patrick.net

SF ace says

MCMSinger says

I can confidently say that the housing market definitely is in risk of falling 90-95% - even though that may sound extreme - when you look at the math behind it - it is actually very logical. Again - Math doesn’t lie, opinions do.

Yes, Math doesn’t lie, opinions do. Your math fails the application test.
make everyday count

They only thing you need to do is go take yourself to good old Detroit where the closing costs & taxes is more than the asking price in some cases while in other cases you can't even give it away for free with entire towns completely abandoned - ready to be demolished & turned into farmland.

Otherwise if you still insist on being right, close your eyes. Then I will be wrong.

"I can confidently say that the housing market definitely is in risk of falling 90-95% - even though that may sound extreme - when you look at the math behind it - it is actually very logical. Again - Math doesn’t lie, opinions do."

Yeah, you might be right about that guess for some of the rural or remote suburban areas. I don't believe that will be the case for most of the areas that are close to city centers. So, I would argue that the percentage of drop depends on the neighborhood and average local income level, and popularity of that place.

What you describe banks doing is actually what banks do. It's the very definition of fractional reserve banking. You deposit $1 and they extend $10 in credit in the form of various degrees of risk in their loans. It's a safe capital reserve ratio of 10%. Some banks hold a higher reserve ratio and other likes Lehman were lower at around 1.5%.

I don't see housing prices falling 90-95%. I see the drop closer to 35-50%.

Yeah, you might be right about that guess for some of the rural or remote suburban areas. I don’t believe that will be the case for most of the areas that are close to city centers.

I think it is the opposite. Prices in city centers will decline at much higher rates than suburban or rural real estate because owning land will be worth way more than what you're going to have to fork over for food.

MCMSinger says

Back in the old days… Minium wage workers bought their own homes within 2 years either with full cash payment or with just a very small loan with a large cash downpayment.

Another romantic. Talking about the good ole days.

Why do the austurians always wax nostalgic? Is that a requirement to join the club?

For the record--minimum wage workers NEVER paid cash for homes in 2 years. Not unless they married well or came into money through an inheritance...

I don't see deflation as a major threat. If the system is rigged and the bankers and super elite own us, then they will not let the system fail. They will just keep the sheeple happy at the minimal level possible.

There are some other bubbles we have to work through like the college costs.

Other bubbles:
-College tuition bubble. College costs will have to come down.
-Expectations bubble. The baby boomers raised a bunch of entitled kids.
-Obesity bubble. The country is getting fat. Fat and miserable.

It depends on the area, and the time span we are talking about. Also, it depends on the governments future decisions. If you take Detroit downtown as an example, or some ghost towns then 90 to 95 percent drop does not sound insane. But, you might be right for some rural areas which might see less price drops compared to some city center neighborhoods. But, overall, it seems to me that popular neighborhoods that has high income levels mostly, will not have more than 30% drop from its current value for the near future. Cause there will always be buyers for popular neighborhoods, but it is hard to say the same for unpopular (mostly rural, suburban) ones...

"Back in the old days… Minium wage workers bought their own homes within 2 years either with full cash payment or with just a very small loan with a large cash downpayment."

Not really. Two years? I'm sorry but I'm not buying that you need a citation.

"Nobody felt anything was wrong with that. Back in the 1960’s, a 20 year old could easily afford to rent, save for a house, pay for groceries, pay for college with hardly any debt & keep a decent car with insurance, gas & maintenance paid - all at the sametime they had saved money at the end of the month for retirement, emergencies & for other things."

Not really. If you were white sure but if you got the delorean to 88mph and went into inner cities back then they certainly weren't saving for homes and paying for college and owning a car.

"All this was done back in the good old days with minium wage jobs. Society has been corrupted to think that a person who may only be a cashier at a fast food or grocery is not even worthy enough to have a decent place for shelter for their needs along with being able to afford basic necessities while still saving some money at the end of the month."

Most of the people that work for minimum wage are minors as a plurality. As people get older they are much less likely to earn minimum wage.

"Today’s young people do not have the same advantages, opportunities or living standards than those of the young people in the 1960’s who are now Baby boomers."

Huh? So they had the internet in the 60's, microwaves, cable tv, gps's, cell phones. Like it or not what you are referring to totally ignores the civil rights movement, the womens rights movement and some might argue the gay rights movement. By communications alone there's much more of an advantage. I personally know people that travel for work sometimes..and it isn't down town it's overseas. No one did that in the 1960's..hell the airliners were still under regulation until Carter in the late 70s.

