June 26, 2006

George Soros says we're in a Gigantic Real Estate Bubble


Via the Piggington blog, from Soros' latest book. I'm going to see Soros at the London School of Economics in a couple of days and I'll ask for his comments on this if I can...

You just know the Soros's, the Buffets etc are way the heck out of real estate and hording cash to buy at distressed prices in a few years. And you know the Trumps are screwed.

I believe we are currently in the midst of a gigantic real estate bubble. It was caused by the determination of the Federal Reserve Bank not to allow a stock market decline in 2001 to turn into a self-reinforcing rout.

The federal funds rate was lowered to 1 percent. Mortgage institutions encouraged mortgage holders to refinance their mortgages and withdraw the excess equity. They lowered their lending standards and introduced new products such as adjustable rate mortgages (ARMs), “interest only” mortgages, and promotional “teaser rates.”

All this encouraged speculation in residential housing units. House prices started to rise at double-digit rates. This served to reinforce speculation, and the rise in house prices made the owners feel rich; the result was a consumption boom that has sustained the economy in recent years.

Again, the bubble can be attributed to a short-circuit between the value of assets and the act of valuation. This short-circuit is called the wealth effect.

64 comments:

Anonymous said...

soros is very, very astute. he has been getting bad press because of his hatred of the bush administration. his record speaks for it self.

Anonymous said...

keith..sell your baubles..gold etc..sell that oil..sell that copper..
and put your money in US treasuries.
Keith, be very afraid.

skytrekker said...

Anyone who goes 'against' the Bush regime- no matter how erudite is smeared, attacked or called 'un-American'- the hallmarks of any right wing entity.

Soros is one among many that do not believe in the republican wags who control Wall street with their 'polyanna' consensus views.

In February 2000 they only saw the economy soaring on, and no end to the IT 'Miracle'.

borkafatty said...

then i must be un-american cause i can not stand bush, but let me add i also can not stand this congress, so i guess i am twice as much un-american.

and if you dont like it tuff shit.

Anonymous said...

Soros gave his money to far-left wackos while Buffet gave his money ($37B) to charity. At least there is one billionaire who reserves our respect.

Soros is a nutcase.

Anonymous said...

Un-American is such a lame short sighted bigoted bunch of bullshit. If you ain't like us, then yuz against us. Tell me what an American is? There is no such a thing as an American. The closest I can come to that is a person with very little sense of self who needs to be propped up by a feeling of belonging which is taken advantage of by redneck politicians. Take your American ass to a library and try travelling so you won't be so easily manipulated.

Anonymous said...

anonymous 3:15:20 PM

I would say you’re the one with a lack of history. You’re brain has been distorted by a bunch of idiot, leftwing speech. I think most of us know what being an American is, and despite all the BS that goes on in this country, America still the best place in the World to live.

Now why don’t you F.O.!

Anonymous said...

One thing is that you want America to win the war against terrorists and dictators. There are people like Soros, Micheal Moore, Chomsky and the like to openly want "the good people of Fallujah" to win the war.


Had Soros donated his money to charity (helping Africa?) instead of trying to buy the elections he might deserve some respect.

Anonymous said...

I worked for the State Department and spent many years in embassies around the world. It was always amusing to me how many of the "hip", well-travelled lefties suddenly found their American heritage when their asses were thrown into a stinking jailhouse. No complaints at all about our foreign policy or rotten administration (Democrat or Republican) as rednecks like me bailed them out and sent them home.

Anonymous said...

Thanks for your beautiful sentiment regarding my American post. I knew I would get the response you posted 'cause that is what you are. Enjoy yourself and your over inflated ego. America is the best place to live, travel, go see other places, I bet you will like 'em.

2500underair said...

If this administration keeps it up America won't be the best country in the world! I just can't wait to see what the thieves have in store after the 2006 elections. It will be, mark my words, every man for himself. Do you think they care about America? The boys are only thinking about how much money they can accumulate and they are doing it. We will be left holding the bag full of S**T.

2500underair said...

If this administration keeps it up America won't be the best country in the world! I just can't wait to see what the thieves have in store after the 2006 elections. It will be, mark my words, every man for himself. Do you think they care about America? The boys are only thinking about how much money they can accumulate and they are doing it. We will be left holding the bag full of S**T.

Anonymous said...

