Spend more.
Try to make more.
Take out more debt.
Save less.
Spend more.
Buy a bigger house.
Spend more.
Try to make more.
Take out more debt.
Drive farther.
Work more.
Spend more.
Die.
February 15, 2007
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A time capsule of the greatest financial mania in the history of mankind, told in real-time by regular folks and patriots. May future generations better understand the madness of crowds, and how power and money corrupt.
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42 comments:
http://www.suburbanchicagonews.com/couriernews/business/berko/255939,3_3_EL14_BERKO1_S1.article
hehehe, right on, Keith.
No need to say more at how MSM & NAR manipulate the ignorant/self absorbed consumers of America.
That's a classic Keith. One question, when will the home builder stocks begin to reflect reality on the ground?
Just in today
Mortgage fraud in Atlanta killing home market...
http://tinyurl.com/ypec5f
Orlando housing glut hammering sales ...
http://tinyurl.com/23g35b
YES FOLKS, THE MELTDOWN IS ACCELERATING AT AN ALARMING PACE. HEAD FOR THE HILLS!!!
There's just a staggering amount of stupids, white trash and semi-literate half-breeds in this country. The elites and corporations have a direct interest that this vast underclass keeps expanding and oonsuming the tangible junk and ideological garbage thrown at them.
Just keep the masses constantly toiling to pay those never ending invoices being generated by the corporations and real "ownwers" of this society.
Is this a great country or what?
Keep up the good work Keith!
That's exactly what Bank of America is trying to do with their new credit card initiative.
This is probably my favorite post of yours ever.
LOL nice analogy!
From "Rick's Picks":
New Way to Hedge
Your Home's Value
For edition of February 15, 2007
Finally, there’s a way to literally bet against the house in the event of a real estate collapse. A California firm is offering cash on the barrel head for up to 15% of the value of your home in exchange for a 52.5% share of any capital appreciation when you sell it. We at Rick’s Picks have inferred that the intention of the company, San Francisco-base Real Estate Equity Exchange Inc, or “Rex,” as it is known, is not to insure homeowners against deflation, since Rex would never make such an offer if it thought real estate prices were about to fall.
Consumers may not think so either, but with home prices across the U.S, already having declined 10 percent in the last year, it might look like a decent gamble, especially to that undeniably broad swath of Americans who are “asset rich but cash poor.” From Rex’s point of view, it’s a straightforward way to earn 3.5% of the gains for every 1% it pays homeowners for the option.
Not So Crazy
It’s not as crazy as it sounds, since the deal would allow consumers to tap the equity in their homes without incurring any debt or payment obligations. There would be no taxes on the cash received, and property owners would have up to 50 years to sell, according to Investment News, a weekly newspaper for financial advisers that reported this story in its February 12 edition.
Naturally, Rex’s competitors in the reverse mortgage business were quick to diss the product, suggesting consumers would never go for it. “The biggest downside is the 50% capital gains for a measly 15% of the house,” said Scott Hanson, co-owner of a reverse-mortgage firm headquartered in Southern California. Hanson might be right if the Rex product were designed merely to allow consumers to extract cash from the equity in their properties. But Rex would also be sharing in the homeowner’s downside risk, and that fact will give its product a kicker that reverse-mortgage firms cannot match. Fees charged by both firms are comparable: Rex would assess a service charge of $15,000 when a house is sold, while reverse mortgages typically generate an origination fee of about $17,000.
Rex’s Deep Pockets
Rex’s biggest shareholder is American International Group, no slouch when it comes to handicapping asset risk. According to Investment News, “The company has agreed to provide capital to homeowners through a hedge fund it set up, Odin Investment Management LLC of San Francisco. AIG also is the largest participant in that fund.”
My prediction is that this product will prove to be so popular that Rex and its backers will close the door to new business within 18 months. Assuming the venture is moderately successful and Rex strikes a deal with, say, 50,000 homeowners living in dwellings with an average value of $500,000, the firm and its partners would be on the hook for $3.75 billion should real estate prices merely stagnate.
http://www.rickackerman.com/commentary/2007/New_Way_to_HedgebrYour_Homes_Value.html
But how do you get all these on Burma Shave road signs?
Mortgage fraud in Atlanta killing home market...
http://tinyurl.com/ypec5f
Quote from the above page...
