese investors.  That’s one of the reasons why we bounced back so fast.  During the foreclosures they could afford to make all cash offers and scooped up quite a bit, which has contributed to the rise in rent and the overall market.

Watch the videos, Syne.  God, you’re so stubborn.

And? How does that refute the fact that California taxes and regulations raise property values and stifle new and denser housing construction?
It doesn't, because you just run off to Google something you can regurgitate in lieu of engaging in the actual arguments made. On top of that, you seem to have linked videos about Vancouver and New York City....not California. And I can only judge the one link based on your quote, because I won't register to read umpteen login-walled sources of bullshit.
It's the pretense of intelligence without substance.
If you like to spend hours indoctrinating yourself with leftist excuses for their own failed policies, that's on you.
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#14
Secular Sanity Offline
(Mar 12, 2018 01:42 AM)Syne Wrote: And? How does that refute the fact that California taxes and regulations raise property values and stifle new and denser housing construction?

It doesn't. It just shows that foreign money distorts the local housing markets that already suffer from a shortage of homes to buy.

My point was that our homeless problem is not solely due to California residents having more mental health issues. Housing costs and rising rent are linked to more Californians living on the streets, especially in the L.A.
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#15
Syne Offline
(Mar 12, 2018 02:39 AM)Secular Sanity Wrote:
(Mar 12, 2018 01:42 AM)Syne Wrote: And? How does that refute the fact that California taxes and regulations raise property values and stifle new and denser housing construction?

It doesn't.  It just shows that foreign money distorts the local housing markets that already suffer from a shortage of homes to buy.
Largely insignificant.
Quote:My point was that our homeless problem is not solely due to California residents having more mental health issues.  Housing costs and rising rent are linked to more Californians living on the streets, especially in the L.A.

And? I agreed with that in my first post to this thread. No one ever said "California residents [have] more mental health issues".
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#16
Secular Sanity Offline
(Mar 12, 2018 03:20 AM)Syne Wrote: Largely insignificant.

No it's not.

Syne Wrote:And? I agreed with that in my first post to this thread. No one ever said "California residents [have] more mental health issues".

(Mar 10, 2018 02:37 AM)Syne Wrote: Considering a large percent of homeless tend to be mentally ill, money might be better spent improving mental care facilities...if only the federal government hadn't pretty much taken that over from states under JFK.

Bearing in mind both yours and Yazata’s remarks on race and poverty, it seems to me that many of us still hold the individual responsible for their socioeconomic fate.  We’re still leaning towards the internal factors rather than any possible external structural dynamics.  Remnants of protestant pride, perhaps?

Question:  Are our notions of success internal or external?
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#17
Syne Offline
(Mar 12, 2018 03:46 PM)Secular Sanity Wrote:
(Mar 12, 2018 03:20 AM)Syne Wrote: Largely insignificant.

No it's not.
You've provided no evidence it is. Remember, we're talking about California, not Vancouver or NYC.
Quote:
Syne Wrote:And? I agreed with that in my first post to this thread. No one ever said "California residents [have] more mental health issues".

(Mar 10, 2018 02:37 AM)Syne Wrote: Considering a large percent of homeless tend to be mentally ill, money might be better spent improving mental care facilities...if only the federal government hadn't pretty much taken that over from states under JFK.
And? Where does that say "California residents [have] more mental health issues"? It doesn't, because that's a straw man. Again, learn to engage the actual arguments made.
Quote:Bearing in mind both yours and Yazata’s remarks on race and poverty, it seems to me that many of us still hold the individual responsible for their socioeconomic fate.  We’re still leaning towards the internal factors rather than any possible external structural dynamics.  Remnants of protestant pride, perhaps?

Question:  Are our notions of success internal or external?

"external structural dynamics" are largely a myth, especially in the US. No one has shown evidence for it when personal decisions are the biggest predictors of lifelong poverty. And it's not like those choices include college or six figures. They're only not getting knocked up before marriage, getting a job (any job), and graduating high school, where there are often lower standards or easier options in failing school districts.

It's reality, not pride. What success is internal or external? Material success? Personal sense of success? Ask a less vague question.
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#19
confused2 Offline
Could we look at the way you can possibly lose 9 trillion dollars? At $200k/house this would be 45 million houses built and subsequently reduced to zero value. I'm guessing actual affordable houses are a trivial part of this loss - the majority can be found in luxury homes and yachts - but I don't actually know this for sure. Any idea how many affordable houses were built or bought for $9T and can they actually be seen - are they real? As a fun thing it seems the British taxpayer lost about $1.5T (not $2T as previously quoted) on the American sub-prime housing market - about $60,000 per British taxpayer - maybe look at that later.

Fun link to UK stake in American sub-prime mortgages:-
https://www.telegraph.co.uk/finance/4325...-debt.html
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#20
Secular Sanity Offline
(Mar 12, 2018 11:27 PM)confused2 Wrote: Could we look at the way you can possibly lose 9 trillion dollars? At $200k/house this would be 45 million houses built and subsequently reduced to zero value. I'm guessing actual affordable houses are a trivial part of this loss - the majority can be found in luxury homes and yachts - but I don't actually know this for sure. Any idea how many affordable houses were built or bought for $9T and can they actually be seen - are they real? As a fun thing it seems the British taxpayer lost about $1.5T (not $2T as previously quoted)   on the American sub-prime housing market - about $60,000 per British taxpayer - maybe look at that later.

Well, acording to Zillow the total value of all U.S. homes in 2017 is $31.8 trillion.
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