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Re:AAPL There's a market for $AAPL shares at $100+. Some people are happy paying this price. Some people think this is too high. There's similarly a market fo

Re:AAPL There's a market for $AAPL shares at $100+. Some people are happy paying this price. Some people think this is too high. There's similarly a market for Palo alto houses at $2.5m. Some people are happy paying this price. Some people think this is too high. When someone comes along asking AAPL to sell them shares of $AAPL for $65 when there's a market for them at $100+, you as the holder of other analogous $AAPL shares won't be happy since such an occurrence will diminish the value or your investment. When someone comes along asking a city for as additional housing stock at $X << $2.5m, you as the owner of an analogous investment asset will respond to the threat of your investment coming under siege. Non-investment aspects of housing's role in society will be greatly diminished in the homeowner's mind, when the home represents 20-50% of their net worth (given that their minds have been conditioned to treat housing as an investment asset).

StanislavPetrov 10y ago
You're missing the point. When there isn't a market for $AAPL shares at $100, but the government steps in to offer $100 to prop up the price of $AAPL stock, there is a problem. That is the issue with housing prices, stocks, bonds, debt, and everything else on the world stage. This central bank interference destroys price discovery and disrupts prices everywhere, including Palo Alto, even if they aren't directing bidding on homes there.
- lisper 10y ago
  That, and also no one needs AAPL stock in order to live, but everyone needs housing. So the price distortions in housing affect society more severely than price distortions in AAPL stock.
  - sangnoir 10y ago
    > That, and also no one needs AAPL stock in order to live, but everyone needs housing If housing should be protected from 'distortions', please explain how foreclosures help? I'm not being snide - my economics knowledge is basic, kindly explain it like you would to a high-school graduate.
    - lisper 10y ago
      People generally don't have enough capital to pay cash for a house so they need to borrow some of the money. Such loans are typically secured by the value of the house. If the borrower doesn't repay the loan the lender needs to be able to liquidate the asset to make themselves whole, hence foreclosure. If this were not done, mortgages would be much more expensive because they would be much risker investments.
      - sangnoir 10y ago
        > If this were not done, mortgages would be much more expensive because they would be much risker investments. So foreclosures protect mortgages, rather than housing directly, right? My take on ancestor was than housing was very important so "price distortions" need special intervention to protect housing as a societal need. I'm probably overthinking it.
        lisper 10y ago
        > So foreclosures protect mortgages, rather than housing directly, right? Yes. But making credit more easily available makes housing more accessible.
dredmorbius 10y ago
People don't need AAPL shares to survive. They do need housing. And food, and clothing, and a reasonable assurance of stability in their lives. Start taking that away, and social fabric starts unravelling quickly.

StanislavPetrov 10y ago

You're missing the point. When there isn't a market for $AAPL shares at $100, but the government steps in to offer $100 to prop up the price of $AAPL stock, there is a problem. That is the issue with housing prices, stocks, bonds, debt, and everything else on the world stage. This central bank interference destroys price discovery and disrupts prices everywhere, including Palo Alto, even if they aren't directing bidding on homes there.

lisper 10y ago
That, and also no one needs AAPL stock in order to live, but everyone needs housing. So the price distortions in housing affect society more severely than price distortions in AAPL stock.
- sangnoir 10y ago
  > That, and also no one needs AAPL stock in order to live, but everyone needs housing If housing should be protected from 'distortions', please explain how foreclosures help? I'm not being snide - my economics knowledge is basic, kindly explain it like you would to a high-school graduate.
  - lisper 10y ago
    People generally don't have enough capital to pay cash for a house so they need to borrow some of the money. Such loans are typically secured by the value of the house. If the borrower doesn't repay the loan the lender needs to be able to liquidate the asset to make themselves whole, hence foreclosure. If this were not done, mortgages would be much more expensive because they would be much risker investments.
    - sangnoir 10y ago
      > If this were not done, mortgages would be much more expensive because they would be much risker investments. So foreclosures protect mortgages, rather than housing directly, right? My take on ancestor was than housing was very important so "price distortions" need special intervention to protect housing as a societal need. I'm probably overthinking it.
      - lisper 10y ago
        > So foreclosures protect mortgages, rather than housing directly, right? Yes. But making credit more easily available makes housing more accessible.

dredmorbius 10y ago

People don't need AAPL shares to survive. They do need housing. And food, and clothing, and a reasonable assurance of stability in their lives. Start taking that away, and social fabric starts unravelling quickly.