Bruddah IZ
DA
Investment properties are usually more than 20%.
Essential Economics for Politicians
- Thread starter Bruddah IZ
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- finance too
Bruddah IZ
DA
Unless you an T are moving in together
Bruddah IZ
DA
That way you can buy 20% worth of equity. Lol.
Hypothetical OC home purchase in early 1980's = $ 50,000.00 @ 17 % x 30 years = $256,622
Current OC Speculative Value of same home paid off in 2010 = $ 650,000.00 to $ 875,000.00
If someone was able to purchase and retain three homes at the above purchase price thru
that time period and paid them off thru the conventional system they would have at the
minimum approx $ 1.2 million financial value at present + all the rental income from 2010
forward til now. That is just a simple example " Messy "....
So buying a house then when the interest " was " 17 % would still be a HUGE gain.
Buying one now @ 17 percent would only happen due to ( I Guess ) Double Rotten credit.
If someone purchased three homes in the 1980's and paid them off in 5 years the " Extra "
value can be discerned with the above numbers. Purchasing a Home right now on the
bubble is not a smart purchase in my opinion at all.
Renting is a viable option until the market drops, then purchase if a value increase is
anticipated on the horizon. Which I do not see in the near future.
Purchasing Retail property is another whole animal that factors in many many different
values and costs.....
Still the same basic principal is applied.
Bruddah IZ
DA
GM, Bailouts, and the Importance of Bankruptcy in Market Economies
Proponents of corporate bailouts miss the importance of loss and bankruptcy within a market economy.
Saturday, December 15, 2018
Oluwatobi Walker
Loss and Bankruptcy
The market economy is commonly referred to as a “profit system.” While true, this description misses the bigger picture. The market economy is more accurately described as a “profit and loss system” in which profits and losses steer scarce resources (i.e. labor and capital) from less able entrepreneurs and inefficient industries to more able entrepreneurs and more efficient industries. If anything, the loss (and bankruptcy) part is probably the most important one.
Entrepreneurial profits signal the creation of value due to accurate entrepreneurial foresight and judgment of consumer needs and wants. As a result, labor and capital are steered into industries that promise high rates of profit from less efficient industries. This helps to increase production, which in turn helps bring down prices of products and services until the rate of industry profits comes in line with the average rate of profits within the economy. This seamless process goes on and on, with some industries expanding while others contract even as the overall economy expands.
Proponents of corporate bailouts miss the importance of loss and bankruptcy within a market economy.
Saturday, December 15, 2018
Oluwatobi Walker
Loss and Bankruptcy
The market economy is commonly referred to as a “profit system.” While true, this description misses the bigger picture. The market economy is more accurately described as a “profit and loss system” in which profits and losses steer scarce resources (i.e. labor and capital) from less able entrepreneurs and inefficient industries to more able entrepreneurs and more efficient industries. If anything, the loss (and bankruptcy) part is probably the most important one.
Entrepreneurial profits signal the creation of value due to accurate entrepreneurial foresight and judgment of consumer needs and wants. As a result, labor and capital are steered into industries that promise high rates of profit from less efficient industries. This helps to increase production, which in turn helps bring down prices of products and services until the rate of industry profits comes in line with the average rate of profits within the economy. This seamless process goes on and on, with some industries expanding while others contract even as the overall economy expands.
Trump's bankruptcies ended up being bailouts, but thanks for the lesson, Cubicle Man.
Bruddah IZ
DA
You’re welcome. But I feel like I failed you because bailouts are not bankruptcies. Kinda like a home is not an asset.
Apparently bankruptcy is a progressive idea.
In order for an economy to prosper it needs investment and investments are risky.
The risks benefit the economy.
Forgiveness of debt encourages investments and risk.
https://www.quora.com/Why-is-bankruptcy-important-for-an-economy
Bruddah IZ
DA
QE baby! Don’t worry. Spigot boy will save the day.
Do you have any assets? pretend that you do and you owned a house and you filled out a balance sheet...do you know what side the house would go on?
Bruddah IZ
DA
Yes
Bruddah IZ
DA
How do we go about our business in this world of scarcity without descending into a barbaric struggle for survival?
Bruddah IZ
DA
.....Even though value is subjective, in a free market, people manifest their values by voluntarily deciding what they will pay for particular products and services. These objective prices, therefore, are reflections of subjective values. Entrepreneurs are able to use these objective prices to calculate expected profit and loss and act accordingly. In a free market, Mises shows, entrepreneurs are able to plan for the future and consumers will receive what they most want.
Socialism, on the other hand, is doomed because there is no way for the central planner to efficiently allocate factors of production because there is no way to calculate profit and loss. In a completely socialistic economy all of the means of production are owned by the state. There is, therefore, no actual exchange of goods, and hence no actual prices that reflect the actual subjective values of human beings. Producers, then, have no way to calculate whether their actions are productive or wasteful from the point of view of society. What is called a planned economy is, instead, as Mises so eloquently put it, “groping about in the dark.”
Socialism, on the other hand, is doomed because there is no way for the central planner to efficiently allocate factors of production because there is no way to calculate profit and loss. In a completely socialistic economy all of the means of production are owned by the state. There is, therefore, no actual exchange of goods, and hence no actual prices that reflect the actual subjective values of human beings. Producers, then, have no way to calculate whether their actions are productive or wasteful from the point of view of society. What is called a planned economy is, instead, as Mises so eloquently put it, “groping about in the dark.”
Bruddah IZ
DA
The moral of the story is that voluntary exchange in a monetary economy allows us to have the civilization we enjoy. In order to engage in voluntary exchange using money, however, Mises stresses that it is neces- sary for people to own private property. You cannot exchange what you do not own. If there is no ownership of private property, there is no actual exchange. If there is no exchange, there is no division of labor and there is no money so there are neither money prices, nor economic calculation. We would be left with chaos, not civilization. For civilization to survive, consequently, Mises teaches us that society must be a private property order. If people are able to own and trade their property as they see fit, wealth increases and civilization prospers.--Shawn Ritenour, Grove City College
Bruddah IZ
DA
The insights of Mises do not stop with his critique of socialism, however. From his 1929 collection of essays A Critique of Interventionism through the rest of his career, he continually explained to whomever would listen that even if the state does not fully socialize the economy, but intervenes only here and there, this too hinders the workings of the price system. To the extent that the state intervenes and curbs the free actions of individuals through price controls, monetary inflation, product restrictions, taxation, and subsidization, to that extent will prices for goods not accurately reflect the values of the people in that society. Such intervention will make it that much harder for entrepreneurs to do their job and one should expect to see shortages in some industries and surpluses in another.--Shawn Ritenour, Grove City College
Bruddah IZ
DA
A man who chooses between drinking a glass of milk and a glass of a solution of potassium cyanide does not choose between two beverages; he chooses between life and death. A society that chooses between capitalism and socialism does not choose between two social systems; it chooses between social cooperation and the disintegration of society. Socialism is not an alternative to capitalism; it is an alternative to any system under which men can live as human beings. To stress this point is the task of economics as it is the task of biology and chemistry to teach that potassium cyanide is not a nutriment but a deadly poison.--Ludwig Von Misses
Bruddah IZ
DA
One may try to justify [social security] by declaring that the wage earners lack the insight and the moral strength to provide spontaneously for their own future. But then it is not easy to silence the voices of those who ask whether it is not paradoxical to entrust the nation’s welfare to the decisions of voters whom the law itself considers incapable of managing their own affairs.--Mises
What side does the house go on?
Iz doesn’t have one and doesn’t know if a house that you inhabit is an “asset” or not, when filling out a balance sheet.