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Ben Jones & Patrick: Psychics or Super-Geniuses?


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2007 Mar 6, 9:13am   19,357 views  179 comments

by HARM   ➕follow (0)   💰tip   ignore  

Patrick's alter ego? Ben Jones - mathematical genius?

As the rolling bubble crash gathers steam, and even formerly hostile MSM sources now reluctantly admit the bubble --and its bursting-- is undeniably real, one question remains: how did people like Patrick Killelea and Ben Jones correctly predict all this so accurately beforehand?

Nearly two years ago, Ben and Patrick founded their now-famous blogs, dedicated to the national housing bubble. They boldly predicted its demise as "inevitable" long, long before most industry experts would even admit the bubble even existed. Now events are unfolding almost like clockwork, almost exactly as predicted:

  • Exhaustion and unaffordability leads first to falling sales & rising inventories, but very sticky prices (at first).
  • Inability to continue flipping and/or serially refinancing forces flippers and over-leveraged FBs to try to exit, spiking inventories and gradually un-sticking prices in successive waves of option-ARM resets.
  • Failure to indefinitely to hide default/foreclosure/repurchase losses off the balance sheets forces many sub-prime operators and MSB issuers out of business, drying up liquidity.
  • The MEW-ATM shutdown spills over into the general economy and either triggers a general recession, or at the very least, localized recessions in extreme-bubble regions.
  • The crash slowly grinds away over years, eroding homedebtor equity via a combination of inflation and nominal price drops, until the price-rent/price-income equilibrium is finally restored.
  • Finally, the rolling crash becomes obvious even to the most clueless FB and the cheerleading MSM. Newsweek issues it's "Housing: Worst Investment Ever!" cover story, close to the exact market bottom.
  • My questions: how could such seemingly average Joes ever predict such events when the brightest, most highly paid industry experts could not? I mean, David Lereah went from "no bubble" to "correction's over" in like 30 seconds flat! If the danger signs were so obvious, then why didn't we hear about them beforehand from the NAR... the Fed... Wall Street? It's not as if these frequently quoted (and rarely challenged) "industry experts" could possibly have known about this mess beforehand, but just kept it to themselves for some reason. Like, that's just conspiratorial, tinfoil-hat wing-nuttery, right?

    So, if the only way to perceive an asset/credit bubble is after-the-fact (as Sir Alan Greenspan has asserted), then how could Ben and Patrick possibly have known about it that far back? Are they psychic? Are these guys prescient modern-day Nostradamus-es? Or, are they financial super-wizards --real-life Hari Seldons-- who can accurately predict the future with mathematical precision, but posing as regular guys? If the housing bubble was so impossible to predict, even with access to the very best market data and cutting-edge computing power (as the experts insist it was), then how could two ordinary working-class stiffs manage to pull off such a feat by themselves?

    Should we be concerned that Patrick and Ben are some form of genetically mutated super-geniuses hiding in plain sight?? How else could they possibly have foreseen the unforeseeable?

    Spooky, isn't it? :roll:

    Discuss, enjoy...
    HARM

    #housing

    « First        Comments 100 - 139 of 179       Last »     Search these comments

    100   Different Sean   2007 Mar 7, 6:18am  

    Don't Chinese pedestrians just 'ignore' vehicles as a cultural habit and stagger onto the road expecting traffic to stop for them? Face-saving and all that, you know... One woman got run down recently because of it -- not even looking for traffic before crossing...

    My sis when living in HK found that drivers just ignored road rules like roundabout right of way etc -- which then translates into terrible driving when they go to Western countries...

    101   Peter P   2007 Mar 7, 6:21am  

    Luckily there aren't many roundabouts here.

    102   MtViewRenter   2007 Mar 7, 6:23am  

    Are roundabouts the same as totaries?

    103   Different Sean   2007 Mar 7, 6:24am  

    Peter P Says:
    Luckily there aren’t many roundabouts here.

    heh, yes, at least they've mastered going in a straight, uninterrupted line...

    104   MtViewRenter   2007 Mar 7, 6:24am  

    rotaries....

    105   Peter P   2007 Mar 7, 6:26am  

    Are roundabouts the same as rotaries?

    Yes. But of course, they "rotate" the other way over there. :)

    I think they can be used to replace semi-busy multi-lane 4-way stops though.

    106   Different Sean   2007 Mar 7, 6:26am  

    Are roundabouts the same as rotaries?

    Probably...

    107   Different Sean   2007 Mar 7, 6:30am  

    Roundabouts are often used on busy-ish single lane roads also, where right of way issues or hegemony of certain routes can be reduced, i.e. everyone gets a turn. Multi-lane roundabouts become a bit of a nightmare sometimes due to driver misunderstandings of which lane they should occupy to go left or right, when they can cut over, etc...

