chenGOD

You think that's fucked up? How about this - in every state except Nevada, it is illegal to pay a woman to have sex with her. Unless of course you film it, and then sell it for profit.

In Ireland there were massive tax breaks given to developers (this was a policy of the FF/PD government at the time of the crash, as well as with the preceding FG/Labour government - though more so in the hotel/commercial market with them), and the low interest rates at the time didn't help either. Better regulation may have caught the problem sooner, but it wasn't the cause (and due to the complexity of how all the debt was being packaged worldwide, it's debatable how quickly they'd have caught it anyway). It wasn't all developers either, there were plenty of first time homeowners who ended up with unsustainable debt as well. As well as that, the easy money available to all the banks worldwide a direct consequence of the monetary policy of the US and EZ at the time, so even in countries where there may not have been tax incentives for investment, or where interest rates alone couldn't account for everything (I don't really know about the US circumstances with that in that much detail, but it wouldn't surprise me if both were a factor there too), the repayment bar was lowered due to the amount of cheap cash the banks were swimming in. Government monetary policy was not particularly loose prior to the GFC - low inflation and low output significant in that determination. Sure interest rates were low, but again, the risk was all on the banks doing the lending. And they showed a serious appetite for risk. The deregulation of the banking sector and lack of oversight on capital reserves, combined with collusion from the ratings agencies, was what enabled the banks to make those ridiculous loans. how about the CRA? it pushed those banks to make a lot of those loans to people who they knew could never pay them back? it wasn't a form of regulation itself? the idea that the problem was caused by rampant free market capitalism is ridiculous. banks were given incentives through the CRA to give risky loans. then you also have the fed, manipulating interest rates drastically, causing all kinds of chaos. then fannie+freddie step in, buy those loans, and they're backed by the gov and therefore supported by tax dollars. at one point they announced their low income loan commitments at $5trillion. the whole thing was a racket. the banks got their bonuses out of it but the gov was orchestrating the whole thing. 'too big to fail' and bailouts also came from the gov. that's hardly a free market with a lack of regulation. The risky loans that started the ball rolling were almost universally in the private market. http://krugman.blogs.nytimes.com/2010/06/03/things-everyone-in-chicago-knows/ Further, it wasn't either of the gov't agencies who repacked the mortgages and sold the "toxic assets" along with good investments. Nor was it gov't policy which led to the massive speculation in the housing market. With regards to the CRA, given that the CRA has been around since 1977, you would think that if that was going to cause a market crash, then it would have done so long before now. What the most cited paper on this finds is that while the CRA did have some incentivizing effect on banks to make risky loans, they did so around periods of CRA compliance testing, and thus the long-term performance would not affect the "safe and sound" principle of lending. As the deregulation of the industry occurred (mainly by the constant erosion of the separation of investment firms and banks, and yes the repeal of Glass-Steagall in '99 under Clinton) , that safe and sound principle went out the window. Finally, two points. One - the majority of subprime loans were done by independent mortgage loan companies who were not subject to the CRA. Two - loans to low and moderate income communities comprised only a small percentage of loans made by CRA lenders. http://www.frbsf.org/community-development/files/cra_lending_during_subprime_meltdown11.pdf

People who should not have been receiving mortgages (NINJAs - No Income No Jobs or Assets) were getting mortgages because banks had a much higher appetite for risk, due to lack of oversight and regulation. This lack of regulation enabled predatory lending. So I suppose one could say this lack of policy encouraged such behaviour.

fixed at what price, by what calculation? it's a nice sentiment in theory, but sadly the maths prove it's impossible to set fixed prices for things and maintain a working economy. housing bubbles are caused by government's meddling in the housing market (usually via subsidies and tax breaks, but also central banks printing too much money, and then they make matters worse by writing off the debt when the investments fail). if they simply hadn't meddled in the first place, and then not meddled after the fact, house prices would remain what people could afford (as long as there was no barrier to the supply of goods and services, and land to build on at any rate). lol are you high? I wasn't trying to remove all blame from the banks btw, certainly in the case of America, the subprime/derivatives shit had a big impact on it as well, but that was not really a big factor in the banking problems in the UK & Ireland for example. Do you have an alternative explanation in those cases? Are you talking about the Global Financial Crisis (GFC) of 2007/2008, or housing bubbles? The GFC was much more than a housing bubble, and to go into the causes of it requires wayyyyyyyyy more space and time than I have. Housing bubbles on the other hand, are generally caused by one thing - people using properties as investment vehicles.

fixed at what price, by what calculation? it's a nice sentiment in theory, but sadly the maths prove it's impossible to set fixed prices for things and maintain a working economy. housing bubbles are caused by government's meddling in the housing market (usually via subsidies and tax breaks, but also central banks printing too much money, and then they make matters worse by writing off the debt when the investments fail). if they simply hadn't meddled in the first place, and then not meddled after the fact, house prices would remain what people could afford (as long as there was no barrier to the supply of goods and services, and land to build on at any rate). lol are you high?

