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Comment by ramraj07 | Hacker News Reader

So good riddance? Do you really think someone who was able to buy real estate in Manhattan needs a handout?

Also the money didn’t disappear, it went to people smarter or luckier than them who used to own the place before. Money doesn’t disappear.

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Always remember teachers pensions and nurses pensions and librarian pensions are tied up in realestate. Saying "someone" like it's a single person is not how investing works. My mother's pension lost heaps. And now yes.. she could use a handout.

yeah tied in BS contracts with unrealistic rental values in NY expecting a CVS and a Chase bank on the same building. In every Manhattan building

The pension fund could have invested in VOO. No one forced them to invest risky investments.

I wasn’t making a judgement about whether the loss was worth it or not… it might create more value in the long run. Sometimes a short term loss is worth it.

That's not how market devaluation works. The "money" (paper money value) definitely was disappeared. It doesn't flow to someone else. Markets don't work like that.

If I buy something for $100, the market value increases to $150 and then drops to $50, I've still lost $100 from the peak on paper. It didn't go to someone else.

The folks holding those assets didn’t have the money either though, until it was time to sell and they sold.

And the people buying 'gained' the difference, by not having to pay it out to gain the asset.

Not sure how it works in the US but apparently in the UK it’s the banks that make up money when giving out home loans and such. So in 2008 I guess fake money was made by banks, to over value shitty new houses, and then investment entities bought these fake money loans as investments. Turns out the entire system was fake and it just collapsed.

The way I see it this is not the case now. Real money was handed over to buy these properties (noted by how many homes were bought for all cash). Money that was redistributed, printed by the government during the pandemic but has now been in proper circulation (thus as real as it gets) and which was paid off to a bunch of property owners who now have this as actual cash (or SPY holdings).

The value of the building going down on paper is only significant when you denominate it in some currency, like dollars, or hours of labor. When the value of a thing goes from $1000 to $100, the people who lose are the holders of that thing, the people who win are the people looking to buy that thing, they can now do so with 10 hours of their labor rather than 100.

They don't gain that value. They gain a savings yes, but they can't turn around and sell that thing for 1000 to make a profit.

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