It's becoming more and more obvious to HP'ers that the .com crash, which really was a credit bubble, never really stopped - the mess was just postponed a bit with a second bubble (still a credit bubble) - the housing bubble. Some pretty smart (and rich) folks have identified this and are positioning themselves correctly. Some really stupid people, let's just say ones who have never read an econ book, wouldn't know a financial bubble if it hit 'em in the face, are doing the opposite and charging full speed ahead.
The leverage used by day traders and housewives back in 1999 - 2000, where $5000 would get you $10,000 in margin, was replaced by absolutely MASSIVE leverage used by condo flippers (and housewives, and strip club managers, and 21 year old unemployed kids, and ...), where $5,000 would get you a $500,000 mortgage - an INCREDIBLE amount of leverage never before seen, never before available to humanity, used by an INCREDIBLE number of people.
This mother of all credit bubbles, represented by the double bubble of .com and now .house, is now coming to an end, but too late to stave off the carnage to come. Now we'll see the ramifications, which we were supposed to see in 2001, but were delayed 60 short months, with 2007 being D-day.
Get ready. Get ready. It's here.
March 29, 2006
The Double Bubble - Dot-Com to Dot-Condo
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The recession is coming sooner. Late 2006.
David
Bubble Meter Blog
Seriously. Will historians remember this as the housing crash of 2006 or 2007?
2007 is more probable, since it seems like economists need LOTS of evidence to call a downturn. I rember the overall economy of late 1989 being very languid, no hiring, new customers hard to find. But the offical "recession" was not identified until mid 1990.
Similar situation in Y2000. The dot com mania was at its crest, but if you were paying attention you'd have seen many articles of layoffs and manufacturing losses. The NBER labelled this recession as starting in the spring of 2001.
But who knows. This bubble is unravelling quickly, because of it's extremity and the slow of information on the Internet. It could be the "Panic of 2006" -- kind of like the "Panic of 1893" (which I think was also based on land speculation.)
I'll amend my comment a little. The panic of 1893 was more currency based. The panic of 1873 was more railroad and land based. Check it out:
Panic of 1873
Citing a two-year-old article as evidence of what Peter Thiel is doing now is just silly. He might be doing the same thing--just use current evidence, not what he said three years ago.
I'm thinking of buying a condo right now in a surburb bordering North Dallas.
What do you think:
1632 sqft
built 1973
2 bdrm
2 bth
2 living
covered parking
small fenced backyard
$99,000
Do you guys think it is overpriced? Should I grab it now or wait for the bubble to pop?
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RickJ
I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.
Take a look at Wallstreetwinnersonline.com
RickJ
So many blogs, so little time. Got to get back to work on my own real estate sites. Enjoyed the visit. Stop by my site if you have a chance.
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