"I don't think I would use the word `crash,'" he said. "When you use a word like that, it's almost a self-fulfilling prophecy in the housing market. These are people's homes. Their retirement is depending on it." - The Corrupt David Lereah, October 2006
Well, he's got a point. The fact that the sheeple now know that the market is crashing is indeed helping bring housing prices back to their historical mean, back to where the fundamentals make sense, and back from the speculative bubble they were trapped in.
A crash is what we will have, a crash is what we will call it, and a crash is what we need.
And his is also correct that people's (sheeples') retirement is indeed depending on their home's price not crashing. Why? BECAUSE THEY DIDN'T SAVE DURING THE HOUSING ORGY, thinking their home was their new magic savings account, their new 401k and their new ATM all in one. Yes, it's sad that this transpired, but it transpired in part because of charlatans like the corrupt David Lereah.
Housing crash, housing crash, housing crash, housing crash. There, I got that out of my system, I hope the corrupt David Lereah didn't mind too much.
October 06, 2006
David Lereah, responding to the Moody's housing report, begs everyone not to use the word "crash". Sorry, David, housing crash is underway
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17 comments:
housing crash.
crash.
By July of next year, expect a press release coming out of the NAR saying that David Lereah is leaving the NAR "to pursue other interests" or "spend more time with his family". Then there will be some comment from Lereah about enjoying his work at the NAR during an interesting time in the real estate market. Then the rest of us will collectively vomit while we discredit Lereah some more.
Not only is a home NOT an "investment", it is REALLY a durable good that WEARS OUT!!!
However, a 401(k)/IRA isn't much better for retirement savings either.
Created as a result of lobbying in congress by BIG BUSINESS (who didn't want to be on the hook to pay the sheeple's retirement), the ERISA laws were passed to make the sheeps responsible for their own retirement.
Furthermore, IRS ALSO succumbed to Wall Street's influence and allowed the 401(k)account (which was a once-obscure provision of the original ERISA law to allow a very select few Xerox executives to create tax-deferred retirement acounts--proving just how influential big business is!) to be applied to TENS OF MILLIONS of sheeple.
Thereafter, Wall Street hijacked the process, created "plan administrators" who take the sheeple's money, put it into "Menu choices", then proceed to clip the poor, ignorant, hapless sheep to death with hidden fees, administrative expenses, bid/ask spreads, "market timing" for insiders, and other shenanigans.
Finally, the sheeps are gonna be in for some big surprises going forward:
1. When 77 MILLION Baby Boomers (at the rate of about 3 million per year) are FORCED to cash out of their 401(k), what's that gonna do to the stock prices?
2. The sheeps have been sold a HUGE bill of goods, as they stupidly believe that the tax-rates will be low when they go to cash out. Please show me where in your 401(k) plan is the written guarantee that your taxes will be lower when you go to cash out than they are today).
3. Finally, just like Las Vegas casinos, Wall Street and Washington DC feel that the money you have is actually THEIRS!!! Don't be surprised if some "national emergency" is proclaimed and "your" 401(k)/IRA is punatively taxed or confiscated outright. Of course, several sheeple who read this will strongly disagree, label me paranoid and alarmist, and refuse to believe that their government and Wall Street would EVER do such a thing.
My response is the following:
Did you know that the government has ALREADY stolen the funds that are supposed to be held in the Social Security "trust fund" (just go Google "intragovernmental holdings") and that Wall Street is the group heavily lobbying for Social Security "privatization"?
Good luck is all I can say if you REALLY believe that a 401(k)/IRA is gonna save you.
For more information, also Google:
1. "The Great 401(k) Hoax".
2. "What if Boomers Can't Retire".
3. The Great Mutual Fund Trap".
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Speaking of sheep: Where's Borka?
Keep fighting!
The Lereah quote is entertaining, but it isn't really the most interesting apart of the article. Lereah seems to have removed himself from the debate altogether. He tried to grab some last minute credibility by "predicting" a price decline, but the real story here is the debate between Moody and Paul Kasriel ("director of economic research at the Northern Trust Corp").
