HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008: BUBBLE TALK

March 29, 2006

BUBBLE TALK - old thread

Have at it

137 comments:

Anonymous said...: For all of those who believe that flat housing prices are fine and are not a decline, think again.

FLAT PRICES = BUST.

If asset prices do not keep pace with inflation the price is depreciated by the shortfall. I.E. if I get a 3% raise this year and inflation is 5%, I've fallen behind by 2%, which is close to a 2% loss in spending power.

I've explained numerous times mathematically how a 10 year stagnation in prices (with 5% inflation) will reduce house prices by 40%.

Keep your fallacy alive that flat prices are nothing to be concerned about.

Let's do the math here:
$100,000 house, flat prices for 10 years, 5% price inflation.

Year House Price Dollars Lost
0 100,000 5,000
1 95,000 4,750
2 90,250 4,512.50
3 85,737.5 4,286.88
4 81,450.62 4,072.53
5 77,378.09 3,868.90
..... figure 6-9 out yourself....
10 59,873.69

Total dollars lost over 10 years:
$ 40,126.31; February 28, 2006 2:50 AM
Anonymous said...: Yes, I second the point. Few people think about real prices when dealing with real estate. But a real decline of 40% in a family's largest single asset is a very negative event. It happened to millions of Americans between 1989 and 1995, and that was only the most recent bust. This time, the runup in prices has been far higher -- people who bought homes in the last years (or most likely those who buy them in the next six months) could be committing themselves to a terrible financial decision.

Also consider another point. This applies to those who are renting now and considering whether or when to buy. With renting costs at an all time low RELATIVE to buying a home, a decision to buy an asset that stagnates in nominal terms for the medium term will cost you much much more, per month and in every other respect, than renting at a lower cost for that medium term. The only way buying makes sense, in many markets today, is if you get continued appreciation in the fairly near term. Otherwise, renting will save you a cargo truck full of money.; February 28, 2006 3:59 AM
Anonymous said...: I own a condo in Phoenix, doubled in the last 18 months. If prices were to stagnate for the next 5 years, would you guys recommend selling now and waiting it out in a rental?

I had a house before this that appreciated enough to pay the realtor's fees when I sold. That pissed me off; an "investment" indeed.; February 28, 2006 6:26 AM
Out at the peak said...: Phoenix anon: Haven't you seen the record breaking inventory in your area? Are you sure your house is worth what you think it is? Median price is down nearly 8% in six months. You definitely want to consider your options.

Scary Phoenix stats; February 28, 2006 7:39 AM
blogger said...: phoenix - it's too late to sell - you would put it on the market at what your realtor or appraiser told you to and it would sit there. there are no buyers.

hp readers - what should phoenix do? put it up at market price? 10% below? 20% below?

or stay put and watch it drop 50% in value?; February 28, 2006 7:56 AM
Anonymous said...: re: FLAT PRICES = BUST.

if YoY prices are flat, many more investors will bail as who wants an investment where YoY returns are 0% for foreseeable future, esp when you are most likey in a negative cash flow situation if you are renting the property and bought recently. New Investors will look elsewhere to put their money while old investors will sell.
my point is that YoY flat prices are unsustainible, true in stocks, true in realestate.; February 28, 2006 8:51 AM
foxwoodlief said...: Well homes are still selling here in Phoenix, to my surprise, but in areas that normally would have sold in any kind of market (location, location, location). I personally thought the market peaked when I sold my home a year ago though when I sold my sell price was 60% above what I paid. Can't time the market even now with bubble fear in the water. One of the nurses I work with just sold his condo downtown for $389,000 and he bought it two years ago for $135,000. He had it oon the market for one month, the first offer he had days after listing the guy didn't qualify so he relisted it and sold it in a week. The Ultrasound Tech I work with has a wife who works for KB Homes out in Surprise and in Dec/Jan they were flat, sold one house when they were selling five to six a week during the summer but he said things have picked back up. They sold 10 homes in Febuary, most of them in the last two weeks so maybe the seasonal slowdown had some impact more than prices? Of course he didn't say what kind of incentives so that may be why. Lots of people here think prices will stablize not go down (idiots) but hey, I buy to live in and if I make some money great. So Phoenix guy if you live in Central Phoenix and don't plan to stay or if you can rent for less, list and see what happens. If you bought the place to live in and love the place and the area, stay put and pay down your mortage. If you bought before the bubble, like most homeowners here then it doesn't matter about paper gains. If you have a great fixed interest rate and bought before the massive price rise you are fine. You bought a home not an investment.; March 01, 2006 1:17 AM
Anonymous said...: This real-estate agent's approach has got to be some sort of indicator...

http://losangeles.craigslist.org/ers/136973645.html; March 01, 2006 1:25 AM
Anonymous said...: It's worse than that. You don't need a flat market to pop the bubble.

Let's assume the market is "slowing down" and there remains 5% appreciation to be had. That will still drive the speculators out, and cause inventory to rise.

It can make sense in a 20% market to hold an empty building, paying insurance, HOA fees, taxes, and mortgage payments. But not in a 5% market. What "profits" could be found are simply eaten away.

Even a cash buyer, would at some point realize that his margins are too low... and the hassle factor too high. Why accept a few percent returns, along with the bother of maintenance and communication with Realtors, when you could just park the money in CDs?; March 01, 2006 1:31 AM
Anonymous said...: Investors would still want a million $ property if there were an opportunity to get 5% appreciation, 95% financing, and low transaction costs. The 5% they earn is not on THEIR money but primarily on OPM (Other People's Money, the basic principle here). However, I think these are exceedingly rare and there won't be 5% appreciation in 2006. There will be depreciation in the bubble areas and marginal appreciation in the nonbubble areas. Also, investors once the fallout from the fake appraisal scandals starts hitting ...oh... any minute now... they won't get their properties appraised or financed. Wait a minute, the fake appraisal scandals are hitting: http://www.kansascity.com/mld/kansascity/news/consumer_news/13963021.htm; March 01, 2006 2:40 AM
Anonymous said...: The link didn't post correctly. It is http://www.kansascity.com/mld
/kansascity/news/consumer_news
/13963021.htm; March 01, 2006 2:42 AM
Anonymous said...: Can anyone tell me if the housing market in Carefree, AZ is softening at all?

I'd appreciate it.; March 01, 2006 3:25 PM
Anonymous said...: Man I shudder when I think about the ass-raping so many homeowners are going to suffer in the next couple of years.; March 01, 2006 4:42 PM
Anonymous said...: If you can afford you current payment(Income supports it) and is used as a home (not an ATM), just ride it out. Dont panic. Unless you just bought at the peak or have an IO/ ARM/Exotic mortgage. Not everyone will suffer. I got my fixed 30yr locked low so I could give a rats ass if the market crashed tonight. I will be sleeping good like my newborn.; March 01, 2006 11:20 PM
Anonymous said...: Zillow.com might show what recent sales prices in your neighborhood are. It is not accurate in Texas. People are bypassing the brokers and saving 6%.

It might be hard to get the refi cash out loans if the property is mortgaged to the max. Some people were cashing out to get down payments to buy other properties.; March 01, 2006 11:35 PM
an_dochasach said...: Read thisin the wall street journal today. "Get ready for a housing slowdown."

Declining Affordability May Be Affecting First-Time Home Buyers

By Ruth Simon
The Wall Street Journal Online

After climbing steadily for a decade, the nation's homeownership rate appears to have leveled off.

New data released late last month by the U.S. Census Bureau put the homeownership rate at 69% in the fourth quarter of 2005, down from 69.2% a year earlier. While the decline itself is too small to be considered statistically significant, it is the third quarter in a row that the rate hasn't posted a year-over-year gain -- and it's the first time since 1994 that the rate at year-end hasn't increased from the previous year...; March 02, 2006 12:06 AM
Anonymous said...: US HOUSING BUBBLE POWERS ON

ACCORDING TO BBC

http://news.bbc.co.uk/2/hi/business/4763940.stm; March 02, 2006 12:29 AM
Anonymous said...: Regarding the last post, the BBC's POV, reflected in the headline, is taken from the OFHEO data just released showing continued strong price appreciation in Q4 2005 (three mos ended Dec). That report is muddying the waters, at least for some journalists, amid a raft of strong indications that the housing market is poised to fall. What the BBC and others need to consider is that house prices (versus number of sales) are a lagging indicator. Further, the market has turned, according to many many reports from regions all over the country, in Jan and Feb. So data on the Dec quarter is already old news.

There's been an avalanche of negative media reports on housing. This will continue as the data accumulates. The BBC editors need to smarten up or they'll start looking like bleedin' eejits, as they say.; March 02, 2006 2:30 AM
Anonymous said...: Today's OC Register said Orange County now has an 8.9 month supply of inventory at January sales levels! This seems pretty astounding and the numbers for OC on bubbletracker don't seem that high to me. Can anybody verify this or tell me where they got their numbers?

The article is at:
http://www.ocregister.com/ ocregister/money/housing/ article_1021843.php

and the quote is:

"A slowdown in homebuying continued through January in Orange County, causing inventories of unsold homes to rise.

According to one survey released this week, unsold inventories hit their highest level in seven years, while another indicator shows the increase is not as dramatic.

It would take 8.9 months to sell all the homes on the market in January, the California Association of Realtors reported.

The last time it took longer was November 1998, when the supply of homes hit 9.1 months."

It goes on to say statewide there is a six month inventory. Just think, the spring inventory is about to come on (from normal people, not flippers/speculators who dumped their inventory on the market in Nov-Jan). Where I live in Ventura County, I've seen multiple properties around me being taken off the market in recent weeks with people trying to rent them or (I assume) waiting until the spring buying season. What I haven't seen in CA for about the last eight months is any buyers, other than these two flipper guys.

Is it just me or is this one imploding much faster than the 1989 bubble (took 9 years for home values to recover to prior highs)?; March 02, 2006 4:53 AM
Anonymous said...: Phoenix anon here.

Yeah, I'm not panicing and not looking to sell unless I have a compelling reason. I've got a fixed rate mortgage, bought before the major run-up, like my area (Scottsdale), so everything is cool here.

My condo doubled at the peak, is down about 3% now (from the peak) based on recent listings in my hood, so maybe down 5-10% actual selling price. Condos along my street are sitting on the market for 30 - 90 days.

I was just curious what others thought they'd do in my situation (since Phoenix seems to be one of the worst areas). I don't care whether I own or rent so as a purely theoretical financial decision, I've been playing spreadsheet games to see how I can come out ahead. I know I'll be selling in 5 years, so I've been trying to see which situation puts the most cash in my pocket in 2011:

1) sell condo now, invest cash in stocks/bonds, rent apartment half the cost of the mortgage, pull cash out at year 5, or

2) stay in condo, sell at year 5.

But it's tough because there are so many variables and I can't predict real estate or the market worth squat. So, like I said, I'm not going to do anything unless there is a financially compelling reason to do so. It would take one scenario having a conservative prediction of a 5% gain (after taxes and inflation) over the other for me to seriously consider the pain of selling and moving.

But if anyone else has any insights, I'm always interested to hear them. I guess spreadsheet games are for nerds.; March 02, 2006 4:54 AM
Anonymous said...: dude, I would sell. But that's because I believe your real estate asset could be worth far less than you think in a year. Also, if you really are not adverse to renting, then that alone will save you half your mortgage payment. If you sell now, you might find that you can buy a much nicer place in 2-3 years for the same price.

But as you say, there are many variables. How much do you believe the market in Phoenix is poised to take a big fall?; March 02, 2006 12:06 PM
blogger said...: phoenix anon - let's say your place would fetch $300,000 today. When a year from now it'll go for $200,000 at best, would you lose sleep that you "lost" $100 grand?; March 02, 2006 8:39 PM
Anonymous said...: Since oyu said it was more of a money or financial decision, I would sell now. If your homr is a home, if the market crashes, its all paper equity. Who cares. Ride it out.; March 02, 2006 10:21 PM
Anonymous said...: It is a mistake to see the dot com bubble and the RE bubble as separate events. It is really a long rolling, credit-driven, bond mania that has been in place since about 1996. Ten years is a long time for any trend, and the bond bull is getting tired.

Japan and Europe are inching their rates up. This will be a tight money environment coming, and will touch every corner of the economy just like low rates did.

I don't know if it too will last a decade, but it will certainly be for years.

The stock market bubble took nearly 3 years to unwind. Stocks are liquid but people hate to take losses. I think the RE bear market will last at least as long, and probably longer.; March 03, 2006 4:18 AM
Anonymous said...: I have to laugh when I hear people talk about their home equity as though it was actual income or wealth. Even funnier are those who actually believe their house is an investment! Think about it for just a minute, why should the price of a owner-occupied house ever appreciate more than the rate of inflation? Outside of the tax benefit, it generates no income and it costs money to maintain. It's the dotcom bubble all over again folks, and this time the crazies are using the Greater Fool theory to rationalize their purchase of overpriced houses. We all know how the dotcom thing ended...; March 03, 2006 5:48 AM
Anonymous said...: Keith- You know the Phoenix market. Is Scottsdale/Carefree in the same downturn? I'd love to pick up a golf course vacation home out there. I just want to time it correctly.; March 03, 2006 6:59 AM
Anonymous said...: Live in Cave creek. Places like mine + Carefree is a toast. Wait, don't buy.; March 03, 2006 9:34 AM
blogger said...: location location location

but you'll pay 2 to 5 times what a place in other areas of phoenix go for

no need to buy. just rent. if you buy, you'll lose so much money it just doesn't make sense; March 03, 2006 2:53 PM
Anonymous said...: Someone might want to check this horrifying article out:

http://pesn.com/2005/09/23/9600175_Rebuild_Energy_Systems_Not_NewOrleans/; March 03, 2006 5:04 PM
Anonymous said...: http://pesn.com/2005/09/23/
9600175_Rebuild_Energy_
Systems_Not_NewOrleans/

You'll have to type it, I guess. There should be no breaks.; March 03, 2006 11:03 PM
Anonymous said...: New Orleans will be "rebuilt" after a fashion because it is politically impossible to avoid it. The result will be a massive waste of resources in a futile attempt to delay the inevitable, but hey, waste and futile actions are the stock and trade of politicians everywhere. I notice that Gen. Wesley Clark and James Witt, the former FEMA director have formed a corporation and aligned themselves to "help" our government spent that $200+ billion in relief funds -- de nada I'm sure!; March 04, 2006 12:19 AM
Anonymous said...: Anonymous said...

