Comments on: More Frankonomics http://longorshortcapital.com/more-frankonomics.htm We dividend our ad money to you. Thu, 18 Mar 2010 16:35:58 -0700 http://wordpress.org/?v=2.9.1 hourly 1 By: Dave D'Rave http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84499 Dave D'Rave Fri, 25 Apr 2008 01:50:24 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84499 Politicians who can think three steps ahead? I, for one, Welcome our Lizard Overlords! To be fair to Barney, the fact is that adjustable-rate mortgages have four times the default rate of "real mortgages". This is true of sub-prime, alt-A, Jumbo, and conforming loans. Adjustable rate mortgages just plain have a higher risk of default. They also have a lower risk (to the bank) of getting stuck forever with a low-yielding portfolio when interest rates go to the moon, which is why banks love them so much. One regulatory action which would have had a great reduction in the level of problems would have been to ban "Teaser Rates" and any kind of "Option ARM" which involves your payments maybe doubling in 2009. At least, banning these sort of practices would have made the problems obvious much earlier. So, yes, there are actually regulations which increase the stability of the financial system. We here in the reality-based community can either quantify what those regulations would be, or we can sit on our hands and watch as Congress enacts re-regulation at random. Your choice. Politicians who can think three steps ahead?

I, for one, Welcome our Lizard Overlords!

To be fair to Barney, the fact is that adjustable-rate mortgages have four times the default rate of “real mortgages”. This is true of sub-prime, alt-A, Jumbo, and conforming loans. Adjustable rate mortgages just plain have a higher risk of default. They also have a lower risk (to the bank) of getting stuck forever with a low-yielding portfolio when interest rates go to the moon, which is why banks love them so much.

One regulatory action which would have had a great reduction in the level of problems would have been to ban “Teaser Rates” and any kind of “Option ARM” which involves your payments maybe doubling in 2009. At least, banning these sort of practices would have made the problems obvious much earlier.

So, yes, there are actually regulations which increase the stability of the financial system. We here in the reality-based community can either quantify what those regulations would be, or we can sit on our hands and watch as Congress enacts re-regulation at random.

Your choice.

]]> By: Johnny Debacle http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84317 Johnny Debacle Thu, 24 Apr 2008 02:09:46 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84317 Post was written by Juggles. My value-add was that part about the Chocolate Covered Mortgages. And the comment about squid politicians being aware of third order effects (they are dude, they are). Post was written by Juggles. My value-add was that part about the Chocolate Covered Mortgages. And the comment about squid politicians being aware of third order effects (they are dude, they are).

]]> By: Size http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84314 Size Thu, 24 Apr 2008 01:52:24 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84314 So, the recommendation is not to vote for politicians. Good advice. My pet cat has an infinitely better grasp of economics anyway. Vote Fluffy in '08!!! So, the recommendation is not to vote for politicians. Good advice. My pet cat has an infinitely better grasp of economics anyway. Vote Fluffy in ‘08!!!

]]> By: Random Banker http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84283 Random Banker Thu, 24 Apr 2008 00:07:59 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84283 Yes Debacle, Barney Frank is stupid. Yes Debacle, regulation is impossible. But as Warren likes to say there already is class warfare going on and his class is winning. Bread and circuses, old sport. Pleblians can only be ruled by bread (cheap housing) and circuses (American Idol) Yes Debacle, Barney Frank is stupid. Yes Debacle, regulation is impossible. But as Warren likes to say there already is class warfare going on and his class is winning.

Bread and circuses, old sport. Pleblians can only be ruled by bread (cheap housing) and circuses (American Idol)

]]> By: Matt http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84276 Matt Wed, 23 Apr 2008 22:22:13 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84276 Was the Warren 'Oh I am so down with socialism' Buffet quote included to add irony to the story? Anyways, we look all set to have a more regulation more tax loving socialist in office pretty soon, given that the people were thought were fiscally responsible turned out to be anything but. And btw, 1) most people care more about gay marriage (whether for or against) 2) outside of a handful, most people are OK with bailouts and handouts. Was the Warren ‘Oh I am so down with socialism’ Buffet quote included to add irony to the story?

Anyways, we look all set to have a more regulation more tax loving socialist in office pretty soon, given that the people were thought were fiscally responsible turned out to be anything but.

And btw, 1) most people care more about gay marriage (whether for or against) 2) outside of a handful, most people are OK with bailouts and handouts.

]]> By: Sean http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84266 Sean Wed, 23 Apr 2008 21:40:25 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84266 As long as the second order effect is "and then I get re-elected", politicians don't have to worry about third order effects. Unfortunately. As long as the second order effect is “and then I get re-elected”, politicians don’t have to worry about third order effects. Unfortunately.

]]> By: Johnny Debacle http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84258 Johnny Debacle Wed, 23 Apr 2008 21:22:29 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84258 Squid politicians. Squid politicians.

]]> By: Anal_yst http://longorshortcapital.com/more-frankonomics.htm/comment-page-1#comment-84257 Anal_yst Wed, 23 Apr 2008 21:15:26 +0000 http://longorshortcapital.com/more-frankonomics.htm#comment-84257 Wait, wait wait wait a second! You mean to tell me theres politicians that can think 2 steps ahead of themselves? Where? Who? Are we speaking about an alternate reality (and is there a quantum-arb opportunity?) Wait, wait wait wait a second!

You mean to tell me theres politicians that can think 2 steps ahead of themselves? Where? Who? Are we speaking about an alternate reality (and is there a quantum-arb opportunity?)

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