8 ms·

Start worrying when the banks stop offering mortgages to people trying to buy property in south beach. I remember when Katrina flooded New Orleans, lots of peo

• jdpedrie 8y ago
  > They would get some government assistence with the condition that this was the first and only time that the governmnet would help. We'll see how well that holds up next time those people need assistance. Somehow I don't see any elected politician telling his voters "sorry, we already helped you".
  • quotemstr 8y ago
    Right. Intending to break a bad habit carries no weight. Actually doing it is what counts. The government's action here wasn't smart: it was in fact cowardly.
  • craftyguy 8y ago
    That's a common problem with any elected government. Tough decisions like "we need everyone here to move away right now" never get made because doing so would result in some elected politician not winning re-election.
    • beat 8y ago
      Not necessarily. My mother lived briefly in Shawneetown, IL, on the Ohio River (before I was born). After a particularly bad flood, the locals just packed the whole town up and moved a couple of miles inland to higher ground. I took her down to visit once, and she was totally weirded out. The house she lived in still stood there, abandoned. People move away when a location is no longer economically viable, period. They won't move away until then, despite the risks. If they did, no one would live in volcano or earthquake zones. Think San Francisco Bay is going to be depopulated just because it's a dangerous place to live?
      • craftyguy 8y ago
        That's not my point. Obviously people will move away on their own accord if living in a location is no longer safe/viable. My point is, until a location is no longer safe, they will generally stay put and resist any pressure to leave, even if all evidence points to it becoming unsafe in the not so distant future. Elected officials live in the moment, and will not make decisions that impact constituents today in preparation for a future disaster.
        • beat 8y ago
          Remember, in Jaws 2, the people had re-elected the mayor.
    • planteen 8y ago
      Elected officials force people to move in Rapid City, South Dakota after the 1972 flood. Today, the flood plain is a very nice bike path with no houses. This probably happened due to the high deal toll (238 fatalities). "Many businesses were permitted to stay in the flood plain, but houses and motels were either raised or moved due to the likelihood that a flood would occur while a person may be sleeping. The majority of the flood plain was made into large parks, which have increased in number and have been improved and updated on a continuing basis." https://en.wikipedia.org/wiki/1972_Black_Hills_flood https://en.wikipedia.org/wiki/1972_Black_Hills_flood
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  • ryandrake 8y ago
    I know people who deliberately don’t save for retirement because they are betting that few people in their generation will have enough to retire on, and the government politically can’t let elderly people mass-die on the street.
    • grasshopperpurp 8y ago
      Curious - what age group?
      • brandonmenc 8y ago
        In my experience, anyone under age 40, for sure.
        • grasshopperpurp 8y ago
          I'm 34, and that's not my experience. >According to a new survey from Discover, millennials are outperforming older generations when it comes to saving for their future. In a national study of 2,205 people, Discover finds that 81 percent of millennials are currently saving in some capacity, compared to 74 percent of Generation Xers and 77 percent of baby boomers. https://www.businesswire.com/news/home/20180110005313/en/Discover-Study-Finds-Millennials-Saving-Generations https://www.businesswire.com/news/home/20180110005313/en/Dis...
          • brandonmenc 8y ago
            How many boomers are actually pulling in wages? Aren't most of them spending their savings precisely on what they saved it for? i.e., retirement?
            • grasshopperpurp 8y ago
              >Where did baby boomers go wrong? This generation isn’t financially prepared for retirement I couldn't find the percentage of Baby Boomers that are retired, but they certainly (as a generation) are not prepared for retirement. The Baby Boomers are (again, as a generation) incredibly reckless in all facets. https://www.marketwatch.com/story/where-did-baby-boomers-go-wrong-this-generation-isnt-financially-prepared-for-retirement-2017-07-05 https://www.marketwatch.com/story/where-did-baby-boomers-go-...
• legulere 8y ago
  The banks will just ask for flood insurance.
  • chollida1 8y ago
    And when your house floods every other year, that means flood insurance will cost you what it costs to rebuild your house.... each year. which is to say, you won't be able to get flood insurance.
    • Analemma_ 8y ago
      Until the Federal government gets out of the guaranteed flood insurance business-- which is unlikely to happen soon, as there would be fierce political blowback-- you will always be able to get flood insurance supported by taxpayers.
