By Peter P follow 2006 Feb 12, 10:32am 5,408 views 81 comments
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One axiom of real estate is that each market is local and unique. However, money is national or even global. Since credit has been the principle contributing factor in this bubble, we should accept the fact that all "local" housing markets will interact.
Many markets are now in decline. One very reasonable expectation is that the mortgage market will dry up because of the reflexivity between collateral value and credit. If and when this happens, the correction will come to the Bay Area, no matter how "special" and "immune" it may be.
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I am wondering who will ultimately pick up the tab for all of the houses that people will walk away from and banks will own.
I'll be in line to buy one of them.
Is this a new record? Is this as far as we've ever gotten into a thread without a friendly neighborhood troll dropping in to tell us what a bunch of idiotic jealous bitter renters who need to get a real job we all are?!
So if the housing market really does crash, not only will a lot of people lose their homes, but they will lose their pension as well, as many pension funds are tied up in Motgage backed securities. Have I got that right?
I have a feeling that it may even affect money market funds. Correct me if I am wrong.
I think BMW’s are terrific cars. My Dad got hit by in a head on collision by a drunk driver doing 75 mph, and walked away without a scratch. The firemen at the scene said he’d have probably been killed in just about any other car.
Perhaps I should look into getting one next time. ;)
The problem is that BMW is not something that I dare to buy used. (Again, correct me if I am wrong.) It is so desirable that it is difficult to find bargain-basement purchase or leasing deals.
We drive a big SUV type vehicle. At least we don’t have to worry about a Toyota hitting as, or do we?
Depending on Toyota what.
Toyota's answer to Hummer: www.megacruiser.com
It’s probably best to buy private party if you can.
Perhaps. But somehow I feel more comfortable buying a used Lexus.
That’s the only thing that matters. I wouldn’t want to be in a Tercel while being hit by a large SUV though.
No, physics eventually prevails.
I do not understand why people will want to buy a new Tercel when one can get a 10-year-old Lexus LS400 or BMW 740i for a little bit more.
I later found other reported incidents of the same problem with Honda Accord electric seats. Of course, Honda would not acknowledge that there was a problem and attempted to resolve the issue by reseting the death trap.
Newer Volvo's and Saab's have pretty good active rear-end collison protection.
My dream vehicle is a Loomis Fargo truck conversion. :)
I remember a 60 minutes piece on front seats collapsing during a rear end collision. The CEO of Mercedes went on record saying that if a Mercedes failed in such a fashion it would be their fault. Balls German style. I liked it.
Balls German style. I liked it.
Is there such a thing as class-action lawsuit in Germany?
Zey hav ways of making der lawsuitesse go away. ;-)
Sorry but I had a perfect boomer moment this weekend. A friend of a friend has a sailboat and we got invited sailing. We show up with beer and chips (12 pack pacifico), 3 boomers already present, Beatles blaring. Boomer #1 says "hey man, want some 'shrooms". Ahhh not right now. Boomers 2 and 3 of course chomp away. Get underway and boomer 2 busts out the bag'o'dope. Boomers 1-3 preceed to get stoned, I guess that tequilla shots go well with a mushroom/pot buzz. I thought about killing myself. The boat owner (not to be confused with homedebtor) changed the station off of the freedom rock station to a pretty cool modern rock station. I put the knife down. Boomers 1-3 are hitting the pot and tequilla pretty hard. We sailed until they ran out of pot, tequilla and beer. I don't think they even realized that they were sailing. Oh, when we got to the marina, they invited us out to a bar. My wife asked them why the were parting like they were 20, in unison they said because they still were. Rock out man. Did you know that drug overdose is one of the top causes of death for the 50-60 year old crowd?
Did I mention I was the Queen of Tangents?
Also the Blog Queen. We are in the Blog Sphere, out to assimilate all lifeforms into housing bears. :)
Get underway and boomer 2 busts out the bag’o'dope. Boomers 1-3 preceed to get stoned, I guess that tequilla shots go well with a mushroom/pot buzz. I thought about killing myself.... Boomers 1-3 are hitting the pot and tequilla pretty hard. We sailed until they ran out of pot, tequilla and beer. I don’t think they even realized that they were sailing. Oh, when we got to the marina, they invited us out to a bar. My wife asked them why the were parting like they were 20, in unison they said because they still were. Rock out man. Did you know that drug overdose is one of the top causes of death for the 50-60 year old crowd?