    108   Peter P   2007 Mar 7, 6:31am  

    Score is over-rated. Again, why do Asian parents want to ensure that their kids become the perfect employees?

    109   Peter P   2007 Mar 7, 6:32am  

    Multi-lane roundabouts become a bit of a nightmare sometimes due to driver misunderstandings of which lane they should occupy to go left or right, when they can cut over, etc…

    I am under the impression that a single-lane roundabout has as much throughput as a two-lane 4-way stop.

    110   sfbubblebuyer   2007 Mar 7, 6:43am  

    Peter P said :
    Score is over-rated. Again, why do Asian parents want to ensure that their kids become the perfect employees?

    Because they don't believe SS is going to be around and need a different financial net?

    111   Peter P   2007 Mar 7, 6:44am  

    Dont forget ARMs have yet to rest.

    LOL!

    112   Different Sean   2007 Mar 7, 6:45am  

    PAR Says:
    So let me get this straight. The government can create a licensing service that will guarantee that licensed drivers won’t assault you?

    No, of course not. There are a few more checks on licensed drivers in advance, they should have an ID on display, and it might be easier to catch them after the fact by investigating records. Now of course they are fitting tiny cams in cabs and even huge wrap around perspex screens to protect the driver (and possibly the passengers)... A cab driver was found guilty of a similar murder here recently also, but they are all licensed...

    113   Peter P   2007 Mar 7, 6:46am  

    Because they don’t believe SS is going to be around and need a different financial net?

    Especially because of that their kids need to do something drastically different from their peers. Getting into the right schools will no longer guarantee a good life.

    There is no financial net whatsoever any more.

    114   Different Sean   2007 Mar 7, 6:48am  

    I am under the impression that a single-lane roundabout has as much throughput as a two-lane 4-way stop.

    yes, it's probably much more efficient, as less waiting and more 'pipelining' of cars... and reduced likelihood of accidents and misunderstandings... but doesn't the american system of uncontrolled intersections have a 'first arrived, first to enter' rule? here, you have to always give way to the right at a 4-way stop...

    115   MtViewRenter   2007 Mar 7, 6:50am  

    I don't pretend to actually understand the advantages of a roundabout/rotary. We have a good number of them in Boston near where I grew up. There was always a lot of traffic backed up at the busy ones during rush hour, though not noticeably more than normal traffic lighted intersections.

    It was a lot of fun to go in full speed, swerve a little, then hit the gas and shoot out the other side, when traffic's light, of course. It's even more fun to do that with out-of-towners sitting next to you.

    116   Peter P   2007 Mar 7, 6:50am  

    I don’t pretend to actually understand the advantages of a roundabout/rotary.

    You know, I do like to pretend. ;)

    117   FormerAptBroker   2007 Mar 7, 6:51am  

    Even the mention of a small change from the current system in San Francisco where wealthy “medallion owners” pay off the politicians to keep the number of cabs and medallions low and profits high get’s (Comrade) Different Sean to say:

    > Further, there should be no consumer protections
    > or consumer certainty in society.

    It scares me that people like Different Sean think things would be better with more government regulation. Since the politicians are getting so much from the medallion holders I’m surprised that they don’t pass a law making all the cab companies drive Fords so they can extort money from Ford…

    118   Peter P   2007 Mar 7, 6:55am  

    Leaving aside the fact that there are people going round and round for ever in certain busy roundabouts not knowing how to get out, you are correct.

    See, it gives you the option to go around indefinitely while you decide which restaurant to go to. :)

    119   e   2007 Mar 7, 6:57am  

    Especially because of that their kids need to do something drastically different from their peers. Getting into the right schools will no longer guarantee a good life.

    But not getting into the right school might spell certain doom.

    This is a situation where the negatives risks are enormous. Remember: in the future in America, there will only be Director-level and above employees, and Big Box Store employees to service them.

    120   Peter P   2007 Mar 7, 6:58am  

    It is easy, the inner circle gets right-of-way. There are quite a few roundabouts at UC Davis for bikes. And with bikes, everything is multi-lane.

    121   Peter P   2007 Mar 7, 7:00am  

    But not getting into the right school might spell certain doom.

    I think getting a degree might spell certain doom.

    The percentage of degree-holders among the richest people is not too encouraging for college students.

    122   e   2007 Mar 7, 7:00am  

    PAR, have you tried this one for Bay Area listings?

    I get all my listings from www.burbed.com :)

    123   Peter P   2007 Mar 7, 7:02am  

    Remember: in the future in America, there will only be Director-level and above employees, and Big Box Store employees to service them.

    Exactly! Either you drop out and start a multi-billion company or you get a job at a big box store. Neither job requires a degree.