"New Orleans will be 'rebuilt' after a fashion because it is politically impossible to avoid it. The result will be a massive waste of resources in a futile attempt to delay the inevitable, but hey, waste and futile actions are the stock and trade of politicians everywhere. I notice that Gen. Wesley Clark and James Witt, the former FEMA director have formed a corporation and aligned themselves to 'help' our government spent that $200+ billion in relief funds -- de nada I'm sure!"

I wasn't aware they were involved in this. Are you positive? Is there no end to what people will do for money?

If, as the article claims (with very good evidence), New Orleans is sinking, the river is altering course, and nothing can save any of it, this needs to be told. I can't fathom the absurdity of the U.S. GOVERNMENT rebuilding New Orleans in the first place. "Re-growing" is a better word, and in a healthier location should take place naturally over a period of many, many years. To artifically rebuild a destroyed city with ninety percent of its population gone, and its future in such serious doubt, is insane.

The local and state governments let hundreds of people and untold thousands of animals die horrible deaths by doing absolutely nothing to rescue them before the hurricane hit. The federal government dragged its feet after the event, causing far more suffering and death. And now, the Feds want to throw hundreds of billions of dollars into pork projects?

It seems almost pointless to get mad, because the lunatics are running the asylum, and they're not going to let go.

The mayor or New Orleans and governor or Louisiana both belong in federal prison FOR STARTERS. Until that happens (and given how politics operates in Louisiana, it is unlikely it ever will), there is no hope. My family is from New Orleans and I, for one, am disgusted.

I think the destroyed areas of New Orleans should be plowed under, and anything worth saving moved far away. If no private individuals are willing to pay for this, then forget it. If politicians had to fund their fake charity, they'd quickly discover other compelling interests.; March 04, 2006 2:12 AM
Anonymous said...: any guess how long it will take our blog host to claim he is a big owner in RONC and RIMM and is awash in cash? i predict any day since he is so good at predicting things after they happen......; March 04, 2006 6:36 AM
Anonymous said...: Here's your help. Today in the New York Times. The "Grey Lady" of journalism is important because so much meda, print and broadcast, follow her cues.

Hoping for Best in Home Sales, 2 Sides Sit Tight

By VIKAS BAJAJ and DAVID LEONHARDT
Published: March 4, 2006
Along much of the East and West Coasts, home buyers and home sellers are engaged in a stare-down.

Skip to next paragraph

Noah Berger for The New York Times
Sathish Pottavathini and his family want to buy a town house in Northern California for less than $500,000.

Still Going Strong

Different Pictures of the Housing Market

The Change in Home Prices
Take a look at how home prices have changed over the past 30 years across the United States.

It Is European, but It Is Not a Union (March 3, 2006) Many buyers, having heard that the real estate market is a bubble in danger of popping, are refusing to offer the asking price on a house, convinced that it will soon drop. But many sellers are not blinking either, thinking that offers will improve when the weather does and biding their time until then.

As a result, the housing market is now in a deeply confusing state, with average prices still rising even though homes are taking much longer to sell and the number on the market has soared. Sometime soon — probably in the spring, the peak sales season — one side or the other will have to capitulate, many economists and industry executives predict.

"In my opinion, the jury on housing is still out," said Antonio B. Mon, the chief executive of Technical Olympic USA, a home builder. "The period from now until May will tell the tale."

Many real estate agents argue that the current slowdown is merely a pause, pointing out that interest rates remain low and that Americans still seem convinced that houses are a great investment. Buyers, on the other hand, are hoping that the rising number of unsold homes is a signal that a slump is coming. It was an early sign of the last housing slump, in the early 1990's.

Nationwide, the number of existing homes for sale jumped 36 percent between January 2005 and January of this year, the National Association of Realtors reported Tuesday.

In Manhattan, 42 percent more co-ops and condominiums were available for sale at the end of last month than was the case a year ago, according to Miller Samuel, an appraisal company in New York. More Manhattan apartments were on the market in late February than at any point in at least five years.

For now, though, average selling prices have continued to rise, even in the markets that had already experienced the biggest leaps in prices and the increases continued even in the final months of last year. Prices rose 40 percent in the Phoenix area during 2005, according to the federal government. In Manhattan, the median price of an apartment was $760,000 at the end of last year, up from $605,000 at the end of 2004.

The latest statistics on house prices appear to be dominated by sellers who, for one reason or another, quickly received good offers. That has kept average prices rising. Builders of new homes have also offered bonuses to buyers, like enclosed sunrooms or top-of-the-line appliances. So the builders have been able to continue selling homes without cutting the list prices.

But many houses in the Northeast, Florida and California are, in fact, selling for less than they would have six months ago. In parts of the Northeast, the drop has been about 5 percent, estimated Robert I. Toll, chief executive of Toll Brothers, the biggest luxury home builder in the country. Other sellers have cut their price and still not found a buyer.

In Buxton, Me., a suburb of Portland, Geof and Cheri Toner put their three-bedroom Cape Cod-style house on the market for $379,900 late last year, shortly before moving to Raleigh, N.C., for Mr. Toner's job. They have received only one offer — for $350,000, which they rejected — and recently reduced the price to $374,900.

Mr. Toner said he assumed that more buyers would look at the property as the weather warmed up. In the spring, they would not have to wonder whether snow covered up flaws in the lawn or the roof. He expects that the eventual buyer will be a transplant from elsewhere in New England who is willing to pay significantly more than $350,000.

"We're not panicking over it," said Mr. Toner, 48, the regional sales manager of a video equipment maker. "It's just a matter of sitting it out and seeing what happens."

Many real estate agents argue that people like the Toners are doing the right thing and that the market will not slump as it did a decade ago. The job market is now improving. The interest rate on a 30-year fixed rate mortgage remains just 5.79 percent, according to Bankrate.com. And the number of homes on the market remains far lower than in the early 1990's, relative to sales volumes, despite the recent increases.

The current slowdown is simply a transition, the agents say, from a scorching hot housing market to a normal, healthy one. "All we are seeing is a pregnant pause," said Richard A. Smith, chief executive of Cendant's real estate division, which owns Coldwell Banker and Century 21, "a disconnect between sellers and buyers."

But many buyers say they have a sense that the long boom has finally come to an end.

In the San Jose, Calif., area, where the average house price increased 21 percent last year, Sathish Pottavathini, a programmer at eBay, said he was taking his time with the search for a new home and trying to find a good deal.

"I don't want to rush into things especially in this kind of situation," Mr. Pottavathini, who is 32, said, "where you hear about a slowing down everywhere."

He and his wife, Madhuri, spend $1,200 a month renting an 800-square-foot two-bedroom apartment, where they live with their 21/2-year-old daughter, Siri. They would like to find a three-bedroom town house with a two-car garage for less than $500,000.

Although he does not expect prices to fall significantly, he does not think they will rise either and hopes he can find a bargain — a goal that seemed all but impossible in Northern California in the last few years. Now, Mr. Pottavathini said, "If I wait, I might get a better place."

Buyers who showed similar patience in the early 1990's were rewarded. From the summer of 1989 to the summer of 1990, the number of homes for sale rose about 10 percent, according to the Realtors association.

At first, many sellers refused to accept lower offers, thinking that they would get their asking price or close to it. But they eventually had to unload their houses, and in the Northeast and California that often meant reducing the price. In the Los Angeles area, the median sale price of existing houses fell 22 percent from 1992 to 1996, before taking inflation into account.

If a similar slowdown were to happen again, Mr. Toner said he would consider changing his mind and his asking price. "At some point, if this were to become protracted, I would consider lowering the price to attract a buyer," he said.

Mr. Pottavathini, meanwhile, is giving his San Jose search four months. After that, he plans to take a break and wait until his daughter is a bit older and his wife returns to work. With more money coming in, they might be able to pay more.

If they still have not succeeded, they would then consider leaving Northern California — which he called "the best place in the world" — and returning to their native India.

"If the condos become $600,000, it doesn't make any sense to live here," he said. "Imagine owning a house and paying your whole life for that house. I would rather move back to India."; March 04, 2006 10:09 AM
Anonymous said...: Deja vous. I remember 1989 when Arizona real estate speculation was collapsing and S&L's who loaned money to real estate developers where collapsing. The government insured the FDIC deposits backing the mortgage loans. The Feds had to take over the failed S&L banks and put the devalued properties up for sale to pay back part of the loans. The RTC, Resolution Trust Corporation was formed to liquidate property owned by people who were unable to pay their mortgages. There was alot of "creative financing" going on. It was people borrowing alot of money with a little bit of equity down. Supposidely checks and balances were put in place to prevent a future collapse of the S&L industry. Some areas took ten years to recover from overbuilding. It is scary. Those who do not study history might be doomed to repeat its mistakes.

Room for rent: $550 a month. Adeos Arizona.; March 05, 2006 4:03 AM
Dogcrap Green said...: Alright all you clowns that say flat prices equal bust because of inflation.

Exactly what is the inflation if your greatest expense is flat?

Please only answer me if you are one of the clowns.; March 05, 2006 1:31 PM
Anonymous said...: Wonder which side will win the tug O' War! The Buyers or Sellers? One of the sides got to give.

Right now the sellers on the market think they still can get top dollar and are not dropping prices.

Buyers can come in and offer low ball bids....

FYI - my domain name is For Sale By Owner on Ebay right now...; March 05, 2006 9:28 PM
AnonyRuss said...: >>>In Buxton, Me., a suburb of Portland, Geof and Cheri Toner put their three-bedroom Cape Cod-style house on the market for $379,900 late last year...received only one offer — for $350,000, which they rejected — and recently reduced the price to $374,900.

Mr. Toner, if you need food money, there's a hayfield up near Buxton with a long rock wall, and a big oak tree at the north end. In the base of that wall, you'll find a rock that has no earthly business in a Maine hayfield. A piece of black, volcanic glass. There's something buried under it I want you to have.; March 05, 2006 10:16 PM
foxwoodlief said...: Thanks Joe! I think Anonymous is a bitter, cynical loser from all his comments on this site. I read this blog hoping to get the pulse in markets OTHER than Phoenix or Miami or SD! I have always bought a home with VALUE in mind and never for speculation or really for investment though if I make money GREAT. I buy for neighborhood, location, I hate to commute so won't live out in never never land just to afforda a house. Oh, and that idea is an illusion. I'd rather pay $100,000 more and live near my job instead of commute two hours a day, pay for a new car every five years, gas etc., there is more to price than the minimum payment.

Historically house prices are flat adjusted for inflation with moments of price spikes based on supply and demand and SPECULATION. I try to always base my purchase on VALUE and inflation adjusted costs plus the value added for location. If those losers out there want to buy affordable houses there are many homes for them say in South Dakota, Detroit, inner city Philidelphia or Pittsburgh where they can buy a house for less than that house can be built today.

We all have choices. I left California to go to College in 1974 and never went back, too pricey for me then and even more so now. I've owned homes in Tampa and Phoenix and now Austin. I've never paid over $100 a sq foot for a fully decked out house with all the ammenities and I"ve paid as low as $6.16 per sq ft for a 3300 sq ft fixer in Tampa build in 1905. Also just because I personally feel that many homes are over valued and choose not to buy them doesn't mean I believe in the impending doom and gloom many speak of here because I know that most homes were not purchased at the TOP of any bubble and believe only a small percentaage of home owners are at risk if prices decline as long as they have fixed mortgages, didn't buy at the top of their market, have a payment that doesn't exceed 30% of their income. Most the people I know fall into that category. Remember not all of us home owners are over extended Californians or low income workers.

I chose to sell my home last March in Phoenix because I belived a $100,000 increase in my home in two years was excessive (and it went up another $150,000 after I sold). I've always set a goal of owning for five years with a 5% appreciation (minimum for a great location) and then sell when my five year goal is met, even if that occurs in two. Then I look for another home in a growing market with good job growth and climate and buy a home that meets my value test for affordability and cost per sq ft. It took me six months to find a house in Austin that met those goals since even there a lot of the areas I would live have homes that cost more than $100 a sq ft as a fixer, which doesn't fit my mind set no matter how much I love the area of the house.

I built a semi-custom on a 1/2 acre, 3300 sq ft, imported stone and brick on all four sides, 13ft ceilings, 11 ft windows, granite, cherry cupboards tile, and every upgrade you can put in building a quality home in a small neighorhood 9 miles from downtown Austin but in the hill country and all for $101 a sq ft.

Bottom line is you have to choose what you want, what you will pay and stick with it until you find it. If you have to move then you move if you won't or can't pay the price. Fourteen years in Phoenix were enough for me and the charm has gone with the populaton explosion and high cost to live here.

Do I think certain areas are prone to price declines? Yes. Will Phoenix be near the top of the list? I think so but I'm no prophet and prices may just stay flat (which is a price decline in disquise) like Austin did from 2000 to 2005. Are some markets over built? Yes, Miami for one and San Diego.

I think the biggest problem for America isn't house prices but our trade deficeit and our national debt. But then look at Japan and their national debt and it hasn't hurt their currency or GDP. If we experience a deflationary cycle then it won't matter if you bought your house five years ago for 1/2 of todays prices it will cost more however if we go into an inflationary cycle like we had in the early 70s then that $300,000 mortgage fixed at 5 1/2 percent will look like an great investment.

I hope that most the people reading this site will not sit back passively and gleefully wishing for a melt down since that isn't in anyones best interests. What I would like is honest questions to value and home price trends and quality of life issues related to home owning instead of just attacking the market or other bloggers who want a rational discussion.

Tell me you situation. Do you own? Did you buy in the past two or three years? Can you weather the prices come back to a normal, inflation adjusted cost for you location? Do you know good places to live and have a good job and where homes are in line with the local economy?

Too many bloggers have no clue on what it is like to live in other countries or how their house markets work or the cost to live in other countries and so not only do they not compare apples with apples here they try to compare the US with other countries as well. I'm sorry but an $80,000 house in Ecuador isn't a bargain up against a $300,000 house in the USA. Again, local incomes, jobs, currency stability, the ability to even get a mortgage are just some of the issues.

Yes prices go up and prices go down. Losers and winners. I'd hope this site would help people understand how to balance their investment in a home and not to be scarred into apocalyptic thinking. The Dot com melt down was't the end of the world and neither will price moderation or decline in home costs end the world. Look at Iraq for one and people continue to exist, live, eat, die. and homes in Bagdad are expensive!

