Forbes: Housing Woes Hit High End Too

[(former)FormerSanDiegan]

It doesn’t really matter what people think the “right” or “just” solution is for the players involved. The fact is that the housing market became overpriced. It will correct itself to an equilibrium one way or another, primarily by market forces. Regardless of government intervention to slow or suppress the changes.

It wasn’t fair for the people of Banda Aceh, that they were overcome by a tsunami. However, it was an irrepressible reaction to a magnitude 9.0 event. There will be similar consequences, fair or not, in the reaction to the magnitude 9.0 event known as the housing bubble.

[contraman]

Bottom Line,

Government data indicates that Americans earned a smaller average income in 2005 than in 2000.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1% less than in 2000, after adjusting for inflation, an analysis of new tax statistics show.

On the flip side, housing in CA has gone up over 125% or more in the same period of time…….

Nothing more needs to be said here concerning what happens next…..

Sincerely, Contraman

[contraman]

Bottom Line,

Government data indicates that Americans earned a smaller average income in 2005 than in 2000.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1% less than in 2000, after adjusting for inflation, an analysis of new tax statistics show.

On the flip side, housing in CA has gone up over 125% or more in the same period of time…….

Nothing more needs to be said here concerning what happens next…..

Sincerely, Contraman

[contraman]

Bottom Line,

Government data indicates that Americans earned a smaller average income in 2005 than in 2000.

While incomes have been on the rise since 2002, the average income in 2005 was $55,238, still nearly 1% less than in 2000, after adjusting for inflation, an analysis of new tax statistics show.

On the flip side, housing in CA has gone up over 125% or more in the same period of time…….

Nothing more needs to be said here concerning what happens next…..

Sincerely, Contraman

[lindismith]

one thing I don’t understand about Piggington’s why is it everyone loves bad news?

I think all the newbies on this board really need to go into the forums, and start reading our discussions from the beginning.

You will see how every single thread of “what ifs” is now coming true. So it’s not that we love the bad news, it’s that we love being right. It’s the ultimate ‘I told you so’ moment.

We’ve all been discussing this subject for ages, and two years ago seems like an eternity just to get to this point in the market.

The frightening thing is though, everything that was discussed is now coming true, although most of it is unfolding more dramatically and with more volatility than I expected.

[lindismith]

one thing I don’t understand about Piggington’s why is it everyone loves bad news?

I think all the newbies on this board really need to go into the forums, and start reading our discussions from the beginning.

You will see how every single thread of “what ifs” is now coming true. So it’s not that we love the bad news, it’s that we love being right. It’s the ultimate ‘I told you so’ moment.

We’ve all been discussing this subject for ages, and two years ago seems like an eternity just to get to this point in the market.

The frightening thing is though, everything that was discussed is now coming true, although most of it is unfolding more dramatically and with more volatility than I expected.

[lindismith]

one thing I don’t understand about Piggington’s why is it everyone loves bad news?

I think all the newbies on this board really need to go into the forums, and start reading our discussions from the beginning.

You will see how every single thread of “what ifs” is now coming true. So it’s not that we love the bad news, it’s that we love being right. It’s the ultimate ‘I told you so’ moment.

We’ve all been discussing this subject for ages, and two years ago seems like an eternity just to get to this point in the market.

The frightening thing is though, everything that was discussed is now coming true, although most of it is unfolding more dramatically and with more volatility than I expected.

[cyphire]

There are victims here – but they are victims of timing and of chance. They might have drunk the kool-aid, but there was a kool-aid station at every single corner, and all their friends and neighbors were drinking the kool-aid too.

Lets look at the REALLY big picture for a sec….

This country is, and has been, going back to a turn of the century economy. There is a large gap between the wealthy and everyone else, the middle class is shrinking and getting squeezed, and the wealthy are getting HUGELY wealthy. We import everything and keep prices low by having huge numbers of workers (china) making a subsistence wage.

This is the same dynamic we are seeing and have seen in the financial markets. The US is a service economy and instead of building anything, we trade financial futures and financial instruments. Up till last month it was billions of billions of dollars being leveraged for / with corporate debt to buy out everything in sight. Mortgages were sold by the millions, without documentation etc. and repackaged to be just another low risk paper, but in reality explosively toxic financial instruments.

