April 28, 2007

HousingPANIC Stupid Question ofthe Day

Won't it be weird in a few more months (or weeks) when it seems EVERYONE is talking about the housing crash, especially those brilliant market forecasting realtors? When the masses and MSM are saying how it was all such an obvious mania or Ponzi scheme, and how they knew it was all going to crash all along?

In other words, won't it be strange when HousingPANIC is mainstream, versus this cultish little quixotic fight-club? Or will that never happen, as the masses are too dumb to understand what's happening to them even during the downfall, too stubborn to admit they were wrong, or too lazy to find HousingPANIC?

If that comes to pass, I'll miss the days when it was little HP versus the world, a voice in the wilderness.

When the world panics over housing, which is right around the corner now, it might not be as fun to write HousingPANIC.


FlyingMonkeyWarrior said...

I'll miss the days when it was little HP versus the world, a voice in the wilderness.
LOL Keith.

Not as much fun to write about housing.
Maybe it will be fun for HP to watch the demise of the Dollar and the emergence of MexAmerica or ChinAmerica.

Anonymous said...

I used to argue the existence of the bubble with folks when prices were going up. I was called a fool, bubble boy, and gloom and doom. Now every one I meet says prices are coming down and this happens periodically so it is very predictable. Some of the people making this statement are the same ones that called me names for pointing out the bubble during the run up. Now I argue that there is no bubble for fun to work them for their opinion.

Anonymous said...

Fox business block is all about $4 gas coming this summer. Guess that makes WMT a short...

Anonymous said...

I have to say flyingmonkeywarrior is on the right track. There will be new tangents to expound upon, as consumer spending comes to a screeching halt. The housing thing is just the tip of the iceberg. You will see a mass exodus on Wall Street. The dismal economic news will no longer be sugarcoated by the corrupt MSM.

Metroplexual said...

Hey FMW,

Have you seen Firefly or Serenity. It is a future Gubmint that is a fusion of the US and the Chinese called the Alliance.

Joe said...

Housing is just the tip of the iceberg. Housing itself is not gonna bring the whole economy down, it was just another stage in building up what will be the mother of all bubbles. What will that be, China, India, tech (I dount it), gold... who knows? But it will be a last hurrah for "me first" baby boomers looking to milk the system before cashing out and crashing our economy.

The MSM will shift from reporting on housing to covering this new bubble. Quotes like "it's a new paradigm" will be in vogue again.

There's still a long way to go. There will be lots to blog about.

Anonymous said...

Economists often caveat their "predictions" with the fact that there is a lag in the processed data they get and the raw data that is what is occurring at "street" level. This does not wash with me because many lag relationships are well known. The logic being that what participants are doing in the micro-economic level takes time to aggregate & build up to a macro-economic force/level. I understand the logic but it just does not wash with me in this instance.

Why? Because one common & well known lag relationship is b/t Home builder sentiment & the greater economic cycle. There is an observed almost 100% harbinger indicator of the greater economic cycle of present homebuilder sentiment, usually by about a year.

I.e. it takes one year for the micro-economic street level activity of homebuilders to aggregate & influence the macro-economic cycle. So all this BS about how housing & sub-prime/Alt-A not "spilling over" into the greater economy is just that BS. We've had a pt of GDP lost last year because of housing. GDP is now deccelerating even more as the housing sector sinks deeper.

Why does housing have this affect? For the same reason Uncle Sam gives you a tax break to own a home, it boosts consumption because you know have a high maintenance asset that forces you to consume in order to keep the asset's value up & to keep it livable. Plumbing, electrical, siding, utilities, landscaping, roofing, etc. etc. etc!!!

But all the economists in the FED want to say it will not because they all know about the lag, but do not want to be blamed for the mess they created. They are banking on the ignorance of the masses.

The equalizer to this "intellectual dishonesty" HP, the internet & all the other housing bloggers. If the FED had just used the internet to harvest the same grass roots data years ago they could have avoided all the mess that is about to hit the fan this year. If they had just looked at all the articles these blogs posted, commented on and added anecdotal info they would have known to raise rates sooner, pass new regs/enforce old regs on lender underwriting, got the authorities out there to nip all the fraud in the bud then. Instead they chose to do nothing!!

Hold on tight, hope for the best & prepare for the worst!! Good luck!!

robert said...

devestment said...
“Now I argue that there is no bubble for fun to work them for their opinion.”

I do the same. It’s funny how they are now pointing to the same indictors BH’s were looking at 1-2 years ago. What? Those indicators were not valid 12 months ago? These suckers are years behind on the market and it’s gonna catch up pretty fast.

