Dumb

Aloha, People.
This is going to sound biased, self serving and kind of mean. But I think some people are dumb. I'm not saying they're bad people. I'm not saying they do not love their families. I'm not even saying they're unintelligent. I'm saying there are some dumb folks out there (Unintelligent would be the inability to learn or reason. Dumb people are just not looking at all of the facts before they open their mouths).
Take, for instance, Chris Farrell of Bloomberg's Business Week magazine. He wrote an article with the point of view that the government should "pull the plug on government support" from the housing industry. That is his opinion, and not a horrible one. There are a ton of people who think the government shouldn't be involved. That's fine. What I think is dumb (It is kind of harsh sounding. What if I just said his idea is dumb and not him?) is his reason for the government to back out.
His reason is he feels that with the government giving tax credits and buying mortgaged back securities (Keeps the interest rates down) is "Artificially holding prices at above-market levels" (Prices are not above market levels. Prices are always at market level. That's why they call it the "market". People buy stuff and the price is set. If people are only willing to pay $1 for a loaf of bread then that's the market). I don't know where he's buying real estate, but there's nothing artificial going on. Home prices are way low. Yes, the tax credit is helping send buyers to the market. But, how many people are buying a $300,000 home to get $8000 tax credit? Yes, interest rates are low.....that is actually helping a bunch. But, the interest rates nor the tax credit are driving prices up. There is a gang of home buying action going on, but prices are not reflective of the demand. Wanna know why?
When a home is up for sale and someone wants to buy it using a loan then the home still has to appraise. It doesn't matter what someone is willing to pay, the appraiser is going to set a price at MARKET value based on comparable home sales. Appraisers and banks are not going to be making the same mistakes they made prior to '05. You remember those days when an appraiser would drive by the home for sale and then ask you how much you wanted it to appraise for. That's part of what got us into this mess.
So, I really am surprised that this article was written and published. The article even mentions that "sales of existing homes plunged 7.2% in January". How is that artificially holding prices up?
Any way, click on the title and read the stupid article yourself. This is what I'm battling, People.
God Bless