Our Republican administration has advanced greed and screw the people to an unprecedented point. No healthcare, low taxes for the wealthy, capital gains of 15%, anything goes in the financial community, approval of mergers which are anti-competitive, whatever the lobbyists want – carte’ blanch. Sorry – no rants against this please… It’s the middle and lower classes which got screwed by this administration, and it will continue for as long as the party of wealth and power keep paying off corrupt officials (on both sides).

From a micro standpoint – there has to be fuel for the Orc’s underground lair to make weapons with and to get rich off of. This is where the homeowners came in. Desperate to buy a house (whether a orange picker in Barstow, to a doctor’s wife in CV), people do what they have to to get their home. NO ONE is non-emotional and detached when then think of their future, and their living conditions compared to their peers and neighbors. Our government had a hands off policy toward wall street and toward the housing industry. Our politicians get reelected based on the economy (it’s the economy stupid!) and if the price that is paid is lemmings jumping off the edge to feed the financial fires, so be it.

Please… Understand my position. Almost no one can stand under the pressure of timing the market… The market is the market and the hucksters who are making more and more money start going out of control. They lie, misrepresent and then repackage and sell. Will they pay? No. Absolutely not. They will move on to something else and their short term prospects are pretty good – they make out like bandits.

Who pays? We all do. Our government should identify and stop this behavior… But they are the enablers. Where was Greenspan when he dropped interest rates to 0.5%? Why didn’t he report to congress the potential for disaster? Why didn’t congress stop the mortgage market from selling loans to people who were ninjas? This is what Government is supposed to do. Capitalism needs controls, or we have what we had at the beginning of the century – small numbers of people controlling and owning everything, and the regular guy getting screwed.

It is a house of cards…. It’s a house of cards because the dealers have the game rigged.

[cyphire]

There are victims here – but they are victims of timing and of chance. They might have drunk the kool-aid, but there was a kool-aid station at every single corner, and all their friends and neighbors were drinking the kool-aid too.

Lets look at the REALLY big picture for a sec….

This country is, and has been, going back to a turn of the century economy. There is a large gap between the wealthy and everyone else, the middle class is shrinking and getting squeezed, and the wealthy are getting HUGELY wealthy. We import everything and keep prices low by having huge numbers of workers (china) making a subsistence wage.

This is the same dynamic we are seeing and have seen in the financial markets. The US is a service economy and instead of building anything, we trade financial futures and financial instruments. Up till last month it was billions of billions of dollars being leveraged for / with corporate debt to buy out everything in sight. Mortgages were sold by the millions, without documentation etc. and repackaged to be just another low risk paper, but in reality explosively toxic financial instruments.

Our Republican administration has advanced greed and screw the people to an unprecedented point. No healthcare, low taxes for the wealthy, capital gains of 15%, anything goes in the financial community, approval of mergers which are anti-competitive, whatever the lobbyists want – carte’ blanch. Sorry – no rants against this please… It’s the middle and lower classes which got screwed by this administration, and it will continue for as long as the party of wealth and power keep paying off corrupt officials (on both sides).

From a micro standpoint – there has to be fuel for the Orc’s underground lair to make weapons with and to get rich off of. This is where the homeowners came in. Desperate to buy a house (whether a orange picker in Barstow, to a doctor’s wife in CV), people do what they have to to get their home. NO ONE is non-emotional and detached when then think of their future, and their living conditions compared to their peers and neighbors. Our government had a hands off policy toward wall street and toward the housing industry. Our politicians get reelected based on the economy (it’s the economy stupid!) and if the price that is paid is lemmings jumping off the edge to feed the financial fires, so be it.

Please… Understand my position. Almost no one can stand under the pressure of timing the market… The market is the market and the hucksters who are making more and more money start going out of control. They lie, misrepresent and then repackage and sell. Will they pay? No. Absolutely not. They will move on to something else and their short term prospects are pretty good – they make out like bandits.