"I just smirk whenever I hear baby boomers complain & moan about how their 20 something adult child is still living at home - calling them deadbeats when the truth of the matter is that the economic conditions of 2011 is very terrible for young people compared to the 1960’s. Today’s young have limited jobs opportunity & very high costs of living combined with criminally high college tuitions - predatory college loan providers with no option of the debt being discharged in bankruptcy."

Which explains why many colleges have payment plans which are quite affordable. No one forces people to go to college and the terms are open. Cost of living is going down as the most expensive thing people can buy is a house. If you don't drive you don't pay for gas directly.

"At the same time you have dumbdowned curriculum in college. College is becoming the equalivent of high school, it’s a joke."

Which explains why most jobs in the northeast require college. Dumbed down as to what? Knowledge we have now didn't exist in the 60s. Experience might look nice but like it or not times have changed. I personally know a women who has performed bookkeeping for organizations for decades..and she can't find work because she doesn't have a degree in accounting or finance. If you examine management positions of various retailers across the country store managers are increasing requiring a degree. If a company adds a degree as a requirement it makes it nearly impossible for those with time in to go back to school. If I were to take students from 40 years ago and put them in a classroom today they would not pass much of their classes. They wouldn't know how to type, how to look things up on academic sites and generally be overwhelmed by the differences. Heck there's complete programming languages that didn't exist in the 80s let alone the 60s. Auto mechanics? ever hear of a check engine light? Most cannot address that. People need to learn new skills to keep up..otherwise you get passed on and left behind.

"The young generation is what’s going to drive the housing market in the future - if they are not doing well economically - the market is headed for a crash in prices. "

I agree with that as it is just a matter of time.

I doubt that prices will fall 90% in dollar terms. Expect defalationist to "update" their predictions by correlating the decline in terms of gold. A big portion of the decline will be in terms of a lower standing in the world versus foreigners. E.G. See today's article on Brazilians buying up Miami real estate due to a 45% increase in the value of their currency.

If house prices fell 90-95%, the only currency would be who has a loaded gun. Invest in arms now!

Japan's big cities have already fallen about 90% from the peak, in contrast to rural areas which have only seen a 50% or less. I don't see anybody walking around with a shotgun in downtown Tokyo. The fact is, bulls always try discredit us "Realists" by labeling us as "Doom and Gloomers" and bringing up these end-of-the-world visions. But, really, a 90% drop is not going to kill America. This country has survived larger perils.

&imgrefurl=http://seekingalpha.com/article/85666-risk-of-serious-meltdown-in-spanish-economy&usg=__R5MYQWW74Q_r9q_R93rgwPEcvQo=&h=337&w=559&sz=33&hl=en&start=0&zoom=1&tbnid=Zo5FQhDkCL06lM:&tbnh=98&tbnw=163&ei=Er8ATurYOoG8sQOzwYSvDQ&prev=/search%3Fq%3Djapan%2Bland%2Bprices%26hl%3Den%26biw%3D1440%26bih%3D685%26gbv%3D2%26tbm%3Disch&itbs=1&iact=rc&dur=432&page=1&ndsp=29&ved=1t:429,r:14,s:0&tx=114&ty=36&biw=1440&bih=685

Here is the link again:

&imgrefurl=http://seekingalpha.com/article/85666-risk-of-serious-meltdown-in-spanish-economy&usg=__R5MYQWW74Q_r9q_R93rgwPEcvQo=&h=337&w=559&sz=33&hl=en&start=0&zoom=1&tbnid=Zo5FQhDkCL06lM:&tbnh=98&tbnw=163&ei=Er8ATurYOoG8sQOzwYSvDQ&prev=/search%3Fq%3Djapan%2Bland%2Bprices%26hl%3Den%26biw%3D1440%26bih%3D685%26gbv%3D2%26tbm%3Disch&itbs=1&iact=rc&dur=432&page=1&ndsp=29&ved=1t:429,r:14,s:0&tx=114&ty=36&biw=1440&bih=685

Nomograph says

Truthplease says

sheeple…entitled…fat

My experience is that people who insist everyone *else* in the world are fat, stupid and lazy are generally fat, stupid, and lazy themselves.
I notice a lot of that on this board; some folks become angry because they can’t afford the lifestyle they think they deserve, so they lash out on the Internet. It’s an extremely ineffective approach.
Let other pens dwell on guilt and misery — Jane Austen

Nope, just simple observations. Not the whole world, just the U.S. It is easier to assume that the person posting is some person down on their luck. It is interesting to see how you interpreted that comment.