Alas, a few are in total denial nay, delusional. A new co-worker of mine is getting a home built and he’ll be mortgaged to the hilt for $300K+. He said with a straight face, that he’s going to sell in 5-6 years for at least $1 Mil. After my jaw dropped I quickly gained composure and gave him the “RE never goes down spiel, right?” and he just sopped it up. Sucker.

Anonymous said...

prices are way to high to make sense. I have not seem prices come down unless you call $30,000 of a $600,000 dollar home. We have a society that think there home owner but their just pay a mortagage that will never be fully paid. too many i/o and adjustables most of the new home owner will move before they ever pay down the mort. Just like everyone leasing cars and will never own.

FlyingMonkeyWarrior said...

Have you seen Firefly or Serenity. It is a future Gubmint that is a fusion of the US and the Chinese called the Alliance.
Dear Metro,

Hey stranger. No I haven't. I have never heard of it, is it good?
It sounds like a Horror Flick. (;

Anonymous said...

I was just reading this http://www.magicbullets.com/forum/showthread.php?t=7127 and we need to bombard this moron with so much bogus offers his head explodes! What a tool.

Anonymous said...

There is no housing bubble! Prices will rebound by the end of the summer!

Buy now or be priced out forever!
Just make minimum payments on your neg-am-option-arm until the price doubles again, and then sell it for pure profit!!!

In all seriousness, when I started my new job 6 mo ago, my co-workers could not understand why I didn't just buy a house? Why wouldn't I want to pay $700k for a thirty-year-old tiny shitshack?
Fast forward to yesterday, when a co-worker announced she was going to 'try' to sell her house. The mood was like a funeral. One of the ex-bubblers even said, "yeah, everyone knows prices are only going to go down. (!)
The worm is turning, my friends.

Anonymous said...

Not that anyone cares anymore, but Phoenix just went over 60,000 on the ziprealty.com web site. . .I guess the local papers there will just say it is a good buying opportunity. . .

Anonymous said...

It's Ok. My brother is opening his mind to it.He's also glad he didn't buy an overpriced piece of land to build on.He is pretty much honest with himsef about it all now.I expect him to be much more cautious about "hot commodities" for now on.I think he will look at brokers ,and clerks in a realistic way too.I learned some lessons watching this bubble too.Emotion can really "EFF" someone up in these markets,and the extent of the scam was revealed slowly throughout the rise,and into the collapse.Before the collapse,I was a bit cautious,but almost jumped in too.Good thing it didn't happen.To HP goes all the credit.

burn baby burn said...

On PBS they are starting to talk about the housing crash that is starting to happen. We must remember that this is just the tip of the iceberg the loans are just starting to reset now. A year from now we will be in the throes of collapse. Remember that 2008 in an election year this story is going to get huge.
Never underestimate the unclean masses stupidity but, even they will understand it when the sheriff comes to evict them.
From a Psychological/Sociological point of view we are talking about in group vs. out group. We are being co-opted into the mainstream so we are losing our out group status. We have two option we can accept our in status or create a new identity for ourselves. I am going to opt for the latter; by creating a new identity for myself and this blog is going to be helpful. I am no longer coming to be crazy prognosticator of gloom and doom anymore. No I am from this moment forward I am going to be that annoyingly smug I told you so guy. This blog will be my proof that I knew what was going on long before you (fellow HP’ers excluded of course) and by way of extensions I am smarter then you.
I tried out my new persona when I was having dinner with two home debtor that were my friends. They are a Gay couple and they bought a New construction house in February I know what the F*ck were they thinking? I have been telling them since 2005 that real estate is way over valued and disconnected from fundamentals. Well they have been dealing with a friend real estate agent (sic) she did a pocket listing when they bought the house they are in and has been trying to do the same but two contract have fallen through and they are getting near the closing date on the House they had built for them. At dinner they asked my advice I told them they should walk away from the house they had built for them as the house they are in is a nice house in a nice neighborhood. They told me they did not want to do that even though it is worth less than when they signed the contract and have not yet moved in ouch that’s got to hurt. Then I told them they are screwed, stupid, and should have listened to me years ago. Their fake estate agent was at the dinner party and I said they should stop dealing with such an unqualified person. To say they least I will not be getting any dinner invitations from them any time soon. Man did it feel good. I suspect after my friends get over being made about losing so much money they will get over it and we will be friends again sometime in the future. After all it is your friends that will tell you our fly is down or you have tp on our shoe. Yes I could have told them in a nicer way to sometimes people need tough love. I think in the long run they will be fine they make over 200k tighter and no kids so they will be fine they just have to lose about 80 large.

Annoyingly smug I told you so guy out

Anonymous said...

All truth goes through 3 stages. First it is ridiculed. Then resisted violently. Then seen as self-evident.

But unfortunately house prices haven't fallen that much...yet.