In my opinion, it is un-American to celebrate the murder and mutilation of american contractors (or soldiers) in Iraq. That's what Dailykos and other lefties do openly (and since democratic party leaders openly embrace dailykos I guess this applies to democratic party as a whole with few exceptions - Joe Lieberman probably wants America to win the war).

Anonymous said...

I would go further and say it is un-human to celebrate anyone's suffering. I think pushing an idea such as nationalism creates distance between people.

Mark in San Diego said...

Stephen Roach of Morgan Stanley checks in. . .

http://www.morganstanley.com/GEFdata/digests/latest-digest.html

Although a rather long read - his comments (skip to the end) about the Greenspan bubble period should not be taken lightly. . .When Stephen Roach talks, China listens. . .he feels Fed will have to clean up the Greenspan bubble mess, and if housing and the consumer goes down in flames, so be it. . .We (USA) need to start saving again.

Anonymous said...

"it is un-human to celebrate anyone's suffering"

LOL! What a dipshit. Read some history you fool. Since civilization arose, 95% of human history has been written in blood, and human dignity was mostly an afterthought to the rulling elites. I think the founding of America presented a new and hopeful alternative to this rather bleak picture. So spare your egalitarian bullshit for the freegans and other lefties who might actually believe it.

Yes, I want some "distance" between me and the likes of Mao or Stalin, the guys who offed 150+ million while lefties around the world just looked the otherw way

Anonymous said...

Well, you can't blame lefties looking the other ways while Mao/Stalin annihilated 150M+ people. They were actively supporting it. They still are, at least in american campuses. They don't allow ROTC to be there but Stalinists are welcomed. Of course, this is a universe of its own with no real connection to the real world.

Anonymous said...

I hate Soro's, and don't want this guy trying to buy elections and take our guns away. (You think someone who escaped a totalitarian government would want to keep guns in hands of the people...).

But, he does know his stuff with macroeconomics and he is spot on with the housing bubble and why it exists. I wish he was fully leveraged in residential real estate so he would lose his money and not have any left for lefty causes, but no such luck...

Anonymous said...

I am as American as our wonderful president. In other words I don't give a sh*t about anyone except myself, my family and friends who helped me get where I am. I will do anything to get what I want. and right now I want a f*cking market crash. So Bush started a war and kills innocent Iraqi's not to mention good young poor christian Americans. So maybe I'll start a wildfire out here to kill some innocent homes. How will that affect the market? Hmmmmm...any thoughts?

I don't cheer or support the suffering of any person or animal. But I would cry tears of joy if a suicide bomber blew Bush up in 100 tiny pieces of shit. I mean I would openly celebrate on the streets. So would haf this country not to mention the rest of the effing world!

Anonymous said...

I thought this was a housing blog ?
Instead I'm listening to a Dip Shit who posted Anonymous 5:31

Anonymous said...

Anybody care to comment on today's
unexpected increase in new home sales.

This Blog would be more credible if
both sides of the debate are addressed. Not just one-sided reinforcement.

http://biz.yahoo.com/ap/060626/economy.html?.v=4

Bearish in SF

InfidelSix said...

to Anon 5:31

You could always off your mother for the life insurance.

...just sayin'

Anonymous said...

" I thought this was a housing blog ?"

Well, Kieth started this. He decided to want to talk about politics here instead of housing related things. We all know how this ends. Hey, let's see more CBS News. How about forging couple of housing stats documents..

skytrekker said...

The so called 'ownership society' is a clever propaganda technique- devised by Rove/O'Relly/Hannity et al right wingo BS- to lead the sheeple- who also hate queers, global warming, and anything that does not agree with their perverted 'religious zealotry' and moral judgings.

But the sheeple do not realize that in the new 'ownership society' if they break it they really do own it. So as the cost of health care rises, pensions are eliminated, and any other kind of progressive programs for people are axed- the sheeple will soon find out that their ownnership is nothing but a sham- built on debt, lies, msifired military excursions , erosion of civil liberties- all for whom? The CEO's/Corporate state, the upper 7% and the military and real estate industrial complex- as well as the far right wing.

2500underair said...

Amen!

Anonymous said...

George Soros is no uneducated dipshit leftist.

He firmly OPPOSED Communism and devoted much of his life to the liberation and recovery of Eastern Europe. He is smart and very pro-capitalist. And he was pro-American (and still is) when those values were those of universal justice and real economic freedom and progress.

Now, suddenly because he opposes a right wing demagogue with reactionary forces he is a Communist and wants "The good people of Fallujah to win"?

