O.T. Next financial bubble to burst.

[krw]

Clueless, as always. There are *many* target pistols, designed specifically to shoot paper.

[krw]

quoted text -

Do you *try* to be wrong. You certainly are good at it!

[krw]

Why don't you quote and reference, harry? Are you too afraid everyone will see what a fool you are? Too late.

[HeyBub]

• Self defense

• Historical artifact

• Sport shooting

• Investment

• Collecting

• Disturbing the anti-gun fools

• Art

• Settling political disputes (i.e., a sitting Vice President killing the former Secretary of the Treasury)

[HeyBub]

Sure.

A "serious threat to take life" is in the eye of the beholder. For example, a finger poked against a jacket pocket is an ARMED robbery simply because the victim THOUGHT the assailant had a gun.

Whether that threat will ultimately pass the "reasonable man" test is another matter.

[gfretwell]

It is just an illusion. They put price stickers on things and people believe that must be the best price they can get. If they are offering

90 days (or a year) same as cash, there is some money there that you can get back for cash. The salesman may not be able to do it but a manager can. They may give you a discount or they may just throw something in for free that you would have had to pay for. In the case of the last furniture we bought it was delivery and set up, normally $50 at that store.

[krw]

No, not socialist at all. The manufacturer controls the price, not the government. Examples of controlled price products I've purchased recently, Festool and Electrolux.

A manufacturer CONTRACTS with retailers to represent him. Part of that CONTRACT is that the seller will not sell the widget for less than $x (or sometimes exactly $x). The intention is that competition is based on service, not price.

Exactly the opposite, actually. It's a contract, freely entered, between the producer and his agents. "Socialist" would be the government dictating the terms of this contract. There is no requirement that the eventual buyer enter into this contract. There are other products to buy, almost always cheaper if that's what you want. As usual, harry, you have the world upside-down.

[krw]

Irrelevant. It's usually not the retailer offering the financing deal. You can try to squeeze that buffalo all you want but you won't get anything out of it.

"Dickering" is what you would call it, harry. "Haggling" would be more common on this side of the pond.

Fair enough. Go elsewhere.

[gfretwell]

If I wanted a rebate for not using the "free" financing on a vacuum that was price fixed, I would have him throw in a couple boxes of bags. We both understand there is a cost associated with free financing.

[krw]

My refrigerator doesn't use bags. Neither does my dishwasher. ;-)

Certainly, but it's not the same people paying. The retailer, in the above case, is contractually bound to the pricing. In other cases, the interest is being paid by the manufacturer (who doesn't see your end deal), by &bigbox home office, or by the "bank", knowing that enough idiots won't pay on time to make more than enough money to pay the interest for those who do. It's the same deal as cash-back credit cards. I'll take their free money, too (though not as much as I should).

[gfretwell]

You were talking about price controlled products and gave an example (Electrolux) that I accepted as being true). Appliances like fringes and dishwashers are more like a Mexican market. Nobody pays full price and everything is negotiable.

With CDs and money markets paying fractions of a percent I would rather have a box of vacuum cleaner bags. ;-)

[krw]

Electrolux makes high-end consumer kitchen appliances, in Tennessee, BTW. They

*are* price controlled. No one will give a dime's discount, or risk losing the franchise.

The only money I have in such things (worse, a savings account) is emergency money (though probably more than I should).

Again, they don't fit my refrigerator. I don't even know if we have a vacuum cleaner that uses bags. ;-)

[krw]

But you don't get that. I do get a cut, though less than you think is "right". Sorry, you lose, I win.

[krw]

Shit, harry, we've all been telling you that for MONTHS.

[Chris Goldstein]

Wonderfully accurate discussion about why we have such a mess in America with home mortgages, and so why can't the American press articulate the problem as well as the posters on this discussion thread?

Also, it was Alan Greenspan who during the bubble period actually publiclly stated that consumers should be getting ARM loans and not fixed rate loans. When he said that, I was absolutely stunned.

One item that is missing in this discussion is that the real estate bubble in the United States started in 1997. That being the Tax Relief Act of 1997. If you study home prices in many U.S. markets, you will see prices begin to take off starting in 1998, that was due to the Tax Relief Act of 1997. And so home prices in the United States should be at their 1997/1998 levels to be relatively "normal", and so when you hear the "real estate experts" say a market is cheap, compare that market's prices to their 1998 prices, and if they are still above their 1998 prices then that market is still overpriced. You will often hear folks say it should be at 1999 prices, and this is how many of those folks pick the year "1999", they know about the Tax Relief Act of 1997.

