imc indymedia

Los Angeles Indymedia : Activist News

white themeblack themered themetheme help
About Us Contact Us Calendar Publish RSS
Features
latest news
best of news
syndication
commentary


KILLRADIO

VozMob

ABCF LA

A-Infos Radio

Indymedia On Air

Dope-X-Resistance-LA List

LAAMN List




IMC Network:

Original Cities

www.indymedia.org africa: ambazonia canarias estrecho / madiaq kenya nigeria south africa canada: hamilton london, ontario maritimes montreal ontario ottawa quebec thunder bay vancouver victoria windsor winnipeg east asia: burma jakarta japan korea manila qc europe: abruzzo alacant andorra antwerpen armenia athens austria barcelona belarus belgium belgrade bristol brussels bulgaria calabria croatia cyprus emilia-romagna estrecho / madiaq euskal herria galiza germany grenoble hungary ireland istanbul italy la plana liege liguria lille linksunten lombardia london madrid malta marseille nantes napoli netherlands nice northern england norway oost-vlaanderen paris/Île-de-france patras piemonte poland portugal roma romania russia saint-petersburg scotland sverige switzerland thessaloniki torun toscana toulouse ukraine united kingdom valencia latin america: argentina bolivia chiapas chile chile sur cmi brasil colombia ecuador mexico peru puerto rico qollasuyu rosario santiago tijuana uruguay valparaiso venezuela venezuela oceania: adelaide aotearoa brisbane burma darwin jakarta manila melbourne perth qc sydney south asia: india mumbai united states: arizona arkansas asheville atlanta austin baltimore big muddy binghamton boston buffalo charlottesville chicago cleveland colorado columbus dc hawaii houston hudson mohawk kansas city la madison maine miami michigan milwaukee minneapolis/st. paul new hampshire new jersey new mexico new orleans north carolina north texas nyc oklahoma philadelphia pittsburgh portland richmond rochester rogue valley saint louis san diego san francisco san francisco bay area santa barbara santa cruz, ca sarasota seattle tampa bay tennessee urbana-champaign vermont western mass worcester west asia: armenia beirut israel palestine process: fbi/legal updates mailing lists process & imc docs tech volunteer projects: print radio satellite tv video regions: oceania united states topics: biotech

Surviving Cities

www.indymedia.org africa: canada: quebec east asia: japan europe: athens barcelona belgium bristol brussels cyprus germany grenoble ireland istanbul lille linksunten nantes netherlands norway portugal united kingdom latin america: argentina cmi brasil rosario oceania: aotearoa united states: austin big muddy binghamton boston chicago columbus la michigan nyc portland rochester saint louis san diego san francisco bay area santa cruz, ca tennessee urbana-champaign worcester west asia: palestine process: fbi/legal updates process & imc docs projects: radio satellite tv
printable version - js reader version - view hidden posts - tags and related articles

US Real Estate: From Goldmine To Money Pit

by Kenn Spacefield Wednesday, Oct. 08, 2008 at 4:22 AM

Mortgage Backed Securities and Derivatives are Flawed and Failing. The mortgage debt problem is simple really, it has been a total mis-appropriation of equity. The equity lost on flat screen TV's, boats, new cars, vacations, and other living expenses; is equity lost forever. This loss of equity spent on consumer goods and expenses is a pyramid scheme of hyper-capitalism that is flawed and failing. Equity not spent on the property the equity comes from, is equity lost forever, a mis-appropriation of funds, and inappropriate; it is a failing economic model.

Mortgage debt is public, and traded globally, but home appreciation on debt is private profit. This economic model does not work. The idea that mortgage debt is a shared risk of the global economy, interest on the debt is deductible to homeowners, and the appreciation on the debt is private profit; is an economic model that does not work.

The US government promotes and encourages home ownership with tax incentives. The more you owe, the more interest you pay and write off on your taxes, and the more money you make on the appreciation on the debt; if the house goes up, and always goes up in value. This is a failing economic model; because of mortgage interest deductions, shared debt risk, and private profit.

Keeping home mortgage interest tax deductible for the homeowner while they collect equity appreciation on their debt, is a self inflating pyramid scheme propped up by the federal government. The homeowner is rewarded for taking on a higher interest mortgage payment, and this encourages and rewards debt. (People get the biggest house they can afford or maybe two, and use it as a "write off".) This is just plain wrong and this house of cards is flawed and failing. (Home equity loans that are not spent on home repair, remodel, or improvement, is equity lost forever; and its deductible! If everyone's idea is to "up size" now and "downsize" later, who is going to be "up sizing later"? - The retiring baby boomers?.)