_sigh_, shakes head. (And we accused of unfair stereotyping)
"Californians age 40 and older are dying of drug overdoses at double the rate recorded in 1990, a little-noticed trend that upends the notion of hard-core drug use as primarily a young person’s peril.
Indeed, overdoses among baby boomers are driving an overall increase in drug deaths so dramatic that soon they may surpass automobile accidents as the state’s leading cause of nonnatural deaths."
I'm sorry to chime in late about the whole "living beyond your means thing."
In my case, I support my family of 4 on one income. I used to own a house--but I've come to realize, it is not the most important thing in life. I am really happy that my wife gets to do what she wants to do--raise our kids. They are truely benefitting enormously from it.
We drive a used honda and a used Acura. I fullly fund my 401k, I have savings, and I work in sales. I plan to save every bonus check. We enjoy going to the beach, which is free, hiking, which is free, snowboarding (damn on that one!) and just being together as a family. I would not trade it for the "Pride" of ownership or the flash of a German Auto. I did once. It wasn't that great.
I know that the whole yuppy/flaunt it lifestyle is disheartening to many. I know it exists in every town in America. But I say this from experience.
The nouvea riche have ink on their fingers from counting their new money. It is easy to spot a mile off. They are not fooling me or anyone not caught up in the mindless pursuit of status. You can't buy class, happiness, or the respect of others.
And I have to say one more thing that may sound a little out of left field. If you want to buy the nicest house you can imagine, save your money now, start a business, work hard,and be thankful for the success and blessings that come to you.
Where does that come from and does it include alcohol?
It was an article in the LA Times last year, which has since been removed from their website. A copy is here: http://www.truthout.org/docs_2005/101005G.shtml
On vehicles: I bought a Toyota truck in 3/1993. Next month I celebrate my 13th year of driving it. It's probably not very safe in a crash, but it kills me to think of spending money on something new when I have something that works. Original engine. When I see the flashy new vehicles around me in traffic I don't think "they have money" I think "they have debt."
On frugality: When I go to Walmart I often have 4 or 5 discount coupons clipped from the Sunday paper. The other day, when I handed the clerk the coupons (almost $4 off total) she remarked that people hardly ever use coupons there. That kind of blew me away.
Question: Beyond "shorting the market" and buying RE at the bottom, in what other ways can one profit from the ruptured bubble?
One women told me she doesn’t need to have an sexual orgasm, she’s having a perpetual orgasm with her prozac. I wasn’t sure what she meant but I knew it wasn’t good.
Holy mackerel, and I thought I was off thread.
Yes, yes...the nation is having a perpetual orgasm on Real Estate.
I expect opportunities like this to start happening at regular intervals. I got a killer deal on the bike.
Buy his plane, and then his nice boat. :)
New thread: Google and Bay Area real estates
“My life was saved because I was driving a BMW” stories are numerous, you can probably say the same about Mercedes and Volvo. but to me, BMW is the way to go.
Yes, there is a "Volvo saved my life" club. :)
Calling all software designers…Why hasn’t the entire Real Estate process been put online, Buying & Selling, from start to finish ?
Have you tried condoflip.com? :)
My husband read that statistically speaking (I know, I know, probably made up like most stats are) 1 in 4 drivers on the road at any given time are drunk. I don’t know how accurate that is, but it’s probably best to assume it is.
This is unbelievable. Drunk drivers pose much more danger to the society than drug abusers. Also, I think the punishment for DUI is not severe enough because drunk driving is terrorism.
_Must stop the digressions, bad SQT_
Where is Jack, Kurt, and Jamie?
A 40 ft wave does have a way of bringing you back to ‘reality’.
The 40ft wave of foreclosure and bankruptcy may perhaps brink homedebtors back yo reality. ;)
"As to the Paxil/Prozac nation, read Betty Friedan’s The Feminine Mystique, she just passed away this month, but her book might give y’ all a peak into why boomers are parting from this world in drug induced comas. I didn’t read Friedan’s book until I was 40, but I understood better the choices my mother had, and the cultural wall that trapped her in her kitchen."
Wendy McElroy at FoxNews.com writes a coumn called ifeminists. Her last column was about Betty Friedan, and essentially she concluded that she was a fraud. Betty Friedan was a dedicated Marxist, and her survey of "Average American Women" and their choices was really a survey of Wellesly graduates--not middle class women. As such, according to Ms McElroy, Betty Friedan failed poor and middle class women with radicalism that did nothing to address their real problems. The article was an interesting read.
