San Diego Housing Bubble News and Analysis

Sweet, I'm looking forward to the day I can buy a few beach front property in San Diego.

hopefully by that time you won't be living on your savings and unemployed :(

You can always plant your own veggies, raise your own chicken, etc. All that while living in a beach front house in SD :-).

You forgot these gems from the list

#21. Universities will go out of business as no one will be able to afford to attend

#33 We are headed for resource wars, which will result in much resource and infrastructure destruction

#35 Ordinary people are unlikely to be able to afford oil products AT ALL within 5 years

I saw this movie already, Mel Gibson was excellent in it, especially the first two, by the time they got around to making thunderdome, it got silly.

I know you said you didn't agree with it, but if you don't agree with much of it, you have dismiss it all. There is a homeless crazy guy that is always at the same spot on my daily jogging route, he reads aloud from a book, kinda shouting to all passers by. A few times I've removed my headphones to hear what he is saying. None of it manages to sink in because he is a crazy guy that yells 10 hours a day on the corner, so if he mixed in a stock pick as i jogged by, maybe one that I agree with, should I listen to everything he says, maybe pull up a lawn chair and listen to the sermon of insanity, then plan my finances based on his knowledge. Thanks, but no thanks, that's why I have an Ipod

good luck with that 90% reduction on average for r/e

I'm more concerned about the homeless guy lowering your home value. if he manage to get a couple of friends, so it'll be a camp, and then we really will have that 90% value reduction.

It's a classic credit bubble deflating. Except this time, we have a historically gigantic public and private debt ratio to deflate. These things take many years to unwind. 11% of the population now recieves food stamps. U-6 unemployment is in the 20% range for the state and now the nation.

Global economic contraction is firmly in process now. But we're also a very large welfare coutry now and will probably become more so in the future. I doubt there will be devistation, but the standards we've grown used to in the last 30 years are going to be for only the top few percent to enjoy.

Actually he isn't near home, I've been logging a lot of hours these days at the office in gotham city, I am a lunch jogger guy, but that is a good idea, wish I had thought about. Parking a crazy guy in front of the house you want to buy, it has a scooby doo feel to it, like haunting a place to drive the value down. Most scooby doo plots ended up having to do with appraised value, I wish I had applied scooby doo tactics in real life?

That is so true now that I think about it!

Funny Funny.

as in: "dude, I pulled a scooby and scored a 1987 pricing on my new dig!"

=)

Yeah it’s pretty apocalyptic isn’t it?

Number 41 got deleted at the final cut:

41. Scooby Doo will be served as main course at a Chinese bistro after he is acquired; en masse along with all of America’s other worthwhile assets, by the Chinese.

Automatic Earth is generally a good read, I like it. I thought this would be fun.

Is your homeless dude haunting Old Town Temecula? I rode my bike around Temecula a while back and Old Town has really gotten a makeover, but there are some concerning looking individuals roaming around there......

Why do they have the bus station (aka hobo magnet) down there?

Hey TG-

Hebrews 13:2
"Be not forgetful to entertain strangers: for thereby some have entertained angels unawares."

The more I think about the scooby thing, the more I think we can use it as slang. If someone is knocking a particular area/house/stock because they want to buy it for less for themselves, that is "pulling a scooby." Conversely, a "reverse scooby" is what Rt.66 can accuse me of when he thinks I'm pimping my hood for my own property values (which he really can't if you look at my big picture, but it will be more funny when he does it).

Automatic Earth was a good read but there is no real debate on their boards, they are the victims of their own intelligence and the posters and contributing authors just build on each other until it is foil hat time.

Veritas, my ability to interpret biblical text is very poor, it would my most feared jeapordy category. But, yes, I entertain the crazy all the time, I am a nice as I can be, but I am way to rational/skeptical to take their advice, so if one has talked to the angels, I'd probably miss out. I wish one of them had told me that I should have bought Ford stock at $1.01, when I was about to do it, then I would have bought that guy some soup and see how much more the angels told him. But I'll bet in that same bible, you can find twenty verses that warn of turning the street hobo into Dustin Hoffman in Rain man for your own financial gain.

We had a credit bubble unwind in 1929 and in Japan in the 1990's.
Now Unemployment hit 25% in 29, and floated around in Japan.
It's a mess in japan, but it never became Apocalyptic.
It was a mess in 29 but it never became apocalyptic.

TG,
Translation your bum might be an angel in disguise to test the charity in your heart. As for patb, Apocalyptic- I consider World War II Apocalyptic and it was a direct result of the economic damage created by the crash. Unless you think we have too many people and that removing a large amount of the males will improve the quality of the world, then what is your definition of Apocalyptic?

