Thursday, February 20, 2020

Housing: Part 362 - The Odd Case of the Elites vs. the Masses

It is strange that a rant from Rick Santelli delivered from the floor of the Chicago Mercantile Exchange, where he was being cheered on by a bunch of securities traders, is referenced as the founding moment of the Tea Party.  Wall Street style trading floors aren't usually associated with populist anti-Elite moments.



But, the strangeness doesn't end there.  He's complaining about a new Obama proposal to modify mortgages for struggling homeowners.  Now, I'm not necessarily a huge fan of the modification idea.  What really would have been better would have been to stop the horrendous combination of tight monetary policy and newly very tight lending which would have helped to stabilize housing markets.  It's a very distant second-best plan to keep pounding down on housing markets and then to construct some sort of program contrived to help and/or hurt various actors affected by the process.  It's like tying concrete blocks to a guy's ankles, pushing him off a boat, and then throwing him a lifesaver.

But, it's just so odd that there was so much anger toward speculators and banks that it was considered populist to wish that people would lose their homes.  The elites didn't dare to suggest that home prices should stabilize or that part of the solution should be stabilizing the lending market so that people who could have been borrowers for much of the past few decades could still get loans.  But, they did dare to suggest finding ways to keep families in their homes, which caused Santelli's ire.

Here's the kicker.  Most of the damage done to working class home equity was done after the Santelli rant.  Since punishing homeowners and tying the hands of lenders was the rallying cry of the day, low tier home prices crashed in the years after the Santelli rant.  From February 2009, when he made his appearance, to early 2012, home prices in low tier Atlanta neighborhoods, for example, lost about 30% of their values - about twice the decline they had experienced before February 2009.  None of that drop, especially after February 2009, was inevitable, natural, helpful, or an unwinding of anything unsustainable that had happened before.

What percentage of the homeowners in those neighborhoods had bought their homes in 2006 and 2007 with inappropriate mortgages?  A couple percent?

Santelli and his trader friends were very concerned about moral hazard.  "Don't throw the lifesaver to the guy with the blocks around his ankles! If you do, he'll never bother to learn how to swim!"

What's the opposite of moral hazard? Sadism?

Jim Cramer also had a famous rant on CNBC. It was more timely, prescient, and would have been helpful to those Atlanta homeowners.  About the same time that Santelli was ranting, Cramer was being hounded by Jon Stewart and others for being one of the elites that caused this mess.

If only we were better at choosing our populist champions.  Instead, American populists are complaining about what big paddles the elites have, after spending a decade bending over and yelling, "Thank you sir, may I have another."  It seems to me that a reason that a crisis happens every now and then is because every now and then a crisis becomes inexplicably popular.

14 comments:

  1. Egads.

    Home owners should lose their homes, and depositors should lose their savings, so that we may earnestly genuflect to the Moral Hazard Totem in the Orthodox Temple of Macroeconomic Theology.

    US macroeconomists go postal over Trump's trade tariffs on a single trading partner....but just can't seem to understand housing markets. Conversable Economist has charts in recent post showing declining homeownership rates and rising rents.

    Oh, that.

    What is important is the tariffs on China!

    So...we see a populist or a socialist in the White House. The sad part is, the socialist or the populist might actually run the country better than the establishment.

    ReplyDelete
    Replies
    1. HERBAL DR EMU WHO PREPARE HERBAL MEDICINE TO CURE ALL KINDS OF DISEASES INCLUDING HERPES DISEASE.   
       I have been battling this Herpes disease for almost 3 years now....I tried all possible means to get cure from my Herpes Disease but all to be in vain until i saw a post in a health forum about a herbal Dr Emu who prepare herbal medicine to cure all kind of diseases including Herpes Disease, at first i doubted if it was real but decided to give it a try...when i contact Dr Emu via his email (emutemple@gmail.com)  write him and reply me explain how the process work so after ordering for the medicine I got it within 3/4 working days through DHL Delivery and I took it according to the way Dr Emu instructed, I was so happy after 2 week I took the medicine there was very big change in my health when I was done with the process I go for test, I found out I am negative...Herpes patients should also get in touch with this herbalist Dr Emu to get rid of these Herpes Virus forever his whatsapp number +2347012841542. Website: https://emutemple.wordpress.com/ 

