Will the markets who experienced "exaggerated" appreciation during the Ponzi Scheme be the ones who see "exaggerated collapse" during the downfall?
In other words, as always, will it all come out in the wash?
January 08, 2007
HousingPanic Stupid Question of the Day
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16 comments:
Yes, its simple physics. What goes up must come down. If bubbles are local with some positive spillover to the rest of the national economy, then their burst will have their greatest affect locally as well as negative spillover to the national economy.
Yes, there should be no reason why today's market should be any different than the overinflated markets of the past. The bubble markets will revert back to their means.
yes.. indeed.. looking at two years down the road it will be messy for many but good for me!
I think it won't be long before we start seeing shows like "Dog the debt collector".
There is no debtors prison but there is nothing stopping creditors from selling uncollectable loans to hungry newbie debt collectors.
It has nothing to do with "physics". Physics is a science while our current problems involve emotional, ethical, and political schemes that preclude any rational analysis. The closest we can get to a deterministic model is the realization that a credit-based bubble must expand the world-wide money supply at ever increasing rates.
This expansion is needed so interest on the new debt created can be serviced without defaults. Past bubbles (Weimar Rep. or Brazil) were limited by the technologies of printing currency and the time delays of communication between lenders and borrowers. The world today has been networked to a degree unimaginable even twenty years ago. We can now create vast sums of "money" and transfer it in mere fractions of a second. I'm sure there is a limit to this modern scheme (I am a Physicist) because our power budget is finite, but it will be far, far higher than the excesses we saw in previous bubbles.
But gee, I have been told by all my homeowner and flipper friends that It's all about the ocean. No more Land to build on. Everyone, but everyone wants to live in San Diego. That is why it may correct a percentage point or two here and there, but it will never, ever go that low because the last correction was due to defense job losses........ And on, and on..... San Diego ,forever, has had a 37% average earnings/price ratio. Now it's 55%. Hello! Did San Diego corner the Oxygen market? Zombies will keep coming to San Diego, and pay 7 times their income, and they can sell to those foreign investers I keep hearing about!
NO, never. never ever. never never never ever never!!!!
There is no debtors prison
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not yet anyway....
no debtor prisions?
what if the "emergency" is a housing bubble burst and huge numbers of evicted debtors?
In another shining example of modern day corporate fascism, it was announced recently that Halliburton subsidiary Kellogg, Brown and Root had been awarded a $385 million dollar contract by Homeland Security to construct detention and processing facilities in the event of a national emergency.
The language of the preamble to the agreement veils the program with talk of temporary migrant holding centers, but it is made clear that the camps will also be used "as the development of a plan to react to a national emergency.
of course it will happpen. However, many in bubble areas have convinced themseelves that their town is truly different. Everyone wants to live in their particular coastal enclave or city. Flyover is a horrible wasteland full of dumb hicks, etc.
In fact, most of the big bubble areas are losing population, especially young peoople and young families.
California is losing its middle class. The population is only increasing due to illegal aliens popping out 12 children per household. It will soon be a state full of people mowing each others lawns and living 30 to a McMansion.
last anon,
Your precious coastal cities are the ones losing population. Boston is losing people in droves. So is New York City. On the other hand hick, flyover cities like Dallas, Atlanta, Las Vegas, Phoenix are all growing fast.
But please stay in Boston or NY, I'd prefer you didn't move anywhere near me.
BOSTON
The population in Massachusetts grew by 0.1 percent, the fifth lowest rate in the nation. The Northeast's population increased by the same percentage. In the West, the population jumped 1.5 percent, and the South notched a 1.4 percent gain.
About 41 percent of the population gain in Massachusetts between 2000 and 2005 was due to Latinos.
The South now comprises 36 percent of the US population, while the once-dominant Northeast represents just 18 percent.
http://www.boston.com/news/local/
articles/2006/12/22/
states_population_growth_on_stagnant_course/
NEW YORK
Albany, N.Y.) AP - Thousands of people left New York state for other parts of the country last year, making it one of only four states that failed to grow since 2005.
New York has suffered for years as residents head to the Southwest and other high-growth areas. The new estimates provide evidence that is still happening: 256,000 more people moved out of New York to other states than into the state between 2005 and 2006.
http://www.13wham.com/news/state/story.aspx?content_id=18635FFC-
D0A4-4B19-9434-AD15A031DF0D
"It will soon be a state full of people mowing each others lawns and living 30 to a McMansion."
Actually ALL my Mexican friends here in CA are college educated and bought a home PRE-BUBBLE. I myslef make over 100k and my mortgage is a WHOPPING ...ready for this?....$1500.
Oh woe as me!?
In 20 years white kids of middle class white dudes that were shut out of the housing market will be mowing my lawn.
oh yeah...as my fellow hood rat turned wealthy guy SnoopDoog would say..BEOTCH.
Why don't you re-read what I wrote, dummy.
"In fact, most of the big bubble areas are losing population."
Duh. Way to make flyover residents look stupid.
Dear South:
Go ahead and take our less productive, poor, tired and uneducated.
The fact is that new york city is still attracting this country's best and brightest. And real estate prices are doing just fine.
ditto with interest rates, for example 18% in the 70s
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