Thursday, May 16, 2019

An interesting juxtaposition of issues.

There is this:
AOC & Bernie Sanders talking about limiting interest rates on unsecured debt to 15%.

Then there is this:
A story about a new type of loan to help people meet rent.

Then there is this:
A story about households who can't get mortgages for small amounts.

There has been some pushback on the AOC/Sanders proposal.  But, it seems clear to me that those homeowners in the third story could get an unsecured loan of some sort with very high rates more easily than they could get any sort of mortgage.  That is odd.


  1. OT but interesting.

    Why do global house prices rise in unison?

    1. Thanks. Fascinating link. Really highlights the difficulty of parsing this issue. If from 1995 to 2005, home prices in LA tripled compared to Dallas, but in 2004-2005, home prices in both cities had a 10%+ anomaly in price appreciation, then was the bust in 2007-2008 a result of synchronized factors or something peculiar to LA? Either side could be convinced by the data, and where you fall is entirely the result of presumptions that exist above the plane of empirical evidence.

  2. The bad news is, the IMF recommends tougher underwriting standards as a solution to a possible future global house price collapse. I only read the abstract.

    The idea that there needs to be a radical increase in the supply of urban housing, from Vancouver to Los Angeles to Sydney to Hong Kong to London, is just one that does not get traction in macroeconomic circles.

    There is still the nagging issue that many nations with rising house prices relative to incomes) also run chronic trade deficits.

    And of course in the 2008-9 property price collapse, commercial properties actually fell more than residential properties, in the United States.

    Yes, like all of macroeconomics, it is a great topic in which to confirm one's biases!