But one if the largest grocery store chains for over century has had to file bankruptcy.

It may be filing because it is losing business to competitors. It may be filiing because of a reduction in population. It may be filing because it had poor management.

Is it filing because of a precarious real estate environment?

Grocers already operate on some of the lowest margins in the United States.

you seem pretty educated to have elaborate thoughts put on writing.

Everyone is assuming no new jobs or higher wages... Sure things have been bad recently... BUT

10,000 Boomers started retiring or reached retirement age EVERY SINGLE DAY starting January 1st, 2011...

Eventually they will be forced to retire... And that could be as many as 3.65 MILLION job openings a year... for the next 19 years!

Most people are looking at the negatives aspects of our social security and entitlement systems drying up... But is anyone looking at the positive aspects? There won't be enough 20-40 year olds to fill all the vacant Baby Boomer jobs eventually.

This will force wages up dramatically... Do i know when? Nope.. But odds are it will peak somewhere in the middle of boomer retirement cycle in the next 9-10 years...

People don't realize how fast the world can change... None of you would even be on this blog discussing housing 20 years ago! The internet was in its infancy...

Who knows what breakthroughs in technology and job opportunities will drive growth 20 years from now... Have a little optimism in the human race :)

I'm still waiting to ditch my car and where my rocket pack to work... Cut down on that LA traffic commute :)

Will Boomers want to live in retirement communities? How many Boomers have the money to retire at the same lifestyle as the Silents? Will many of them have the wealth to dine out at Red Lobster and Conchy Joe's 4 times a week in the absence of guaranteed pensions? Pay for a $2500 annual golf club membership? Buy $120k luxury RVs?

We shall see what we shall see.

I think the best real estate investment is 2BD condos in urban areas right now, and will be going forward. Families are smaller and DINKs and retirees like the extra room for an office or guest room. I wouldn't buy suburban subdivision real estate anywhere except maybe around DC even with other people's money.

APOCALYPSEFUCK says

They can’t retire!

They were all betting they’d sell their 3/2s for 100x to their kids, who are living in their basements or in abandoned cars in desolate, empty industrial parks - or teaching English in China.

Well, no offense, but most of they will have to retire... whether they like it or not... You can't live forever.... and whose really hiring 65 year old employees?

In fact, a lot of government jobs are offering sweetheart early retirement packages...

Jobs will open up... Especially in healthcare taking care of the aging boomers... If you really want steady work for the next 20+ years.. Go back to school for healthcare-related career....

Here's an interesting piece:

According to conventional wisdom, technological advances and globalization mean that jobs are disappearing for people with outmoded skills and that new jobs are being created that require new skills. Americans whose jobs are offshored should retrain for the jobs of today and tomorrow. America will fall behind in the global competition without better and universal education to teach the skills necessary for the modern jobs that are being created in America.

Specifically, it is often said that the internet has changed everything, and that being comfortable with the paperless, wireless, digital, global, online, lightning-fast, on-demand, information age is the key that unlocks the door to modern jobs. American youth are notoriously proficient in these skills, and those over 55 are notoriously lacking in these skills and resistant to acquiring them. It follows that as industrial age jobs are disappearing and information age jobs are being created, young workers will fit right in and older workers will be left in the unemployment lines.

In fact, however, there has been a strong trend in the opposite direction.

The employment-population ratio for 16-24 year-olds started declining in 2000—just as we were all getting computerized and networked. Meanwhile the employment-population ratio for those 55 and older has been increasing since 1993. In the Great Recession, youth employment has been devastated and mature worker employment has hardly been affected at all. If these trends are being driven by skills, conventional wisdom must be wrong about what skills are needed and the importance of education. More likely, it hasn't been a skills story but one about the advantages of incumbency and the need of older workers to keep working as retirement benefits have declined.

http://www.realitybase.org/journal/2011/6/18/american-youth-digitally-skilled-and-unemployable.html

It will probably be the same old story as always: All the places we want to fall will remain stubbornly overpriced while everywhere else will fall. That seems to be the case now after a crash so I wouldn't expect anything all that different from here on out.

As I recall, the Census Bureau's presagement was the population of the US would rise by 50% to 450 million by 2050, due to extremely high immigration rates. Japan has no immigration and a population density 4 times that of California. My bet is on price increases, although not for a number a years. The international bankers plan to force in debt undertakers to buy the real estate and fund the baby boomer pensions.