      • Retric 8y ago
        Federal Flood Insurance has had zero net subsidy from 1968 to 2004. While covering up to 5.5 million homes in the US. https://en.wikipedia.org/wiki/National_Flood_Insurance_Program https://en.wikipedia.org/wiki/National_Flood_Insurance_Progr... Currently it's 25 billion in debt, but that's cheap in terms of federal programs of that magnitude (~15 $ per home per year). Further, the net economic gain from allowing people to build in slightly at risk areas has easily been worth 25 billion over that time period. Consider, without some form of insurance you could not build downstream of major dam's as the low risk of them failing puts huge areas at risk.
        • mrfredward 8y ago
          So the program broke even for 36 years, then started running up debt in the early 2000s...because of more severe weather. As sea levels rise and weather gets more severe, this program will become much more expensive.
          • Retric 8y ago
• kamaal 8y ago
  One of the things I learned from Bangalore's real estate market is to stop using Banks as some kind of proxy validation for things. Its always common to hear people say 'If banks lend a loan against X, X must be ok to buy'. In reality although banks do a bit of verification here and there. Its mostly they are looking for a way to recover their money from you. In many cases you will see the banks will happily lend money, and then if things go south, they will go after your collaterals or destroy your credit rating etc. Very rarely can you tell them, 'You approved of it, so bear the loss'.
  • codegeek 8y ago
    what happened with bangalore's real estate market ? Just curious.
  • klipt 8y ago
    In a "no recourse" state like California, the bank can go after the house they loaned on but can't go after any of your other assets. Florida is not a "no recourse" state though.
• syshum 8y ago
  You have just laid out the US National Flood Insurance Program, which is slightly more forgiving, I believe they will rebuild your home 1 time, then if you have a 2nd claim they pay to relocate you and the property is no longer buildable or rather no longer eligible for Flood Insurance.
• scottlamb 8y ago
  > Start worrying when the banks stop offering mortgages to people trying to buy property in south beach. If the 2007 financial crisis taught me anything, it's that we can't rely on the banks to make sound financial decisions, particularly regarding mortgages. Even more so now that the government bailed them out at taxpayer expense. They know that will happen again when needed. They have a safety net so they can gamble as much as they want—they can win but not lose. They will continue to believe this until/unless the government breaks them into pieces that aren't "too big to fail". Perhaps they already should have stopped offering those mortgages.
  • clarkmoody 8y ago
    The 2007/8 bailout of banks is far from the first time the US government has socialized losses in the sector. The modern era of Wall Street bailouts started in the '80s after the Mexican Peso crisis. Bank bailouts have been happening since Colonial times, through emergency suspensions of specie payment, par laws, legal tender laws, etc. > we can't rely on the banks to make sound financial decisions Banks that have an implicit (or explicit) guarantee of bailout are making rational decisions about risk, since they can offload it on the taxpayer.
    • fernandopj 8y ago
      > Banks that have an implicit (or explicit) guarantee of bailout are making rational decisions about risk, since they can offload it on the taxpayer. Agreed. From their perspective it's a sound and rational play - a better term would be to say we can't rely on banks to make moral or ethical decisions from a society perspective
    • downrightmike 8y ago
      The shoe was on the other foot once: "Morgan helps end the Panic of 1893 Gold certificateOn February 20, 1895, J.P. Morgan & Co. led a bond offering that helped rescue the United States from a severe two-year economic depression." https://www.jpmorgan.com/country/US/en/jpmorgan/about/history/month/feb https://www.jpmorgan.com/country/US/en/jpmorgan/about/histor...
  • 8y ago
• will_brown 8y ago
  I live in South Beach. Private flood insurance has pulled out of the market after Hurricane Andrew in 1992, and it’s not just South Beach it’s a majority of Miami-Dade County. On the beach it has gotten to a point where some commercial properties can’t get insured...that will be an inevitable disaster.
  • landcoctos 8y ago
    .
    • will_brown 8y ago
      If you know a way to delete your profile/history on HN let me know. Afraid not much I can do
      • deleted 8y ago
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      • graeme 8y ago
        You can message the moderators
    • driverdan 8y ago
      Why does that matter? Look at my profile, you can figure out who I am instantly.