Zeitgeist: Yeah, that remark by Pat struck me as well. 50 million dead ain't apocalyptic?

I'm paraphrasing a comment I heard about the policies of the Italy, the US and Germany during the 1930's, which went: "Italy chose the past, America chose the future, and Germany chose oblivion". World War II WAS a direct result of the Great Depression and also was a result of the "unfinished business" of WWI, too.

It certainly was apocalyptic. I think you'd get no argument from the survivors of Hiroshima and Nagasaki on that count.

I think its interesting that this has wondered to "how to treat hobos/homeless" (appropriate given the venue).

And WW2 (also appropriate)

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Ok, its shooting fish in a barrell to pick out some of the zingers on the list and pooh-pooh them. This is obviously an uber-bear type list, digestable only by a small portion of the populace at the moment.

So......

Which ones do you think might actually happen?

And if they do come about.... how many of the others can be pushed closer to plausability?

That's the thought process the list provoked in me.

Its already here, Obama is a dangerous extremist who appealed to populists.

"The flip side of the manic optimism we saw in the bubble years will be persistent pessimism, risk aversion, anger, scapegoating, recrimination, violence and the election of dangerous populist extremists"

Populism is a discourse that claims to support "the people" versus "the elites". Populism may comprise an ideology urging social and political system changes and/or a rhetorical style deployed by members of political or social movements. Generally, populism invokes an idea of democracy as being, above all, the expression of the people's will.

The only ones I see as a possibility are, but not in the context they put them especially with the occasional next leading question:

#12 We are headed eventually for a bond market dislocation where nominal interest rates will shoot up into the double digits

#13 Real interest rates will be even higher (the nominal rate minus negative inflation)

#15 Government spending (all levels) will be slashed, with loss of entitlements and inability to maintain infrastructure

#16 Finance rules will be changed at will and changes applied retroactively (eg short selling will be banned, loans will be called in at some point)

#19 People with essentially no purchasing power will be living in a pay-as-you-go world

#23 The US dollar will continue to rise for quite a while on a flight to safety and as dollar-denominated debt deflates

But here's where I don't like the way they wrote it, it's kinda like how some polls are skewed with the way they ask a question. A lot of them are two parters, like #23, it is written simply but #24 is written so as if you believe #23 is true, then #24 must be. #19 is vauge, do they mean all people? If you put the word "some" in front of the sentence, I'd say it is true now, it wont apply to all. It has some classic, associative theorum (or bolean) that mimmic timeshare salespeople. An apple is red, an apple tastes good, therefore we will all live in grass huts and eat rocks.

Look at #16, sure part a and b make sense, but c is ridiculous, indulge me, lets break it down, yes financial rules will be changed at will. We see that now, I'm still there. Short selling will be banned, o.k., it has for certain industries and for periods of time, I'm still there. But then C, loans will be called in at some point. You lost me right there, which loans? How many? Maybe some? Not all. Do they mean all home loans? Loans and interest have existed since the first trading occured when someone traded a goat for some corn, banking has been around since the templars, these things aren't going away.

They need to soften #15, government spending will go down, some entitlemens will be lost or reduced and some infrastructure will be "maintenance deferred" The way they have it, even mexico isn't in that kinda shape.

Classic timeshare sales, you like vacations (o.k), vacations prices go up on average (I'm listening), therefore, give me 50 grand....ooops, you lost me
right there.

Oh give me a break. "Dangerous extremist," my ass. That you would say this about AT MOST a moderate leftist says way more about you than it does him. Go back to your AM talk radio.

Getting back to the doom and gloom posting:
> I know you said you didn't agree with it, but
> if you don't agree with much of it, you have
> dismiss it all.

It was interesting how the OP cherry-picked predictions from the list. The predictions that were posted here seemed intriguing and I too followed the link and had to laugh at some of the other predictions that were not posted here. I definitely think we're in for very rough times ahead, but universities shuttering? Armageddon? C'mon.

I'm waiting for medicare to blow up, corporate taxes to go sky higher, and additional taxes that Obama will throw on the working class (mandatory taxes for universal health care, cell phones,etc) to make up for the ballooning deficit so that the general public to wake up and stop worshipping him as the messiah.

I still vote for high inflation in the mid-future.

As far as 90% off of RE on the entire U.S.......If that really were to happen, RE would be the last thing on 99% of the people's mind. In fact, a better option might be just to live in a different country.