Sunday, March 05, 2006 4:39:03 PM; March 05, 2006 11:41 PM
Anonymous said...: Dogcrap - you are an idiot. Do you not understand inflation? INFLATION = rise in prices.....

Price appreciation doesn't matter if you have a fixed loan. If you pay $1000 a month today for a $200,000 you will pay $1000 a month in 10 years regardless of inflation. Inflation only matters to those who are needing to sell. Inflation erodes the value of a dollar and hence effects asset prices.

If your house price is not keeping up with inflation the value is eroding, simple as that.; March 06, 2006 1:28 AM
Anonymous said...: property taxes, water, gas, electric up. Fixed loans but other costs going up.; March 06, 2006 2:05 AM
Anonymous said...: Anyone have info on Reno market.; March 06, 2006 2:06 AM
Anonymous said...: I'm a bigger believer in the housing bubble implosion than anyone I know. I sold my CA condo and house in 2002 and late 2004 and now live in a rented apartment. However, I think many people are expecting prices to drop immediately now. The typical reaction is a price stickiness and little or no movement. In the extremely speculative markets (and from reading these blogs we all know the list) will see significant price drops in 2006 but places where people with families live might not. Also, there are ways to hide price declines (seller pays closing costs, free upgrades, etc.) so they don't work their way into the median prices reported by mainstream media. Let's not get overly excited just yet. We might not see significant corrections in most bubble markets until 2007 or 8.; March 06, 2006 6:21 PM
Anonymous said...: From March 6th at http://www.bondsonline.com/Todays_Market/The_Outlook_Today.php

"David Rosenberg of Merrill Lynch notes that the Loanperformance website states that 17% of properties which have ARM’s now have negative equity while 29% of properties that were purchased or refinanced in the first three quarter of ’05 also have negative equity."

Maybe it's alreafy been noted or commented it on, but it's the first time I've seen it.; March 06, 2006 6:51 PM
Anonymous said...: It's not just Phoenix. In Boulder, CO there are more foreclosures than there are sales since January. But the real estate community and buyers are in denial....just sitting on the properties. Most of the foreclosures are because of zero interest and second mortgages.; March 06, 2006 7:03 PM
Anonymous said...: Anon,

Even with fixed rate mortgages, folks are commonly going to have negative equity. It takes years to gain just 7% equity with a 30yr fixed. I mention 7% because that is usually what it takes to sell your house is realtor/closing fees.

Now with the median home value falling from 219k to 210k, it's even worse for everyone trying to build equity.

Anon in Austin, TX; March 06, 2006 9:06 PM
Anonymous said...: phoenix anon -

The only concern I would have would be what would happen if your condo had a large vacancy rate due to foreclosures. Would your Condo Fee double?

If that is a real possibility, I would dump the condo for now, take your profits, and re-invest at the bottom of the bubble in a few years...; March 06, 2006 9:48 PM
Anonymous said...: Median Home Sale Price

10-2005 $234,800.00
11-2005 $225,200.00
12-2005 $221,800.00
01-2006 $211,000.00; March 07, 2006 3:30 AM
Anonymous said...: How many of you out there believe in "Rich Dad" Robert K.'s prediction of the mother of all bubbles bursting, major economic collapse, and we should prepare now (e.g. buy gold). He also says there's going to be huge opportunities to get rich in the aftermath.; March 07, 2006 6:47 PM
Anonymous said...: Does anyone know if realtors are creating false comps by convincing buyers to agree to a high sales price and then giving cash back at closing? In other words, on paper, a house looks like it sold for $350K, but really the buyer paid $320K and got $30K back at closing.; March 07, 2006 8:00 PM
Anonymous said...: Foreclosures up 45% in January 2006 compared to 2005. People valued their stick built homes too highly. Buyers might as well delay buying until the bargains start to appear. Money for nothing, chicks for free.

http://www.realtytrac.com/news/press/pressRelease.asp?PressReleaseID=87

Check to see if I got that right.; March 08, 2006 12:51 AM
Anonymous said...: You know there is a problem when mortgage industry recruits people from county jail. I guess armed robbery looks good in resume, if you apply for a position in mortgage industry.

(Mr. Littlejohn is the person of interest in the rape and murder of NY grad student.)

New York Times (March 7):

"Your violent and out-of-control behavior shows you to be a menace to society," the decision read. "Your continued incarceration remains in the best interest of society."

But two months later, Mr. Littlejohn had served enough of his sentence to qualify for a conditional release. He took a job with a mortgage lender and met with his parole officer, officials said. But he failed to tell parole officials that he was working as a bouncer at a bar, which may have violated the conditions of his parole.; March 08, 2006 2:13 AM
Anonymous said...: i started a real estate coaching class through rich dad ,just a bunch of bs (recieved a refund). He doesn't know anymore than anyone. Bottom line if you want to make money in real estate get in early and look for rentals that pay the mortgage on a fixed loan and leave after a bills are paid at least 10%. Only place to do this in the west i have found is utah. If investing for appreciation with ajustable loans, io or whatever the big bullshitter at the loan office tells you, your taking a risk like las vegas with a loan.

Tuesday, March 07, 2006 9:37:28 PM; March 08, 2006 4:47 AM
Anonymous said...: According to the Washington Post, page D4, 3/8/06: the treasury department has started tapping the civil service pension fund in order to avoid going above the $8.2 trillion federal debt limit.

This must mean they already robbed the Social Security and Medicare funds.

I am not sure Bush has been told there is a law about a borrowing limit. They did not know it was unlawful to expose a CIA agent either.; March 08, 2006 5:40 PM
Anonymous said...: "raiding civil service pension fund "

ahh taking a page from the San Diego government handbook...; March 08, 2006 8:11 PM
Anonymous said...: Rates Jump To 3 Year Highs

Wow. 18 basis point rise on the 30-year, in one day??

I have thought for quite some time, that when the 30 year crosses 6.5 percent, it's over! Cash in your chips. Turn out the lights... The market can't and won't come back. It must deflate.

Well, we are almost there.

Above 6.5 percent, borrowers will be looking at rates they have not seen for 5 years. Five years ago is roughly the last days of a "rational market", and it's a long enough time for a great deal of complacenty to have established itself.

Americans don't like to remember anything before "the good times". They prefer to define the "good times" as normal, and forget what normal was really like.; March 09, 2006 3:42 AM
Anonymous said...: Housing to stay strong: Fed's Poole
Rising income, jobs to keep market at high level in 2006

By Greg Robb, MarketWatch
Last Update: 4:21 PM ET Mar 8, 2006

WASHINGTON (MarketWatch) -- The U.S. housing market should remain strong in 2006, and there is no national real-estate bubble that's about to burst, St. Louis Fed President William Poole said Wednesday.
"My hunch ... is that housing activity will stabilize and remain at a high level this year," Poole told the Regional Chamber and Growth Association in St. Louis.

Poole said his forecast was based on the expectation that the Federal Reserve "will keep underlying inflation low and stable."
Real household income "will recover nicely due to the waning influence" of last year's spike in energy prices, he said.
"Continued healthy job growth will also help keep housing at a high level," Poole said.
Rapid increases in house prices over the past few years have led to much speculation in the media and financial markets about a price bubble.
Economists at Goldman Sachs said their research has led them to conclude that home prices are 20% overvalued at present, although the regional variation is enormous.
Poole said it's nearly impossible to forecast a price bubble.
"Indeed, given that bubbles always burst -- if there is no burst there was no bubble -- clear advance evidence of a bubble can never exist," Pool said. "If the evidence was clear, then everyone would know about the bubble and forthcoming burst, but then the buying that created the bubble would never occur in the first place.
"So if you have an academic interest in house prices, I recommend that you wait a few years. If you have a direct financial interest, I can't help much -- you're on your own," he said.
Poole said he did expect "some slowing in the growth of average home price nationally."
Exaggerated concerns
But Poole dismissed fears of a nationwide housing bubble.
He said research from the St. Louis Fed suggested that U.S. house prices "are not particularly unreasonable" based on fundamentals.
"The conventional view, which I subscribe to, is that a housing-price bubble does not exist on a national average basis, but there may be pockets of the country where prices have risen beyond levels that can be justified by economic fundamentals," Poole said.
Poole also said he wasn't worried that slowing prices would dampen consumer spending.
"The marginal contribution to the pace of consumer spending stemming from the wealth effect -- that is, from households extracting a portion of their home equity to spend on goods and services -- is not likely to be a significant concern," Poole said.
In comments to reporters following his speech, Poole said the economy is "strong and stable."
"It is hard to imagine ... the outlook could be more stable and healthier than it is right now," Poole said.
He said inflation expectations "are quite well anchored." End of Story; March 09, 2006 7:41 AM
Anonymous said...: Whatta crock! The Fed is absolutely out to lunch on this. This era is nothing like previous low intrest rate periods. In the 1950s, families bought entry level 3 BR 1 ranch homes that were about 1000 sq ft large. The payments were modest, people used fixed rates, and even a 1% rate rise wasn't a huge impact to people.

Now we have a sea of 2500 sq foot spec homes bought intrest-only by the most marginal of qualifiers. Over 80%, 80%, EIGHTY PERCENT, of the market in California!!!

Long rates anything close to historical averages are going to create a whole new class of "bag holders".; March 09, 2006 12:28 PM
Anonymous said...: you guys are scaring me! is a regular money market fund safe with a falling dollar?; March 10, 2006 12:08 PM
Anonymous said...: "is a regular money market fund safe with a falling dollar?"

The falling dollar cuts both ways. Prices for imported goods (oil, autos, electronic gadgets) will go up, while the selling prices for U.S. exports should be more attractive to foreign buyers. But we import far more than we export these days, so I expect a falling dollar will hurt more than it helps.

Also, the foreign holders of U.S. Treasury debt (Japan, China, Korea) will probably dump their holdings rather than watch them lose value as the dollar declines. This will jack up interest rates significantly.; March 10, 2006 4:27 PM
Anonymous said...: Family buys 60's tract home in Silicon Valley for $570K on an ARM with 100K down in Spring 2004

Spent $15K on improvements to make it livable

Lender's assessment in February 2006 put house value at $810K

Brother tries to inform them about Bubble, suggests selling and renting as a possibility to protect them from a crash

Family decides to refinance with a 7 year ARM, + a 20 year fixed, or some such arrangement

They are happy in their house, but brother worries about them; March 11, 2006 12:40 PM
Anonymous said...: Why not make some scratch on the bust...short LEND and FED (buy puts)...subprime mortgages (high ltv, I/O's) backed by bubbalicious collateral in Cali and other bubble markets...; March 11, 2006 5:04 PM
Anonymous said...: Be glad that family was at least conservative enough to get a 7 year ARM, instead of a 6 month LIBOR, or intrest only negative amort, or other such nonsense.; March 11, 2006 5:48 PM
Anonymous said...: http://www.freep.com/apps/pbcs.dll/article?AID=2006603110319; March 12, 2006 1:22 AM
Anonymous said...: Its always later.; March 13, 2006 3:31 AM
blogger said...: Phoenix, a market already spinning out of control, has seen inventory explode ANOTHER 50% since the start of the year. Amazing. A couple hundred more go on the list every day... 50,000 here we come. Where does this number peak?

1/2: 26,715
1/10: 28,790
1/20: 31,457
1/30: 32,512
2/10: 34,608
2/20: 35,455
2/28: 36,176
3/10: 37,680
3/12: 38,184; March 13, 2006 9:16 AM
Anonymous said...: "is a regular money market fund safe with a falling dollar?"

Since the last poster didn't really answer, let me.

Short answer is: yes. Yes, a $US-denominated money market fund is safe in the sense that your capital will be preserved, and you will continue to earn interest on that capital, even if the dollar tanks. Mind you, your assets will remain $US dollar assets, so your buying power in other currencies will decline sharply. In other words, your trip to Europe will get a whole lot more expensive. But so long as you are spending your money in the good ole USA, your assets will be safe in spite of a dollar dive.; March 13, 2006 10:32 AM
Anonymous said...: you'll love this article

http://online.wsj.com/article_email/SB114204536747195612-lMyQjAxMDE2NDEyMTAxNDE1Wj.html; March 13, 2006 10:49 PM
Anonymous said...: Other comment about money market: prices will skyrocket in the case of a currency crisis. A loaf of bread for a hundred bucks is fine if your salary inflates to ten million a year but salaries tend to inflate slow. Too bad.

Fixed rate debt is good in hyperinflationary situations, as long as your cash is held in non inflating commodities ready to payback the bank/loanshark when their value inflates compared to your fixed rate principal.

Floating rate debt is very bad. Avoid.; March 14, 2006 7:56 PM
Anonymous said...: Hey Keith..I have a suggestion. Could you please have people post what their education level / profession is? I am just curious to see where folks are comming from.

In regards to myself, 4 year college degree and I work in Finance.

Let me know what you think.; March 15, 2006 6:13 PM
Anonymous said...: This may not be a great idea (last post). The blogasphere is very democratic; education does not always guarantee that a comment is going to be intelligent or well-informed. It would potentially discourage people who didn't finish college but know what they are talking about because of their experience, etc. An idiotic comment, whatever the education level of the person writing it, usually comes through as idiotic.

I've got a masters degree, and I don't know shit about lots of things. Like home maintenance, for example.

Getting people to post educational creds sort of violates the blogging culture, in my view.; March 16, 2006 2:41 AM
Anonymous said...: Hey Keith..I have a suggestion. Could you please have people post what their sexual prefference / astrology sign? I am just curious to see where folks are comming from.

In regards to myself, I'm a switchitting sagitarius.

Let me know what you think.; March 16, 2006 3:50 AM
Anonymous said...: No Bull...
I am a male high school dropout who owns a small manufacturing company that has been profitable for 10 years. Before that I was a coin and bullion dealer. I am supporting my wife who has returned to college and my daughter who goes to a 1000$ a month private high school. I am 43 years old and bitter as hell about economic bull sh@t. I resent bankers and realtors for what I feel is reckless endangerment in what should be a fiduciary duty. I am heterosexual. I tried bisexuality but did not like it and resent Brokeback Mountain.; March 16, 2006 4:27 PM
Anonymous said...: Yeah, but what's your sign?; March 16, 2006 4:40 PM
Anonymous said...: Yeah, but what's your sign?
thats personal; March 16, 2006 5:12 PM
Anonymous said...: QUOTE: As a result, the housing market is now in a deeply confusing state, with average prices still rising even though homes are taking much longer to sell and the number on the market has soared.