The bankers will never allow prices to drop 90%. There are billions in Asia and Africa, not to mention Latin America, who will willingly come and undertake debt. This is not "our" country and this is not a democracy if the bankers determine who comprises the majority constituency of the future. And population increases from immigration are ultimately an unsustainable ponzi scheme... but that is a separate book.

Extropico says

S would rise by 50% to 450 million by 2050, due to extremely high immigration rates

I bet you they did not envision reverse of that. What will happen if things remain worse for a couple decades. Rise in population by itself does not mean uplift in economy. Go ask India and China, did their population blasted up in recent years? Nope.

I think one of the biggest time bombs would have to be the shadow inventory. Think about it this way if you are a bank and want to raise money to lend you could easily just put some homes on the market. But in doing so it might lower the amount that the rest of them are worth. Well what are the chances that one might simply cause a domino effect?

Extropico says

My bet is on price increases, although not for a number a years. The international bankers plan to force in debt undertakers to buy the real estate and fund the baby boomer pensions.
The bankers will never allow prices to drop 90%. There are billions in Asia and Africa, not to mention Latin America, who will willingly come and undertake debt. This is not “our” country and this is not a democracy if the bankers determine who comprises the majority constituency of the future. And population increases from immigration are ultimately an unsustainable ponzi scheme… but that is a separate book.

The bankers have everything to gain by collapsing prices. I bet that they will collapse prices - so they can have more people default & take over more property.

A lot of people don't understand that the big top banks lose nothing by people defaulting but gain everything by it because they never lend the money in the first place as mentioned fractional reserve banking.

Once the collapse the prices - they then will create a bubble to sell it off expensive or rent it out.

There no incentive for them to keep the prices up... but every incentive to collapse the stock market and the housing market.

Although I agree that bankers may not follow this plan since they already are extremely wealthy & may not care about money anymore but mainly about control. Though collapsing the system will give them more power.

"The way to make money is to buy when blood is on the streets"
-John D. Rockefeller

I don't think 90 to 95 % decline in price is an unreasonable prediction. All bets are off as to what might happen. We are witnesing an unpresidented time of economic, social, environmental and political upheaval on a world wide scale. Our Golden Age is at an end. What now?

samofvt says

I don’t think 90 to 95 % decline in price is an unreasonable prediction

You are completely insane then. Are rents also going to fall 90%? Are wages going to fall 90% too?

MCMSinger says

The bankers have everything to gain by collapsing prices. I bet that they will collapse prices - so they can have more people default & take over more property.

I agree that people of private enterprise would love to see a price collapse of 90% and buy when "there is blood in the streets." The caveat today is that those loans are often federally insured by the taxpayer(Fannie, Freddie, VA, FHA) and if the banks fail, those deposits are federally insured by the FDIC. The top bankers are also often top government officials who must deal with the issue of taxpayer financed bailouts. This will put some degree of political limitation on letting the too big to fail banks actually fail. People of the Kenyesian perspective are continually appointed to the Federal Reserve Board in order to try to prevent the ponzi collapse during our time. With high immigration inflows, they think they can avoid a 1930s type collapse for the forseeable future.

tatupu70 says

tatupu70 says

samofvt says

I don’t think 90 to 95 % decline in price is an unreasonable prediction

You are completely insane then. Are rents also going to fall 90%? Are wages going to fall 90% too?

You need to check your facts. Many people are forced to pay 5-8 times their annual wages for a home even right now. I believe this is especially true in Southern California - which in my humble opinion generally has the worst value for the price. Nice state though it's just that the home prices are an even bigger rip off there.

Rents are very high right now by the way - mainly because of property & school taxes going up beyond even 2005-2006 caused by irresponsible spending, school unions demanding every benefit under the sun along with greedy wages & a huge deficit risking bankruptcy for many cities.

48 states are on the verge bankruptcy - the property taxes keep going up. Eventually the sheeple will have enough though & they will lower the taxes. But the main parasite for these property taxes are the public schools & their socialist unions demanding 6 figures.

One superintendent in my area is making $400,000.... For what? The US President should paid more if these people are making this much money & giving little in return.

The rents are also going up because people can't afford these home prices & are deciding to rent instead or the people aren't willing to pay these prices. Then you also have foreclosures - once the people are evicted by sheriff - they will need to find some new shelter - most likely rent.

Rents do need to come down.

If wages fall 90% like you say - than what's the point? Because the wages right now are very low to pay for the costs of living even right now. If the cost of living falls but also the wages by 90% - then they only winner are the people who have saved up or have cash on hand but the people living paycheck to paycheck will still be in the same position.