I urge anyone with children or anyone attending an American university to read "Who stole Feminism" by Christina Hoff-Sommers of the American Enterprise Institute. It is frightening that people who preach hate receive federal funding and teach our children.
If Betty Friedan is a fraud, then why are so many American suburban/urban women still doing drugs to cope? I am no Marxist, nor a fraud, but her description fits my mother and mother-in-law, intelligent women who never felt fulfilled. Certainly, they had their happy days, but I would not throw out everything she has to say about the role of women. Nor do I throw out everything Marx has to say about power and the working class.
Friedan is was no more a fraud than Bush I would propose.
even the drugs of today, are not as strong as those in the 70's, my daughter did a research paper in college and told me her results.
Maybe the need or appetite for more and more drugs, and thus overdose, somehow parallels the need for more and more equity, and thus the bubble. Maybe our country so promotes consuming it is an obsession of one kind of object or another (trying to relate this to housing without dwelling on boomers).
Maybe what is national about the bubble is the consumption,
just the right rug,
etc, etc, etc,
a national addiction.
And The Yellow Wallpaper, that is by Charlotte Prekins Gilman. A fraud too? perhaps, but she was 19th c. and spoke from familiar ground.
I am not a purist,
I am a poet,
I borrow from everyone.
A verb here,
a noun there,
to form a whole thought.
We do not live in isolation,
Marx or Friedan,
or even the Shrub,
we are influenced by them all.
SQT, it is indeed a sad story.
My wife's family (both male and female) were early supporters of Women's rights since the earlyt 19th century. As upper-class Virginians, this was quite rare, and quite controversial. It also came without the hatred and academic fraud of New England gender feminists. Given that they had reasonable and prcatical goals, they were quite influential.
The idea that womens rights should be linked with hating men and "un-gendering" children is abhorrent. The fact of the matter is that women should be free to choose a career or stay at home as mothers. My wife is a UVA graduate, and is at the same time thrilled to be a stay at home mom.
Unfortunately modern feminism claims that the "sex gender system" has so corrupted women that their choices to be mothers are "unauthentic" because they were raised in the corrupt system. They lifted this idea from Lenin, and it explains why they are elitist and yet clalim to speak for all women at the same time.
In other words, modern feminists are mysogynists as well as misandrists. They are also centered primarily in the Ivy League Universities. If feminists want to hate men, hate women, and harm children at the same time, they should do so without federal funding.
Let me please re-iterate my recommendation for "who stole feminism" by Christina Hoff-Sommers. The reviewers who reject it are no doubt radical gender feminists.
Sorry to be OT yet again, but this is a topic that offends me deeply as a Husband, the father of a young daughter, and an American. There is a good reason why 75% of American women refuse to delcare themselves feminists.
Deo Vindice, may great^7 grandfather (a quaker) wrote the first treatse on the wrongs of slavery and women's rights. The bullshit 60's woman's rights feminists are an artifact of that drug hazed environment. I think the best spokesperson on woman's rights is SQT, that chick has got balls.
even the drugs of today, are not as strong as those in the 70’s, my daughter did a research paper in college and told me her results.
Ok you boomer fuck, here's a fact for you Pot, weed, reefer, KGB, the kind, in the 60's, you remember the 60's right? You were getting fucked by strangers in the park, remember? Ok, back on track, in the 60's mary jane was ~ ( that means approximatly) 2-4% THC, (that's the active ingrediant of marijuana, otherwise known as tetrahydrocannabinol) modern pot, perhaps as a result of your influence ;) is ~ 15-25% THC.
Shit I forgot everything was better in the 60's
Anyone knows if you have an ARM, but fixed for the first 10 year, what is the risk of this type of loan?
One risk is that interest rate may be higher on the 11th year. On the other hand, if you sell before then, the proceed may not cover the loan principal. It all depends on your cost basis, of course.
Also, if interest rate goes up within this 10 year period, fewer people will be able to afford your house at a given price.
There is no particular risk if you intend to pay off the mortgage by the end of the 10-year period.
And can anyone comment on the Las Vegas housing bubble? $300K for a 2000 sq ft. new home, good investment?
Hard to say. I love LV, but I am not familiar with the market. Ask ptiemann.
Can you obtain positive cashflow without using Option ARM?
Something was wrong with the Google thread, it would not scroll down to the bottom, nor did it include the submit comment box. Is that my computer or the thread?
Hmm, strange. Try refreshing the page.