QUOTE: Does anyone know if realtors are creating false comps by convincing buyers to agree to a high sales price and then giving cash back at closing? In other words, on paper, a house looks like it sold for $350K, but really the buyer paid $320K and got $30K back at closing.

Dr. Irwin Kellner explains in his article “The price is wrong” that the median prices being reported, which are going up while the bubble is deflating, are wrong. Here’s his explanation:

The most common average price is the median price. This is the midpoint of all prices recorded in a given month. As you might imagine, the location of this midpoint is determined by the range of prices recorded. Thus, if more higher-priced homes are selling than lower-priced units, the median or geographic midpoint will move up accordingly. By the way, the same thing is true for another type of average -- the mean.

Here's another thing to ponder: like new cars and trucks, many new homes have list prices. These are the prices that get recorded when the house is sold -- even if the seller has to sweeten the deal by offering such amenities as upgraded appliances, furniture, carpeting and the like. And there's a lot of this discounting going on, according to a March 4 article in the Wall Street Journal. Indeed, on the same day, the New York Times ran a story quoting the CEO of homebuilder Toll Brothers as saying that many houses in the Northeast, Florida and California are actually selling for 5% less than they did six months ago.

Another reason to question what is reported as average home prices is that new homes are getting bigger, so part of these higher prices simply reflect more materials and a bigger piece of land. The Census Bureau reports that the size of the average new home is now about 2400 square feet -- a 15% increase since 1990.

Finally, logic would tell you that when interest rates rise, the more expensive homes, whose buyers are not as likely to be as affected by stiffer borrowing requirements as buyers of less expensive homes, will sell faster than lower-priced models.

Dr. Irwin Kellner is chief economist for MarketWatch. He also is the Weller professor of economics at Hofstra University and chief economist for North Fork Bank.
http://www.marketwatch.com/News/Story/Story.
aspx?guid=%7BA4434D59%2D303E%2D4D85
%2DBB20%2D334256808B1C%7D&siteid=
mktw&dist=; March 16, 2006 8:23 PM
Anonymous said...: no reason to get hositle regarding my request to post education level / profession?

Just a way to calibrate people's opinions. If you are a fluffer giving advice about the direction of the dollar and global trade imbalances..well..I would like to know that.; March 16, 2006 9:38 PM
Anonymous said...: Would one of the big giant brains please explain TOL's rally; March 16, 2006 9:44 PM
Anonymous said...: That's easy Chauchie. The bond market rallied and tomorrow also happens to be the day options expire.

Da Brain; March 16, 2006 10:11 PM
Anonymous said...: buy or be happy renting for a longtime. i think take as much easy money as possible, roll the dice. how else will the poor ever be able to leverage money like this. So you go bk its better than want until your 80 to retire. look at the donald, leveraged to the hilt.; March 17, 2006 4:40 AM
Anonymous said...: Hey Keith..I have a suggestion. Could you please have people post what their education level / profession is? I am just curious to see where folks are comming from.

OH, KISS MY UNEDUCATED A$$
Typical american, you dont look like me, your not as rich as me, your not as educated as me!!
Your a god and I'm just a little peon!!; March 17, 2006 4:34 PM
Anonymous said...: In case your curious, I've got a B.S. degree in CompSci and I'm getting my M.A. degree in Economics.; March 18, 2006 12:58 AM
Anonymous said...: 3/17/2006 CNBC TV commentator says.... Traders are dumping Real Estate to buy stocks !!!

Noticed an increase in trading volumes lately !!!; March 18, 2006 3:18 AM
Anonymous said...: The recent stock rally is suspect. This isn't 1995 where the economy was firing on all pistons, and the market made new highs nearly every day until the summer of 1996.

It's traders searching for returns, in an inflationary environment. Can't keep holdings in dollars, that's for sure.; March 18, 2006 2:03 PM
Anonymous said...: Does anyone know anything about FOREX?
I got a form letter in the mail offering a FOREX Algorithm computer program for sale and a seminar. Should I stay or go?; March 18, 2006 3:30 PM
Anonymous said...: Bubble has popped in the Twin Cities - see link http://www.twincities.com/mld/twincities/14127138.htm; March 18, 2006 4:12 PM
Anonymous said...: Inflation is low. Energy prices fell and housing prices are falling in some areas. The DOW was making a rally.

In some areas there has not been a double digit drop in housing prices. There were very few for sale signs.

Too many people were resting on their academic laurels. A degree prepared one for an entry level position; was not proof of a brilliant career path. There were alot of art history majors with high academic achievement, but are of very little use to people. In 1929 there were many highly educated people buying stocks.

Not everyone who was flipping condos had no education, and so what? I might get a cheap condo if the builders ever overbuild this area, something people have been saying might not never happen.

Northern Virginia; March 18, 2006 4:27 PM
Anonymous said...: Hey Northern Virginia, have you looked at the markets in southern Virginia? In some of these old manufacturing towns, 40% of the deed transfers are between financial institutions. People are commuting 100 miles to Greensboro or Winston because, well... there isn't any job growth... and they can't sell their homes. To anyone.

DC and Danville may as well be on opposite sides of the world.; March 18, 2006 5:16 PM
Anonymous said...: Here's something for those of you who like charts AND political posts deviating from the housing bubble:

http://tinyurl.com/ytgzn; March 18, 2006 5:35 PM
Anonymous said...: The guy who suggested we all post our eduction level, though I disagreed with the proposal (I was the first in the thread to do it) does have one very good point. You don't want to be taking investment advice from anonymous participants on a blog. Research the markets on the net, by all means, but make sure you know exactly who's giving the advice. And even if someone does tell you who they are or what degrees they've got, don't take it for granted that 1) they're telling you the truth, 2) it means they're well informed.; March 18, 2006 8:14 PM
Anonymous said...: I'm not giving investment advice of any kind. My posts just offer opinions based on my best educated guesses or academic/life experiences. Take it or leave it.; March 19, 2006 12:33 AM
Anonymous said...: Mortgage delinquencies up in the 4rth quarter 2005.

http://www.usatoday.com/money/perfi/housing/2006-03-16-mortgage-delinquent_x.htm

Other than the bubble in California, there were problems in the Midwest with factories closing, and mortgages in New Orleans where there was not much flood insurance.; March 20, 2006 8:32 AM
Anonymous said...: Word on the street is Phoenix market is slowing. Amazing how quick they are to point out what was obvious 6 months ago

Phoenix Housing Market Seen Slowing; March 20, 2006 7:44 PM
Anonymous said...: Fed admits it could be WRONG about housing,it could get UGLY

http://www.marketwatch.com/News/Story/Story.aspx?guid=%7BC3A6E113%2D5C56%2D4FB3%2D84DE%2D7F1B075D48C5%7D&source=blq%2Fyhoo&dist=yhoo&siteid=yhoo; March 20, 2006 10:57 PM
Smart Grid blogger said...: News from China: Shanghai's sizzling property market fizzles

Mon Mar 20, 11:04 PM ET

SHANGHAI (AFP) - Signs of a sharp downturn are emerging in Shanghai's once-sizzling property market with prices slumping more than 30 percent for some apartments and increasing reports of mortgage defaults.

Like so many other sectors of China's super-charged economy, massive investor speculation led to a real estate boom in the nation's financial hub of 17 million people that saw prices double in the three years from mid-2002.

But housing prices began sliding in June last year after the government introuced a package of tightening measures for the runaway sector, according to Song Hai, a property lawyer at local law firm Zhongxia, and industry analysts.

Since then developers have cut prices, small real estate shops have gone bankrupt and many first time homeowners have begun feeling the squeeze on mortgages now worth more than the homes purchased.

One example of rising home-loan defaults, Song said, was in Xianfeng district, a 40-minute drive southeast from the center of Shanghai.

One hundred-meter flats there which were selling for 500,000 yuan (62,000 dollars) in the middle of last year had now dropped by more than 33 percent, according to Song.

"Most investors borrowed 350,000 yuan from the bank but due to the shrinking market and the poor location, these houses are just not worth that much any more," said Song, whose firm has handled 100 default cases since June.

"The most common result is that investors are returning the property to the bank and waiting to see how much the bank can get for it.

"Unfortunately, many investors will still need to pay back loans since the houses just cannot sell for what they were bought."

Last year bad housing loans hit 1.55 billion yuan, up from 558 million yuan in 2004, according to official statistics.

"It's a systemic risk if you are a Shanghai bank," warned UBS economist Jonathan Anderson.

Yet it was not so long ago that the Shanghai housing market was so tight that prospective buyers had to queue for tickets to enter a bid for a new apartment in an unfinished block.

It was usually a foul tempered affair too. People jostled as they waited for hours, sometimes days, only for many to be turned away.

Those lucky enough to secure bid tickets also often found that the best units had been pre-sold to those with inside connections.

At times even the tickets themselves became a saleable commodity but now the party of irrational exuberance is over.

By the end of last year, Shanghai's average housing prices had declined 31.9 percent from 9,153 yuan per square meter 12 months earlier, according to a report by property agency Savills China.

The slide has continued this year, with average downtown prices slipping in February to 17,477 yuan from 18,383 yuan in January, according to Yiju, China's largest property agency.

Yu Ying, an area manager with Yiju, said that in the city's Pudong district, developed from once marshy fields into a jungle of ultra-modern skyscrapers over the past decade, prices for top quality projects slumped badly last year.

"Take Shanghai Green City on Pudong South Road, prices were as high as 18,000-yuan per square meter but ... they have declined sharply to 10,000 yuan," said Yu.

The municipal government has since come under heavy fire for stunting growth in the sector, accusations that Shanghai mayor Han Zheng dismissed at the annual national parliamentary session in Beijing this month.

The official Xinhua news agency quoted Han as saying that the city had adopted stable control measures and was merely bringing costs under control.

The central government initiated measures in April and May last year to quell worries over bubbles in the property sector across the country.

It imposed nationwide varying capital gains taxes linked to the length of a buyer's holding period, the banning of pre-completion sales and a tightening of land-use rights.

Under pressure from the central government, Shanghai enacted even stiffer regulations, requiring homeowners to pay off their existing mortgages before selling a property.

In March it also raised the floor lending rate for housing loans of five years or more by 20 basis points to 5.51 percent, while loans now require a downpayment of 30 percent of the price, up from 20 percent.

http://news.yahoo.com/s/afp/20060321/bs_afp/chinaeconomyproperty;_ylt=AlO4FTdDziCxC0HyfaZ70SUO57EF;_ylu=X3oDMTBjMHVqMTQ4BHNlYwN5bnN1YmNhdA--; March 21, 2006 3:58 PM
Smart Grid blogger said...: Bernanke May Keep Pushing Interest Rates Higher, Economists Say

March 21 (Bloomberg) -- The Federal Reserve will keep raising interest rates, brushing aside arguments that low long- term bond yields signal a slowing economy, analysts concluded after listening to Fed Chairman Ben S. Bernanke.

Bernanke, in a speech yesterday to the Economic Club of New York, said he doesn't interpret the narrowing gap between short- and long-term rates as ``indicating a significant economic slowdown to come'' and may instead reflect investors' confidence in the economy.

``The main point is that he's not worried about a weaker economy ahead,'' Ethan Harris, chief U.S. economist at Lehman Brothers Holdings Inc. in New York, said in an interview from the event. There's ``maybe a tiny bit more hawkishness here'' about the outlook for interest rates.

Bernanke's speech was his last scheduled appearance before the Fed meets March 27-28 to decide whether to increase interest rates for a 15th straight time, to 4.75 percent. The Fed chairman's optimistic outlook for the economy, and his view that homeowners can absorb a slowdown in the housing market without too much strain, suggests rates will move higher.

``He will need to compensate for the lower-than-usual long rate with higher short rates,'' said Kevin Harrington, managing director at Clarium Capital Management in San Francisco, which has $1.8 billion under management.

Complicating Fed Policy

Low long-term interest rates complicate the Fed's job of managing the economy because they blunt the effects of increases in the Fed's short-term rate. Yesterday's 4.66 percent yield on the 10-year government bond was little changed from June 2004, when the Fed began the longest series of rate increases in more than 25 years. The so-called yield curve ``flattens'' when short- and long-term interest rates converge.

``While an inverted yield curve has been a historically good predictor of recessions, that relationship has weakened over the last 15 years,'' said Joseph LaVorgna, chief fixed income economist at Deutsche Bank Securities in New York.

Bernanke said the relationship between short- and long-term bond yields shouldn't be the main benchmark for setting economic policy.

``Many, many variables go into making the forecast,'' and the yield curve alone is not ``by itself a useful benchmark for policymaking,'' Bernanke said.

``He is leaving the door open for further rate increases beyond next Tuesday,'' John Ryding, chief economist at Bear Stearns Cos., said in an interview. ``The key headline `This does not signal a slowdown' is exactly the message the Fed has been sending for a while.''

Healthy Consumer Finances

Bernanke said consumer finances appear healthy, and the increase in mortgage debt from the housing surge of the last five years ``may not be a particularly serious problem'' because families have replaced higher rate consumer debt with home loans.

``Wealth has grown,'' Bernanke said. ``Families have made a lot of progress in restructuring their liabilities.''

Bernanke's speech ``demonstrated that housing market concerns are not going to be an inhibitor if the Fed has to raise rates,'' said Robert Hormats, vice chairman of Goldman Sachs International in New York. ``He downplayed those concerns.''

Economic Outlook

Bernanke said other indicators now show ``market participants do not harbor significant reservations about the economic outlook,'' adding that corporate risk spreads, ``would seem to be consistent with continuing solid economic growth.''

Junk bonds yield an average of 3.3 percentage points more than Treasuries, about the narrowest since July and compared with 4.1 percentage points when the Fed began raising interest rates, according to Merrill Lynch & Co.'s index data. High- yield, high-risk bonds are rated below Baa3 by Moody's Investors.

Futures contracts tied to the Fed's benchmark rate show traders expect Bernanke and the Open Market Committee to raise its main rate by a quarter percentage point next week.

``There's some room for interest rates to go higher,'' Maria Ramirez, president of MFR Inc. in New York, said in an interview. ``People are coming to accept'' that there are ``more of these moves to come.''

The U.S. economy will grow at a 4.7 percent annual rate from January through March, the strongest pace in more than two years, another Bloomberg survey showed. That's almost triple the fourth-quarter growth rate.

Bernanke said there are four possible reasons why demand for long-term U.S. bonds may have increased, lowering the yield investors require for holding a longer-term maturity.