The federal governments debt, mortgage debt, and the loss of value in real estate is going to continue to climb. Housing prices will fall until people can afford to buy homes on what they actually earn. The United States has destroyed its reputation and economic trust globally and trashed the constitution here at home. This is a meltdown globally from the US being seen as a respected "superpower" to now being seen; as a bully you cannot trust. All the federal debt and real estate value loss is going to cost the US government a lot, but I feel the damage done to the United States reputation globally and at home; will cost it even more.

I have felt for twenty years real estate has been over-valued, and over priced. Real estate appreciation has been ridiculous and unsustainable. I am still not ready to buy, as the prices are still not low enough, and have 20 to 30 percent - and even 40 percent to drop, before people, on what they make can afford them. This is real estate coming back down to earth, and I am not panicked, or in crisis.

Americans are making less, and housing just kept rising and costing more, more, and more. Hows that working for you?

I have heard there are 70 million (plus) disenfranchised (under-paid) Americans who do not file income tax. I feel more people are feeling disenfranchised with the federal government and I feel this number will rise. This disenfranchisement causes people to shy away from passive participation with the federal government, to active non-participation in the economic affairs of the federal government.

Buying a house turns your life into a business, and the federal government then has total access and knowledge of your finances. The financial markets use government papers to qualify you for a loan.

The federal government has ruined itself in my eyes. I hope for its "fiscal" failure; due to deficit spending. I hope the federal government becomes bankrupt and irrelevant.

It is all about the real estate, which is all about the money, and the federal governments goldmine of income tax collection, turning out to be a dilapidated money pit.

The debt from bad war, torture, illegal imprisonment, domestic spying and "other" bad debts; that the US federal government has yet to realize, tabulate, or equitize. If you have lost your job and your home; the US has lost a taxpayer.

From Gold Mine to Money Pit - the 2008 fall of US Residential Real Estate. A Trillion Dollar band-aid Bail Out that - (like most homeowners did with there equity money and their last home repair; put a band aid on it, and spent the money somewhere else) does not fix the problem.

Are you part of the problem?

The US governments encouragement towards home ownership and the tax benefits granted are well known. With real estate appreciation and the tax credit, it is like living in a little gold mine. You can chisel out equity as you go along your merry way and chuckle at all those people who did not buy real estate sooner.

Where I live houses have doubled in six-seven years and land has doubled in five years. Now land and houses are not selling even at reduced prices, because they have not come down enough to be affordable to the people who live here. (A lot of Californians moved to Washington state and that drove up prices - boy has that slowed down!)

This "bail out" is an absolute joke. The idea the US government can control or diminish house mortgage failure or control or influence the price of housing; is absurd.

Many more people will be walking away from their home mortgages and a lot more mortgage derivatives will fail. This is not the stock market talking, it is home prices on main street.

It is the chiseling away at equity by homeowners who now find their little gold mine is a money pit. It is worth less than their debt they have piled onto their home and the mortgage, and it only makes sense to walk away and buy the house next door for thousands less.

Will the bail out work?

No one knows if the US governments bail out of bad mortgage debt will work.

I feel it is a trillion dollar band aid for a much larger problem; and whether or not it works - will mean what you meant by; "Will the bailout work?"

I feel it is only going to slow the economic problem down in hopes US residential real estate will start to appreciate and the "crisis" is solved.

So the question really is; When will US residential real estate start to appreciate?

No one knows, but here is my opinion;

The US residential real estate market will not be appreciating much over the next ten years.

US real estate is over-valued and still has not come down enough to sell excess suburban homes.

A lot of US residential real estate built over the last 30 years was built out of materials with a 30 year lifespan.

Tens of millions of US homeowners are aging and selling homes in the suburbs and this will accelerate.

There is an exodus from the suburbs to population centers as traffic, cost, age, and pollution, become more of a concern.

The US is experiencing high unemployment, and an economic "slowdown" as "consumers" have less to spend.

The number of residential mortgages "underwater" will continue to rise for at least a year.

It is no longer a new homeowner "sub-prime" lending problem - as many "prime" older homeowners are now underwater due to the constant chiseling away at their equity through second mortgages, and equity lines of credit.

Sixty to eighty percent of US residents are two weeks from the streets, if their lines of credit-money and/or job is lost.