Who pays? We all do. Our government should identify and stop this behavior… But they are the enablers. Where was Greenspan when he dropped interest rates to 0.5%? Why didn’t he report to congress the potential for disaster? Why didn’t congress stop the mortgage market from selling loans to people who were ninjas? This is what Government is supposed to do. Capitalism needs controls, or we have what we had at the beginning of the century – small numbers of people controlling and owning everything, and the regular guy getting screwed.

It is a house of cards…. It’s a house of cards because the dealers have the game rigged.

[cyphire]

There are victims here – but they are victims of timing and of chance. They might have drunk the kool-aid, but there was a kool-aid station at every single corner, and all their friends and neighbors were drinking the kool-aid too.

Lets look at the REALLY big picture for a sec….

This country is, and has been, going back to a turn of the century economy. There is a large gap between the wealthy and everyone else, the middle class is shrinking and getting squeezed, and the wealthy are getting HUGELY wealthy. We import everything and keep prices low by having huge numbers of workers (china) making a subsistence wage.

This is the same dynamic we are seeing and have seen in the financial markets. The US is a service economy and instead of building anything, we trade financial futures and financial instruments. Up till last month it was billions of billions of dollars being leveraged for / with corporate debt to buy out everything in sight. Mortgages were sold by the millions, without documentation etc. and repackaged to be just another low risk paper, but in reality explosively toxic financial instruments.

Our Republican administration has advanced greed and screw the people to an unprecedented point. No healthcare, low taxes for the wealthy, capital gains of 15%, anything goes in the financial community, approval of mergers which are anti-competitive, whatever the lobbyists want – carte’ blanch. Sorry – no rants against this please… It’s the middle and lower classes which got screwed by this administration, and it will continue for as long as the party of wealth and power keep paying off corrupt officials (on both sides).

From a micro standpoint – there has to be fuel for the Orc’s underground lair to make weapons with and to get rich off of. This is where the homeowners came in. Desperate to buy a house (whether a orange picker in Barstow, to a doctor’s wife in CV), people do what they have to to get their home. NO ONE is non-emotional and detached when then think of their future, and their living conditions compared to their peers and neighbors. Our government had a hands off policy toward wall street and toward the housing industry. Our politicians get reelected based on the economy (it’s the economy stupid!) and if the price that is paid is lemmings jumping off the edge to feed the financial fires, so be it.

Please… Understand my position. Almost no one can stand under the pressure of timing the market… The market is the market and the hucksters who are making more and more money start going out of control. They lie, misrepresent and then repackage and sell. Will they pay? No. Absolutely not. They will move on to something else and their short term prospects are pretty good – they make out like bandits.

Who pays? We all do. Our government should identify and stop this behavior… But they are the enablers. Where was Greenspan when he dropped interest rates to 0.5%? Why didn’t he report to congress the potential for disaster? Why didn’t congress stop the mortgage market from selling loans to people who were ninjas? This is what Government is supposed to do. Capitalism needs controls, or we have what we had at the beginning of the century – small numbers of people controlling and owning everything, and the regular guy getting screwed.

It is a house of cards…. It’s a house of cards because the dealers have the game rigged.

[PadreBrian]

No one here is looking for 1989 levels. 2002 prices before the liar loans, zero down on jumbo mortgages that flippers loved sooooo much and drove the housing prices through the roof, is where things will settle.

[PadreBrian]

No one here is looking for 1989 levels. 2002 prices before the liar loans, zero down on jumbo mortgages that flippers loved sooooo much and drove the housing prices through the roof, is where things will settle.

[PadreBrian]

No one here is looking for 1989 levels. 2002 prices before the liar loans, zero down on jumbo mortgages that flippers loved sooooo much and drove the housing prices through the roof, is where things will settle.

[lindismith]

great post Cyphire.

I get more and more disgusted everyday.

Barry’s blog has a link to all the CDO insider stuff that went on. Completely appalling. It’s graft.

http://bigpicture.typepad.com/comments/2007/08/cdo-insiders-we.html

[lindismith]

great post Cyphire.

I get more and more disgusted everyday.

Barry’s blog has a link to all the CDO insider stuff that went on. Completely appalling. It’s graft.

http://bigpicture.typepad.com/comments/2007/08/cdo-insiders-we.html

[Author]

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