* — The Georgia Association of Realtors recommends that real estate agents not include the size of the property in for-sale listings.
WTF???
Materialism still has a pretty strong grip on American society. But within a few years people will realize that having two or three homes with two or three BMWs and a shitload of stuff just does not give them any satisfaction whatsoever (whether they actually own the stuff yet, or whether it's still just a dream for them). If anything, all this 'stuff' clutters their life and gives them stress related ulcers, health problems, and lack of time to enjoy life. Just having to maintain, keep track of, and pay for this crap becomes a nightmare. And for many who have to work like dogs just to make ends meet--it's nothing short of enslavery. Someday the material girls and boys in this insane world will wake up and realize that they've been duped with the mantra of the 'American Dream'--their governments, banks, and corporations have enslaved them under the banners of 'free country', 'freedom of choice', 'free up your equity', 'free health benefits', blah, blah, blah ad nauseum. They will realize that it's impossible to keep up with the Joneses, so it becomes pointless to even try. For those who have 'made it', and have financial security, they will realize that all the stuff they have is just crap, that they are not immune to sickness, and that when they die they won't be able to take it with them anyway. So the masses will revolt. They will simplify their lives, downsize, reduce clutter, work less, spend more time in nature and with family and friends.
It's all fun and games until the bills come due
Head for the hills imbecile moron idiot renters. Blowfly's riding into town, comin' to hunt some renters down.
Zillow: David Lereah's House Declining In Value
http://tinyurl.com/27ecw5
David Lereah Watch
http://davidlereahwatch.blogspot.com
OMG, Greg Swan is blaiming and disparging the seller as the new evil with regard to the Bubble and HPanic.
He is disgusting.
http://www.bloodhoundrealty.com/
BloodhoundBlog/?p=1046
SPAC Disease Reaches Pandemic Proportions
This euphoric optimism of the common home seller has been studied by the American Medical Dissociation, and it has coined a neologism:
Schitzo Prospectus Actualis Capitalis.
(Editor’s Note: a break with reality concerning the expectation of material gain.)
The acronym, SPAC (pronounced “Space”), has entered modern parlance to speak of sellers with the disease. “Spacers,” as these unfortunates have become known, appear to be causing Realtors apoplectic frustration. But what is this disease, and how has it reached epic proportions?
One of the contributing factors of the disease appears to be neighborhood gossip. It is not uncommon for homeowners in a given community to keep each other apprised of the going rate for homes through the neighborhood grapevine. Our reporter asked a local homeowner to give her opinion of her home’s value:
WUSA Reporter: “What do you think your home is worth today, Mrs. Bon-Mot?
Mrs. Bon-Mot: “Well, the Pastiche’s place down on Maple Drive is very similar to ours, and his sold about a month ago for $525,000. It took him a couple of months to sell, the market being what it is, but it did sell.
You can blame wall street. If these banks and other financial institutions that originate the loan had to "stick with" a borrower until the loan was paid back, it would be a different story.
The market allows this debt to be consolidated into billions and then sliced and diced to fit different risk catagories / portfolios.
As long as there is someone down the line to purchase this higher risk debt, there is no incentive to lend with conservative or common-sense criteria.
The disincentive to ruin ones credit has been enough up to this point to prevent a mass default / crash of this segment of the market.
Seems like a "slippery slope" to me, and I think it's just a matter of time. At some point lending will have become to risky, and things go negative. No one will buy this debt at that point, and then the "bag holder" (Chinese investors, retirement investors in AR, FL) will loose.
Hey that's the definition of success.
Ask the Enron boys.
Spoken like a true communist Keith. Somewhere up above Karl Marx is smiling today.
Mortgage fraud in Atlanta killing home market...
http://tinyurl.com/ypec5f
Did you actually read the article or just the headline? Median home price is up 5% from a year ago in Atlanta. Doesn't sound like a dying market to me.
Wait until blowfly is bearish on housing, then buy all the property you can carry.
My friend, whose wife is an RE agent, always gets pissed at me for bringing up housing decline. He keeps saying that I'm negative and then when the market goes down, if it goes down, it is then time to buy, buy, buy, as stocks and houses only go up. He likes to juxtopose 1987 to now. he said if he had sunk tons of $$$ into the market when it took a dump back then he'd be wealthy now. So basically he said if the market(s) go down you should buy, buy, buy, instead of save, save, save. I can see where he is coming from, but what "if" the markets never come back up? I asked him that and he said they ALWAYS do. Any thoughts?
