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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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43 comments:
Pro athletes and year round golf
WHEN ALL US BROWN SHIRT, FLYING MONKEYS STARTED SHARING INFORMATION ACROSS THE U.S, MUCH TO THE DISMAY OF THESE (FILL IN THE BLANK HERE)...
we live outside the US, my wife being an American who has lived outside the US for 8 years (we visit the US at least 3 times x year)
while watching one of those 'flipping' shows on HGTV a couple years ago I asked her in amazement "how is this that you get no money down financing????"
answer was "you can, you just pay higher interest" ......."REALLY?", that started my research on this as she eventually wanted to buy a house in her house state (Michigan) to spend more time with her family.
now that its all clear we just watch the prices go down/down/down until we are comfortable with price/bang for the buck and then we buy :)
INSTANTLY! My uncle is a realtor/broker who started in the 80's and I saw it all with this crook. His famous technic was too break into someone else's listing, break things that were obvious yet less expenses like fixtures and railings. Then go to the owner requesting the listing because he protects his listings and was willing to replace broken items! Haha, it was unreal, and he is no different then any other scum bad realtor or broker.
I thought it would crash around the time I was house shopping since I worked the numbers and found out that it would cost me over 4 times rent to live in a marginal home that "was mone."
And the thought was one of "shoots and ladders" since all my retirement cash would have been slurped up.
They are not making any more land..
NOW is a GREAT time to BUY...
no document required loans
I knew the real estate market was in bubble territory when homes in my neighborhood were selling for 500K to 1.2M in summer of 2004!!! Mind you, up into the late 1990's houses were affordable for an average income earner but then things just went crazy. It always amazed me to see a 2500 square foot house listed and sold for like 850K and this same house in 2000 was selling in the range from 300K to 375K at the most.
You know a realtor is lying when their lips move... Actually, I met a very smart portfolio manager in late 2003 (Nandu Narayanan) who basically predicted all this stuff... That was the first time I heard the term Ninja Loans.
I knew, when the guy that worked at the desk in back of mine said "I can't do this anymore" when referring to his job, and he started just buying real estate. He would get two or three calls a week from his realtor "buddy" and the questions would all be the same: 1) How much is it 2) How much can I rent it for 3) does it have granite counters (I'm not making that up). While he was working with us he bought 5 or 6 properties with no down, interest only loans. He never stopped saying "what a great time to buy". That is when I knew that things were in a bubble and there would eventually be trouble.
Don't know how he is doing today, since I have not seen him in a year and a half, but I bet things have changed for him.
He did say something interesting about the multiple unit dwelling market, such as quad plexes and six plexes. Because, he had accumulated so many properties at the time that he figured that he was ready to go into multiple units. He said that these units were so, so expensive that even if you accounted for 5 years of appreciation, and then sold, the "alligator" was so big that you would still be underwater! And that is accounting for bubble type appreciation! That is when I really knew that we were headed for a crash.
I learned they were dishonest many years ago as a construction superintendent. The sales people would stab us in the back every time something went wrong with their sale. They would also screw-up the buyers selections and blame us for putting in the wrong materials or colors.
We were suppose to be on the same team but there job and of coarse commission was more important.
in 1991 when I lost my first house to a lying realtor in a bubble market.
Yesterday I called a realtor on the phone. They talked to me for half an hour.
I realized we were in a bubble when I tried to buy a house in 2003. I made a bid on a house for asking price. The next bid came in at $50K above the asking price and the realtor turned to me with a smile and asked if I wanted to counter-offer.
Yeah, right.
Only in America could there be a housing bubble. Greedy stupid Americans. The rest of the world only takes what they need to survive. Only Americans are greedy and want everything.
It started for me when I couldn't afford the average median home!
My wife and I both make good money, No kids, No Debt!
The places we looked at within an affordable range... I wouldn't want to live in!
Thats when I knew.
.
No income verification or documentation!
0 down!
Interest Only!
150% financing!
NO Credit, No problem!!!!!!!
Thats when I knew!
When flipping became fashionable!
For me it was around 2002 when they completely took over Arizona. Every chick I met in a bar was a realtor and totally stupid too. When I saw the lack of brainpower running that industry I knew we were screwed.
from 5:20 above
How right you are!
A very good friend of mine made an offer on a Very Small OLD house in Frisco hills in 2002 or 03...
They lost it, I'm glad they did,
Asking: $730
They Offered: $730
Sold for over $900 in a bidding war
Whose sorry now?
When I started reading Housing Panic.
In July 2005, I started to panic. I knew the peak was coming soon. I staged my house as fast as possible (took a few months though). When I got an offer ($35K more than what I would have accepted from one open house) in October and closed in November, I was so happy.
I'm even more happy today as that house sold again a few months ago for $190K less as an REO sale. That could have been my loss if I listened to Realtors and others.
When those dumb-asses on HGTV were talking about making 40 percent profit on a house in a week - after they installed a few window shades and granite countertops. And, then to watch those imbecilic "homebuyers" pay the inflated price, while smiling at the cameras.
"Oh honey, look at those brand new granite countertops!"
That really showed me that greed was in, and common-sense, budgeting was out the window.
