September 27, 2006

Oh dear god tell me we've moved past denial and are sailing into fear harbor by now

Seriously, is anyone in the US, ANYONE, still in denial that the bubble has burst? Is anyone, ANYONE, still in Euphoria or Anxiety mode?

Come on!

We have to be, just have to be, in Fear mode by now as a country, with many others already way past that and into Desperation, Panic, and for sellers cutting their price to get out from under their housing financial deathtrap before Mr. Foreclosure shows up, Capitulation mode for sure.

Of course, this blog hits its zenith when we move into Panic mode, but even I think that'll be a year or so from now, when the blood is really in the streets, and not just with housing, but with everything. Yes, everything.


Anonymous said...

Very funny site! I love it. Gonna tell all my friends.

Anonymous said...

there's probably no way to move back up the chart is there (from right to left)

if that's the case, we all should know how this is going to go down

Anonymous said...

It's a 20-40 year cycle. Don't expect the euphoria to be over so quickly. We're still at the top stage.

David in JAX said...

I think most people are still in the denial stage. I believe most people think we have bottomed out (denial of the truth) and think that prices will soar back up. I was also listening to some local talk radio people who were convinced that the latest housing report was a political ploy by the media/politicians to help sway the election.

All Denial.

haggis said...

Perhaps the US has moved into Fear.

But everyone in the UK is still in Denial.

I've been working at the pointy end of the development business for 20 years and everyone tells me my property views are idiotic. I wouldn't necessarily call myself 'smart money' but I'm certainly not stupid money - and I'm very cognizant of market cycles as my livelyhood depends upon the fortunes of that fickle beast.

In a couple of years everyone will be muttering about how the 'smart money' got out and left everyone else holding the bag. The fact is, people don't like facts. They live in an emotional marketplace which thrives on gossip and mythology. Books and statistics are just too boring! And reality is useless unless it confirms the happy bias that everyone's a property investment tycoon.

And no one sees the irony. Where's the fun in that?

David said...


Some people are still on denial. Some have arrived at fear.


panicearly said...

still in denial im afraid. my sis+hubby is buying 5 acres in ft.myers florida for $535k, closing in a couple weeks i think.
I sent all the links to shillers charts, and they just ignore the topic and never reply with anything.

Anonymous said...

I don't know how to state this tactfully, so I won't.

Look, gang, we are on the last bubble. And the biggest bubble.

My prediction:

At least TEN MILLION homes in the U.S. are gonna be dumped back on the market over the next few years.

And, as I have stated repeatedly on various posts on this blog over the last few days, the Fed and feds will pull out all the stops to try to mitigate the damage, including:

1. Possible "debt moratoriums" to allow homedebtors to stay in the McMansions while the feds work on a bail out plan.

2. Monetization of Fannie/Freddie/FHLB/Private Mortgage debt by the Federal Reserve.

3. "RTC II The Sequel" to create an orderly liquidation of the ten million homes dumped on the market.

4. Various scams and schemes to hide and/or "socialize" the losses that banks, mortgage insurers, Fannie/Freddie/FHLB/Private Mortgage Issuers have on their books by offering to trade the worthless debt by equally-worthless gov't bonds by the feds.

Depending on the various responses above, the result may be highly inflationary, deflationary, or both.

And again, I remind the posters on this board that ALL financial institutions are involved in the "Great Real Estate Mortgage Bubble" from banks to money market funds to hedge funds to mutual funds to mortgage insurers to Fannie to Freddie to derivatives traders to pension funds name it.

So, when the fear finally REALLY sets in, you had better ALREADY have prepared.

I'll let you decide what "prepared" means for you. However, I will state for the record that having a CD or passbook savings account at a bank ain't gonna cut it.

Anonymous said...

I am going to say denial-fear area.

Anonymous said...

my sis+hubby is buying 5 acres in ft.myers florida for $535k, closing in a couple weeks i think.

THAT'S A STEAL. For the person selling it. LOL. I bought 2.5 hillside acres north of Tampa for $27,000.


Miss Goldbug said...

Thanks to radio, headline news, and magazine cover stories everyone knows that housing appreciation and prices are dropping.

Even the FB's that would say otherwise, are now believers.

I was getting pretty tired of hearing the excuses why their place in CA "wont loose value".

Bring it on.

Eti said...

I don't think the bubble has burst yet. Homes are still extremely overpriced in most areas. Houses has gone up at least 100% over the last 7 years and now a small 10-15% decrease does not make any difference. If the prices drop by 50% or more then we can start to talk about market adjustment.

Anonymous said...

I would say Butch is definitely in the Fear stage. Most everyone else is in Denial or Anxiety, and some idiots, namely the morons who are now buying investment properties in Texas and the Carolinas, are still in Euphoria.

