Serotonin said:

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Yeah, it's impossible to talk in generalities.

Is someone who buys a Lexus greedy? What if it's used? What if it was bought for safety features, or reliability?

Is someone who has multiple houses greedy? What if they show hospitality and share them with friends and family? What if they rent them out to vacationers at a much better value than the local hotel? What if they employ 5 locals who are then able to support their children and pay medical bills because of it?

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I stand by my statement that money as well as all other possessions are merely neutral tools. How they are used by humans is still always a reflection of the human's character, not the tools.

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Why is a person or group of people buying multiple houses evil???

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the issue is market manipulation, not merely buying houses. Blackrock buying up inventory at markups to push other buyers out is not the same as a standard bidding war among purchasers.

Why not?

diehard03 said:

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Why is a person or group of people buying multiple houses evil???

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the issue is market manipulation, not merely buying houses. Blackrock buying up inventory at markups to push other buyers out is not the same as a standard bidding war among purchasers.

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Those being pushed out are an externality. There is nothing wrong with a company paying top dollar over individuals for homes. If that company was trying to get the house on the cheap, thats different.

But Blackrock is allowed to engage in risky behavior here. Ask any of the homeowners getting paid over asking how unethical they feel the situation is.

Blackrock is going to hold the bag and unwind their losses if this goes bad on them. If Blackrock seeks a federal bailout, now were talking about bad behavior again.

This whole system is being driven by cheap debt as well. Neither homeowners nor Blackrock would be acting like this without cheap cheap money.

As a side note, america's future is inevitable. It will look like the Netherlands eventually. They've had a stock market the longest. All signs point to societies heavily invested in stock markets look like The Netherlands eventually.

Access to capital. Being able to influence government to get favorable terms that the rest of the population does not have access to.

to be clear, I am not saying that these things are inherently evil. I am saying that the morality of it all is more complex that some people are making it.

I'm not sure why we need to cape up for some of these guys and pretend like they are a small business that just did well. Many of these extreme wealthy are influencing entire markets in their favor - at the expense of people who may or may not have their money in those funds.

Gotcha. I see what you're saying and agree. It is complex and these are not small entities.

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But Blackrock is allowed to engage in risky behavior here. Ask any of the homeowners getting paid over asking how unethical they feel the situation is

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.Ask them how they feel about trying to buy the next house.

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Blackrock is going to hold the bag and unwind their losses if this goes bad on them. If Blackrock seeks a federal bailout, now were talking about bad behavior again.

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but of course they will get it. As Zobel mentioned, joe blow america has their pension in blackrock. it can't fail...

On a macro level, we are seeing the repercussions of decades of people investing directly in the stock market. As 401ks replace pensions and people take the advice to invest more, those major companies grow closer to the federal government. This isn't even getting into ETFs concentrating market power into fewer hands.

Moral hazards abound as stocks become sacrosanct. Elected politicians who cause stock dips see short careers.

When you speak of pure profit maximization and taking advantage of high capital to pursue market downturns or in anticipation and to further induce a scarcity it's very tough to draw a line. Things that seem gross when your power is so great you can manipulate a market seem fine and clever when it's a mom and pop.

Every rule has an exception. Even for payday loans which I generally find gross, there is a legitimate argument that people run across a circumstance where this could do them good. I'm of the opinion that that scenario is exceedingly rare and people are better off at a pawn shop, washing windows, working three jobs or riding a pole before giving these folks a dime-but even still.

Well you could say why not do a payday loan but don't commit usury. Ok but we may look at the high risk of these loans and determine that even the lowest interest rate that would turn a net profit can lead to a hopeless cycle of debt.

I tend to be of the opinion that absolutes don't work well in this arena and we need to make judgments calls based on gross generalizations. Not unlike deciding what age to consider someone an adult.

one MEEN Ag said:

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Serotonin said:

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Yeah, it's impossible to talk in generalities.

Is someone who buys a Lexus greedy? What if it's used? What if it was bought for safety features, or reliability?

Is someone who has multiple houses greedy? What if they show hospitality and share them with friends and family? What if they rent them out to vacationers at a much better value than the local hotel? What if they employ 5 locals who are then able to support their children and pay medical bills because of it?

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I stand by my statement that money as well as all other possessions are merely neutral tools. How they are used by humans is still always a reflection of the human's character, not the tools.

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Right on. Paul said "the love of money" (not money itself) was the problem:

1 Timothy 6:10
King James Version
10 For the love of money is the root of all evil: which while some coveted after, they have erred from the faith, and pierced themselves through with many sorrows.

