Hard Times = Boom Times for Some

Well, there are times when I have disagreed with mkl so strongly that I started to believe he was the latest troll on this forum. Then there are other times when I have agreed completely with him. Does that make me a troll, a troll hater, or a troll sympathizer?

Anyways (and that's my wink at you, mkl), I think I agree with most of his positions on this thread. I would just have expressed them with a very different communication style.

As for Lowe's and Home Depot ... if hurricane Earl is bearing down on your property and you have to board it up or lose most everything, and if these two retailers decide that a sheet of plywood should sell this week for $200, then I think they would have become vultures. I think there were legal actions taken against some shops that did essentially that during Katrina. But as for not acting like charities and giving away construction/repair materials to people who can't sell their homes? I don't think I have seen anyone suggesting that would make them vultures. Why would you propose a straw man argument like that? It can't accomplish anything but get people psst off.

I think the crisis occurs when the economy is so bad that one group of people become unemployed and can't pay their obligations, such as their mortgage. Other people who might be potential buyers of the house aren't confident that they will be able to hold onto their own jobs, so they are reluctant to make the commitment; furthermore, they see the plummeting prices of housing in the neighborhood because of the foreclosures and distressed sales, so why would they even consider offering prices that would benefit the seller? On top of that, the banks are reluctant to renegotiate terms (arguments above notwithstanding) because they have no assurance that the homeowner ever will recover financially.

I don't see any solution to this until there is sufficient recovery in the overall economy that people are employed and confident enough of their employment status that they will make large purchases. We also need to achieve a condition where lenders will actually make loans.

In the meantime some people are going to be hurt badly, while others will make out like legal bandits. I have already noted my own situation with an unsold house -- a condition that would put me in the category with the very unfortunates except that I can afford to wait for an extended period for conditions to improve.

On the opposite side of the buyer/seller story is my younger son. He has very stable employment in a position he likes very much, which pays him a reasonable salary. Last fall, my wife and I encouraged him to take the venture of becoming a homeowner, and we fronted him enough funds to make that possible. He obtained a mortgage loan (at a historically low interest rate), purchased a condo from a builder that was feeling pressure to reduce unsold inventory (and got it for an amazingly low price), and got an $8,000 bonus incentive from the federal government. Was my son being a vulture to take advantage of the builder, the lender, and the government? I don't think so; I helped him negotiate his deals, and I think he made a very sound investment without unfairly exploiting anyone.

Quote: Doc

Well, there are times when I have disagreed with mkl so strongly that I started to believe he was the latest troll on this forum. Then there are other times when I have agreed completely with him. Does that make me a troll, a troll hater, or a troll sympathizer?

On the opposite side of the buyer/seller story is my younger son. Was my son being a vulture to take advantage of the builder, the lender, and the government? I don't think so; I helped him negotiate his deals, and I think he made a very sound investment without unfairly exploiting anyone.

You've nailed the internet definition of "troll": "A pejorative term applied to someone with whom one disagrees". The term USED to mean someone whose presence on internet chat rooms/forums was for the sole purpose of inciting arguments. Now, it means someone that you are losing an argument to :)

The question of "exploitation", or whether one party or another to a transaction is a "vulture", would depend on a couple of things: one, is the parties' participation in the transaction completely voluntary? Two, are the parties completely informed, or is there asymmetry of information? A couple of examples from early in the twentieth century would be speculators who swooped down on Dust Bowl farms and bought them for virtually nothing; they were taking advantage of peoples' distress, in that they had no real choice but to sell. The 1920's Owens Valley water wars, where the city of Los Angeles used divide-and-conquer tactics to buy up all the farmland that controlled water rights, was an example of exploitation: the L.A. agents used lies and deception; there was asymmetry both of information and of power. The current foreclosure wave has elements of both of these earlier exploitations.

Cutting to the chase yet again, my whole point is, auctioneers who auction property for any legal reason are businessmen, not vultures. Its their job to do the auction, not sit around like God and decide the moral implications of what the sale means. I'm so sick of these Arbiters of Morality who are trying to take over everything we do. It won't be long until a Coke machine takes your picture, runs it through a computer, and refuses to give you a Coke because you're too fat.

Quote: EvenBob

Cutting to the chase yet again, my whole point is, auctioneers who auction property for any legal reason are businessmen, not vultures. Its their job to do the auction, not sit around like God and decide the moral implications of what the sale means. I'm so sick of these Arbiters of Morality who are trying to take over everything we do. It won't be long until a Coke machine takes your picture, runs it through a computer, and refuses to give you a Coke because you're too fat.

No, strictly speaking, they aren't the vultures, they merely facilitate the vultures and profit by giving them a venue in which to operate. They're like the German chemical company that manufactured Zyklon B gas, which was, after all, only supposed to be used as a pesticide. Yep, morally unimpeachable.