Is it really a parade if there's only one person? Also I like how he works for his own name. That's handy for business cards.

Highly recommend watching with music off though. Substitute some 2350 Broadway.

It's just a sorry ass reminder of how out of shape I am.

Does there even need to be a vote? If there is one here among you who is not ready for more, I say come forth, that we may mock you and cast thee out.

Ah if only i earned a wage. *waits for newer aphex by listening to relatively new aphex*

The real wages that both Stephen and I are referring to are real wages for males under full employment. Female real wages are lower than males. It should be noted again that Stephen initially referred to average real wages, while I prefer to use median real wages (because outliers blah blah). And it should also be stated again that for us in Canada, we had it lucky compared to the rest of the G20. And this was only due to the commodities boom that drove oil prices to record highs - now that they're falling (or "undergoing a market correction") Canada's shitty, one-dimensional economy is going to suffer. Anyways - blerg...death to america!

Whaaa? Does not compute.

Good lord I'm not 21 anymore, no matter how much I will my body to believe it to be true. One ultimate tournament and my left knee is shot.

I could never technically be friends with someone from Cowtown ;)

Yeah he can throw them up on bandcamp for example. also Ludd is gay for Erik. also, cosbys the shit out of goDel.

Very weird. Regardless, the link you provided shows that shelter has increased 33.5% since 2002 (lord knows how much it's increased since 1981), and we know that real average wages (for males) have increased only 14% since 1981. So taking the best case scenario into account for wages, it should surely be easy to see how real wages do not keep up with the cost of housing. Ah, sorry, my bad - there are a variety of indices used to compute CPI. The one I linked to was the "CPI basket organized according to goods and services", not the "all items CPI".

And interestingly enough, the cost of homes is not included in Canada's CPI basket. Rent is, various types of insurance related to home ownership, mortgage interest cost, other services related to home ownership, but not actual homes. http://www23.statcan.gc.ca/imdb-bmdi/document/2301_D59_T9_V1-eng.htm

Actually... the real wages calculation already factors in the higher proportion of income spent on housing that you mentioned since that increased expenditure is represented in CPI? No? No. Think it through. I did but I'm no expert in this area. Real wages are an inflation adjusted representation of wages. Costs paid for shelter are included in calculating inflation. Real wages therefore include the increased cost of shelter in their calculation. Can you spell it out for me or show me what I'm missing? I'm not being facetious flippant (better word imo tbqh byob), I actually don't understand. Come on Stephen - I already spelled it out for you. Wages (adjusted for inflation) have remained basically flat. Housing prices have increased faster than inflation. The calculation of real wages doesn't account for proportional spending. Think of two lines. The wage one basically goes straight, while the housing one goes up.

Actually... the real wages calculation already factors in the higher proportion of income spent on housing that you mentioned since that increased expenditure is represented in CPI? No? No. Think it through. Audio - yeah Pacific NW house prices are ridiculous. Vancouver is off the chain. How bout some good news: America is not getting fatter anymore

Yes, well part of the problem is that we have historically low interest rates, with really only one way to move in the long-run. That goes for 'muricah as well. Combined with reduced savings, this is asking for some serious trouble.

I know what real wages are, please stop repeating yourself. The point is that people are spending more of their income on owning a home. http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-014-x/99-014-x2011002-eng.cfm#a2 Shelter costs and affordability About 3.3 million households (25.2%) spent 30% or more of their total income on shelter—which is the threshold defined by the Canada Mortgage and Housing Corporation (CMHC) to measure housing affordability. Households with shelter costs exceeding the affordability threshold paid an average of $1,259 per month—exceeding 30% of their household total income by an average of $510 per month. Owner households exceeded the affordability threshold by an average of $617 per month, while tenant households exceeded it by $403 per month. Almost three-fifths (58.6%) of owner households had a mortgage—representing over four-fifths (83.2%) of owner households exceeding the affordability threshold. About half a million (557,435 or 13.7%) tenant households lived in subsidized housing. Just over one-third (36.9%) of tenant households in subsidized housing paid 30% or more of total income towards shelter costs. Lone-parent households and non-family households were more likely to pay 30% or more of total income towards shelter costs—about twice the proportion of couple-family households. An additional point to consider is that some Canadians are starting to use homes as investment vehicles: http://business.financialpost.com/personal-finance/mortgages-real-estate/canadians-dont-just-love-home-ownership-theyre-growing-fond-of-income-properties-too This is taking things backward - we want to eliminate the rentier class.