If anyone is insane - it's you. ;)

I once read an article about Warren Buffet & he said that you just have to see the facts for what they are if you want to profit in any type of investment. And many people will become emotional & fired up when talk about either a certain invest being good or bad. He said that you need to keep your position on an investment if your facts are solid despite how pessimist or unbelieving others maybe about your prediction.

And by the way many wealthy people are warning people. Tony Robbins warned people in August 2010 about the stock market - telling them that there will be a bull run but it will collapse at record levels. He said that generally if you invest in the stock market in August 2010 - there is a good chance you will make money but it will eventually collapse very hard & you want to make sure that you have sold your shares before that happens. So generally it's best to think about protecting yourself finically. He also talked about baby boomers & real estate values affecting the economy. So the premise that only "poor" people are expecting the economy, stock market & housing market to collapse is very false.

Tony Robbins Economic Warning
http://www.youtube.com/watch?v=Z_rShZA_IjE Part 1
http://www.youtube.com/watch?v=LZuJqrcwrEU Part 2

Warren Buffet Quotes Below
Be fearful when others are greedy and be greedy only when others are fearful.

Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can't buy what is popular and do well.

PS. A decent apartment in a decent area should be $200 a month - sounds ridiculous but it's not. They only reason stopping that are the property & school taxes along with inflated artificial paper value.

MCMSinger says

One superintendent in my area is making $400,000

MCMSinger says

Because the wages right now are very low to pay for the costs of living even right now.

MCMSinger says

If anyone is insane - it’s you.

OK--keep listening to Tony Robbins. And waiting for the 95% fall in housing prices.

"PS. A decent apartment in a decent area should be $200 a month - sounds ridiculous but it’s not. They only reason stopping that are the property & school taxes along with inflated artificial paper value."

Based on what...when incomes go up then values go up. SF cost more than Kimball NE...why..well there's probably 1,000 times more people in SF, more things to do etc.

"48 states are on the verge bankruptcy - the property taxes keep going up. Eventually the sheeple will have enough though & they will lower the taxes. But the main parasite for these property taxes are the public schools & their socialist unions demanding 6 figures."

States cannot file for bankruptcy as they'll simply cut spending. Only Vermont can legally go into debt. Unless there is a actual contract then spending can easily be cut. Even with a contract then it is simply a matter of negotiating. Look at what happened in Wisconsin

@mdovell

"Most of the people that work for minimum wage are minors as a plurality. As people get older they are much less likely to earn minimum wage."

Completely false. A lot of older people are beginning to work minimum wage jobs. The job market is changing very much...

"Huh? So they had the internet in the 60’s, microwaves, cable tv, gps’s, cell phones. Like it or not what you are referring to totally ignores the civil rights movement, the womens rights movement and some might argue the gay rights movement. By communications alone there’s much more of an advantage. I personally know people that travel for work sometimes..and it isn’t down town it’s overseas. No one did that in the 1960’s..hell the airliners were still under regulation until Carter in the late 70s."

What you are mentioning is an advancement of technology not an advancement in OPPORTUNITY to better oneself financially & career-wise. You might argue that technology is allowing that opportunity but the technology doesn't matter if the fundamentals of the economy is terrible.

The women's right movement was funded by The Rockefellers to be able to tax half of the population & to have kids in school at an earlier age so they can indoctrinate them how to think. Feminism was a CIA operation to destabilize society between the genders & break up the family. Please research the REAL agenda behind movements before proclaiming how positive their effects have been. (I do think women deserve equal pay & equal opportunity but women these days are more in favor; I can give you proof for this statement - so don't think about saying "Men tend to get paid more & promoted" - because I will debunk it!)

Women by the are forced to work anyway due to the costs of living; but many of them are being brainwashed into thinking they are only working because they want too & it's the modern thing to do - when actually there is much more to the story.

And by the way - If I had a time machine - I would choose to live in the 1960's or the 1970's - I'd happily give up microwaves, the idiot box, internet, gps & cancer causing phones in return to a better opportunity to reach my potential in terms of education, career and finances. Not to mention I would be able to eat more natural foods - not the chemically infested foods we have today.

"Which explains why many colleges have payment plans which are quite affordable. No one forces people to go to college and the terms are open. Cost of living is going down as the most expensive thing people can buy is a house. If you don’t drive you don’t pay for gas directly."

Who wants to pay payment plans? And by the way they are NOT affordable -they take up a large chunk of your income & sometimes take years to pay off. And people are FORCED to go to college - it's a weed out method used to control people's role in career & their financial level.

