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Quite frankly, you've missed the mark on a number of points. First is that dirty money is effectively worthless until it's cleaned, and launderers recognize th

Quite frankly, you've missed the mark on a number of points. First is that dirty money is effectively worthless until it's cleaned, and launderers recognize that it will take some percentage to clean the money. In other words, they're willing to take a loss on an asset, as that's their fee for getting clean cash. > The only reason money launderers can have an outsized effect on the real estate market is because they generate more demand. Period. But that demand is no different from legitimate buyers. Demand is demand. That's the entire story. You're not seeing the full story, and it's a point that's touched on in the article. These transactions don't happen in a vacuum, and the market doesn't know that the buyer was legit or a launderer. The transaction sets a comp, which then gets used by everyone to set their prices. Enough transactions from launderers, and you can effectively reset what the market value for a property is. There's also impact on supply as many who are deciding on when might be a good time to sell now see the market 10% higher than expected. Suddenly you can get an increase in supply, higher market values, and transactions that make it more favorable for launderers. >A launderer will always prefer to buy 2 properties at a market value of $1 million each, over buying one of those at an inflated $2 million. Always. The laws of supply and demand don't disappear just because you're laundering money. A launderer prefers transactions that are least likely to generate attention from the authorities. Depending on the legal legwork, the "suspiciousness" of a given transaction, and other factors it's tough to say what they'd prefer.

crazygringo 6y ago
> In other words, they're willing to take a loss on an asset, as that's their fee for getting clean cash. But like everyone else, even if there's a loss, they want to minimize it. They're not seeking a loss, so it doesn't matter. Nobody gives up money they don't have to -- that's the entire point I'm making. I'm not missing the mark, it's the article that's missing the mark. > Suddenly you can get an increase in supply, higher market values... That's the demand I referred to originally. Demand is demand. You're just describing demand. That's the full story. > A launderer prefers transactions that are least likely to generate attention from the authorities. Once the provenance has been hidden through layers of LLC's, they still have plenty of options. They don't need to give up half their money, which is my point, so they won't. So it's very easy to say what they'd prefer -- they prefer to keep as much of their money as possible. The article, and you, seem to be arguing that money launderers have no problem throwing away money for no reason, as if money doesn't matter and prices can be driven up arbitrarily without limit. My point is that this is false: money launderers seek to keep as much of their money as they can while still laundering it effectively. By the time they've made it to the stage of negotiating over a price of purchase, they function economically as a buyer like any other.
pessimizer 6y ago
> willing to take a loss on an asset Is nothing like "desire to take the greatest loss on an asset." > A launderer prefers transactions that are least likely to generate attention from the authorities. Seems opposed to a desire to pay far too much for a thing. The desire for people exfiltrating money from their home countries to buy real estate is because they are buying something that will never crash to nothing. Like you said, they don't really care too much if it's overvalued - the one thing that overvalued property always is, by definition, is widely available right now. A nice side benefit is that you can park your kids in it, now, with the excuse of going to university, while you either continue to embezzle money and stay as quiet as possible to avoid discovery or arrest, or play revolution push-your-luck as a courtier to a dictator.

crazygringo 6y ago

> In other words, they're willing to take a loss on an asset, as that's their fee for getting clean cash. But like everyone else, even if there's a loss, they want to minimize it. They're not seeking a loss, so it doesn't matter. Nobody gives up money they don't have to -- that's the entire point I'm making. I'm not missing the mark, it's the article that's missing the mark. > Suddenly you can get an increase in supply, higher market values... That's the demand I referred to originally. Demand is demand. You're just describing demand. That's the full story. > A launderer prefers transactions that are least likely to generate attention from the authorities. Once the provenance has been hidden through layers of LLC's, they still have plenty of options. They don't need to give up half their money, which is my point, so they won't. So it's very easy to say what they'd prefer -- they prefer to keep as much of their money as possible. The article, and you, seem to be arguing that money launderers have no problem throwing away money for no reason, as if money doesn't matter and prices can be driven up arbitrarily without limit. My point is that this is false: money launderers seek to keep as much of their money as they can while still laundering it effectively. By the time they've made it to the stage of negotiating over a price of purchase, they function economically as a buyer like any other.

pessimizer 6y ago

> willing to take a loss on an asset Is nothing like "desire to take the greatest loss on an asset." > A launderer prefers transactions that are least likely to generate attention from the authorities. Seems opposed to a desire to pay far too much for a thing. The desire for people exfiltrating money from their home countries to buy real estate is because they are buying something that will never crash to nothing. Like you said, they don't really care too much if it's overvalued - the one thing that overvalued property always is, by definition, is widely available right now. A nice side benefit is that you can park your kids in it, now, with the excuse of going to university, while you either continue to embezzle money and stay as quiet as possible to avoid discovery or arrest, or play revolution push-your-luck as a courtier to a dictator.