"Moderate leftist"? Uh, okay, I'll bite. What do YOU consider an "extreme leftist"?

He's extensively refashioning our banking, finance and auto industries, but he's a moderate according to you. In his first five months in office, he's outstripped the profligacy of the BushCo years (which took seven years to accumulate) and his policies will cost us trillions of dollars in future obligations.

He's a populist demagogue in the worst sense of the word and contained in all of his soaring oratory about "Hope" and "Change" are all the necessary symbols and rhetoric of a dyed-in-the-wool Leftist.

Of course, according to Frank Rich of the NYT, anyone who disagrees with Dear Leader is a right-wing extremist, dead set on overthrowing our government by force. Which then sets the stage to disarm the country, because those pesky guns are dangerous.

He's not a moderate in any sense of the word. Parse the words carefully, amigo, because they mean things.

obama got the job at the worst possible time. anyone read the Onion? (theonion.com) there's an old headline, i'm paraphrapsing, but somethinglike, Nation Elects Black Man To Nation's Shittiest Job

I'm waiting to buy at 95% off.

Excellent disection of "the list" TG.

Hatfield, I don't know if I cherry picked or left anything out. Afterall, I included the link right at the top and encouraged people to "go take a look at http://theautomaticearth.blogspot.com/20..." before including my snipet of the list. Good job finding those elusive zingers on the list.

Flu said:
"As far as 90% off of RE on the entire U.S.......If that really were to happen, RE would be the last thing on 99% of the people's mind. In fact, a better option might be just to live in a different country."

Flu, good point. I think regardless of the actuall percentage of the drop we will know a bottom is close when "RE would be the last thing on 99% of the people's mind" as an investment.

Let's have a look at recent "List" news:
From Mish

States most dependent on Personal Income Taxes

This is a very grim report on state finances. http://globaleconomicanalysis.blogspot.c...
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Fewer people are receiving jobless aid largely because more of them have exhausted their standard unemployment benefits, which typically last 26 weeks. Government figures, in fact, show the proportion of recipients who used up their jobless benefits in May topped 49 percent, a monthly record.
Given that the proportion of recipients who used up their jobless benefits topped a monstrous 49 percent, the continuing claims number going forward will be essentially meaningless. Indeed, the primary reason we set these records in the first place is that many states extended benefits.

Looking ahead, expect the administration to highlight the huge drop in continuing claims as if it means something necessarily good. It doesn't. The drop in continuing claims means more home foreclosures and credit card defaults are coming because 49% of those who were receiving benefits now have no money coming in at all. http://globaleconomicanalysis.blogspot.com/
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And globally:

World hunger reaches the 1 billion people mark
By ALESSANDRA RIZZO – 1 hour ago

I bet if you work in state level tax collection this looks a lot like a depression. If you just got your last unemployment check (still no job), or if you are now going hungry the "list" is probably not so radical?

A huge number of people are now "dropping" off the UI payment roles. If the govt does not do another extension soon, these people are going into 'depression mode' pretty fast from here out.

Maybe you should understand your own words first, amigo.

Demagoguery: a strategy for gaining political power by appealing to the prejudices, emotions, fears and expectations of the public — typically via impassioned rhetoric and propaganda, and often using nationalist or populist themes.

Gee, that sounds a lot more like the previous administration than the current one.

Well, I guess I was trying to amplify on a point made earlier - the list does contain a lot of salient & likely outcomes of the current fiasco. But the bullet list is made a lot less compelling with the inclusion of some batshit-crazy notions like "In the future the consequences of unpayable debt could include indentured servitude, debtor's prison or being drummed into the military" and "Modern healthcare will be largely unavailable and informal care will generally be very basic." I was half-expecting David Byrne's "In the future, women will have breasts all over" to make an appearance.

I mean, if the author really believes we are headed inevitably towards the Mad Max scenario, you'd think he'd start with that premise, not bury it in a bullet list which otherwise contains salient predictions. And the list itself is made considerably less compelling as a whole. It's kind of like the metaphorical crazy guy on the street corner mentioned earlier - if he keeps saying things, some of them are bound to be true. :)

BTW, if you're not subscribed to John Mauldin's newsletter, I highly recommend it. It's free, it comes out a couple times per week, features a lot of great guest writers (including Richard Russell) and it does a pretty good analysis of what's going on right now. And unlike a lot of the free newsletters out there, it's virtually free of spam or incessent offers to sign up for this, buy that, etc. You can sign up at http://www.johnmauldin.com/