I think it's been said already, but modern billionaires are very different from prior aristocrats. They aren't monopolizing land, resources, or infrastructure. Musk became a billionaire almost solely based on a mediocre car company and hype. Then he catches flak for being a billionaire on SNL. He's literally done nothing wrong to earn that wealth. Not that he's a saint or anything, but he's not evil for starting a hyping a company.

OTOH, I do have a problem with capital flush companies buying up scores of single family homes. Housing is a basic need, and family home ownership has so far been a very good thing for our society. Companies buying these and letting them sit empty is a societal negative similar to trying to buy up water and not let anyone have it until the value goes up. Any market that rewards and encourages this behavior needs adjusting just like any market that leads to a plethora of monopolies.

Why do you think they're letting them sit empty?

No hard data, just the fact that the rental market seems to be just as bad as the home buying market. If massive numbers of single family homes were being bought and rented, then you'd expect a shortage in the buying market and a glut in the rental market. We aren't seeing that

ramblin_ag02 said:

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No hard data, just the fact that the rental market seems to be just as bad as the home buying market. If massive numbers of single family homes were being bought and rented, then you'd expect a shortage in the buying market and a glut in the rental market. We aren't seeing that

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Every indicator I've seen shows that SFH homes, even if rented, immediately fly off the market. If its in the highly desirable areas that people are trying to move to, its going to move quickly.

Blackrock isn't buying these homes to let them sit. They plan to rent them out. The move into homes by private equity is fueled by three things:

-Offsetting their impending losses in commercial real estate as that sector sorts itself out in the upcoming years.
-Hedge against inflation by gaining physical assets
-Provide cash flow for pension funds.

Where the homes are going to sit is if Blackrock bought subprime homes (doubtful), can't find renters at prices that make their over the top offer work (a real risk), or this inflation is truly transitory and we see a major pullback in housing (doubtful).

If anything, you're going to see the Blackrocks of this world unwind their low ROI assets into a market 3-5 years from now thats probably even more inflated.

+1

It makes no sense to buy a house and sit on it vs renting. It's like burning money.

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It seems to me that many people hide their envy behind a charge of greed against those who have been more successful than they.

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i think this misses the bigger point that some of these guys, like the Bezos's of the world, can become the entire market and set the standards.

This isn't just someone being more successful than you.

Dad-O-Lot said:

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And before the question is asked, I am far from wealthy. I probably won't be able to retire until about noon on the day of my funeral.

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I'm keeping this line.

And you Dad-o-Lot, are wealthy. You just happened to follow the pre-industrial revolution model towards wealth. Your wealth is your family.

Growing up, as we learned about money in grade school I asked my parents, "are we wealthy?". My dad would first chuckle, and then my mom would chime in with. "There is more than one way to define wealth. We all have a wealth of health, a wealth of happiness and joy, a wealth of friends and family members, etc."

Even as an elementary age kid who just literally just learned about money, I knew this was something only poor people said and rolled my eyes at the nonanswer. In my mind, if we had money - my parents would say it.

Nowadays I firmly believe what they are saying. I wouldn't trade any of those things for more money. Also, I realized that my parents nonanswer is a dead giveaway for a stealth wealth middle class lifestyle. I'll tell em I'm on to them when I see them next.

I think its also worthwhile to note that if you move down from the billionaire class to the millionaire class, wealth does not look like you think it does.

Everyone should go read the millionaire next door.

If you want to rail against a culture of greed, overconsumption and envy its usually not the 'wealthy' you're attacking, but those who just have high incomes.

diehard03 said:

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It seems to me that many people hide their envy behind a charge of greed against those who have been more successful than they.

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i think this misses the bigger point that some of these guys, like the Bezos's of the world, can create an entire new market and set the standards.

This isn't just someone being more successful than you.

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If you create the new market, perhaps you should be able to set the standards.

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If you create the new market, perhaps you should be able to set the standards.

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I don't know why you editted my post to respond to something I didn't say.

Nonetheless: is it ok to use slave labor for a new market you create? according to you, you get to set the standard.

Ecclesiastes(along with Job my two favorite books of the Bible) sums it up really well.

I try to read it every month or two for grounding.

diehard03 said:

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If you create the new market, perhaps you should be able to set the standards.

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I don't know why you editted my post to respond to something I didn't say.

Nonetheless: is it ok to use slave labor for a new market you create? according to you, you get to set the standard.

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I know you didn't say that. I was just noting that this "control of the market" often is because the business created a new market. That transition to welcoming competition is critical, but there is an inherent advantage in being the first.

But what does that have to do morality though?

diehard03 said:

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But what does that have to do morality though?

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absolutely nothing. It is neither moral nor immoral. It is amoral.

My mother used to say, "yes, we're rich, and some day we might even have some money."