Bond Demand

First, investors may be more confident that central banks will keep inflation low and growth stable.

``With long-term inflation expectations apparently anchored at low levels and with the prospect of continued economic stability, market participants may believe that it is appropriate to price bonds for an environment like that which prevailed four or give decades ago,'' Bernanke said.

A second possible reason may be the expansion of dollar reserves held by foreign central banks, especially those in Asia. Even so, because dollar bond markets are so large, Asian central banks may only be having a moderate impact on yields.

``Reserve accumulation abroad is not the only, or even the domination explanation for'' the recent behavior of low long- term Treasury yields, he said.

A third reason could be the need for long-term assets by pension funds to match their liabilities for the baby boom generation, and the fourth may be that the supply of long-term bonds ``seems not to have kept pace'' with demand.

`Ambiguous'

Bernanke said the conclusions the Fed should draw from the narrowing interest rate gap are ``ambiguous'' and policymakers should look at other indicators.

``If spending depends on long-term interest rates,'' Bernanke said, and special factors lower those rates, then demand will be stimulated and ``a higher short-term rate is required.''

If low long-term yields are signaling too little demand for investment and an excess of savings, that might argue for a ``lower'' required policy rate.

``To the extent that Bernanke's arguments imply `less reliance on the yield curve' and thus more on `other indicators,', one could argue that his views may favor somewhat greater tightening,'' said Peter Kretzmer, senior economist at Bank of America Securities in New York, said.

Inflation

Inflation has remained subdued even as the economy has expanded. The central bank's preferred inflation barometer, the personal consumption expenditures price index, minus food and energy, averaged 1.8 percent during the past three years, compared with almost 3 percent during the prior 20 years.

Investment into the U.S. has soared in the last decade. Net foreign purchases of U.S. bonds and stocks, including Treasuries, rose to $868 billion last year from $133 billion in 1995, a more than 600 percent increase at a time when the economy expanded by less than 70 percent.

BLOOMBERG.COM

Last Updated: March 21, 2006 00:08 EST; March 21, 2006 4:59 PM
Anonymous said...: Latest from David Lereah
Housing Slowdown May Reverse Next Year

http://www.courant.com/business/hc-nehousing0321.artmar21,0,1239592.story?coll=hc-headlines-business; March 21, 2006 6:33 PM
Anonymous said...: HOUSING BUBBLES ARE NOT LIKE STOCK BUBBLES

Unlike stock market bubbles, real estate bubbles don't pop. Collapsing stock market bubbles are characterized by a sudden collapse in prices because stock markets are highly liquid. You see huge volumes of transactions at ever lower prices during a stock market collapse. Collapsing housing bubbles, on the other hand, are characterized by illiquidity, a sudden collapse in transactions. Buyers and sellers seem to disappear. The reason is a reversal in the psychology of buyers that developed at the top of a speculative housing market. Buyers had been buying at prices they knew were too high but on the assumption that they'd be able to sell if they needed to. The thought was: "Ok, maybe it's overpriced, but at least I'll be able to sell it later for at least what I paid for it, but likely more." What happens on the way down is that houses go on the market and just about NO ONE shows up to look. That's because buyers weren't buying earlier primarily because they needed a place to live, but because they thought the price would likely rise and that, in any case, they'd be able to get out when they wanted with all of their money or more. On the way down, neither condition is true. So buyers stay home, so to speak.

I highly recommend reading the complete article at:
http://www.alwayson-network.com/
comments.php?id=6472_0_4_0_C; March 21, 2006 8:23 PM
Anonymous said...: "Housing bubbles don't collapse suddenly. They go through a long series of self-reinforcing deflationary stages that typically last five to seven years. Given the extreme and unprecedented nature of the current housing bubble, I expect a ten- to fifteen-year downturn to follow this boom. The government will step in with all manner of supports and bailouts along the way, similar to those that created the bubble in the first place, so the exact trajectory of the decline is impossible to predict. Here I estimate how and over what time period the decline may occur..."

Continue reading article at:
http://www.itulip.com/housingbubblecorrection.htm; March 21, 2006 9:21 PM
Anonymous said...: Remember when bubbles were synonymous with innocent childhood fun and not the basis of our economy?; March 22, 2006 2:09 AM
Anonymous said...: Did anyone see the TV show Housing Bubble or Boom on ABC tonight? I missed it an am curious if it told a accurate story.

Could it be the first in a series of points of recognition?

Simmssays...
americaninventorspot.com; March 22, 2006 6:50 AM
Anonymous said...: LOOK at what has happened downtown Orlando!
Who needs chicken Farms. Good pic, but it is really scary because Bird Flu is spread to Humans by dry and aerosolized bird droppings. Bird Flu is in the Bahamas headed to Fla via the migratory routes and is expected to enter the US here in Florida simultaneous with Alaska. I am shaken to the core.
This pic is where the downtown high priced Condo BOOM is!!!
I can not believe this.
http://www.local6.com/news/8182571
/detail.html; March 22, 2006 2:29 PM
Anonymous said...: What your Million dollar could buy in NORTH DOVER, TOMS RIVER, NEW JERSEY 08755

How the heck this suburb had such Luxurious homes when in fact Hospitals supporting the neighborhood is suffering from Medicare reimbursement losses.... Can this Bubble be supported for a longer time period ????

Just www.ZILLOW.com North Dover area of Toms River, NJ 08755 !!!; March 22, 2006 3:43 PM
Anonymous said...: The most recent sales data for the Washington DC market shows housing prices stablizing, but inventory growing.

go to: http://dcbubble.blogspot.com/2006/03/no-more-talk-of-rising-prices-but-no.html; March 22, 2006 7:02 PM
Anonymous said...: Keith here's a good one IMO:

Betting on the Big Easy -- Why on earth has KB Home launched a major building project in the wildly uncertain New Orleans real estate market?

One of the characteristics of The End is that the players think that everything they touch will turn to gold. Think of all the internet IPO's and companies doing stupid things that thought they too would strike it rich with their can't-miss products and "new era" business plans back in 1999 -- does anybody else remember that a company was going to design a peripheral that would generate smells and odors based on web page content?

So here we have KB Homes deciding that they're gonna build in New Orleans, never mind that nobody should build in New Orleans as a matter of geography and meteorology. (A proper New Orleans Levee Premium for hazard insurance would make the recent Florida Hurricane Surcharges look like a random Administrative Fee.)

Furthermore, there is a distinct possibility that even Uncle Sucker will come to his senses and refuse to offer Federal Flood Insurance in that area.

Does KB now think that buyer demand exists under any set of circumstances, everywhere, for eternity, for any number of houses they decide to build? That they will sell whatever they want to a city of bankrupted welfare recipients just because they have the ability to build it?

I guess it does!; March 22, 2006 10:28 PM
Anonymous said...: Pardon me for saying this but this is all BS. I do not know what is happening in other areas of the country, but San Francisco Bay Area real estate is in best shape ever. For example an unfinished development on Potrero Hill called Sierra Heights has been sold in less then a week. The price of a 2 bedroom condo is 650K and there is a waiting list just in case people change their mind and backout of a deal. The development is located across from a homeless shelter and bordering low income housing projects.
I might be wrong, but there is no end to this. Prices keep going up and there is a steady demand for housing.
On another hand you can rent a nice 3 bedroom flat with roof deck of 2200 per month. Why pay $4000 mortgage? Can someone explain what might be going through their head?; March 22, 2006 11:25 PM
Anonymous said...: The experience of toher countries, like the UK and Australia, suggest that prices will flatten out and not drop sharply. The values might come back into alignment through a long period of little or no growth, while inflation gradually eats away at real values.; March 23, 2006 12:55 AM
Anonymous said...: The experience of toher countries, like the UK and Australia, suggest that prices will flatten out and not drop sharply. The values might come back into alignment through a long period of little or no growth, while inflation gradually eats away at real values.

Just look at the first comment to see how I explain this is a bust in itself...; March 23, 2006 2:55 AM
Anonymous said...: The dismal science tries to apply reason to understand inherently irrational phenomena of human behavior. Today's existing home sales numbers were a surprise to everyone and even the NAR spinmeisters called them an anomoly. Is there ANYONE here, besides the guy who posted a little higher from San Francisco, with anecodotal evidence of increased home sales in February their area? (BTW, I used to live in SF and think people there are motivated mainly by their infatuation with the city and self-identification as San Franciscans, whom they believe are the most sophistocated humans alive and envy of all who breathe).

Where I'm at, Westlake Village, CA, there is new inventory coming on the market fairly steadily now and very little of what was on the market last fall being sold, although some of it is being taken off the market (some with "for rent" signs out front now). There are at least five 0.9-1.2M$ homes that have been vacant for months within a mile of where I life. However, I did actually see a "sold" sign yesterday for the first time in a month or more. To me today's report smells a little fishy, but I can't believe they would try to pull such a huge whopper so I tend to believe there was a surge in sales.

Perhaps some folks who were on the fence were pushed off by the recent incentives and obviously rising rates and some of the speculators who cashed out of expensive places like California in the last year or so went to Texahoma and bought five houses with their profits from one???; March 23, 2006 6:46 PM
Anonymous said...: HOUSING BUBBLES GO INTO FORECLOSURE

Investor's Business Daily 3/23 reported February foreclosures up 18% compared to January and 68% YOY.

The imbeciles taught that real estate prices never go down.; March 23, 2006 7:07 PM
Anonymous said...: I live in central Ohio. My subdivision of about 100 homes has had zero homes up for sale since November. I think about 10 or 12 sold all of last year. Homes in this neighborhood are about 2700+ sq ft. $350k to $425k.

No sign of trouble here yet. That's my anecdotal report.; March 23, 2006 10:15 PM
Anonymous said...: KB cancellations

hxxp://www.investor.reuters.com/Article.aspx?docid=9244&target=companyoftheday&src=cms

A recent anouncement by KB HOMES of quarterly profits pointed to record sales and increase in backlog for the quarter, yet going forward there was a 16 percent decrease in orders driven by a 32% cancellation rate growing from last year's 25% rate.

This is another sign of potential weakness in the sector. Housing prices were more inflated in some areas than other areas.

There is a problem with more than a quarter of the mortages taken out in 2005 having no equity accumulated and those in trouble with making payments are no longer able to sell their houses at a profit to get out of paying off the delinquent loans that are on the rise. In 2004 a person unable to make payments sold the house for a nifty profit and moved in with the inlaws, or did a cash out refi and waited for more equity to accrue before taking out another loan.

Real Estate Mogul cashes out:

http://www.newsmax.com/archives/articles/2005/10/26/200100.shtml; March 24, 2006 4:41 AM
Amy said...: New home sales are finally slowing down. The speculators who were sucking up all the new homes are finally backing out. Inventory is growing exponentially.

http://tinyurl.com/h4mj6; March 24, 2006 3:59 PM
Smart Grid blogger said...: Personal bankruptcies soar to all-time high
Bankruptcies jumped 30% to nearly 2.1 million last year as debtors rushed to file petitions before new restrictions took effect.
March 24, 2006: 4:36 PM EST

NEW YORK (CNNMoney.com) - The number of Americans filing for bankruptcy jumped 30 percent last year to the highest on record as debtors rushed to file petitions before new restrictions took effect, according to the Administrative Office of the U.S. Courts.

Personal bankruptcies filed in the federal courts totaled 2,078,415 in 2005, up from 1,597,462 petitions filed in 2004, the office said in a statement on its Web site Friday.

It was the largest number of bankruptcy petitions ever filed in any 12-month period in the history of the federal courts, according to the office, which collects information for the federal judiciary.

Bankruptcy filings for the period between Oct. 1 and Dec. 31, 2005, also hit a record high for any quarter, the office said.

The increase was largely in response to the passage of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005, which went into effect on Oct. 17, 2005.

Under the new law, it became harder for individuals to file for bankruptcy under Chapter 7, which would let them clear their debts and get what's known as a "fresh start."

The law made it more likely that debtors file under Chapter 13, which requires them to repay at least some of their debts within five years.

In a Chapter 7 bankruptcy, your assets, minus those exempted by your state, are liquidated and given to creditors, and many of your remaining debts are cancelled. Since many Chapter 7 filers don't have assets that qualify for liquidation, credit-card companies and other creditors can get nothing.

In a Chapter 13 bankruptcy, you're put on a repayment plan of up to five years. Any debts not addressed by the repayment plan don't have to be paid.

Of the total number of bankruptcy filings, there were 1.7 million Chapter 7 filings, up 46 percent from 1.1 million in 2004. Chapter 13 filings fell 8 percent.

http://money.cnn.com/2006/03/24/pf/personal_bankruptcies/index.htm; March 25, 2006 8:38 AM
AnonyRuss said...: After ABC News had a piece on the housing bubble, it was only natural that the local ABC affiliate in Phoenix would put a local spin on the story. Even though I rarely watch local news, I saw the promo asking something like, "Is the housing bubble bursting in the Valley?" and was kind of pleased that at least the words housing bubble were being openly acknowledged in relation to metro Phoenix.

I still expected the worst, and was not disappointed. The most tiresome crap denying the economic realities all crammed into one 2 minute piece. They talk to 1 real estate "consultant" and concluded "it's not time to panic;" "New York and Miami are not the Valley"; "you can sleep easier, you're home probably won't drop in value;" and "now is the time to buy because there are 10 times the number of homes on the market."

The discuss the "meteoric rise" in prices over the last 2 years and 20% investor-purchases in 2005, as well as the extreme increase in inventory, but just willfully refuse to acknowledge the next logical step in this cycle. A step which is already underway. F.U. Steve Irvin.

http://tinyurl.com/ecron; March 26, 2006 4:16 AM
John Polomny said...: So we had the internut bubble back in 2001 and now the housing bubble. What will be the next bubble?; March 26, 2006 4:58 AM
Anonymous said...: Coming soon to a state near you:

Immigration March Draws 500,000 in L.A. By PETER PRENGAMAN

LOS ANGELES - Immigration rights advocates more than 500,000 strong marched in downtown Los Angeles, demanding that Congress abandon attempts to make illegal immigration a felony and to build more walls along the border.

ADVERTISEMENT

The massive demonstration, by far the biggest of several around the nation in recent days, came as President Bush prodded Republican congressional leaders to give some illegal immigrants a chance to work legally in the U.S. under certain conditions.

Wearing white shirts to symbolize peace, marchers chanted "Mexico!" "USA!" and "Si se puede," an old Mexican-American civil rights shout that means "Yes, we can." They waved the flags of the U.S., Mexico and other countries, and some wore them as capes.