Funny the stock market going up yesterday. Saudi Arabia arrests 172 terrorists planning on destroying all the oil facilities. On one hand, it's good they stopped them. On the other, it's worrisome that there are that many terrorists out there. What happens if they don't stop them the next time? Oil at $150 a barrel? Gas at $6 a gallon?

No matter, the stock market has no worries.

gregoryw said...

Here's mainstream: one of Hef's girlfriends on "The Girls Next Door" has half an episode dedicated to her buying real estate in San Diego because it's a good investment, and her "boobs paid for it".

Season 3, Episode 4: My Bare Lady
Original Air Date: 1 April 2007
Holly starts an internship with Playboy, Bridget gets her demo reel ready, and Kendra is on a quest to acquire real estate.

Doug said...

Sometimes I wonder how long it's going to take for the word to get out here (Montana). Part of the problem is that I haven't seen any local RE stats since January. Realtors don't release them. Everyone assumes that Montana is "conservative" and will be spared the national downturn. I think it could be a good 6-12 months before "Montana is different" begins to go away.

If you still want to be a voice in the wilderness, come to the U.S. Rocky Mountain region. Nobody thinks it will happen here.

edd browne said...

Is Howard Beale still dead ?
"…banks are going bust; shopkeepers
keep a gun under the counter; punks
are running wild in the street, and
there's nobody anywhere who seems to
know what to do …"
" All I know is that first,
you've got to get mad. "

[then do things out of
your comfort zone; then more]

Metroplexual said...


Actually it kind of is with bogeymen called reavers, check it out. Only I caution you that it is addictive and only recognized by the Brits as the best SciFi movie/ show of all time(star wars be damned).

Anonymous said...

When is a curse, a blessing?
You be the judge.
I own 20% of a business which has 12 stores in 3 states.
I have put everything I own into this business for the last 8 years. The more astute will realize that I am a stuckholder, not an owner nor a stockholder! :)
In May of 2005, I had only 1 more year to pay off my business debt and I was in panic mode, thinking I will not be able to buy a friggin' house if I waited. FFS, I had scrimped, saved, done without and thought, 'my day will come', and alas, I am about to be priced out of a nice house. My condescending clerk showed me a flippin' trailer for $500,000 and I had a 'white trash moment' and realized from whence I came. So I told him I would wait and pay my business debt off first, and perhaps I could buy a house I liked. He said I could obtain a 'stated income' loan because I had excellent credit. I told him I have excellent credit because I don't live beyond my means. He called several times later but finally got the hint.
This story is not over.
In the end of August, do you remember what happened? Suffice it to say, I had a large investment in New Orleans!
Thank God, I didn't buy an over-priced albatross.
Anyhow's(sic), all is better now, and I'm loving the RealtyTrac's foreclosure section of Scottsdale, where several nice houses(REO's at that) are going for $100 to $150 /sq ft.

A friend just said 'you ein't seen nothing yet, wait til 2008'.

I didn't say that I was once the VP of Real Estate for a small bank w/ only a $50 Mil RE Portfolio.
That was when we used 36/28 ratios, used PMI and would turn down loans which we deemed would hurt a borrower. Foreclosures were a pain in the rear!

Keep up the good work, Keithie!!!

Paul E. Math said...

I think we'll always be in the minority. Even when everyone recognizes that we were in a bubble they will still misunderstand it's meaning and consequences. Even when we are shown to have been right all along they will still fail to accept our analysis and judgement because their uncle is a realtor and he knows better.

In short, people who were too intellectually lazy or stupid to adequately conduct their own analysis will continue to be lazy and stupid. Always have been, always will be.

Anonymous said...

The mainstream is already catching up.

Not that anyone listens. While I've been reading HP, one co-worker quit to become a Realtor (he popped by the office not long ago...no sales, of course - good thing he also does networking consulting!). Another one paid cash for a house that he knew sold for well over $100k less only a couple years ago. A third one wants to move to shorten his wife's commute - insists on buying not renting. Three attempts at warning, three strikes. I could go on...

Anonymous said...

Yeah, well it was interesting to see Jin Cramer, the perennial Stock Market bull, say this morning on the Sunday talk shows that he expects the market to rise another 1,500 points by October, followed by a recession. No words like "50% risk of a recession" or the like: just recession.

He even got the reason for this stuff right: depreciation of the dollar means the continued market run-up isn't 'real' per se, but indicative of American companies performing well overseas; also recession triggered from housing slowdown.

If that's not mainstream, I don't know what is.

I'm not so sure it's that the MSM can't report bullish talk, it's just that there's little benefit in being the bearer of bad news! The general public feels that reporting anything negative is likely to
scare investors, and become a self-fulfilling prophecy.

Notice how the bullish rantings of someone like Cramer are quite acceptable; it's American to be a BULL. Bears are, for the most part, seen as commie pinkos. ;)