The Collected Works of Author and Blogger Larry Roberts

Archive for May, 2014

Affordable housing programs are intended to provide good homes to low wage earners; instead, they provide government handouts to developers. Russ Wetherill, May 31, 2014 If there’s one thing I can’t stand… [full-disclosure: there’s actually a lot of things I tolerate, but don’t really like very much, like stop lights – what are those good for? Sure they prevent accidents, and save lives, but I probably waste an hour a week just sitting there fish-eyeing the people in the next car for signs of instability.] … but one thing that irks me more than most is phony compassion for the poor. The poor aren’t particularly wealthy, and thus generally not a very good source of revenue. In an ordinary universe,…[READ MORE]

The US foreclosure crisis contributed to the nation's jump in suicides, independent of other economic factors associated with the Great Recession. People form attachments to many things, and these attachments are the source of most suffering. I recently lost a $300 laser distance finder I use to play golf; I was so upset that I couldn't concentrate on my game for a few holes, but I got over it and accepted my loss. I was attached to that item, and losing it caused me to suffer. We've all experienced the grief of losing something we value, but the suffering caused by these attachments can sometimes be extreme. Ownership is a primal form of attachment, and becoming attached to your shelter…[READ MORE]

The housing recovery benefits the top 1% who have the cash and the credit to complete the sale. The other 99% continue to struggle. The rich get richer, or so they say. It's the rich who have the cash for a down payment and the good credit to qualify for a mortgage, so the one segment of the housing market seeing the most activity is the top 1%. For everyone else, the housing recovery is something they only read about in the financial media, but it doesn't really impact them. With the current political and financial regime in place, the 1% benefit the most. Federal reserve policy provides cheap debt to inflate asset values, and since the 1% owns most…[READ MORE]

Large real estate investors in California reject higher prices and stagnant rents and dramatically slow their purchases over the last 18 months. Sales are slow across the country, but particularly in California, because prices are too high. When prices were low enough that investors could obtain a sufficient yield, they bought them; in fact, they bought a great many of them, so many that they absorbed all the available inventory and drove prices up to the point that they no longer make sense on a cashflow basis. The theory was the owner-occupants would step up, pay higher prices, and sustain the market momentum. It hasn't worked out that way. In the past, whenever affordability became a problem, lenders would come…[READ MORE]

Negative equity is making ordinary homeowners into speculators in the options market, each betting on the continued reflation of the old housing bubble. An option contract provides the contract holder the option to force the contract writer to either buy or sell a particular asset at a given price. A typical option contract has an expiration date, and if the contract holder does not exercise their contract rights by a given date, they lose their contractual right to do so. An option giving the holder the right to buy is a “call” option, and the option giving the holder the right to sell is a “put” option. The writer of an options contract is typically paid a fee or a…[READ MORE]

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