The Collected Works of Author and Blogger Larry Roberts

Archive for 2011

For readers of this blog, the editorial that follows will not cover new ground. For the wider readership in California, what follows is pure sacrilege. Bursting our bubble Why do we continue to think that rising home prices are a good thing? By Michael Kinsley -- February 15, 2011 If President Obama could ask for one gift from the economy — one statistic that turns unexpectedly rosy — what would it be? If Americans in general could choose one change in their financial situation, what would they choose? I suppose Obama would choose a decline in the unemployment rate. But a close second for Obama, and quite possibly first on the list of other Americans, would be a rebound in…[READ MORE]

Should the government provide loan guarantees to subsidize home ownership? The arguments in favor of government subsidies all come down to putting people into homes they cannot afford in a free market. The theory is that homeowners care more for their properties and community and are less likely to cause social unrest. There is no real evidence to support this idea, but expanding home ownership has been the cornerstone of government policy since before the Great Depression. The arguments against are summarized below. Ten Arguments Against a Government Guarantee for Housing Finance By ANTHONY RANDAZZO From the Reason Foundation -- February 9, 2011 There is a growing belief among mortgage investors, industry groups and some policymakers in Washington that some…[READ MORE]

During the housing bubble rally, the grass was greener and the light was brighter. At higher prices with boundless hope, we reached the dizzying heights of real estate wealth, a dreamworld of unlimited appreciation and personal spending power. Currently our housing market is completely supported by and dependent on government loan guarantees. By offering to assume all risk of loss, the federal government though the GSEs and the FHA is underwriting loans at historically low interest rates. This caused money to flow into mortgage lending at a time when proper risk management was to flee. This kept some of the air in the housing bubble which allowed the government to get control of the market's descent. The question is how…[READ MORE]

We want our government officials to lie. We must, or we wouldn't continually put liars in positions of power. Ben Bernanke made a number of public statements around the peak of the housing bubble and during the financial meltdown that suggested his grasp of the obvious was challenged. Personally, I prefer to assume men like Bernanke are knowingly deceiving the general public to avoid feeding into a financial panic. If Bernanke is as clueless as his public statements make him out to be, he is more like Greenspan than I am comfortable with, and our financial system is being run by a fool. Last week I noted that the government commission to study the housing bubble and the financial meltdown…[READ MORE]

Nobody is perfect. Everybody plays the fool sometimes. We hope we put people in positions of power who know what they are doing. Sometimes, these people fail, and when they do millions suffer for their arrogance and their ignorance. The sad conclusion of the government commission on the financial crisis concluded the entire ordeal was avoidable. If a few key people in power had made different decisions, we could have averted a housing bubble and the near meltdown of our financial system. Financial Crisis Was Avoidable, Inquiry Finds By SEWELL CHAN Published: January 25, 2011 WASHINGTON — The 2008 financial crisis was an “avoidable” disaster caused by widespread failures in government regulation, corporate mismanagement and heedless risk-taking by Wall Street,…[READ MORE]

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