In Other AFFH News

12 07 2016


Accompanies this.

They should know that, to the urban politicians pushing a higher minimum wage, this is a feature, not a bug.


German Moral Miracle

14 06 2016


German government 10-year bonds are in negative rate territory.

You mean to tell me all those racists and xenophobes in the bond market don’t think that all those Syrians and others that the Merkel government is importing will have made the German economy a roaring dynamo by 2026?  I don’t get it, they told us they were all engineers and geniuses.


6 06 2016

Palo Alto, California

Bloomberg profiles the fall of Theranos and Elizabeth Holmes suddenly going from a multibillionaire to flat broke, at least on paper.

From there, you’ll read something I’ve told you here in this space through the years:  Much of the wealth of the extremely rich is illusory because of its liquidity and therefore its volatility.  Mark Zuckerberg only has $51 billion because he has x number of shares of Facebook multiplied by the current per-share market price of Facebook stock.  If people quit being that fond of FB stock, then Mark Zuckerberg isn’t worth $51 billion anymore.  This is why Zuck is so thrown in to the cheap labor immigration agenda, because he needs his labor expenses at FB to stay as low as possible in order to impress the investors and the mutual funds executives, to keep FB’s stock value high.

The problem with Elizabeth Holmes is just as you read in the link to Steve Sailer’s article about her and her company:  Too many important men drank the SJW “we need a uterus in SV” kool-aid, and that created a bubble around her which was bound to pop sooner or later.  And let’s not even talk about how Michael Bloomberg got to be worth $45 billion.

But then the article ends with more normal people, and ends like this:

There’s a lesson here for normal people. The one highly illiquid asset that many middle-class people pour a huge percent of their wealth into is their house. Houses are time-consuming and expensive to sell, and if you borrow against your house you’ll have to pay interest on the loan. So houses are illiquid. This implies that many middle-class homeowners are very under-diversified because they have so much of their personal wealth tied up in residential real estate.

In other words, your house is a little bit like Elizabeth Holmes’ stock in her own company. On paper it might be worth a lot, and much of that does reflect real value. But if your local housing market crashes, your net worth is in big trouble. I think more people should consider that before making the decision to buy instead of rent.

My bet is that the author of this article and perhaps a few sympathetic-to-“normal people” editors at Bloomberg are trying to dog whistle to “normal people” not to tie too much up in an owned house, because the Federal government is about to cram jam some AFFH apartment complexes full of black ghetto formerly urban Section 8/AFFH clients in your subdivision.


All In 191 Years’ Work

2 05 2016

Washington, D.C.

The total national debt didn’t hit $1 trillion until October 1981.

The national debt has increased by that much in the six months since Sir Orange of Cincinnati’s final parting shot.

One other national debt statistic I probably uniquely monitor is this:  The dollar trajectory of the national debt started shooting upward when Nancy Pelosi became House Speaker after the 2006 blue wave midterms, she formally got the gavel on January 3, 2007.  In all the time since that day, either she has been House Speaker or Baraq Obama has been President of the United States, and relevant Republican Party officials in that time span have mostly aided and abetted their profligacy, those being George W. Bush, the aforementioned Sir Orange, or the current House Speaker, Eddie Munster.  So I subtract the current national debt from the national debt on January 3, 2007, then divide.  As of end of April reporting 54.7% of American history’s national debt has been the doings of Pelosi/Obama.

Before I get any e-mails, I know, it’s not entirely a fair comparison, percent of GDP is better, yadda yadda.

Of course, I’m typing this for nothing, because I know that nobody gives a shit, and nobody’s going to give a shit as long as enough people and institutions are buying T-Bills.  And people are going to keep buying T-Bills as long as the interest rate climate outside of T-Bills sux rox, and as long as the American military is or seems to be by far the world’s most powerful.

Be There And Be Square

4 11 2015


Anybody going to broach the subject of black people taking on frivolous debt and their propensity not to repay?


Megan McArdle Notices Things

17 09 2015



So while initial down payments may not have done much to predict default in individual cases, we could argue that requiring 20 percent down would still have done a lot to prevent so many people in the market from going into default. The down payment is the biggest obstacle most people face to getting into a house. Closing the door to anyone who couldn’t get that much cash together would have kept houses much more closely tied to incomes, meaning that the bubble simply could not have inflated as large as it did — and therefore, would not have had the same catastrophic effects coming down.


Of course, it’s easy to say this in hindsight. It was a lot harder to develop insight at the time. When prices had been in a long, gentle rise for decades, high down payments looked like expensive and unnecessary insurance against something that rarely happened. They looked like a barrier keeping historically disadvantaged groups, like minorities and immigrants, from accumulating wealth the way that prosperous native white families had. They looked like something that regulators and bankers had needed to require before they got so darn smart about managing credit risks, and credit markets.

However, the down payment requirements historically existed for a reason; we didn’t need to wait around to “develop insight,” all we needed to do was remember why.  After all, we were allowed to notice that down payments had a disparate impact on “historically disadvantaged groups,” so why couldn’t we remember why down payments were required?  After all, there were people at the time when George W. Bush was telling us ZOMG THE RACISM OF DOWN PAYMENTS LOL~!!!!!1 that were warning us that eliminating down payments would disassociate housing prices from people’s incomes and their ability to save money, and would therefore create a bubble in housing prices that eventually would have popped, defeating the financial assumptions of those who said that we didn’t need down payment requirements anymore.

Bad Mood

17 08 2015


Moody’s docks the city’s credit rating, because…

The agency attributed the St. Louis downgrade to the “city’s weak socioeconomic profile; reliance on earnings taxes which are due for voter reauthorization in 2016; a relatively narrow financial position; and a high debt burden.”

The reason why the city earnings tax is up for voter reauthorization next year is because of 2010’s Proposition A.  I think Moody’s is worried for nothing if they think city voters will vote to do away with the earnings tax.  It’s just that I think that there was an ulterior motive behind Prop A.  (And while you’re there, you’ll find what turned out to be a spot on prediction about someone who used to be in Congress from CD-2).


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