Saturday's march was among the largest for any cause in recent U.S. history. Police came up with the crowd estimate using aerial photographs and other techniques, police Cmdr. Louis Gray Jr. said.

Other demonstrations drew 50,000 people in Denver and several thousand in Sacramento and Charlotte, N.C.

Many protesters said lawmakers were unfairly targeting immigrants who provide a major labor pool for America's economy.

"Enough is enough of the xenophobic movement," said Norman Martinez, 63, who immigrated from Honduras as a child and marched in Los Angeles. "They are picking on the weakest link in society, which has built this country."

The U.S. House of Representatives has passed legislation that would make it a felony to be in the U.S. illegally, impose new penalties on employers who hire illegal immigrants, require churches to check the legal status of people they help, and erect fences along one-third of the U.S.-Mexican border.

Elger Aloy, 26, of Riverside, a premed student, pushed a stroller with his 8-month-old son at Saturday's Los Angeles march and called the legislation "inhumane."

"Everybody deserves the right to a better life," he said.

The Senate is to begin debating the proposals on Tuesday.

President Bush on Saturday called for legislation that does not force America to choose between being a welcoming society and a lawful one.

"America is a nation of immigrants, and we're also a nation of laws," Bush said in his weekly radio address, discussing an issue that had driven a wedge into his own party.

Bush sides with business leaders who want legislation to let some of the estimated 12 million undocumented immigrants stay in the country and work for a set period of time. Others, including Senate Majority Leader Bill Frist, say national security concerns should drive immigration reform.

"They say we are criminals. We are not criminals," said Salvador Hernandez, 43, of Los Angeles, a resident alien who came to the United States illegally from El Salvador 14 years ago and worked as truck driver, painter and day laborer.

Francisco Flores, 27, a wood flooring installer from Santa Clarita who is a former illegal immigrant, said, "We want to work legally, so we can pay our taxes and support the country, our country."

In Denver, police said more than 50,000 people gathered downtown at Civic Center Park next to the Capitol to urge the state Senate to reject a resolution supporting a ballot issue that would deny many government services to illegal immigrants in Colorado.

Elsa Rodriguez, 30, a trained pilot who came to Colorado in 1999 from Mexico to look for work, said she just wants to be considered equal.

"We're like the ancestors who started this country, they came from other countries without documents, too," the Arvada resident. "They call us lazy and dirty, but we just want to come to work. If you see, we have families, too."

Between 5,000 and 7,000 people gathered Saturday in Charlotte, carrying signs with slogans such as "Am I Not a Human Being?" In Sacramento, more than 4,000 people protested immigration legislation at an annual march honoring the late farm labor leader Cesar Chavez.

About 200 people protested outside a town hall-style meeting held by Rep. James Sensenbrenner, R-Wis., a leading sponsor of the House bill. He defended the legislation, saying he's trying to stop people from exploiting illegal immigrants for cheap labor, drug trafficking and prostitution.

"Those who do that are 21st-century slave masters, just like the 19th-century slave masters that we fought a civil war to get rid of," Sensenbrenner said at the meeting. "Unless we do something about illegal immigration, we're consigning illegal immigrants to be a permanent underclass, and I don't think that's moral."

Since Thursday tens of thousands of people have joined in rallies in cities including Milwaukee, Los Angeles, Phoenix and Atlanta, and staged school walkouts, marches and work stoppages.

The demonstrations are expected to culminate April 10 in a "National Day of Action" organized by labor, immigration, civil rights and religious groups.; March 26, 2006 6:00 AM
Anonymous said...: Great thread, nice mix of wits in the posts.

San Jose, CA anecdote: don't listen to the media, I've been monitoring the condo complex where we rent( yes, I've done the numbers too.) via zillow and other more nefarious sources. The names have been changed to protect the guilty but it is a well established and one of the "best" complexes in one of the "best" neighborhoods. Asking prices are now down to mid 2005 numbers and everything is still sitting. We are talking about a ~$750k to ~$650k drop between December and March! The usual sleight of hand is being performed; on and off the market at a reduction to reset the clock, rumors of "sale pending" when suddenly a unit comes back on the market, talk of unspecified incentives, etc. The large variation in the numbers combined with no resultant transactions makes for a lot of unpredictability. Nobody really has a handle on the magnitude of this and there is a lot of denial and damage control going on right now. The cash in the bank may get devalued but we can still spend it unless they close the banks down.
To the earlier poster I have multiple college degrees; ceramics, art history, and educational psychology, but I try not to let them get in the way of my common sense.; March 26, 2006 10:20 AM
Anonymous said...: Call for submissions, I invite everyone to contribute:

I want this to be a one-stop shop for the hard facts relating to the bubble. If you have some interesting info, links, ideas, anything - please share them and they will form part of this page.

http://globalhouseprices.blogspot.com/2006/03/housing-bubble-facts-and-figures.html; March 28, 2006 2:11 AM
Anonymous said...: I love this country. My parents came here illegaly and dad worked construction. Financed my college, made serious cheddar $ during dotcom and I just cashed out on 2 properties in the bay area. I helped my illegal uncle buy his first home in 2002. He also just sold it and from the profit was able to buy my 2 aunts homes in AZ free and clear. Wow, only in Amaerica baby.; March 28, 2006 2:38 AM
Anonymous said...: Denial, it’s not just a river in Egypt

By Mike Whitney

Mar 27, 2006, 01:27

A lot of rubbish has been written lately about “religious faith.” The fact is, there’s a force that’s more powerful than faith; the power of denial. America is drowning in denial. Most people would rather keep their heads stuck in the sand than face the disaster right before their eyes.

Congress just voted to spend another $92 billion for a war that no one supports and, yet, there's not a whimper of protest from the American people. They’ve raised the national debt to a whopping $9 trillion, every penny of which will be paid off by our children and their children’s children. Still, not a peep from the public.

Do the American people care? No way; a few soothing bromides from our lobotomized commander in chief and they’re lulled back to sleep.

It’s called “denial.” D-E-N-I-A-L.

Maybe you’ve already figured out that the Bush administration is fudging the numbers to make them look good? You’re right. Walter J. Williams (Dartmouth, BA in Economics and an MBA; economic consultant for Fortune 500 companies) has compiled the data and found that “real unemployment is running at 12 percent, real CPI (Consumer Price Index) is running at 8 percent, and real GDP (Gross Domestic Product) is in contraction. The country is already in a recession and headed for much worse.

No one believes this can go on forever. The administration has racked up another $3 trillion in debt in just five years, most of it going to Bush’s well-heeled friends via the “tax cuts.” At the same time, they’ve made the tax cuts “permanent,” knowing it will increase deficits by $400 to 500 billion per year. Deficit spending has become a permanent function of government.

The only thing that keeps interest rates from skyrocketing is the massive and “unsustainable” trade deficit.

When Reagan initiated his tax cuts the budget deficits soared to $200 billion the first year. That pushed interest rates up to 9.5 percent, killing the real estate market and causing the deepest recession since the Great Depression. Greenspan bailed him out by raising Social Security payments and then diverting that new revenue into the general fund. (SS has basically been a flat tax ever since) Our Social Security dollars now pay for roads, social programs, and endless war.

Last year the trade deficit climbed to a new high of $725 billion and is headed for $800 billion this year. Foreign countries now hold so much of our debt that Dubai can afford to buy our ports and China can snatch up Fannie Mae. China alone has an $800 billion account surplus; 75 percent of which is US debt and securities.

The Bush team likes this arrangement because it fits with their belief that national sovereignty should be transferred to the multinational corporations. As for the rest of us, who think that our ports, public lands, water, and resources should be the sovereign property of the people of the US, well, we’re out of luck, because $3 trillion worth of those assets now belong to China, Japan, and Saudi Arabia.

The other reason the American people haven’t felt the pinch of excessive government spending yet, is because of the unique relationship between the greenback and the sale of oil on the global market. Countries are forced to keep stockpiles of US currency in their central banks because oil is only denominated in dollars. This creates a de facto monopoly which ensures that dollars will continue to circulate on a massive scale whether the face value of the greenback goes up or down. (It is estimated that approximately $2.3 trillion are constantly circulated in oil transactions) It is the perfect confidence-game run by the hucksters at the Federal Reserve.

Most countries would prefer to purchase oil in their own currency (or in the more stable euro) rather than using the greenback which is buckling beneath $9 trillion of debt. Regrettably, any move to the euro is tantamount to a declaration of war against the United States and bound to invite “shock and awe-type” reprisals.

Washington will defend the “greenback-hegemony” with every weapon in its arsenal. That’s why Iran is in the crosshairs right now. Their threat to open an oil exchange (that would trade in euros) is a direct challenge to the dollar’s dominance as the world’s reserve currency. The Bush administration will never let that happen. An Iran Bourse would allow the central banks around the world to ship boatloads of unwanted dollars back to America and put the greenback into a death-spiral.

America’s economic future requires that we continue to control this “global extortion-racket” while producing humongous trade deficits which are mortgaging our country to foreign lenders.

There’s only one problem with this scheme; the American consumer is broke. Wages have been flat since the 1970s (in fact they have gone down by 2.3 percent since Bush took office) personal savings are at 0 percent, and housing prices (which generated $600 billion in additional spending last year) have flattened out. The American consumer represents 70 percent of GDP and has also been the major engine for growth in the global economy. Unfortunately, he’s “tapped out,” overextended and penniless.

That explains why so many corporations are packing up and headed for more promising markets in Southeast Asia. Hell, the Bush administration has even created tax incentives for them to leave.

The corporate exodus from America is not simply about high paying, high tech jobs leaving the country. It is also about the massive flight of capital and the destruction of the manufacturing sector. Right now, the only thing that keeps the US on its precipice is the teetering housing market which is headed for the dumpster. When the bubble bursts, we’ll see why Bush devoted so much time to building his police state apparatus.

Under Bush, we’ve seen a shocking acceleration of globalization. The major corporations have already loaded the boats, shifted the jobs, and drained every farthing from the public till. The Federal Reserve has cobbled together a dollar-system that allows it to print worthless script in exchange for the wealth and resources of foreign nations. It’s a plan that addresses the needs of America’s plutocrats and bigwigs, but leaves 99 percent of the people to fend for themselves while facing increasing scarcity and hardship.

This is why we fight; to defend this system of corporate larceny and extortion. This is the “noble cause” for which Casey Sheehan and thousands of others have given their lives.

Isn’t it time we pulled our heads out of the sand?; March 28, 2006 2:53 AM
Anonymous said...: Some people thought tulip prices might always rise.

http://www.ricedelman.com/planning/investing/tulipbulbs.asp

It is human nature to pay too much for a thing at the wrong time after hearing that other people were made rich buying the thing.; March 28, 2006 2:40 PM
Anonymous said...: http://www.ricedelman.com/planning/investing/tulipbulbs.asp

The full link for the above post.; March 28, 2006 2:42 PM
Anonymous said...: Anonymous said...

"Denial, it’s not just a river in Egypt"

"By Mike Whitney"

"Mar 27, 2006, 01:27"

"A lot of rubbish has been written lately about 'religious faith.' The fact is, there’s a force that’s more powerful than faith; the power of denial. America is drowning in denial. Most people would rather keep their heads stuck in the sand than face the disaster right before their eyes.

"Congress just voted to spend another $92 billion for a war that no one supports and, yet, there's not a whimper of protest from the American people. They’ve raised the national debt to a whopping $9 trillion, every penny of which will be paid off by our children and their children’s children. Still, not a peep from the public.

"Do the American people care? No way; a few soothing bromides from our lobotomized commander in chief and they’re lulled back to sleep.

"It’s called “denial.” D-E-N-I-A-L.

"Maybe you’ve already figured out that the Bush administration is fudging the numbers to make them look good? You’re right. Walter J. Williams (Dartmouth, BA in Economics and an MBA; economic consultant for Fortune 500 companies) has compiled the data and found that “real unemployment is running at 12 percent, real CPI (Consumer Price Index) is running at 8 percent, and real GDP (Gross Domestic Product) is in contraction. The country is already in a recession and headed for much worse.

"No one believes this can go on forever. The administration has racked up another $3 trillion in debt in just five years, most of it going to Bush’s well-heeled friends via the “tax cuts.” At the same time, they’ve made the tax cuts “permanent,” knowing it will increase deficits by $400 to 500 billion per year. Deficit spending has become a permanent function of government.

"The only thing that keeps interest rates from skyrocketing is the massive and “unsustainable” trade deficit.

"When Reagan initiated his tax cuts the budget deficits soared to $200 billion the first year. That pushed interest rates up to 9.5 percent, killing the real estate market and causing the deepest recession since the Great Depression. Greenspan bailed him out by raising Social Security payments and then diverting that new revenue into the general fund. (SS has basically been a flat tax ever since) Our Social Security dollars now pay for roads, social programs, and endless war.

"Last year the trade deficit climbed to a new high of $725 billion and is headed for $800 billion this year. Foreign countries now hold so much of our debt that Dubai can afford to buy our ports and China can snatch up Fannie Mae. China alone has an $800 billion account surplus; 75 percent of which is US debt and securities.

"The Bush team likes this arrangement because it fits with their belief that national sovereignty should be transferred to the multinational corporations. As for the rest of us, who think that our ports, public lands, water, and resources should be the sovereign property of the people of the US, well, we’re out of luck, because $3 trillion worth of those assets now belong to China, Japan, and Saudi Arabia.

"The other reason the American people haven’t felt the pinch of excessive government spending yet, is because of the unique relationship between the greenback and the sale of oil on the global market. Countries are forced to keep stockpiles of US currency in their central banks because oil is only denominated in dollars. This creates a de facto monopoly which ensures that dollars will continue to circulate on a massive scale whether the face value of the greenback goes up or down. (It is estimated that approximately $2.3 trillion are constantly circulated in oil transactions) It is the perfect confidence-game run by the hucksters at the Federal Reserve.

"Most countries would prefer to purchase oil in their own currency (or in the more stable euro) rather than using the greenback which is buckling beneath $9 trillion of debt. Regrettably, any move to the euro is tantamount to a declaration of war against the United States and bound to invite “shock and awe-type” reprisals.

"Washington will defend the “greenback-hegemony” with every weapon in its arsenal. That’s why Iran is in the crosshairs right now. Their threat to open an oil exchange (that would trade in euros) is a direct challenge to the dollar’s dominance as the world’s reserve currency. The Bush administration will never let that happen. An Iran Bourse would allow the central banks around the world to ship boatloads of unwanted dollars back to America and put the greenback into a death-spiral.