WTF? Complete invented lies. Soros ain't Chomsky, who is a deluded leftist.

The liberals have the facts on this one right.

US liberals did not approve of Mao and Stalin---those were deluded Communists and almost all liberals (in the sense of Enlightenment values) dropped them right away.

Anonymous said...

"un-American to celebrate the murder and mutilation of american contractors (or soldiers) in Iraq. That's what Dailykos and other lefties do openly"

Is there *any* *evidence* about mainstream liberals this is the case?

That's a rhetorical question, because the answer is of course "no". Liberals may think that it was a predictable consequence of a strategic disaster and a simultaneously brutal and incompetent prosecution of a war but I've seen no "celebration" whatsoever.

The right has been smearing liberals with the equivalent of

"Yeah, well you types WOULD eat a puppy if it looked like Laura Bush's dog!"

i.e. insinuating bizzare and untrue motives to liberals without any evidence.

Anonymous said...

Dailykos had a written comment on his blog celebrating the murder and mutilation of the 4 american contractors in Fallujah. Once the right-wing blogs noticed it he removed the post but its existence is well documented and proved. Similar posts are common on other left wing blogs. Micheal Moore himself said that Iraqi insurgents are heroes, not terrorists. Democratic leadership is openly supporting dailykos and Micheal Moore. It tells a lot.

Anonymous said...

ALL THESE GUYS ARE SCUM.. .SOROS, BUFFET, ETC.. THEY RAPE THE AMERICAN CAPITALIST SYSTEM, AND THEN TURN IN TO COMMIE LEFT WING FUCKS. FUCKE EM ALL.

Anonymous said...

Buffett is also a leftist who gives his money to abortion rights and other baby murderer groups.

Anonymous said...

if nothing else this blog always supports my belief that those who support bush in the U.S. are total freaks.

Anonymous said...

Skytrekker:

The ownership society means you can own your own HSA, Health Savings Account, which I do, it's great. I already have enough money in it to cover my high deductible, I am waiting for the market crash to put the additional money into mutual funds, the money I contribute comes right off my taxable amount.

Ownership society means owning my own SIMPLE IRA through work, it's great, I trade ETF's, can buy CD's, stocks, bonds, GLD, whatever I want, and Bush increased the limits, comes off my taxable amount.

This is the true ownership society, now I want to stop contributing to the ponzi scheme known as Social Insecurity, bad for you, bad for me, bad for the US Economy!

As for owning a home, it's garbage for the next 10 years, if you were stupid enough to buy one, dump it now. I like to check my balances on a daily basis, and set stop losses.

Anonymous said...

Ownership society is con, saying that it is "real" is pathetic, you don't control nothing, your "savings" will be worth nothing soon.

Also saying Social Security is a ponzi scheme is a joke as well, considering that it isn't in any real danger, yet the "intellectuals" say it is, because they want the money.

Bush and the Neo-Cons are traiters and have committed treason. They should be hunted and their coconuts popped.

Anonymous said...

Yeah we need loads more ghetto and white trash babies overpopulating this country. You jackoffs who oppose abortion are totally retarded.

Fact is we should be under similar rules to China where pregnancy is in check.

Anonymous said...

You know, blogs get "troll" comments, even this one.

That somebody anonymously posted something stupid and outrageous doesn't mean it's an opinion held by "mainstream liberals" any more than the White Christian Aryan nation drivelings of prison gangsters represents the Republican party.

DailyKos now lets some of the long time users 'troll rate' comments which are really stupid.

panicearly said...

i could care less about private military contractors, mercenaries is what they are, so fuckem, i dont are which side they are on. nothing patriotic about those nitwits.

Anonymous said...

Also saying Social Security is a ponzi scheme is a joke as well, considering that it isn't in any real danger, yet the "intellectuals" say it is, because they want the money.

eh??? No real danger? Are you even remotely aware about the SS situation? In 12-13 years it does not have enough money to pay SS to retirees (unless a lot of old people die suddenly). Originally, we had something like 15 workers per one retiree but in a few years we have 1-2 workers per 1 retiree. This is a ponzi scheme and there is no way this can be sustained.

Anonymous said...

Sure it can. Print more US Currency and hand it out as if it always existed. We have been doing that for years already. Sure everything will eventually collapse in a huge fireball but that's going to happen anyway. Should be fun to watch.

Anonymous said...

SS has its own fund, 100% funded by the current workers to pay for the current retirees. It is not possible to "print" money for SS purposes. It has to pay itself (in practise, people must die sooner or workers must work longer).

