patrick.net

Someone should have stopped you from opening it.

Why? Does it mean that every stupid act should be stopped? What if turns out that it is stupid to stop stupid acts?

Data matters if it can effect psychology. I think proof that 300 flippers are losing money sends a powerful message, Don’t you?

If psychology is data-driven then the bubble would not have existed.

Data matters. But the presentation of data matters more. And the preception of data matters most.

That said, I am not saying that your site is useless. We get to track the progress of the crash and laugh our heads off. :)

I don’t think you can save people from themselves.

Then how should stupidity be contained? How can we protect ourselves from stupidity?

If BB starts lowering rates or finds some other way to bail out all the FB’s out there, then there is no containment of the mass stupidity of the past few years.

Excellent! Another twist: does it make use stupid for not getting stupid loans?

Is stupidity the new wisdom?

But if people face foreclosure and financial ruin, maybe– just maybe, they won’t be so stupid in the future.

Maybe not... :(

Does anyone have any improvement suggestions?

Try putting the amount loss diagonally across the picture, in bold, red letters. :)

e.g. $44000 LOSS

This way, people can more easily associate the loss with the house.

I wonder how many people we’re taking out of the market with these discussions and blogs? Maybe a little education can eliminate this stupidity…

Not many, I afraid. Most buyers will not even look for reasons of staying out of the market. People who come to these blogs belong to a self-selected group of skeptical buyers.

But these blogs are very useful for interested readers to track the market.

How hot was Sacto over the weekend?

> Maybe a little education can eliminate this stupidity…

I want a pony.

To speak to the starting topic, I remember hearing somewhere "without evil, good stagnates". If you don't give people the chance to screw up, and [learn from their mistakes || remove themselves from the population], you only increase the overall level of stupidity. Especially if there's some other incentive torwards doing stupid things (ooh! I can get a new Hummer!), if you remove the penalties, evolutionary pressures will favor the stupid.

112 °F late Sunday afternoon in Modesto.

SQT Says:

One way to contain stupidity is to make sure that people are held responcible for stupid acts. If someone stupidly commits a crime, they usually face some sort of punishment.

The problem with American society is that accountability for one's own actions is nil. Criminals can plea insanity. Your obesity is the fault of the fast food industry. Parents blame poorly raised kids on the schools, schools blame it on the parents. I kid you not, there's a movement afoot to include the diagnosis "explosive rage disorder" in the new psychiatric diagnostic criteria (DSM).

In that context, do any of us really think FB's/banks/shady lenders/appraisers/The Fed/Bush will get any blame for this debacle?

Max,

Your site is just awesome. This is precisely the type of information I was hoping to compile for BA. Not just the flippers, but to chronicle the price reductions and crazy gains that happened in previous years. But it was just too time consuming. So I know how much effort you must have put in. Hats off to you.

I second the suggestion to put the "Loss" in bold red ;-)

On a side note, I had posted your site to this forum on 20th - in the "Cry for help" thread. Unfortunately not many - except DinOR - noticed it. Better late than never.

Criminals can plea insanity.

To me, insane criminals should still be removed from the society.

I kid you not, there’s a movement afoot to include the diagnosis “explosive rage disorder” in the new psychiatric diagnostic criteria (DSM).

People who cannot contain their "explosive rage" should be removed from the society.

We give criminals so much benefit of the doubt that undesirable behaviors are not sufficiently disincentivized.

I kid you not, there’s a movement afoot to include the diagnosis “explosive rage disorder” in the new psychiatric diagnostic criteria (DSM).

I have no problem with that, as long as it's used to put people away someplace nice and safe. (Which we all know won't happen).

Parents blame poorly raised kids on the schools, schools blame it on the parents.

We should blame both.

Parents must control their kids. Schools must expell bad kids. There is no place for kids who disrespect the society.

I have no problem with that, as long as it’s used to put people away someplace nice and safe.

Someplace "nice", safe for the society, and cheap.

I think the same law should be applied to people regardless of their mental health. Having a rage "disorder" does not make a criminal less deadly.

Being kind to the wrongdoers is being cruel to everyone.

newsfreak: And what, pray tell, are the distinguishing characteristics of each such... species?

I suspect that most people would agree that people should not be bailed out of their stupid decisions (moral hazard). Therefore, bailouts are, generally speaking, a bad idea.

But should we actively prevent people from making stupid decisions? It is hard to answer in the abstract. On the one hand, I'm not sure the government should be involved in dictating loan terms between willing lenders and borrowers. On the other hand, at a certain point stupid decisions, in the aggregate, can be wasteful and destabilizing. I would say that this was true of the tech bubble and probably also the housing bubble.

But who is really going to get burned? The housing finance system is so complex that it is hard to know how this will all shake out. Many FBs will probably walk away and declare BK. Painful, but not exactly debtor's prison. Many banks will have to take large loan losses on their retained portfolio. Weaker banks who have retained too much leverage will go BK. The banks which have managed to offload a lot of their risk will probably do ok. But someone is holding on to all that risk. Whether or not the government explicitly adopts a bail-out policy, it is easy to see how the taxpayers could end up footing a large part of the bill. (For instance, a lot of companies could go BK, which means that PBGC will need to assume a lot of pension liabilities for banks, finance companies, etc.)

People can declare BK, but they can't leave behind their equity loans, or credit cards - as I understand it - due to the new bk laws, and the IRS will be after them for their cut of the debt forgiveness that any bank makes on the repo'd home. So, I wonder what effect that will have on them?

I suspect that most people would agree that people should not be bailed out of their stupid decisions (moral hazard). Therefore, bailouts are, generally speaking, a bad idea.

It is more complicated than that.

Expectation of future bailouts is bad because it incentivizes irresponsible behaviors. The bailout itself is usually well justified. The only problem is whether the bailout will reinforce the expectation of more bailouts.

The solution: bailout the entity but punish the natural persons behind the entity. This way, irresponsible behaviors can be disincentivized but the adverse effects of a crisis can be avoided.