Report this post as:

LATEST COMMENTS ABOUT THIS ARTICLE
Listed below are the 10 latest comments of 1 posted about this article.
These comments are anonymously submitted by the website visitors.
TITLE AUTHOR DATE
"Are you part of the problem? " "Are you part of the problem? " Wednesday, Oct. 08, 2008 at 2:32 PM

Local News

Change Links September 2018 posted S02 10:22PM

More Scandals Rock Southern California Nuke Plant San Onofre A30 11:09PM

Site Outage Friday A30 3:49PM

Change Links August 2018 A14 1:56AM

Setback for Developer of SC Farm Land A12 11:09PM

More problems at Shutdown San Onofre Nuke J29 10:40PM

Change Links 2018 July posted J09 8:27PM

More Pix: "Families Belong Together," Pasadena J02 7:16PM

"Families Belong Together" March, Pasadena J02 7:08PM

Short Report on the Families Belong Together Protest in Los Angeles J30 11:26PM

Summer 2018 National Immigrant Solidarity Network News Alert! J11 6:58AM

Watch the Debate: Excluded Candidates for Governor of California M31 5:20AM

Change Links June 2018 posted M28 7:41AM

The Montrose Peace Vigil at 12 Years M22 8:01PM

Unity Archive Project M21 9:42AM

Dianne Feinstein's Promotion of War, Secret Animal Abuse, Military Profiteering, Censorshi M17 10:22PM

CA Senate Bill 1303 would require an independent coroner rather than being part of police M10 9:08PM

Three years after OC snitch scandal, no charges filed against sheriffs deputies M10 8:57PM

California police agencies violate Brown Act (open meetings) M02 8:31PM

Insane Company Wants To Send Nuke Plant Waste To New Mexico A29 11:47PM

Change Links May 2018 A27 8:40AM

Worker-Owned Car Wash on Vermont Closed A27 5:37AM

GUIDE TO REBEL CITY LOS ANGELES AVAILABLE A13 12:39AM

lausd whistle blower A11 6:58AM

Website Upgrade A10 10:02AM

Help KCET and UCLA identify 60s-70s Chicano images A04 8:02PM

UCLA Luskin: Casting Youth Justice in a Different Light A02 6:58PM

Change Links April 2018 A01 6:27PM

More Local News...

Other/Breaking News

Paraphysique de psychosomatique S22 6:58AM

Chuck Grassley: Women Abusing, Animal Murdering, Illegal War Supporting Criminal S22 2:58AM

Finance Capitalism and the Digital Economy S21 4:45PM

Muselières syndicales, muselières patronales S21 7:19AM

Jeff Bezos, Amazon, The Washington Post, Whole Foods, Etc S21 2:50AM

Why Choose Nut Milk Over Cows' Milk S21 1:01AM

Antrhopocène, le grand effondrement S19 9:53AM

Creative Destruction Hack Diamonds Windows/iOS/Android - Creative Destruction Generator S19 12:51AM

Abolir l'économie S18 11:18AM

The Dictatorship of Corporations S17 5:26PM

18 Lethal Consequences Of Hunting S17 3:13PM

Paraphysique de l'outplacement déontologue S15 6:51AM

Creative Destruction Hack Mod Generator S15 3:49AM

Shopping du bashing S14 8:42AM

After Lehman Brothers, Experts Say Global Financial Crisis Can Happen Again S13 8:28PM

“Animaniacs in Concert!” Starring Voice Legend Rob Paulsen S12 9:30PM

Probabilités de fin d'humanité S12 6:49AM

Florida Area of Migrant Farmworkers Denied Right to Construct Health Clinic near NaplesCIW S11 2:57AM

Propagande de virus, virus de propagande S10 7:34AM

Steer clear of work morality! S09 12:10PM

Sweatshop Lodge Ceremony Continues in US Fed Prisons Led by Inmates S08 6:17PM

Paraphysique de l'origami S08 7:11AM

The Shortwave Report 09/07/18 Listen Globally! S06 11:23PM

August 2018 Honduras Coup update S06 12:28PM

Du réussissement putréfié S06 10:55AM

Brett Kavanaugh Filled The 5th Circuit With Execution Judges S06 6:14AM

Log S06 4:25AM

Augusta Georgia Woman Gets 5 Year Prison Sentence for Writing About Russians Crime Acts S05 8:29AM

More Breaking News...
© 2000-2018 Los Angeles Independent Media Center. Unless otherwise stated by the author, all content is free for non-commercial reuse, reprint, and rebroadcast, on the net and elsewhere. Opinions are those of the contributors and are not necessarily endorsed by the Los Angeles Independent Media Center. Running sf-active v0.9.4 Disclaimer | Privacy