    If you have a degree, you will be pigeon-holed into the middle class, the "surplus" class.

    124   Different Sean   2007 Mar 7, 7:02am  

    Leaving aside the fact that there are people going round and round for ever in certain busy roundabouts not knowing how to get out, you are correct.

    See, it gives you the option to go around indefinitely while you decide which restaurant to go to.

    I've done a couple of 360s while getting my bearings over time... altho it gives you an option to do a U-turn as well, which an ordinary intersection normally won't do...

    sounds like the old Warner Bros cartoon with the guy stuck indefinitely on the freeways...

    125   Peter P   2007 Mar 7, 7:07am  

    I’ve done a couple of 360s while getting my bearings over time… altho it gives you an option to do a U-turn as well, which an ordinary intersection normally won’t do…

    We do U-turns in america all the time. :)

    I have also made U-turns using freeway cloverleafs.

    126   DinOR   2007 Mar 7, 7:08am  

    NV,

    Those are some butt ugly numbers my friend! Love the Zip Code breakdown. Betcha' Marshall Prentice and John Karavol never thought they'd be pumping out those kind of stats! :)

    127   e   2007 Mar 7, 7:09am  

    506 sq ft 53-year old cottage for $999,000 with Los Altos schools (2665 MILLER AV, MTN VIEW).

    Sale History
    03/15/2006: $885,000
    05/07/1999: $475,000

    Now that's chutzpah.

    128   Peter P   2007 Mar 7, 7:11am  

    You can also be stuck in a set of freeway cloverleafs indefinitely.

    129   DinOR   2007 Mar 7, 7:11am  

    Portland has "traffic circles" all up and down 39th and they can be a gas (if you're actually using them) and a real drag if you're going all the way up. I will say that they keep the traffic flowing and that seems to be better for the people that live on high volume surface streets.

    130   DinOR   2007 Mar 7, 7:17am  

    "35% off peak 2005 prices to dance a victory jig"

    Uh, I do a little jig every time another subprime lender goes belly up!

    35% off peak I will rent a 40' luxury motor home and go coast to coast with a m@tha f*ckin' bullhorn on full volume to promote my HELOC Bustin' Daddies Tour! :)

    131   e   2007 Mar 7, 7:21am  

    You can also be stuck in a set of freeway cloverleafs indefinitely.

    One of my friends from Seattle who was visiting recently asked me "Why are all the interchanges so bad in California?"

    I'm not sure if he was referring to the:
    -101 N entrance at Mathilda
    -85 N entrance & 237 E exit at El Camino
    -101 S at Rengstorff

    Those are pretty damn scary places.

    132   Doug H   2007 Mar 7, 7:23am  

    OT......

    Want to check a site to see if it is blocked by The Party?

    http://www.greatfirewallofchina.org/test/

    133   Peter P   2007 Mar 7, 7:24am  

    Interchanges are much better in San Diego. Also, I believe they have modified many full-cloverleafs to parclos along 880.

    One "good" thing about cloverleafs is that you can safely abort merging and try again.

    134   Peter P   2007 Mar 7, 7:30am  

    IIRC they post yield signs instead of merge signs in Seattle. Is this true?

    135   MtViewRenter   2007 Mar 7, 7:34am  

    eburbed said:

    -85 N entrance & 237 E exit at El Camino

    Is it really that bad? That's right by where I live, but since I work locally, I don't use highways much. Never felt like it was such a problem though.

    We were down in LA a couple months ago. Seemed like so many of the highway entrances down there are just nuts. You have like 20 feet to accelerate from 0 to the speed limit or you'll get rearended. 237 E from 101 S is kinda like that. Great excuse to buy a sports car.

    136   MtViewRenter   2007 Mar 7, 7:36am  

    I meant 237E from 101N....

    137   MtViewRenter   2007 Mar 7, 7:37am  

    Damn, maybe it's 101W. You get the idea.

    138   sfbubblebuyer   2007 Mar 7, 7:41am  

    Here's a distress sale in Saratoga. They're trying to get 950,000 for the property, and if you look back at zillow, the property was last bought in 2000 for $750k. They won't work with any other realtors, which says to me that 950K is just about the least they can accept while getting out from under their mortgage, which suggests 920K in debt. It seems like this is a golden example of House ATM gone badly. I suppose it's possible that they could make their payments for 7 years and lost a job and have to sell... but in that case it wouldn't be a distress sale as they'd have well under 750k owned by now, even with a 0% down loan.

    139   Peter P   2007 Mar 7, 7:42am  

    237 E from 101 S is kinda like that.

    No, you get a very long aux lane before it exits at Mathilda.

    237 W from 101 N is another story though, although the merge zone is quite wide.

    I meant 237E from 101N….

    No such exit.

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