"If these banks and other financial institutions that originate the loan had to "stick with" a borrower until the loan was paid back, it would be a different story."
Not so fast, Merrill Lynch is trying to force the firms that originated those bad loans to buy them back.
Ugh, Swann's writing style is awful.
"parlance"
*puke*
I just saw a commercial on CNBC for Pointer Mortgage. The commercial ended with the narrator saying "we give happy endings".
Keith please provide link.
Guys try to "keep up with the Joneses" just to get laid.
Where's Richard and Borkafatty?
Stores near where millionaires live sell everything at absurdly high prices. Partly to keep out the hoi poloi...but partly...because they are trapped in the old gilded cage! When you have finally clawed your way to that ultra-rich bracket, you are FORCED to spend ultra-large amounts of money.
Merely becoming somewhat more affluent can have the same effect. This observation makes me a "communist" because it pours cold water over your fat cat fantasies. The law of averages says most of us are going to be average. Why not learn how to enjoy that, or even live below your means? Too "radical" an idea? Anti-American?
One heir I know of bought a mountain and lives the life of a hermit, out of a beat up pickup truck. Oh, but that could never be YOUR fate, could it?
but what "if" the markets never come back up? I asked him that and he said they ALWAYS do. Any thoughts?
Pick any 10 year period from 1900 on. During that 10 year period had you bought a house you would have made money. This includes the 1930s too.
So,you can listen to the morons here that are predicting 70% crashes in r/e (and have been predicting it for 2+ years now) or you can listen to 100+ years of statistics.
Your choice.
Go, go, go little homedebtors! Keep that wheel spinning...you're starting to drag your little feet a bit. We don't want to see you taking a tumble inside there.
You bought the equities bubble.
You bought SUV's.
You bought Bush II.
You bought cheap Chinese imports.
You bought the war in Iraq.
You bought the housing bubble.
And you financed it all with debt!
Silly, foolish homedebtors.
Debt = Success in the Upside Down thinking of America.
Work more.
Rent to make someone else rich.
Rent goes up.
Work harder to pay rent.
Landlord gets richer.
Landlord raises rent.
Work more.
Priced out of the market forever.
Can't you trolls spot a sweet buying opportunity?
Nigel
Hey Keith, I'm bullish on pharmaceuticals and distilled spirits. Imagine the amount of hamsters that will be hitting the bottle and taking antidepressants like Zoloft, Paxil, etc.
nigel February 16, 2007 4:35 PM
Isn't that also true for ARM and IO mortgages?
Renters = landlord gets richer.
Buyer = bank gets richer.
Renters are able to save; buyers build equity. However, renting is typically a temporary thing.
Housing up over any 10 year period?
How about buying in 1928? Don't think that one worked out.
Most 10 year periods have had a good 50%+ of inflation like the 70s, 80s and into the 90s...or they were recovering from the depression (40s 50s). So saying "house prices almost always (you said always but late 1920s to late 1930s wouldn't have worked)", is not very meaningful.
Besides, when before have houses tripled in 5-6 years and then held that value? It's unchartered territory.
Housing HAS been a good investment. Doesn't mean it always will be. Stocks HAVE been good but buying them after a huge runup in 2000 didn't work very well.
You can listen to the morons who tell you to buy at the peak or you can listen to sane people and buy near the bottom.
Who's the moron who bought IPIX stock at $400 in 2000? That stock is now worth about 3 cents a share. The moron pumpers were telling people to buy tech stocks back in 2000 because over any 10 year period, stocks went up.
Do yourself a favor and don't buy an overpriced crapbox. Never overpay for anything. If a house gets more expensive as it gets older, then it is overpriced.
The Japanese housing market is still down. The tulips market is still down. The dotcoms are still down. The telecoms are still down. The NASDAQ is still down. The S&P is still down. The DOW would still be down if they hadn't removed GM and other slackers - the old switcheroo.
Renters = landlord gets richer.
Buyer = bank gets richer.
It's more like Renters = landlord loses money. I can rent for 50% of actual costs here.
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