"America’s economic future requires that we continue to control this 'global extortion-racket' while producing humongous trade deficits which are mortgaging our country to foreign lenders.

"There’s only one problem with this scheme; the American consumer is broke. Wages have been flat since the 1970s (in fact they have gone down by 2.3 percent since Bush took office) personal savings are at 0 percent, and housing prices (which generated $600 billion in additional spending last year) have flattened out. The American consumer represents 70 percent of GDP and has also been the major engine for growth in the global economy. Unfortunately, he’s “tapped out,” overextended and penniless.

"That explains why so many corporations are packing up and headed for more promising markets in Southeast Asia. Hell, the Bush administration has even created tax incentives for them to leave.

"The corporate exodus from America is not simply about high paying, high tech jobs leaving the country. It is also about the massive flight of capital and the destruction of the manufacturing sector. Right now, the only thing that keeps the US on its precipice is the teetering housing market which is headed for the dumpster. When the bubble bursts, we’ll see why Bush devoted so much time to building his police state apparatus.

"Under Bush, we’ve seen a shocking acceleration of globalization. The major corporations have already loaded the boats, shifted the jobs, and drained every farthing from the public till. The Federal Reserve has cobbled together a dollar-system that allows it to print worthless script in exchange for the wealth and resources of foreign nations. It’s a plan that addresses the needs of America’s plutocrats and bigwigs, but leaves 99 percent of the people to fend for themselves while facing increasing scarcity and hardship.

"This is why we fight; to defend this system of corporate larceny and extortion. This is the “noble cause” for which Casey Sheehan and thousands of others have given their lives.

"Isn’t it time we pulled our heads out of the sand?"

Anonymous II said:

Dear Mr. Whitney:

Maybe you should pull your head out of something else first. "The Bush team?" "Shock and awe-type reprisals?" What asylum did you escape?

Reading a book doesn't make you an economist or an expert in international politics, and your comments concerning Bush certainly don't represent facts. They represent the imaginings of a paranoid schizophrenic.

Were you by any chance marching in Seatle a year or two ago, trowing bricks through store front windows, and screaming about the World Bank?

Cooking the books has been going on in Washington for years. Clinton, who gave us NAFTA, found new ways of defining inflation. Did you complain then? As for Reagan, his tax cuts boosted the amount of tax revenues through the roof, and were simply a repeat of those instituted by John Kennedy. They didn't destroy our economy; they saved it. Carter, the dreariest and most inept president in my lifetime, had pretty much run it into the gutter.

The dot-com bubble was Bill Clinton's crowning achievement, at least according to him and Al Gore. Did you complain about that? When Carter had us lining up for gasoline did you complain?

The government of the U.S. isn't a monarchy. Those monsters you rail against were elected by Americans and can be as easily turned out of office. We give them their power, so if anyone is to blame, we are.

Congress votes to give more money to the war because Congress got us into war in the first place, and cannot now suddenly cut off funds. Talk about a disaster. Do you remember what happened when we pulled out of Vietnam and Cambodia? Do you want that to happen again?

Iran is in the crosshairs right now because Iran is a vicious fundamentalist Muslim country trying to acquire nuclear weapons which it most certainly will use against Israel. It is also a major player in the Iraq insurgency. Iran has wanted to control Iraq for many years. The current president of Iran is one of the kidnappers who held Americans hostage during the Carter administration. Should we ignore him and his bomb project?

The movie "Chicken Little" is something you might want to check out. So is a prescription for Prozac.

Don't look under the bed, because you might find a Leprechaun.

Hang crosses on your windows to keep vampires at bay.

Bury all your money in the back yard.

Keep changing your IP Address.

Don't even THINK about flying saucers, because extraterrestrials CAN read your mind.

Kleenex boxes make excellent footwear.

Yes, people ARE whispering behind your back.

Anon II; March 28, 2006 3:32 PM
Anonymous said...: Anonymous II said:

"Maybe you should pull your head out of something else first. "The Bush team?" "Shock and awe-type reprisals?" What asylum did you escape?"

How much did the Party pay you for this piece of lies and insults?

Bush is just a puppet. Disagree with that and everyone knows that you're a paid writer.

"your comments concerning Bush certainly don't represent facts."

So you say, but can't prove otherwise. Typical denial of inconvinient truths.

I'd say everything in the original article has been seen already and confirmed by many sources. Google will help.

"Cooking the books has been going on in Washington for years. Clinton, who gave us NAFTA, found new ways of defining inflation. Did you complain then?

So, when there's a small fault 10 years ago, we may now do whatever we want and say: they started it?

Excuses.

"As for Reagan, his tax cuts boosted the amount of tax revenues through the roof"

And spending even higher. His star wars idiocy skyrocketed the speding
_and_ foreign debt, but you don't care about those. Just pick a number, any number, which favors your ideology.

"The dot-com bubble was Bill Clinton's crowning achievement, at least according to him and Al Gore."

You mean Greenspan didn't rule the economy? You must be living in your own world, where facts don't count.

" Did you complain about that? When Carter had us lining up for gasoline did you complain?"

US Oil company cartel intentionally choking the production to lever the price up wasn't the reason?

One thing is sure: _every oil company_ made record profits in that year.

You really like to rewrite history, don't you? What was your country of origin again? Soviet Union, perhaps?

"The government of the U.S. isn't a monarchy. Those monsters you rail against were elected by Americans and can be as easily turned out of office. We give them their power, so if anyone is to blame, we are."

Delusion. When Diebold promised to Bush that he'll be the president, the deal was done and Bush got even the second term in spite of having lowest support in decades. There's an old russian saying: "It doesn't matter how the people vote, it does matter who counts the votes".

Diebold counted the votes.

The citizens have exactly zero power now and live in a dictatorship. Some of them haven't just realized it yet. They will, very soon.

"Congress votes to give more money to the war because Congress got us into war in the first place, and cannot now suddenly cut off funds."

Bush and his goons knowingly lying about weapons of mass destruction wasn't the real reason?

"They" must pay you well. Spin doctoring is a hard profession.

Bush and his buddies in weapon & construction industry are milking tax payer's money through congress to their own pockets. Not surprisingly the president has put a lot of pressure to congress to obey his(his masters) will. Bush obviously hasn't any will of his own.

" Talk about a disaster. Do you remember what happened when we pulled out of Vietnam and Cambodia? Do you want that to happen again?"

In Vietnam happened nothing, vietnamese won. Too bad, eh?

What the f*ck were US doing in Cambodia in first place? Or Vietnam.
There wasn't even oil there.

"Iran is in the crosshairs right now because Iran is a vicious fundamentalist Muslim country trying to acquire nuclear weapons which it most certainly will use against Israel."

Which launches immediately one or more back. And that is US concern why? Israel has more weapons and firepower than all neighbouring countries put together. And a capable army to use them.

You happen to conviniently forget that Pakistan is a fundamentalist Muslim country who has nuclear weapons already. And planned to use it against India, too. But of course, there's no oil in Pakistan. Nor oil bourse.

"Vicious" is the term reserved for US, for invading Afghanistan and Iraq. For nothing but oil, of course.

" It is also a major player in the Iraq insurgency."

US invasion and controlling of Iraq oil has nothing to do with it?

Where are the WMD's in Iraq? Bush, Cheney and Rumsfeldt promised those.
They lied and knew they were lying.
But you believed, I suppose.

They _found_ euro-based oil bourse, though, and immediately ended it. But of course, that wasn't the real reason to invasion. 900 trillion foreign debt is nothing and some weapons in a poor country at the other side of the globe is.

How much bullsh*t can one believe?

" Iran has wanted to control Iraq for many years. "

So you say. The US _controls it now_. Iran/Iraq-war ended as unfinished, why didn't Iran take Iraq then if they wanted it so?

You have lost so many big pieces of your stories that they don't seem very coherent.

"The current president of Iran is one of the kidnappers who held Americans hostage during the Carter administration. "

So you say. How about some facts for a change?

"Should we ignore him and his bomb project?"

US _does_ ignore North Korea and their bomb project. But of course, there is no oil nor euro-based oil bourse in North Korea.

It's stupid to see Machiavellis and pacts where there aren't any, but its more stupid not to see them when there are.

Which one you want to be?; March 29, 2006 3:31 AM
Anonymous said...: Anonymous II said:

"Maybe you should pull your head out of something else first. "The Bush team?" "Shock and awe-type reprisals?" What asylum did you escape?"

How much did the Party pay you for this piece of lies and insults?

WHAT PARTY? I'M A REGISTERED INDEPENDENT. I VOTED FOR RALPH NADER.

Bush is just a puppet. Disagree with that and everyone knows that you're a paid writer.

I THINK HE'S A PUPPET, TOO. WHAT DO YOU HAVE TO SAY ABOUT THAT?

"your comments concerning Bush certainly don't represent facts."

So you say, but can't prove otherwise. Typical denial of inconvinient truths.

INCONVENIENT TRUTHS? HOW ABOUT LIBEL? THE ORIGINAL ARTICLE WAS POSTED AT HTTP://ONLINEJOURNAL.COM, NOT FAMOUS FOR FACT-CHECKING, OR SOMETHING CALLED OBJECTIVITY.

I'd say everything in the original article has been seen already and confirmed by many sources. Google will help.

SAYING IT DOESN'T MAKE IT SO. THE INTERNET IS A HOTBED OF CONSPIRACY LUNACY.

"Cooking the books has been going on in Washington for years. Clinton, who gave us NAFTA, found new ways of defining inflation. Did you complain then?

So, when there's a small fault 10 years ago, we may now do whatever we want and say: they started it?

Excuses.

SMALL FAULT? HOW ABOUT DISASTER? THE POINT BEING THAT LEFT-WING FANATICS FOLLOW A DOUBLE-STANDARD. WHAT THE LEFT DOES IS FINE, NO MATTER HOW STUPID, WHAT THE RIGHT DOES IS EVIL, NO MATTER HOW INTELLIGENT.

"As for Reagan, his tax cuts boosted the amount of tax revenues through the roof"

And spending even higher. His star wars idiocy skyrocketed the speding
_and_ foreign debt, but you don't care about those. Just pick a number, any number, which favors your ideology.

THE DEMOCRATICALLY CONTROLLED CONGRESS SPENT THE MONEY. WHO DO YOU THINK CONTROLLED ALL THE REVENUES? WHO DO YOU THINK VOTED FOR THE STAR WARS TECHNOLOGY THAT DID NOT BANKRUPT AMERICA, BY THE WAY?

"The dot-com bubble was Bill Clinton's crowning achievement, at least according to him and Al Gore."

You mean Greenspan didn't rule the economy? You must be living in your own world, where facts don't count.

FACTS DO COUNT: (1) THE FACT THAT THE DEMOCRATIC PARTY CLAIMS BILL CLINTON SAVED THE ECONOMY IN THE '90S WITH MONEY GENERATED FROM DOT-COM BUBBLE TAXES; (2) THE FACT THAT BILL CLINTON TOOK CREDIT FOR ALL THE TAXES COMING IN FROM THE DOT-COM BUBBLE, AND (3) THE FACT THAT AL GORE CLAIMS TO HAVE INVENTED THE INTERNET.

"Did you complain about that? When Carter had us lining up for gasoline did you complain?"

US Oil company cartel intentionally choking the production to lever the price up wasn't the reason?

One thing is sure: _every oil company_ made record profits in that year.

I NEVER SAID THEY DIDN'T. OIL COMPANIES SUCK.

You really like to rewrite history, don't you? What was your country of origin again? Soviet Union, perhaps?

NO, I DON'T REWRITE HISTORY. I REMEMBER IT.

"The government of the U.S. isn't a monarchy. Those monsters you rail against were elected by Americans and can be as easily turned out of office. We give them their power, so if anyone is to blame, we are."

Delusion. When Diebold promised to Bush that he'll be the president, the deal was done and Bush got even the second term in spite of having lowest support in decades. There's an old russian saying: "It doesn't matter how the people vote, it does matter who counts the votes".

THE VOTES WERE COUNTED AND RECOUNTED AD INFINITUM. GORE ONLY WANTED VOTES IN DEMOCRATIC COUNTIES RECOUNTED, NOT THOSE IN REPUBLICAN MAJORITY COUNTIES. HOW COME? DO YOU THINK ALL THE NEWSPAPERS (MOST DEMOCRAT) IN FLORIDA LIED WHEN THEY SPENT A YEAR RECOUNTING THE VOTES AND DECLARED BUSH STILL THE WINNER?

LET'S NOT FORGET THE MILLIONS OF ILLEGAL VOTES FROM ILLEGAL MEXICAN AND OTHER (NON-CITIZEN) IMMIGRANTS THE DEMOCRATS GET EVERY FOUR YEARS, OR THE FACT THAT LYNDON JOHNSON WAS ELECTED TO THE SENATE BY DEAD PEOPLE, OR THE FACT THAT JOHN KENNEDY WAS ELECTED TO THE WHITE HOUSE BY DEAD PEOPLE. DEMOCRATS HAVE BEEN RIGGING ELECTIONS FOREVER, SO THEY ARE IN NO POSITION TO COMPLAIN. WHY DO YOU THINK THEY ENCOURAGE ILLEGAL IMMIGRATION? BECAUSE ILLEGALS ALMOST ALWAYS VOTE (ILLEGALLY) DEMOCRAT (FREE STUFF, YOU KNOW).

Diebold counted the votes.

UH, HUH. AND ONLY A HANDFUL OF CONSPIRACY BUFFS KNOW THE TRUTH? YOU MEAN NOBODY IN THE MAINSTREAM MEDIA CAN USE GOOGLE?

The citizens have exactly zero power now and live in a dictatorship. Some of them haven't just realized it yet. They will, very soon.

THEY CAN VOTE ANY WAY THEY WANT. WHO IS THE DICTATOR, AND WHAT IS HE DICTATING? YOU DON'T HAVE A CLUE TO WHAT OPPRESSION IS.

"Congress votes to give more money to the war because Congress got us into war in the first place, and cannot now suddenly cut off funds."

Bush and his goons knowingly lying about weapons of mass destruction wasn't the real reason?

KNOWINGLY? I THOUGHT BUSH WAS SUPPOSED TO BE RETARDED, BUT NOW HE'S A MASTERMIND???

"They" must pay you well. Spin doctoring is a hard profession.