Cost of living is down? lol okay. And if you don't drive you don't have full control of your life unless you live in a big city like Manhattan. Having a car has become more of necessity today.

"Which explains why most jobs in the northeast require college. Dumbed down as to what? Knowledge we have now didn’t exist in the 60s. Experience might look nice but like it or not times have changed. I personally know a women who has performed bookkeeping for organizations for decades..and she can’t find work because she doesn’t have a degree in accounting or finance. If you examine management positions of various retailers across the country store managers are increasing requiring a degree. If a company adds a degree as a requirement it makes it nearly impossible for those with time in to go back to school. If I were to take students from 40 years ago and put them in a classroom today they would not pass much of their classes. They wouldn’t know how to type, how to look things up on academic sites and generally be overwhelmed by the differences. Heck there’s complete programming languages that didn’t exist in the 80s let alone the 60s. Auto mechanics? ever hear of a check engine light? Most cannot address that. People need to learn new skills to keep up..otherwise you get passed on and left behind."

Wrong! They only reason college is required by most jobs is because it's a weed out method to have certain people in poverty & others in prosperity - regardless of whether the one without the useless piece of paper is actually 10 times skillful, talented & valuable than a moron who think just because he sat down on desk & repeated what he was told he is entitled to more. Anybody can copy & repeat but it takes a genius to create & innovate. Public schooling & college is not about teaching people to create things - it's about teaching people to be obedient & do whatever they are told to do without questioning the validness behind it.

That's a nice definition of a sheeple. And sadly most people are sheeple.

"Dumbed down as to what?" - Dumbed down as to useless subjects with no application in the real world. Obsolete courses & irrelevant courses required for every major. High school taught oneself to be independent after graduation back in the past. Nowadays High schools is about brainwashing you to pony up thousands of dollars to learn useless shit along with making you think that what the bankers do is good for America.

Experience doesn't look nice, you clueless sheep - Experience is what really counts! Because experience is doing & By doing you learn a million times more than mentally masturbating on to bullshit some idiot in front a classroom mumbles out of his mouth from a textbook.

What the masses of idiots think of as "education" is really only dependence on having others give them orders and not being able to learn themselves. If you want a true education - go to your local library and/or a good bookstore with a wide selection of excellent books.

Go research the truth about behind public education. It was funded by the Rockefellers with a evil agenda.

Majority of accountants are overpaid morons who think they are somebody so brilliant because they sit around all day & know how to do 2 + 2.... And their jobs are really only secured by the unconstitutional IRS system set up by international bankers to pay for the interest on debt of the Federal Reserve notes they lend to the US government.

(on accountants): "I want them all fired. They're not productive, they don't do any real work. Get them out of here today."
-Henry Ford, Automobile Businessman. (His business was financially very well off without these worthless idiots who think they are geniuses when in reality they are parasites that need to be burned.)

And you are right, students 40 years ago would not pass the "tests" today because the "tests" are assessing how much useless knowledge you have in the first place. I sure would love to fail those tests.

How is a manager a leader when all they did was learn how to repeat after authority? A manager needs to have a brain of their own.

Stop talking about things which you know nothing about but only think you do. That's one of the main problems with society today - people think they are competent & know how things work - when they really do not.

-Have a Nice Day

I bet 100% of everything I have that THIS WON'T HAPPEN - 90-95% drop within this decade and next. Who dares to bet?

MCMSinger says

And by the way - If I had a time machine - I would choose to live in the 1960’s or the 1970’s - I’d happily give up microwaves, the idiot box, internet, gps & cancer causing phones in return to a better opportunity to reach my potential in terms of education, career and finances. Not to mention I would be able to eat more natural foods - not the chemically infested foods we have today.

The idiot box and microwaves existed in the 60's and 70's, so you wouldn't have to give those up. As for cancer, it'd be a wash with all the cigarette smoke that would be in every establishment you go to. But hey, the grass is always greener, right?

MCMSinger says

The women’s right movement was funded by The Rockefellers to be able to tax half of the population & to have kids in school at an earlier age so they can indoctrinate them how to think. Feminism was a CIA operation to destabilize society between the genders & break up the family. Please research the REAL agenda behind movements before proclaiming how positive their effects have been.

Are you down there? Hello? You keep digging that hole so deep I can't see you anymore!

You've made your point. You think house prices will fall 90-95%. Fair enough. They could, but really anything could happen. Small essays filled with conspiracy theories aren't going to convince anyone, just let things play out.

First of all thank you for the thought proving post. It doesn't matter much what I think about the predictions you make per say, and they are bold, rather what one thinks of the fundamentals of your argument.