Except, there is no increase in wages, and the cost of housing can of course be separated out from inflation. If the cost of housing has been increasing faster than the rate of inflation, then you can see that our ability to buy housing is constrained because real wages are tied to inflation.

Fair. So if you use median real wages and they've remained relatively flat then we're doing just dandy and people can stop complaining that everyone is poor and stuff is so expensive etc. This is not the argument people are making - they're combining the chart in the other thread (the one showing working hours have gone down), with the fact that real wages have remained relatively flat, to show that actually things are not that great. (Sorry all y'all Americans, I'm about to talk about Canada) Now if we look at the demographic here on watmm, males between 17-34 have actually seen their real wages go down. So you can see where a lot of people on here are coming from. When you tie that in with the fact that housing prices (whether resale or new) in urban centres (you know, places where people actually want to live), have increased faster than the rate of inflation, you can begin to see where the problem lies (data on housing prices from Canadian Mortgage and Housing Corporation). And this is in Canada, where things are not so bad. In the States, the income gap is growing, and there are no indications that the trend will reverse anytime soon. Edit: for 'Murica the situation is much the same: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/

Thanks, I know what real wages are. I'm merely pointing out that CPI and inflation are not the same thing. It's telling that that's the only point you felt you could reply to. As to misinterpretation of the data, I think we both know that average wage is a terrible measurement because outlier effect. Regardless, the data show that real average wages have increased 14% from 1981-2011 and the cost of a basket of goods has risen over the same period 142% Looking at median real wages, which is a much better tool in this debate, we can see that real wages have remained relatively flat.

btw: you gave an example of the full time hourly wage increase in canada. do you know what the cost of home or car in canada was 30 years ago compared to today, or is it around the same price? The wage increase I referred to was in "real wages" meaning it was adjusted to consider consumer price index (inflation) increases. The term "real wages" means our earning power despite increases in the cost of consumer goods and shelter/etc. According to my research this actually includes the increased price of vehicles and shelter. Therefore the increase in wages I referred to is normalized according to real inflation (printing more money) as well as increased prices across the board. Let me know if I'm not making sense, but ultimately what I'm saying is Canadian's have more disposable income than 1981 because our "real wages" even when considering the increases in CPI (including transportation/cars and houses) has increased. Like... given the prices in 1981, we made $22.55 per hour. Fast forward to 2011 and adjust for inflation (printed money) and CPI increases, it's the equivalent as if we made $25.03 per hour in 1981. But to directly answer your question I don't have data available RE housing prices. My gf's mom bought her house for $80,000 in 1980. But consider the interest rate on cars etc back then was near 25%. Stephen - couple of things: CPI and inflation are not the same thing. When you adjust for the Bank of Canada's inflation target, it's easy to see that wages have not kept up to inflation here. You say that in 1981 we made $22.55/hr, and in 2011 we made $25.03. I'm assuming you're using this table. So you should note that that is the average wage for men. For women the average wage went from 17.38/hr to 21.85/hr. So yes women rose from 77% to 87% of the average hourly wage. When we look at the median wage - which is much more useful, things don't look so rosy. In 1981, men earned 21.18/hr, whereas in 2011 they earned 22.27/hr (note this is less than in 1984, 2009, and 2011). Women earned 15.72/hr in 1981, and 19.37/hr in 2011. So at least the median wage for women has grown much better in comparison to men's median wage. It should also be noted that the above stats are only for full-time work. There are all kinds of interesting charts and comparisons there, but this one stood out to me as being quite important: http://www.statcan.gc.ca/pub/11f0019m/2013347/ct012-eng.htm This is important because in 2011, retail trade was the largest of all sectors for the Canadian labour force at 11.5%. Finance and insurance made up about 5%. Anyhow, from their own chart, StatCan says: "Overall, average hourly wages of full-time workers increased by 14% from 1981 to 2011." Now inflation. Now if we want, we can use the bank of canada's very own handy inflation calculator We can see that a basket of goods that cost $100 in 1981, costs $242.02 in 2011. This is a percentage change of 142%. Which is a bit more than the 14% increase in real hourly wages.