Anonymous said...

Butch, I like your comments.
So what does "prepared" mean to you? What have you done?

Anonymous said...

What does "RTC II The Sequel" mean?
Thanks... And what are you doing to prepare? Are you buying gold? If all the banks are f**ked, than where do we put our money? Under the mattress? I agree that this could get ugly.

Anonymous said...

Everyone is at a different stage. Many are still euphoric, some are having anxiety, and some are in panic.

Most Americans don’t watch the news.

Anonymous said...

Anxiety maybe, but nowhere near fear and denial yet. Here in western CO the economy is booming and despite a slow down in sales for momes over $500K, the lower priced houses are selling like hotcakes even though their valuations have doubled since '01.

We may not hit the rocky bottom some on HP are predicting. Loans are easy to get and the people in trouble with their boutique mortgages will be refinanced in to deals they can afford. Out here any businessman or rancher who can scrawl his name can get a commercial loan, money is flowing like water in the springtime.

Anonymous said...

Then why does colorado have one of the highest foreclosure rates in the country right now? If "everyone" can simply refinance and pay the refinanced rate, than why is this happening? I admire your opptimism, but sometimes you simply need to look at the facts.

Anonymous said...

The foreclosures are mostly in the Denver metro area. Denver is a story without a happy ending. Personally I'm hoping for a mag. 9 earthquake, centered in Boulder with the legislature in session, to remove that festering carbuncle from the state.

Outside of Denver, there is no HP.

Anonymous said...

Colorado currently has high foreclosure rates in the Denver area. Western Colorado is hundreds of miles from Denver, and it is in the midst of a big oil/mining boom that will probably bust out like it always does in a year or two.

Anonymous said...

Some, will Never get past the Denial stage!

Their sheer arrogance will be their downfall!

Anonymous said...

Lots o' denial here in SoCal with glimpses of fear in their eyes!

sandiegoHICK said...

Definite denial here in San Diego!

Ego and arrogance galore!

Don't believe it?

Just watch 'Million Dollar listing' on Bravo channel!

Then you'll understand!

haggis said...

Personally, I'm in the shut up, take notes & drink coffee phase.

Anonymous said...

denial has no place in business or investment. if you want to be in that arena, you've got to be decisive based on numbers and instinct and decide. move on and don't look back, but learn from the past.

Anonymous said...

i say CONFUSED, because it's between denial and acceptance. they wanted to finally accept the reality, but they keep on hearing david lereah's bullsh't, so they're in between, stuck and confused. that only happens to dumb people by the way.

Anonymous said...

"Western Colorado is hundreds of miles from Denver, and it is in the midst of a big oil/mining boom that will probably bust out like it always does in a year or two."

The federal government is dumping tens of billions of dollars every year into the southwest to finance all forms of boondoggles like:

Natural gas wells are going in by the hundreds to feed pipelines that run those electrical generators in CA, OH, & NY, you know, the plants that had to switch over from coal.

All that funny money filters down and makes people want to buy stuff. Sorry, there are no signs of a HP or impending doom in these parts. Condo flippers in Denver might be screwed, but not us.

Anonymous said...


No housing bubble, maybe a bearish market

Refinance season is upon us!

Homebuilders index is up!

Bubble reporting is tainted!


Anonymous said...

It is possible to go back and forth along that chart, of course. Of the people who realize we've crested the peak, maybe not so many are considering all possible consequences of a housing crash. After all, we survived the 70's energy crisis, the Savings & Loan disaster, the dot com bubble..."they" always come up with something, even if it is fake. Denial mixed with shallow thinking.

Bill Bond said...

On average, I think we've just entered FEAR in the last month or so. Some laggards, while those who bought in the last 12 months are generally ahead and closer to PANIC. But on average FEAR has just set in.

YUP, still a year or so away from PANIC. Could be faster or slower but a year is a good estimate. We're at least 2 years from when the real crisis begin with Fannie Mae, banks and large hedge funds start to unwind their leveraged positions.


Anonymous said...

Here in San Diego's north county, a month or so ago, realtors (typically arrogant) we're still cocky!

Fast forward to today, three different realtors,when asked, All admitting to a Very Noticeable slow down!

Anonymous said...

borkafatty is in denial of his manhood! But still optimistic about a turid love affair with Keith!

Anonymous said...

dude, most people haven't even hit the anxiety stage yet

BubbleShanker said...

I would say we are at fear level right now.

Looks to me that it is taking about 4 months per drop since Euphoria, anyone else notice that? So another year and 8 months we would be at depression, seems to be moving kind of fast.

Any comments?

Anonymous said...

4 mos a drop? You watch how Fast things start moving once denial is gone or Fear begins!!!