Tuesday, May 6

Bubbles are fun

I don't entirely understand this entire mortgage crises. I read an article that claimed US homeowners had lost 6 trillion dollars in wealth. But in fact everything they had is still there. Every house is there in the same condition it was in the first place. All that has been lost is some made up number of what the house was worth. yeah, that sucks for the people who bought houses only to find out they weren't worth nearly what the paid. But the house is still the same house they bought in the first place. It's like you bought a tv for $100 and then you found out you could have gotten it for 50. Yeah that sucks, but nobody forced you to buy it for a hundred. If it wasn't worth $100 to you then you shouldn't have bought it. If it was worth $100 to you in the first place, then you can still keep it and be happy.

The other thing is, that it seems to me this is a 0 sum game. That is as the housing market expands rapidly prices go up and if you sell your house just before the bubble burst you make a lot of money, and if you buy just before the bubble burst you lose a lot of money, but as a society nothing is lost or gained. The house is the same, the only question is who loses and who gains. So it seems to me the total loss to society of this entire mortgage crises ought to be 0. For every person who overpaid for a house, there is someone else who got overpaid for his house. Given the lack of any loss to society (as far as i can tell) it seems like there has been a huge over-reaction to this mortgage crises.

Also while we are on the topic of bubbles we were looking at toys for a certain someone who likes bubbles... (vytenis.) Anyway i saw a bubble toy that was a bubble lawn mower, which i take it blows bubbles as you pretend to mow the lawn. I thought that was weird enough, but then they also had a bubble grill. We left before i could carefully exam it, but it was definitely a bubble grill. So i guess you pretend to grill something and bubbles come out. I don't know how that can possibly make sense. They also had some sort of electric turbo bubble guns for those who want to coat their entire house in bubble mixture which they were selling in gallon jugs. Whatever happened to just using that little blower you stick in that little bottle.


Blogger Aras said...

the big thing you missed in the mortgage crisis is that the people losing are mostely poor people losing money not to other smarter poor people but rather to banks. so imagine for instance for each 1,000 poor people who lost $100,000 some stockholder of a bank won $100,000,000. Sure that's fair, but it doesn't make more than 0.1% of people happy. and it's a loss compared to a win for a 1,000 voters compared to 1.

That was all approximation based on my not doing any research into the subject.

As for the bubbles, Ellen's family in Bufallo has a cool little machine that blows wind at a faris wheel of bubble sticks that swim through a pool of bubble mixture on the bottom of their turn, so when they come up they bllow bubbles. It was pretty cool.

I'm not down with the bubble guns though. Don't kids play with guns enough? Does everything have to be a gun?

I am definately down with the bubble grill.

4:47 AM  
Blogger Trashcan said...

except it's not banks making money, they are all losing money too. They people making money is whoever owned the house and sold it at it's inflated value. In some cases that may be speculators or real estate moguls, but i think for the most part it's ordinary people. Someone dies so their kids sell their house, someone decides to move so they sell their house, whatever the reason, i think mostly it's normal people selling to other normally people. I'm not saying i understant all the complexities here, but that's what it seems like to me.

It was pointed out to me that we used to have a giant bubble thing. It was like the size of a frying pan, you would dunk it into a similiarly huge thing of fluid, and then run holding it, which would create an enormous bubble. I only vaguely remember it, but it seems pretty cool.

2:28 PM  
Blogger Aras said...

what in the world are you talking about? are you suggesting i run around with a bucket of water with a pan in it? that's crazy!

8:38 AM  

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