site banner
PaperclipPerfector  6d ago (text post)   2936 thread views

Small-Scale Question Sunday for October 19, 2025

Do you have a dumb question that you're kind of embarrassed to ask in the main thread? Is there something you're just not sure about?

This is your opportunity to ask questions. No question too simple or too silly.

Culture war topics are accepted, and proposals for a better intro post are appreciated.

1
Top Bottom Old Controversial Comments
Jump in the discussion.

No email address required.

  1. Zoning should be done at the state level.
  2. Zoning should be more about common sense rules to permit access to shared resources like street parking by mandating additional density, also include increased off street parking.
  3. Reduced immigration and very limited foreign direct investment in real estate
  4. Mortgages should be arms and Freddie and Fannie should be in the business of democratizing access to pay fixed swaps/swaptions.

In my view, the reason housing is such a wealth engine is the 30 year fixed rate mortgate's inflation protection. The goal of housing policy should be to make the inflation protection available to creditworthy citizens without tying it to real estate ownership. Housing should be financed with balloon arms then people with business loans, home loans and other investment asset financing could get pay fixed swaps or chains of swaptions in amounts that match individual liabilities. The goal being to increase ownership and financing of higher return assets than housing.

I’d consider myself financially literate, but I can’t tell what the hell you’re talking about.

The goal of housing policy should be something like “getting more citizens into their own housing.” I don’t see how you’d decouple that from real estate.

Would inflicting “swaptions” on the average family of four actually do anything to achieve that kind of goal?

By lending money for 30 years at a fixed rate we bundle two things together in homeownership. First the purchase of a home, second a massive inflation hedge (because we lock the cost of borrowing the money for 30 years).

In most of the world you buy a home with a floating rate loan or shorter term mortgage. Which means if inflation rises, the cost of financing homes rises everywhere but in the US.

This makes home ownership an excellent investment in the US,, raising both the price of homes and the amount of home people want to buy in the US.

Most business debt is on the same floating rate terms, as non US mortgages, but at international business scale it's inexpensive to buy a derivative to make the net effect act much more like a fixed rate debt product. Freddie Mac and Fannie Mae in the US use these financial instruments to allow them to loan money on long fixed rate terms, too, effectively taking a derivative that's too big for an individual, and splitting it, but only for home loans.

If we swapped them into a pure splitting derivatives to individuals and severed the tie to owning a home, it would make financing that's currently only available to large businesses available to smaller enterprises and let people buy the inflation protection they may want with their home loan, but getting it in a separate rather than bundled transaction. Or getting a smaller more leveraged bet at a higher cost to protect other financial.

The wealth engine of homeownership isn't just the home it's also getting to finance it at a fixed rate for a long time. We should let people who would otherwise prefer to rent not need to buy a home to get long term fixed rate financing.

What is this place?

This website is a place for people who want to move past shady thinking and test their ideas in a court of people who don't all share the same biases. Our goal is to optimize for light, not heat; this is a group effort, and all commentators are asked to do their part.

The weekly Culture War threads host the most controversial topics and are the most visible aspect of The Motte. However, many other topics are appropriate here. We encourage people to post anything related to science, politics, or philosophy; if in doubt, post!

Check out The Vault for an archive of old quality posts. You are encouraged to crosspost these elsewhere.


Why are you called The Motte?

A motte is a stone keep on a raised earthwork common in early medieval fortifications. More pertinently, it's an element in a rhetorical move called a "Motte-and-Bailey", originally identified by philosopher Nicholas Shackel. It describes the tendency in discourse for people to move from a controversial but high value claim to a defensible but less exciting one upon any resistance to the former. He likens this to the medieval fortification, where a desirable land (the bailey) is abandoned when in danger for the more easily defended motte. In Shackel's words, "The Motte represents the defensible but undesired propositions to which one retreats when hard pressed."

On The Motte, always attempt to remain inside your defensible territory, even if you are not being pressed.


New post guidelines

If you're posting something that isn't related to the culture war, we encourage you to post a thread for it. A submission statement is highly appreciated, but isn't necessary for text posts or links to largely-text posts such as blogs or news articles; if we're unsure of the value of your post, we might remove it until you add a submission statement. A submission statement is required for non-text sources (videos, podcasts, images).

Culture war posts go in the culture war thread; all links must either include a submission statement or significant commentary. Bare links without those will be removed.

If in doubt, please post it!


Rules


Recommended Posts And Communities

Recommended Realtime Chats