Low interest rates in advanced countries have pushed money into real estate

Re:Low interest rates in advanced countries have pushed mone... by ivalm on Wednesday November 24, 2021 @11:22PM (#29338205)

Except his mortgage is still under water and the banking system will fail (also rational Bob should just walk away from the house to lower his debt through bankruptcy and house repurchase). This is kind of similar to what happened in 2008, except 2008 was still “small” scale.

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Re:Low interest rates in advanced countries have pushed mone... by SinParadise on Wednesday November 24, 2021 @11:44PM (#29338297)

>Except his mortgage is still under water

So? The house is as livable the day before the mortgage went underwater as the day after mortgage went underwater. It only matters if Bob care about selling the house. If Bob's primary intent is to live in the house as opposed to selling it, it wouldn't be a problem.

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Re:Low interest rates in advanced countries have pushed mone... by ivalm on Thursday November 25, 2021 @12:35AM (#29338502)

At the very least you are screwing the owners of the mortgage who will have to write off lots of loans as Bobs everywhere walk away from the underwater mortgages (which is oftentimes the right thing to do even if one didn’t intend to use the house as an investment).

But also it significantly limits Bob’s options in life. They can no longer refinance to repair the roof, they can’t move to a different city for a better job, etc.

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Re:Low interest rates in advanced countries have pushed mone... by diffeomorphism on Thursday November 25, 2021 @01:43AM (#29338819)

So? They wrote a 500k mortgage on a 200k house and they knew that. Bob had no real choice, but they chose to profit off that 300k error. That is not "screwing" it is "correcting".

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Re:Low interest rates in advanced countries have pushed mone... by xenihn on Thursday November 25, 2021 @01:36AM (#29338774)

>At the very least you are screwing the owners of the mortgage who will have to write off lots of loans as Bobs everywhere walk away from the underwater mortgages

Yes, that's the point...

>But also it significantly limits Bob’s options in life. They can no longer refinance to repair the roof, they can’t move to a different city for a better job, etc.

Bob knew the risks.

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Re:Low interest rates in advanced countries have pushed mone... by lumost on Thursday November 25, 2021 @10:56AM (#29342353)

If everyone is a bob it’s the banks problem rather than a bob problem.

Within the legal system remedies Bobs everywhere are going to bankrupt. Banks can arrest the bankruptcy by changing the legal system, and Bobs everywhere can change the legal system to make bankruptcy more lenient.

At the end of the day a large portion of the population is not going to simply accept that they need to shoulder the losses for a bubble they didn’t make and had no perceived choice but to participate in. Particularly not when it occurs twice in two decades.

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Re:Low interest rates in advanced countries have pushed mone... by xenihn on Thursday November 25, 2021 @03:19PM (#29344642)

>At the end of the day a large portion of the population is not going to simply accept that they need to shoulder the losses for a bubble they didn’t make and had no perceived choice but to participate in.

They (you?) don't have to accept it. That's not a factor at all. Your acceptance is not required.

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Re:Low interest rates in advanced countries have pushed mone... by lumost on Thursday November 25, 2021 @07:06PM (#29346264)

Who takes the loss is a matter of societal acceptance. There are many historic examples of societies clearing debts through jubilees, negotiated settlements, nationalization, revolution, and economic restructuring.

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