When in 2007 realtors and home builders in the Phoenix would actually answer their phone and speak with me. Before that if I could get anyone to answer, they were very rude and condescending (spelling?).
First,,I'm not a realtor or a banker...
What is a realtor??? Nothing more than a salesman selling a big ticket item.
The first move made is by the 'buyer' who wants something. Any kind of salesmen will assist you in this. He's just selling. He's the one helping you get your wish. If you're dumb enough, you'll buy the most expensive thing you can't afford, and it's YOU that wants the salesman to be on your side,,telling you how brilliant you are,,as you tell him "Thank You!" The salesman is nothing more than the dealer at the card table - it's you who lays down your money and plays the game,,not the dealer.
The mortgage brokers and bankers,,,,they do one thing,,,They Sell You Money. They sell you money for a profit, so you can buy a house.
The biggest liers in all of this housing shambles are the people who lied to themselves. Not the bankers,,not the realtors. The crime of the realtors and bankers was NOT telling you that you were lying to yourself - that was their crime. And if they told you that you were lying to yourself,,you would be insulted and walk away to find a realtor and banker who were 'on your side' --
Sing along now, "CountryWide, We're On Your Side!"
Believe it or not, when my wife & I were searching for our first home years ago,,we had a realtor who flat out said,,"Forget it,,YOU CAN"T AFFORD THAT ONE,,but let's find one you CAN afford."
And so she did.
An honest banker or realtor is now considered an insulting, negative, non-team playing asshole, and that's why there are so few or none of them these days.
Hey Keith,,, you need another title question for people to answer...
"When, if ever, did you realize you were lying to yourself when you decided to buy a house you absolutely could not afford?"
Sing along now, "CountryWide, We're On Your Side!"
Errr, that's Nationwide Insurance.
Have to agree with you Jack. I AM a realtor, although I mainly do property management for my company. The sale I do are to investors living outside the area. I don't try and sell overpriced properties because I end up managing them and know what's not a good investment. It's easy to lose money with rental properties, and managing a money losing investment is a nightmare.
About the time I heard about 'no intrest' loans I lost intrest entirely. Anyone dumb enough to go for that is friggin STOOPID. Offers of free lunch type crap is always the dead give away on any scam.
I guess for me the real question is how many of them were actually lying and how many were actually stupid enough to believe and perpetuate lies told by their brokers and the REIC.
I tend to think that a lot of the little underlings who have recently been turned into ramen munchers really did believe the lies themselves.
2004
- Globethistle
I have know for many years that realtors were scum and they would do anything to make a deal .You can't trust a word they say . They don't deserve the money and they helped push up the prices with all their lies .
-Have to agree with you Jack. I AM a realtor, although I mainly do property management for my company.-
thats all we need is a investor realestaet agent. must be a nar wannabe. whats wrong can't you find any more suckers to sell a house to so
now your selling to outoftown investors? twice a looser is what you are.
BWAHAHAHA
-The salesman is nothing more than the dealer at the card table - it's you who lays down your money and plays the game,,not the dealer.-
a bunch of BS and you know it.
if the salesman is the dearler then he is the one who holds all the cards. quit lying your a real estate agent to.
When I read the August 2002 Itulip article with Dean Baker "Is it a Bubble"???? I made real sense also that Gale Bullock pgtigercat.com site now retired excellent essays
Keith, you should have differentiated "crash" from "peak".
I knew there would be a "crash" when a friend at a party mentioned he was going to sell his house lot, (bought 5 months prior), because he just saw, that day,a lot sold for 100K in the same town.
That meant a 50 % profit!!!!!
I was amazed, and quickly thought of the 20K lots for sale just 3 years prior.
THAT was the moment I knew this was something that was going to crash to the ground. (Spring 2003).
Now, on the "peak" question. When I heard the number one hedge fund manager put his yacht up for sale, August 2006, I think.
THAT was the moment I knew we peaked.
I sold all my property in April 2006 and am now renting.
Wife is killing me to buy....
Investment advice;
Property REIT's are MASSIVELY OVERVALUED!!!
Look into the one's with the greatest debt.
Buy puts as far out as you can. Do not spend all your money at once, average up, or average down, but this may take a few months/year or so.
Find the ones with the most debt. (SPG?)
Debt will be the killer, as all the companies that have massive debt, (like some homeowners), will need to find the cash flow to service THEIR OWN DEBT, (like some homeowners).
Guess THAT will lead to lower profits when interest payments must come from sales!!!
SPG puts
IYR puts
AVB puts
SHLD puts
I own all these, but do your own research; no critics when they all go through the roof.
Anonymous said -
"a bunch of BS and you know it.
if the salesman is the dearler then he is the one who holds all the cards. quit lying your a real estate agent to."
Sorry my friend, retired Bell Labs 32 years.
You presume the dealer cheats. I presume he doesn't. It's you who stepped up to gamble, not the dealer.
When I couldn't understand how people's mortgages worked anymore.
Realtors are scum of the earth.
When 500,000 became the norm in Philadelphia where the median income is 30k for married people.
I knew this was gonna blow in 05.
I sold credit reports to mortgage companies. The loans these companies were doing were awful.
499 credit scores!!!! Come on....
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