I believe at heart your post was a critic of fractional reverse banking and perhaps to put too fine a point on it, by extension, the rule of 78s

http://www.wdfi.org/wca/consumer_credit/credit_guides/rule_of_78s.htm

If so I concur. We've lived through a decade plus of baked-in inflation and we still need to ride out the deflationary part of the cycle before either normalcy or hyper-inflation comes to pass.

Keynesian economics practiced in the form of large government programs and Union entitlements on the one hand and supply side tax "pre-bates" on the other are both designed to promote economic activity by linear algebra as opposed to animal spirits are only possible once a society allows itself to be governed by fiat. (Look at the EU today.Whatever one thinks about relative political positions of the citizenry in Southern Europe their vote not only doesn't matter, it isn't even inconvenient since the same policies will result. Now think about our own system and imagine there is much of a difference. Kind hard to do from where I sit)

Without the political will to work towards a international system of currency integrity (otherwise trading partners will just export their deflation as China now does) I worry that a hyper-inflationary period, neo-dark ages if you will, has to be where this is all going.

shrekgrinch says

If commodity prices are deflationary, then why are people risking their lives stealing copper from hot electricity main lines?
http://pittsburgh.cbslocal.com/2011/06/22/thousands-without-power-in-cranberry-twp/

Why else would a homeless person steal food? BECAUSE THEY HAVE NO MONETARY NOTES!

When everybody has piles of money in there hands - that's called inflation.

When hardly anyone has a penny - that' called deflation unless of course the currency is being overthrown.

The dollar is still generally the world reserve currency. I already explained that the dollar isn't backed by anything but neither are the majority of other currencies that are much much more unstable than the dollar.

I find it funny that some posters are trying to fault find me on little details to try discredit me - instead of looking at the heart of the issue which is fractional reserve banking & how the banks become more wealthy by shutting out lending in order collapse asset prices to trigger defaults. The did the samething during the great depression & they contracted the availability to money. They lose nothing by defaults but gain everything.

Most likely they have the same game in mind. History repeats itself. At the same time I also don't claim that deflation will happen for sure but what I do claim is that deflation is big risk when you look at exactly what the banks do when they give out loans. Even credit cards do the exact same thing.

It's amusing though that people fear monger inflation when inflation is most likely going to help them. Why? Because the majority of Americans have debt - when the scarcity of money rises by 10 times - it will take 10 times the effort to pay off that same debt. Inflation will hurt savers though but majority of Americans hardly have any savings or no savings at all.

Deflation will bring poverty to you. That's the real enemy. It's no surprise that the majority of people always claim how inflation is going to happen. They majority of people also claimed how real estate was they only best investment under the sun back in the bubble years.

People tend to believe what they want to happen. And that's why 90% of investors lose money or break even in a 10 year period.

StoutFiles says

The idiot box and microwaves existed in the 60’s and 70’s, so you wouldn’t have to give those up. As for cancer, it’d be a wash with all the cigarette smoke that would be in every establishment you go to. But hey, the grass is always greener, right?

The original poster spoke about Cable TV we have today - I could care less about cable tv.

And yeah - microwaves existed but they were NOT common & very expensive - By the late 1960 to early 1970's, microwaves were $400-500 back then - In todays money that is approximately $2775.67

Close to $3,000 dollars. Do you know anybody that spends $3000 on coffee machine today? Maybe if they are wealthy but majority of people do not own a $3,000 dollar coffee machine.

What makes you think they would own a microwave appliance for $3000?
Elvis Presley owned one but he wealthy & it was considered a luxury at that time.

StoutFiles says

Small essays filled with conspiracy theories aren’t going to convince anyone, just let things play out.

I never brought up the women's movement - the original poster brought it up & claimed how great it was - which is false. I simply pointed out his own faults as he was trying to point out mine. No need for you to interfere.

http://www.elliottwave.com/freeupdates/archives/2011/06/06/Housing-Market-Worst-Since--The-Great-Depression-.aspx

"Conquer the Crash said to expect a 90% decline in average real estate values and to bide your time until your dream house became available at ten cents or less on the dollar. Today I received a flyer in the mail. It reads, 'Bank Foreclosed Property—Now Available at Pennies on the Dollar! All properties will be liquidated; first come, first choice.' One example is 6.2 acres of wooded mountain property with 700 feet of stream-front for $29,900, which is more than 75% off its previous asking price. A rather famous estate near where I live cost $50 million to build, and it is now listed for sale at $16.75 million. That’s 2/3 off, based on the asking price, which no one seems to be taking."
Elliott Wave Theorist, March 2011

When Conquer the Crash published in 2002, stocks were in a big downtrend. But for several years afterward, the investing public increasingly believed housing was a "sure" investment.