      Delete
    2. This is another testimony on how Chief Dr Lucky cured my HIV disease. Do you need a cure for your HIV disease? Do you want to be cured from your cancer disease? Or you want to be free from any type of disease. Kindly visit his website https://chiefdrluckyherbaltherapy.wordpress.com/ , he just cured my HIV disease and I’m very grateful to him, he is the only herbalist that can cure you.  
      WhatsApp number : +2348132777335 
      Via Email : chiefdrlucky@gmail.com
      Thank you all for reading,
      God bless"

      Delete
  2. Happiness is all i see now, i was herpes sicker for 6 years but i thank God for directing my footsteps to Dr Emu, he gave me instructions and i followed and in 2 weeks i was completely cured using his medicine, I am now Herpes Negative Contact Dr Emu for more information, He also has other cure to other ailment, HIV AIDS, CANCER, DIABETES, HEART DISEASE, HEPATITIS B/C And also restore broken relationships such as Ex HUSBAND, Ex WIFE, BROKEN MARRIAGES, Any kind of Problem in any relationship can be restore back in 24hours, Just Email: emutemple@gmail.com  Whatsapp or call: +2347012841542

    ReplyDelete
  3. Nice post!..good information,it is really helpful..it really impressed me alot and i just loved it.Thanks for posting such an informative content:
    Local Packers And Movers Bangalore

    ReplyDelete
  4. Natural herbs have cured so many illness that drugs and injection can’t cure. I've seen the great importance of natural herbs and the wonderful work they have done in people's lives. i read people's testimonies online on how they were cured of HERPES, HIV, diabetics etc by Dr Edes herbal medicine, so i decided to contact the doctor because i know nature has the power to heal anything. I was diagnosed with Herpes for the past 3 years but Dr Edes cured me with his herbs and i referred my aunt and her husband to him immediately because they were both suffering from Herpes but to God be the glory, they were cured too .I know is hard to believe but am a living testimony. There is no harm trying herbs, Thanks. Write him on WhatsApp on +2348151937428. @dr_edes_remedies deals with
    (1)Alzheimer virus
    (2)Cancer
    (3)HIV
    (4)Herpes
    (5)Genital warts
    (6)ALS
    (7)Virginal infection
    (8)HPV
    (9)Hepatitis
    (10)Asthma
    Email him on dredeshome@gmail.com
    https://dredesherbalhome.weebly.com/product-order.html
    https://www.youtube.com/channel/UCWhBHvtpo772EWAEdsFWmWQ

    ReplyDelete
  5. Packers and Movers Ahmedabad list, Cheap Packers Movers Ahmedabad Charges, Local, Affordable Household Shifting Ahmedabad @ Packers and Movers Ahmedabad

    ReplyDelete
  6. Packers and Movers Ahmedabad - We Provide ***Best Service Providers, Safe, Reliable, Affordable, Trusted ###Movers and Packers in Ahmedabad List, Household Shifting, Office Relocation: Choose Top Verified Packers and Movers Ahmedabad Compare ???Shifting Service Chrages, Price Quotation, Rate List Charts and Save Money and Time @ Packers and Movers Ahmedabad

    ReplyDelete
  7. Packers and Movers Bangalore as a Services providing company can make all the difference to your ###Home Relocation experience. Bangalore based Company which offers versatile solutions, Right team that easily reduce the stress associated with a ???Household Shifting, ***Vehicle Transportation. we help things run smoothly and reduce breakages and offer you seamless, Affordable, Reliable Shifting Services, Compare Shifting Charges. @ Packers And Movers Bangalore

    ReplyDelete
  8. Omg I Finally Got Helped  !! I'm so excited right now, I just have to share my testimony on this Forum.. The feeling of being loved takes away so much burden from our shoulders. I had all this but I made a big mistake when I cheated on my wife with another woman  and my wife left me for over 4 months after she found out..  I was lonely, sad and devastated. Luckily I was directed to a very powerful spell caster Dr Emu who helped me cast a spell of reconciliation on our Relationship and he brought back my wife and now she loves me far more than ever.. I'm so happy with life now. Thank you so much Dr Emu, kindly Contact  Dr Emu Today and get any kind of help you want.. Via Email emutemple@gmail.com or Call/WhatsApp +2347012841542

    ReplyDelete
  9. To know more about Chief Dr Lucky you can visit his website (https://chiefdrluckyherbaltherapy.wordpress.com/)
     