IMHO, we need to stop the damage caused by the Tax Relief Act of 1997 ASAP. Most of us are now paying more for our homes because of the Tax Relief Act of 1997. It has created a generation that buys homes to resell them within a few years to get the tax free income. I=92ve seen guys buy multiple homes, rent all but one of them, and then they rotate thru the homes as their principal residence, staying in each them for 2 years, selling it, taking the profit, and then move into one of their remaining rentals, sell that after 2 years, and keep the cycle going by buying more homes and churning thru existing homes. I=92ve seen many people do this, sometimes with just one home at a time, and other times at the other extreme where they queued up multiple homes at once. When things fell apart in 2008, I knew one woman who was maybe 25, probably should have been making $50K or so at a decent job, but instead she went to work for an Los Angeles mortgage company, purchased 6 homes in LA... she was so overextended that when she couldn't rent one of them, the entire mess came crashing down on her, and that caused at least $1 million in mortgage losses from just one person who was engaging in this destructive speculation. The same destructive speculation that was also causing those of us who just wanted to buy a home to live in to have to pay 2x to 3x what we would have paid for it if the Tax Relief Act of 1997 never existed.

Below is summary of what the Tax Relief Act of 1997 did.

..."Starting in 1997, what's the best tax break available to Jane and John Q. Public? If they're homeowners, it's selling their house.

Homeowners already know the many tax breaks that Uncle Sam offers, most notably mortgage interest and property tax deductions. Well, he also has good tax news for home sellers: Most of them won't owe the Internal Revenue Service a single dime.

When you sell your primary residence, you can make up to $250,000 in profit if you're a single owner, twice that if you're married, and not owe any capital gains taxes.

"Most people are not going to have a tax obligation unless their gain is huge," says Bob Trinz, a senior tax analyst at RIA, which provides tax information and software to tax professionals.

Some sellers are surprised by this break, especially if they've been in their homes for a while. That's because before May 7, 1997, the only way you could avoid paying taxes on your home-sale profit was to use the money to buy another, more-expensive house within two years. Sellers age 55 or older had one other option. They could take a once- in-a-lifetime tax exemption of up to $125,000 in profits. And in all instances, there was tax paperwork (Form 2119) to fill out to show that you followed the rules.

But when the Taxpayer Relief Act of 1997 became law, the home-sale tax burden eased for millions of residential taxpayers. The rollover or once-in-a-lifetime options were replaced with the current per-sale exclusion amounts.

"There is some logic to this law change because most people under the prior rules didn't recognize a taxable gain because they rolled it over into another residence," says Trinz. "The change essentially makes it easier to dispose of your residence." Still some requirements to meet

If you used pre-1997 rules for residential sales, don't worry. That doesn't disqualify you from claiming the exclusion on any residential sales now. The law change applies to all sales since it took effect.

Another bonus of the new rules: You don't have to buy another home with your sale proceeds. You can use the money to travel to Europe in style, buy an RV and drive across the country or get all those designer shoes you never could afford before. Even better, there's no limit on the number of times you can use the home-sale exemption. In most cases, you can make tax-free profits of $250,000 (or $500,000 depending on your filing status) every time you sell a home.

Ah, but we are talking taxes here. You did notice that phrase "in most cases," didn't you? There's always a catch. Before you put a "For Sale" sign in the yard, you need to make sure your house-sale situation is one of those "most cases."

First, the property you're selling must be your principal residence. That means you live in it. This tax break doesn't apply to a house or other property that you have solely for investment purposes. In those cases, the usual capital gains rules apply.

You can, however, turn a rental house into your primary residence, making the sale of it eligible for the exclusion. This is accomplished when you meet the IRS use and ownership tests: You own and live in the home for two out of the five years before the sale."...

[hallerb]

Congress to help the deficit is talking or ending all the tax deductions on home ownership, including the mortage interest deduction.....

[Higgs Boson]

[...]

Why stunned? Anything that comes out of a Libertarian's mouth is by definition untrustworthy.

Remember how shocked, shocked! Greenspan was, publicly, at the financial collapse. The markets weren't working as he believed they should have. Tfui! BTW, ever saw a black or poor Liberatarian?

HB

[hallerb]

[gfretwell]

Depending on where you live, the excess supply of houses was estimated to be between 5 and 10 years in 2007. They simply built too many that were gobbled up by speculators believing things would always go up. They are still working through that excess inventory. If they drop the mortgage deduction on second homes that will get worse. If the mortgage deduction on the primary home was dropped you would see another 2007 type crash. At that point the only people who would get a deduction would be landlords on rental property (Schedule C business expense). One of the biggest tax incentives to own would be gone.

[krw]

If interest rates go up significantly it will get much worse. However, the building trades will essentially cease to exist.

Tax incentive, yes. Biggest incentive, no.