WHO ARE "THEY?" THE LIZARD ALIEN MASTERS I SERVE AS A 33RD DEGREE MASON AND MEMBER OF THE TRILATERAL COMMISSION WHEN I'M NOT RUNNING THE WORLD FROM MY ILLUMINATI-OWNED CONDO?

Bush and his buddies in weapon & construction industry are milking tax payer's money through congress to their own pockets. Not surprisingly the president has put a lot of pressure to congress to obey his(his masters) will. Bush obviously hasn't any will of his own.

I THOUGHT HE CLAIMED JESUS WAS HIS MASTER.

"Talk about a disaster. Do you remember what happened when we pulled out of Vietnam and Cambodia? Do you want that to happen again?"

In Vietnam happened nothing, vietnamese won. Too bad, eh?

MORE THAN A MILLION CAMBODIANS (INCLUDING WOMEN AND CHILDREN) WERE SLAUGHTERED BY THE COMMUNISTS WHEN WE LEFT. TENS OF THOUSANDS OF SOUTH VIETNAMESE CIVILIANS (INCLUDING WOMEN AND CHILDREN) WERE SLAUGHTERED BY THE NORTH VIETNAMESE COMMUNISTS WHEN WE LEFT. PEOPLE PANICKED TRYING TO GET OUT ON THE LAST AMERICAN PLANES AND HELICOPTERS BECAUSE THEY DIDN'T WANT TO BE LEFT BEHIND AND SLAUGHTERED. DID YOU EVER OPEN A HISTORY BOOK? DID YOU EVER READ THE BOOK OR SEE THE MOVIE "THE KILLING FIELDS?" DID YOU EVER DO ANYTHING OTHER THAN SIT ON THE INTERNET READING THE FANTASIES OF MASTURBATING DORKS WHO'VE NEVER BEEN ON A DATE?

What the f*ck were US doing in Cambodia in first place? Or Vietnam.
There wasn't even oil there.

ASK THE DEMOCRATS JOHN KENNEDY AND LYNDON JOHNSON. NIXON, A REPUBLICAN, GOT US OUT.

"Iran is in the crosshairs right now because Iran is a vicious fundamentalist Muslim country trying to acquire nuclear weapons which it most certainly will use against Israel."

Which launches immediately one or more back. And that is US concern why? Israel has more weapons and firepower than all neighbouring countries put together. And a capable army to use them.

HOW DO YOU LAUNCH A BOMB BACK WHEN YOU NO LONGER EXIST? FANATIC MUSLIMS AREN'T AFRAID OF DYING, EVEN FROM RADIATION POISONING, BUT SANE PEOPLE ARE.

You happen to conveniently forget that Pakistan is a fundamentalist Muslim country who has nuclear weapons already. And planned to use it against India, too. But of course, there's no oil in Pakistan. Nor oil bourse.

INDIA HAS WAY MORE NUKES, SO PAKISTAN HAS NO ADVANTAGE. RUSSIA HAS TEN TIMES MORE OIL THAN IRAQ AND IRAN COMBINED. HOW COME WE HAVEN'T INVADED?

"Vicious" is the term reserved for US, for invading Afghanistan and Iraq. For nothing but oil, of course.

TRY TELLING THIS TO THE MILLIONS OF WOMEN IN AFGHANISTAN WHO CAN GO TO SCHOOL AND WORK AGAIN, AND WHO NO LONGER HAVE TO FEAR BEING STONED TO DEATH FOR LEAVING THEIR HOMES WITHOUT MALE ESCORTS. THERE IS NO OIL PIPELINE IN AFGHANISTAN AS CLAIMED BY MICHAEL MOORE. HE MADE IT UP, AND USED FOOTAGE OF A PIPELINE IN ANOTHER COUNTRY. AMERICA HAS NOTHING TO GAIN FINANCIALLY FROM AFGHANISTAN. IT'S THE MOST MISERABLE PLACE ON EARTH.

"It [IRAN] is also a major player in the Iraq insurgency."

US invasion and controlling of Iraq oil has nothing to do with it?

HAVE YOU FORGOTTEN THE IRAN CRISIS OF THE 1970'S? OH, I FORGOT, YOU'VE NEVER OPENED A HISTORY BOOK. BUT, THEN, WHO NEEDS HISTORY BOOKS WHEN WE HAVE CONSPIRACY WEB SITES, WHICH ARE SO MUCH MORE TRUSTWORTHY?

Where are the WMD's in Iraq? Bush, Cheney and Rumsfeldt promised those.
They lied and knew they were lying.
But you believed, I suppose.

DON'T YOU THINK THEY WOULD KNOW THEY'D BE CAUGHT IN THE LIE, IF, IN FACT, THEY WERE LYING? BILL CLINTON ALSO BELIEVED IN THE WMD'S (BEFORE BUSH WAS ELECTED) AND WARNED AGAINST THEM. TONY BLAIR BELIEVED IN THEM. THE GOVERNMENTS OF ITALY, SPAIN, FRANCE, GERMANY, AND RUSSIA BELIEVED IN THEM. HILLARY CLINTON BELIEVED IN THEM. EVERYONE BELIEVED IN THEM EXCEPT, IT SEEMS, FOR YOU. HAVING A DIRECT LINE TO SADDAM HUSSEIN'S INNER MIND MUST HAVE COME IN VERY HANDY. SO WHY DIDN'T YOU SHARE YOUR SPECIAL KNOWLEDGE, AND SAVE US AND THE U.N. ALL THE TROUBLE?

They _found_ euro-based oil bourse, though, and immediately ended it. But of course, that wasn't the real reason to invasion. 900 trillion foreign debt is nothing and some weapons in a poor country at the other side of the globe is.

How much bullsh*t can one believe?

YES, HOW MUCH BULLSHIT CAN YOU BELIEVE?

" Iran has wanted to control Iraq for many years. "

So you say. The US _controls it now_. Iran/Iraq-war ended as unfinished, why didn't Iran take Iraq then if they wanted it so?

BECAUSE OF SADDAM HUSSEIN, WHO DID HAVE POISON GAS, AND FREELY USED IT ON HIS ENEMIES.

You have lost so many big pieces of your stories that they don't seem very coherent.

"The current president of Iran is one of the kidnappers who held Americans hostage during the Carter administration. "

So you say. How about some facts for a change?

AGAIN, THE 1970S HOSTAGE CRISIS IS A FACT.

HERE. START READING ABOUT THE WONDERFUL PRESIDENT OF IRAN.

http://www.cnn.com/2005/
WORLD/meast/06/30/iran.president/

"Should we ignore him and his bomb project?"

US _does_ ignore North Korea and their bomb project. But of course, there is no oil nor euro-based oil bourse in North Korea.

IT DOES NOT. THE U.S. HAS BEEN PRESSURING NORTH KOREA FOR YEARS AND ORGANIZING WORLD OPPOSITION TO ITS NUCLEAR PROGRAM. YOU REALLY ARE LIVING IN A BUBBLE, BUT IT HAS NOTHING TO DO WITH REAL ESTATE.

It's stupid to see Machiavellis and pacts where there aren't any, but its more stupid not to see them when there are.

Which one you want to be?

DO YOU HAVE MANY OF THESE PACTS? ARE THEY SIGNED IN BLOOD? ARE THERE CLOVEN HOOF PRINTS AND LITTLE DEVILS AROUND THE MARGINS?

I WONDER IF ANY HAVE MY NAME ON THEM, SINCE I'M PART OF THE ONE-WORLD CONSPIRACY ORCHESTRATED BY LUCIFER AND THE U.S. GOVERNMENT FROM A UFO BASE IN NORTHWEST NEW MEXICO. OOPS! I'VE BLURTED MY BIG SECRET. PLEASE KEEP IT UNDER YOUR HAT, SINCE THERE IS NOTHING THERE TO GET IN THE WAY.; March 29, 2006 6:16 AM
Anonymous said...: From Microsoft's Encarta Encyclopedia (already installed on most American computers)

"Khmer Rouge

"Khmer Rouge, Communist movement that ruled Cambodia from 1975 to 1979. The regime, which was headed by Cambodian guerrilla commander Pol Pot, came to power after years of guerrilla warfare. While in power the Khmer Rouge murdered, worked to death, or killed by starvation close to 1.7 million Cambodians, or more than one-fifth of the country’s population.

"Cambodia was a French protectorate under the nominal control of a king from 1863 until 1953, when France granted Cambodia its independence. At the same time, Communist forces known as the Viet Minh were engaged in an independence struggle against France in neighboring Vietnam; the Viet Minh, which had recruited an army of Cambodian allies in common cause against French colonialism, defeated France in 1954. Although Cambodian guerrilla forces and the Viet Minh controlled much of Cambodia by 1954, the Geneva Conference, which marked the end of the war in 1954, left Cambodia in the hands of its monarch, Norodom Sihanouk.

"As political factionalism grew in Cambodia, Sihanouk began to crack down on his opponents, including Communists. The Communists fell into two groups: Vietnamese-trained veterans of the independence struggle, including former Buddhist monks and their peasant followers; and younger urban radicals such as Pol Pot. While the former were major targets of Sihanouk’s repression, Pol Pot and his followers were left largely untouched because of their privileged backgrounds and French education. This group gradually assumed leadership of the Communist movement. After Pol Pot became secretary general of the Workers’ Party of Kâmpŭchéa (later renamed the Communist Party of Kâmpŭchéa, or CPK) in 1963, the party made a concerted effort to seize control of Cambodia.

"By 1966, the American escalation of the war in neighboring Vietnam began to have a destabilizing effect on Cambodia. North Vietnamese and National Liberation Front (NLF) forces, made up of Vietnamese Communist guerrillas, established logistical bases and supply routes in Cambodia. While Sihanouk attempted to keep his country out of the Vietnam War, his political repression increasingly drove veterans of Cambodia’s anti-French struggle back into dissidence, where Pol Pot’s CPK drew them into its plans for rebellion. The CPK launched a revolt against Sihanouk in 1967. Sihanouk termed the rebels Khmer Rouge (French for “Red Khmers”), so-called after Cambodia’s predominant ethnic group, the Khmers. Communist insurgency campaigns continued until the Khmer Rouge took control of the government in 1975.

"In 1969, embroiled in Vietnam, the United States began a secret B-52 bombardment of Cambodia in an effort to knock out strongholds of the North Vietnamese and NLF. A year later Sihanouk was overthrown by U.S.-backed General Lon Nol. The Vietnam War spilled across the border, and the conflict tore Cambodia apart for five years. During the secret bombing American planes dropped 490,000 metric tons (540,000 tons) of bombs, killing about 100,000 Khmer peasants by August 1973, when the bombardment ended (see Secret Bombing of Cambodia). Meanwhile, the Khmer Rouge, aided by Sihanouk and the North Vietnamese, who did not want a pro-U.S. Cambodian government, battled Lon Nol’s government for control of Cambodia.

"On April 17, 1975, the Khmer Rouge armies defeated the Lon Nol regime and took the capital, Phnom Penh, immediately dispersing almost all of its more than 2 million inhabitants to a life of hard agricultural labor in the countryside. Other cities and towns were also evacuated. The Khmer Rouge renamed the country Democratic Kâmpŭchéa (DK), and for the next four years the regime, headed by Pol Pot as prime minister and other members of the Standing Committee of the CPK Central Committee, terrorized the population. Almost 1.7 million Cambodians were killed, including members of minority and religious groups, people suspected of disagreeing with the party, intellectuals, merchants, and bureaucrats. Millions of other Cambodians were forcibly relocated, deprived of food, tortured, or sent into forced labor. Of about 425,000 Chinese Cambodians, only about half survived the Khmer Rouge regime. While most of about 450,000 Vietnamese Cambodians had been expelled by the Lon Nol regime, more were driven out by the Khmer Rouge; the rest were tracked down and murdered. Of about 250,000 Muslim Chams (an ethnic group inhabiting the rural areas of Cambodia) in 1975, 90,000 were massacred, and the survivors were dispersed. By 1979, 15 percent of the rural Khmer population and 25 percent of the urban Khmer population had perished. The most horrific slaughter took place during the second half of 1978 in a purge of the Eastern Zone on the Vietnam border, where resistance to the Khmer Rouge was strong. At least 250,000 people were killed in the worst single massacre of the Khmer Rouge period. Religion in Cambodia was also affected by the Khmer Rouge regime. Buddhism was completely suppressed from 1975 to 1979; many monks were defrocked and sent into forced labor, while others were killed. The Khmer Rouge also attacked the neighboring countries of Vietnam, Thailand, and Laos in an attempt to reclaim territories lost by Cambodia many centuries before.

"When a faction of Khmer Communists rebelled in the Eastern Zone in May 1978, Pol Pot’s armies were unable to quickly crush them. Fighting continued until January 1979, when a Vietnamese invasion swept the Khmer Rouge from power. Vietnam installed surviving Khmer defectors at the head of a new government. The Khmer Rouge army retreated to the Thai-Cambodian border, and with the help of countries such as Thailand and China that opposed Vietnamese domination of Cambodia, waged a long guerrilla war to retake power. Throughout the 1980s the Khmer Rouge’s Democratic Kâmpŭchéa retained international recognition as Cambodia’s government, and occupied Cambodia’s seat in the General Assembly of the United Nations (UN). However, the Khmer Rouge became increasingly marginal in Cambodian politics during the 1990s. In 1989 Vietnam withdrew from Cambodia, and in 1991 Cambodia’s warring factions signed a peace treaty, which the Khmer Rouge later repudiated. After Cambodian elections were held in 1993, no foreign countries continued to recognize DK as Cambodia’s legal government. The DK lost its UN seat as well as most of its sources of international aid. In 1996 Ieng Sary, one of the Khmer Rouge's top leaders, left the group with a few thousand soldiers and received amnesty from the Cambodian government. Changing its name to the National Solidarity Party in 1997, the Khmer Rouge denounced Pol Pot in a show trial and placed him under house arrest. Pol Pot died in April 1998, shortly before the Cambodian government asserted that its troops had captured the remaining Khmer Rouge forces. In May the government declared its intent to bring remaining Khmer Rouge leaders to trial for crimes against humanity."

Contributed By:
Ben Kiernan

Microsoft ® Encarta ® Encyclopedia 2004. © 1993-2003 Microsoft Corporation. All rights reserved.; March 29, 2006 2:24 PM
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HousingPANIC - The Housing Bubble Blog with an Attitude Problem, 2005 - 2008

March 29, 2006

BUBBLE TALK - old thread

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