While Lereah asks Moody not to use the word "crash", Kasriel claims that Moody has been too optimistic about the market. The moody report defines a crash as a drop of 10% or more, and claims that many regions will experience a crash. Other regions will drop smaller amounts, and some will merely stagnate for several years.
So the debate now is really between "optimists" who expect a severe correction and a negative but manageable economic slowdown, and housing bears who expect a major haircut and severe economic consequences.
This is such a difference from the "just say no to the housing bubble" article writting by a relator who is so out of it she thinks the Tokyo RE crash was "a few flat years".
I'm not as bearish as HP on housing - though I do recognize a major crash is a risk. But either way, it's refreshing to see that the media is finally starting to understand how to frame this debate.
Lereah is a professional and a complete hunk. Bubble bears are bitter renters who live in their parents basement.
crrrrraaaaaaaassssssssssshhhhhhh, sh, sh, sh, sh
Sphinx
How about dive then?
I like housing tumble.
don't care what you call it, a crash is a crash!
a pig with a gold ring in it's snout is still a pig!
"David Lereah, responding to the Moody's housing report, begs everyone not to use the word "crash."
And I agree with the man. Why use the word "crash" to describe the current housing market. There are many less-objectionable alternatives, such as:
break down
calamity
cataclysm
catastrophe
collapse
crackup
crisis
disaster
failure
fiasco
insolvency
rupture
tragedy
wreck
we'll see what happends... Stirling on the tpmcafe.com blog recently wrote an ingenious little piece that talked about how wages (ability to pay) and price of assets (wealth generators) are seperating.
I'm not sure what the meaning of "economic fundatmentals" is any more...
I'm not totally convinced that 401(k)'s will tank, but who knows?
If we assume a 4% inflation rate, today's Dow of 13000 can be compared with a Dow of 10600 in 2000.
In absolute terms, the Dow is higher but through the glasses of inflation, were still down 2400!
I recently looked at the Stanford University Endowment, and they got a 7.8% return over 3 years so that's about 4% when corrected for inflation.
And inflation is real: a box of cereal, at a local food store, was priced at $5.00-- maybe because WIC shoppers tend to go there and the government pays?
I still think your retirement will be good if you are a saver.
Every time I put $1500 in my 401k, $500 of that is paid by the government-- because of deferred taxes.
I don't worry about future taxes because, if I have that much money to worry about, I'll be happy to pay them.
I like to "live below my means." Thus, a house is off limits and I simply save the difference between supporting a house and living in a very modest apartment. That way, my wealth is guaranteed to build in any market as long as I work!
One of the reasons why housing can increase faster than wages is because there are people like me who save and have a stash in the bank.
In that case, higher interest rates are great because that leads to lower prices which can be paid off in a one lump sum!
Economies are cyclic, I believe, to cater to people who use different money management strategies. If you can wait out the cycle, you should be Ok.
For years now it has been mind boggling to hear people refer to their house as an "investment". I am not talking about the past couple of years, but since I first became a homeowner (uh, borrower, uh sitter?), 16 years ago. very few "buyers" actually net money after, maintenance, insurance, taxes, interest, and other fees.
a house as a residence is a cost of living.
"These are people's homes, their retirement depends on it".
WTF???!!!
So the current generation and other first time buyers are supposed to bend over and take it in the a$$ because these dumbf$cks couldn't figure out a better way to fund their retirements?
This is the most infuriating comment I've heard during this whole mess.
Here's what I think about your "retirement plan": go live under a f$cking bridge. If the best you could come up with to secure your future is "housing always goes up", you DESERVE whatever calamity comes your way.
And don't expect the next crop of Americans to put themselves into eternal debt servitude buying your overpriced POS at an inflated price that you would NEVER PAY YOURSELF, NEVER HAD TO PAY, and would never be ABLE to pay yourself.
Lord, talk about throwing your kids, grandkids and everybody else who doesn't own a home yet under the bus.
Lereah is disgusting.
Seriously, somebody shut this bum up and throw him out.
"Lereah is a professional and a complete hunk".
I'll give you that, he's handsome alright.
I predict a great career for him as a JC Penney or Sears catalogue model before this is over.
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