• ebikelaw 8y ago
  Insurance companies aren't morons. They already know this region is doomed. https://www.axios.com/sea-level-rise-costing-billions-in-home-prices-7920a7a8-8db4-45b1-ad21-357c4d522fcb.html https://www.axios.com/sea-level-rise-costing-billions-in-hom...
• bilbo0s 8y ago
  >I remember when Katrina flooded New Orleans, lots of people were asking why rebuild the city when it almost certainly will flood like that again. And the answer was a simple, do you know how much it would cost to relocate everyone? I was working briefly with Halliburton during the Rita-Katrina time period. I think it might behoove you to take a more holistic look at this issue. I'll try to be visual in my explanation by simply asking you to Google maps of the energy pipelines in the US. Here are a couple: https://www.oilandgas360.com/america-needs-pipelines-for-at-least-the-next-20-years/ https://www.oilandgas360.com/america-needs-pipelines-for-at-... https://www.api.org/oil-and-natural-gas/wells-to-consumer/transporting-oil-natural-gas/pipeline/where-are-the-pipelines https://www.api.org/oil-and-natural-gas/wells-to-consumer/tr... I think you get the picture. And that's just energy. It's not only energy that make places like New Orleans, Galveston, and Houston critical. Let's just say that if New Orleans disappeared tomorrow, not only would the US be in for a decidedly bad time, but the nutritional intake of children in Sub-Saharan Africa would be materially affected. Some of the ports along these coastal plains are enormously important. Of course not all of them are important. I'm not here to argue that Myrtle Beach or Miami are as critical as New Orleans, New York, or the NIT. I'd just strongly urge us to look at the ports and be judicious. If Miami disappeared tomorrow, we would be fine. So yeah, who cares? If Houston disappeared tomorrow, that's a whole different thing. If that happened, I'm just saying that we'd better have a good plan in place for that contingency. Those different realities should, and currently do, inform our strategic policies on these different ports. You can't simply say, "Move this enormously important, warm water port." That's not how you "engineer an empire" so to speak. All that said, we can mitigate impact. Outside of a few Engineering history specialists, not many people realize that Chicago was built on a swamp that was prone to flooding as well. Not saying that the Chicago solution is appropriate for the situations in Miami or Houston, just saying that there are definitely ways to think long term about minimizing impact.
  • simonbarker87 8y ago
    > but the nutritional intake of children in Sub-Saharan Africa would be materially affected. Sorry for the dumb question but I don’t get the link between New Orleans and African children? I’m in the UK, so may be missing some common US knowledge?
• tzs 8y ago
  > Start worrying when the banks stop offering mortgages to people trying to buy property in south beach. Florida is a recourse state, isn't it? That might make whether or not banks offer mortgages a trailing indicator rather than a leading indicator of how risky it is there. In a non-recourse state (Alaska, Arizona, California, Hawaii, Minnesota, Montana, Nevada, North Carolina, North Dakota, Oklahoma, Oregon, and Washington), if the borrower stops paying their mortgage the bank can foreclose and sell the property, and that ends the borrower's obligation. If the proceeds from the foreclosure were less then what was owed too bad for the bank. That's all the get. In a recourse state, it starts out the same. The bank forecloses and sells the property. But in a recourse state, that only ends the borrower's obligation if the proceeds are enough to pay the remaining debt. If they fall short, the borrower still owes the difference. The bank can go after assets other than the property, or can go for wage garnishment, or both.
  • howard941 8y ago
    > Florida is a recourse state, isn't it? It is, and the lender almost invariably chooses to first sue on the note so as to avoid taking title to the property for as long as possible.
• h4b4n3r0 8y ago
  Actually start worrying when insurance companies start refusing to insure properties there against flooding. Estimating risks is their bread and butter, they will know. I’ve actually discovered (from the Yale “Financial Markets” MOOC) that US government uses mandatory insurance to get people to move out of areas which are likely to be flooded, etc. USG makes the insurance mandatory, and insurance companies, quite predictably, price just about everyone out. People either pay through the nose or move out. Edit: reading further into the thread, looks like they already are refusing to insure. Move TF out.