General retirement age of 75 sounds likely if current SS system is not changed radically.

Anonymous said...

Guess I'll just have to crank up my own printing press.

Anonymous said...

That somebody anonymously posted something stupid and outrageous doesn't mean it's an opinion held by "mainstream liberals" any more than the White Christian Aryan nation drivelings of prison gangsters represents the Republican party.

Republicans do not invite White Christian Aryan leaders sitting next to former president in the conventions. In fact, republicans do not want to have anything to do with this kind of extremists unlike mainstream democrats who openly embrace dailykos and his comrades and they invite people like Micheal "people in Fallujah are heroes" Moore to presidential conventions.

There is a difference.

damonbots said...

Soros looks pretty F'd up. Sure that isn't Richard Lynch?
http://officialrichardlynch.tripod.com/rlynch6.html

Anonymous said...

Soros gave his money to moveon.org while Gates and Buffett gave their money to charity. Soros makes me sick.

Anonymous said...

He spent someting like $27M toward trying to get Kerry elected. Wow, what a shithead!

Anonymous said...

why is this blog 90% left wing/liberal? I am just curious, any theories? I have mine...

Anonymous said...

MoveOn.org! That's great. So Soros is in the same league as Janine Garafalo, and Ben Affleck. It's like Stuart Smalley w/ a commodity trading account. What total losers. Plus, he is one ugly dude. Here's m latest spread: buy Leiberman/sell McCain, scary because this is from a hard right guy, but work w/ me here.

Anonymous said...

I went to the other housing blog site and it's much better than this one. This one, which I had in my favorites, has now been replaced. I'm interested in comments on today's new home sales and have to wade through this partisan bickering. I'm outa here.

... before I say bye though... labels, lib, con, left, right cause confusion and aren't that useful. It's about being reasonable, rational, and intellectually honest. Few are.

I'm an independent, and fwiw, leftists are the most deluded and seem driven by emotional dysfunction. They're always fighting "the man". Always the morally superior fighting for the downtrodden. It's about feelings -- not reason. And any myth or distortion of facts is okay to justify their "feelings".

There are knuckleheads on the right too -- but they're usually just ignorant and immature followers.

The immature on the right can be englightened -- or just given good leadership will follow along. The left can never be reasoned with -- no matter how compelling the logic and evidence.

My 2 cents -- the leftists won't agree of course. 'bye... hope the blog gets back on topic one of these days.

Anonymous said...

Soros and leftards suck cow penis

Anonymous said...

agreed! he blows, figures keith would look up to him. Aim high

Anonymous said...

I haven't seen one mention of Soros' Open Society foundation, which does real good work.

I'm not sure about some of his other social "investments", but I can see how it certainly would be a good thing to balance out the fascist Bushian stranglehold on the US.

Frankly it will turn out worst of all for the US, so I'm not quite sure why Soros cares so much.

keith said...

I quote a billionaire investor who thinks we're in a housing bubble and everyone thinks I'm a left wing nut

Yup, that's smart, go pull up the voting record of any source quoted on HP and by the transitive property, that's HP's politics

Man, Fox News really does have the US brainwashed at this point

Laughable

anonymous said...

I went to the other housing blog site and it's much better than this one. This one, which I had in my favorites, has now been replaced. I'm interested in comments on today's new home sales and have to wade through this partisan bickering. I'm outa here.

Bye


I quote a billionaire investor who thinks we're in a housing bubble and everyone thinks I'm a left wing nut

Just for the record, I don't think you're a left wing nut. From what I've gathered based on your comments, you sound Libertarian, though you may only share some of their sentiment.

Also for the record I enjoy the political slants on the blog. That is why I come here the most often. For some people politics is deeply personal and they are easily offended by opposing viewpoints, instead of just strengthened or enlightened. I'm glad people like the above leave, they don't understand the entire picture. The blog does seem to have a tone of paranoia most of the time but it's not completely unfounded and may prove itself out in the end. But even if it turns out that we didn't really need to be as worried as we are, it still speaks to a particular human need, the need to always be prepared for the worst.

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Anonymous said...

Although it is not true that all conservatives are stupid people, it is true that most stupid people are conservative. -- John Stuart Mill

Anonymous said...

Before Buffet gave his money away (still in the process...) Soros gave it to the world via his Foundation. The amazing thing is that Buffet took a very "unconservative" decision for being the poster boy of the conservatives!

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