Most people who purchased a home in 2002 would not have imagined that the price they paid then would be unchanged ten years later. Alas, that's the way it turned out:

"Home prices in big metro areas have sunk to their lowest since 2002, the Standard & Poor's/Case-Shiller 20-city monthly index showed...Since the bubble burst in 2006, prices have fallen more than they did during the Great Depression."
Associated Press, (5/31)

Dow Jones Marketwatch (6/1) quotes an economist who said "[home] prices have now fallen by more than the 31% decline endured during the Great Depression."

The article also mentions that it took nineteen years for home prices to recover to their pre-Great Depression peak.

Real estate prices spiraled down precipitously during the early 1930s, including single family homes, hotels and rental properties.

Late in his life, renowned stock trader Gerald M. Loeb authored the classic book The Battle for Stock Market Profits (1971). These excerpts are from that book:

I lived in New York City in 1929. Hotels of all kinds were then going up on every side. They were in deep financial trouble almost overnight. I paid $12,000 a year rental for my two-bedroom-and-living-room suite in the Savoy Plaza. A year later I paid $4,000 a year, and this rate prevailed for about ten years.

During the 30s, occupancy rates in many cases dropped to under 50 percent. Hotel equities were wiped out . . . Commercial rentals also dropped severely. I know of cases where landlords practically waived the rent entirely just to keep the space occupied. The hope was that when times improved the building owner would have a rent-paying tenant again.

List prices were meaningless. During the 1933 bank holiday I paid $8 a day for a $40-a-day suite in an Atlantic City luxury hotel.

There were equities in co-op luxury apartments that sold for six figures in 1929 going for just $1 in the 1930s. The owners could not pay their taxes, mortgage interest, and maintenance.

Prices of homes declined sharply. There was a mortgage moratorium.

The point of recalling these scattered incidents is that there is never any such thing as a one-way street when it comes to economic trends.

In more recent decades, home prices were on a "one-way street" -- namely up.

But as we know, the trend in real estate prices did an abrupt U-turn. Now it's traveling swiftly in the opposite lane.

Maybe I am a foolish optimist, but I think that house prices won't go down 95%. But it's not all beer and skittles in some places. It depends on the spot the house is in. Was there 1. huge bubble 2. mortgages to illegal alien residents 3. low wage location 4. broke town location 5. crime 6. HUD houses and apartments 7. etc.
My friend lives in a part of town that is a bit crummy. Some guys got killed about 300feet up his street in these apartments inhabited exclusively by illegal aliens.
Across the street there are a few condos for sale. They are asking huge money, some fools put in 1. stainless steel gadgets 2. granite counters 3. tile floors 4. ETC. It is all expensive lipstick on a pig.
For kicks I check out a town that borders Monterey. Saw a place for sale for $243K. Bought in June 2005 for $689K. Some bank took a bath on this little dump.
If the area is pretty nice like San Franciso, stuff is not going down so far. If it's someplace pretty crummy, like Las Vegas, then they're going down or are already down.
What many Americans didn't know was in some wealthy countries with high standards of living many people actually rent.
But, it's fun to see how things that you normally rent even are not immune to the scam of trying to convince you to buy anyway.
Time shares are the example. They try to convince you to "buy" what you visit a few days per year, when renting hotel rooms is of course more in your interest.

SF ace says

90

SF Ace - you probably failed you high-school math class, didn't you. Simple 10th grade induction proof method would have taught you that if there is 1 place where prices with fall or already fell 90%, prices will fall 90% everywhere:

There is 1 place where prices fell 90% (LV let's say).
If prices fell 90% in place n there would surely fall 90% in place (n+1block), because, if they didn't, people would just buy in place n, instead, causing sellers in place (n+1block) to lower their price until 90% fall is achieved.
Therefore, prices will fall 90%, everywhere.

MCMSinger says

Back in the old days… Minium wage workers bought their own homes within 2 years either with full cash payment or with just a very small loan with a large cash downpayment.

I remember back in the days I used to deliver pizza part time and pay student loans while renting a 2bd town house. I could go to any concert I wanted to. Life was pretty easy.

Maybe today we are just paying for the fake prosperities of the past. That last housing bubble especially, it wasn't free. Eventually karma catches up with us all. I tend to think that if government were to get out of the housing industry it would become good on it's own again.