     A friend that suffered from Herpes and was cure with the help of this great herbal doctor Chief Lucky so i decided to contact him for help in getting rid of my families genital herpes virus 1/2 which i did and all i was told to provide was just some useful information and some materials used in preparation of the natural cure and that i did and now i am the happiest person on earth because i am writing this testimony of mine with joy and happiness in my heart to the whole world to know that natural remedy is real because i am a living testimony of Chief Lucky traditional herbal cure and i want you all to contact Chief Lucky via his email: chiefdrlucky@gmail.com or WhatsApp him +2348132777335 am sure he will help you too.

    ReplyDelete
  10. I am here to explore blogs forum about the wonderful and most safe cure for HERPES SIMPLEX VIRUS . I was positive to the deadly Virus called HERPES and i lost hope completely because i was rejected even by my closet friends. i searched online to know and inquire about cure for HERPES and i saw Dr ERAYO testimony online on how he was cured so many persons from Herpes Disease. so i decided to contact the great herbalist because i know that nature has the power to heal everything. i contacted him to know how he can help me and he told me never to worry that he will help me with the natural herbs from God! after 2 days of contacting him, he told me that the cure has been ready and he sent it to me via FEDEX or DHL and it got to me after 4 days! i used the medicine as he instructed me (MORNING and EVENING) and i was cured! its really like a dream but i'm so happy! that's the reason i decided to also add more comment of Him so that more people can be saved just like me! and if you need his help, contact his Email: (drerayoherbalhome@gmail.com) you can contact him on whatsapp +2348151937428.
    He also cure the below listed sickness;
    (1) HERPES,
    (2) DIABETES,
    (3) HIV&AIDS,
    (4) URINARY TRACT INFECTION,
    (5) HEPATITIS B,
    (6) IMPOTENCE,
    (7) BARENESS/INFERTILITY
    (8) DIARRHEA
    (9) ASTHMA...
    https://alternativeherbs.weebly.com

    ReplyDelete
  11. I was a HIV-AIDS patient and I got it from cheating on my wife. It was sort of a payback but a week later I was told by a friend that the person who I cheated with had the HIV-AIDS virus and did not tell me. I was so stupid by not using a condom I thought since he was an old school friend he was trustworthy. But I was wrong. I cried and cried. Two days later, I got a phone call from my friend and he told me about a person who is known by another friend, who can help me. I could not let my wife know what I was going through. I finally got his email address: oseremenspelltemple@gmail.com and I emailed this man my story and he replied me immediately saying i should be calm and told me that everything will be OK. I could not come to terms with what I was hearing but then I concluded it did not matter because I was so broken I just needed help. I was going out of my mind literally. I was confused with what he was telling me, but I listened. He told me about some materials i need to buy that he needed to cast the spell and I said OK. I bought the materials to him, I sent down my picture to him and my positive result sheet and he replied me that i am going to be negative under 3days. I message Him every 2hours for 2day and I knew he thought that I was crazy but I did care I needed a shoulder. Behold, the third day he messaged me i should go for a test that i will be negative. My marriage could be broken because of a stupid mistake and my life was on the line. I remembered when I was going to get the results of my re-test I called him up again and told him that I was going to get my results today and his reply was “so" and that everything will be as he explained. I knew then that he was getting tired of me calling him, maybe I was wrong. Well I got my results and the first person I called was him - again. As he said hello I started to cry and cry. I could not believe it. I was given a second chance in life.This man is a great spiritual HIV/AIDS healer, his healing spell on aids healing is very powerful .please brothers and sister, contact Dr Ose oseremenspelltemple@gmail.com
    whatsapp +2348136482342www.facebook.com/Dr-odion-spell-temple-110513923938220

    ReplyDelete
  12. Looking for professional and licensed verified @ Packers and Movers at an affordable cost?
    Your search ends here... Hire the most licensed and verified packers and movers at an affordable cost and save money
    100% Licensed & verified Transporters in India, Call us on 888 666 3106
    Packers and Movers India | Licensed Transporters | Hassle-free relocation

    @ Movers and Packers in Bangalore
    @ Movers and Packers in Hyderabad
    @ MovingNow Packers and Movers Blog
    @ MovingNow Packers and Movers Blog

    ReplyDelete