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carlislematthew
ParticipantAmericans have a much shorter view of time than the Chinese. As a culture they are quite capable of taking a longer term view than we are.
I’m not sure if it’s cultural or political. Once Chinese governments are just concerned about being re-elected every 4 years, then I think we’ll see the same level of short-sightedness over there too.
ParticipantNewt Gingrich stated that he thinks that we are in the early stages of WW3 on Meet the Press on Sunday, July 16th, 2006.
I’ve heard this referred to as the “Hitler of the day” complex. Basically, pick your regional thug and turn him into a huge monster. Whip up some panic. Throw in a dash of military defense spending. Voila.
ParticipantNewt Gingrich stated that he thinks that we are in the early stages of WW3 on Meet the Press on Sunday, July 16th, 2006.
I’ve heard this referred to as the “Hitler of the day” complex. Basically, pick your regional thug and turn him into a huge monster. Whip up some panic. Throw in a dash of military defense spending. Voila.
ParticipantWhy else would Brazil be ahead of us?
Because their population is MUCH smaller and they already use much less gasoline, so the scope of the problem is much smaller. In addition, they make ethanol out of sugar (cane, I think) which is a MUCH MUCH more efficient way to make ethanol. My understanding is that making sugar from corn, like we do in the US, uses a lot of energy and so the net energy you get out of it isn’t very much.
Also, imagine a significant portion of the US went to corn-produced ethanol. Imagine how much fertilizer we’d be dumping into our rivers and seas. It’s quite bad already, I’m not sure I’d want to increase the problem by 100, or 1000, or 10,000 times.
There are newer forms of ethanol production that are being worked on (cellulosic ethanol?) that is a process that can work with a lot of organic waste materials: sawdust, sticks, I dunno, lots of stuff. Politicians like to talk about this one a lot, so that makes me suspicious that it’s just something in the future we can point to so that we don’t have to do anything NOW.
Participantthe big picture is that coastal California will lose tech jobs because young techies cannot afford any decent homes especially if prices stay high. That will have a devastating negative long term impact on California’s economy.
I’m not so sure about that. Young techies are the only people that might actually be *able* to buy a house these days! Also, young techies are often ok (or prefer) to live in a condo. Sure, they’ll get married, have kids, and want a house, but that’s no longer the same 25 year old techie earning 80-100K with money to burn.
Besides, once people with money can’t afford to buy houses, then nobody will be able to sell their houses at those inflated prices. Eventually, an equilibrium will be reached.
ParticipantI think the effects we’re seeing already are at the gas pump! Gas prices *seem* to be affecting consumer spending already (depending on who you talk to) and increases at the pump can only make things worse.
If there was a full scale WAR over there (which isn’t happening yet) then I think we’d easily see $4 gasoline almost overnight, and move towards $5 or $6 depending on how bad things got over there.
I believe this will accelerate (not create) the next recession. This is why I think it’s almost futile to guess when the next recession will occur. The problem? Events!
But don’t worry, just refinance and buy a Prius! 😉
ParticipantWow! That’s a 100% increase in inventory! If we extrapolate that over the entire country, I can safely and confidently predict a 100% increase in real estate inventory!!!!!
ParticipantHow does the price of condos relate to the price of houses? If condos are down x%, then does this also drag the price of entry level houses down y%, which in turn also has an effect on the more expensive houses?
I’m wondering if the condo fallout might have a bigger impact than just condos and that the pain may bleed into the SFR market, adding to the general decline due to overall economic factors.
ParticipantIf the Fed knows all this, then don’t they have an idea of what we’re in for? I mean, don’t they have teams of people running forecasts, and analyzing EVERYTHING, and then controlling whatever factor(s) they need to? I realize we’re in a capitalist market, and not everything can be controlled, but why let interest rates get SO low?
My belief regarding interest rates is that the fed took what they perceived to be the lesser or two evils. They could do one of two things:
1) Lower interest rates massively.
2) Lower interest rates, somewhat, but not so much as to massively stimulate the housing market.I believe that they chose option 1 because in their minds it was the lesser of two evils. They felt that they could reduce the extent of the recession (that would affect EVERYONE) and trade that for a future housing problem that would only affect SOME people. I believe they traded problems and exchanged a short-term issue for all, into a long-term issue for some. Now, it may not be the case that the long-term issue will only affect “some”, but my theory is that they didn’t realize the extent to which people would be so crazy.
The fed are economists, and they’re not stupid. So they must have had an understanding of what lower interest rates would do. Yes, it would save the short term. Yes, Greenspan could go on record as telling everyone to get ARMS and refinance. But the result should hopefully be some time in the future, and only affect some regions (the “frothy” ones”) and only some people in those regions.
In summary, I believe that that Greenspan and his “pals” picked a milder recession and a few bankruptcies, over a stronger recession and a stable housing market.
Just my 2 cents…
ParticipantThey are beautiful homes, and I dream of owning one like that someday.
Surely, you mean renting, Powayseller? 😉
ParticipantDrive up Mira Mesa Blvd and take a nice zoomed-in picture of the “open house” signs! OK, so this works best on Sundays..
I saw 7 signs on one street corner all bunched up together this Sunday!
ParticipantHave a friend who lives there on the canyon. Some great locations. Good luck, I suspect you’ll get what you want and more.
That’s exactly the location that I’m looking at too. In fact, I just got back from mountain biking in the canyon (it’s a huge preserve) and was taking a look at the houses up on the hill.
Participanthttp://en.wikipedia.org/wiki/Wealth_Effect
I don’t know a whole lot about it, but the article above makes it seem pretty simple.
In answer to your question about when people will actually pay back these loans, I agree with your “what the hell?” assessment of the situation. I wonder the same thing.
Rising home equity gives you the opportunity to do a few things:
1) Cash out and move to an area where prices are NOT inflated (as much).
2) Cash out, stay in town, but downsize.
3) Borrow more money!
Lots of people have taken option 3. I think a very common thread was people with credit card debt using a HELOC to pay that off, and buy a BMW while you’re at it. After all, it’s “free money” and your house will only ever go up in value so you can always sell in a pinch if you need to. Besides, the payment is only XXX a month! What a deal!
I don’t think the majority of HELOCers realized that they were only paying interest, that the interest would double in 2 years time (which it has already), and that they would actually have to pay this money back at some point!
Plus, once the HELOC is maxed out, I believe the spenders will go back to their old lifestyle of gradually accumulating credit card debt because their spending habits have not been fixed. If anything, they’re probably worse now because the infusion of cash has made them feel more wealthy than they really are (the wealth effect!) and so their lifestyle has changed. Nicer vacations, nicer restaurants, kids have a higher allowance, etc. It’s REALLY hard to go down in lifestyle, but it only take a nanosecond to go up!
ParticipantSorry, but since Piggington is about reality, mira mesa is no garden spot and I would not want to raise my family or invest a half a mill in real estate there.
I agree. I’m currently renting a house in Mira Mesa due to the proximity to work and general conveniences. Apart from that, it’s pretty cheap and if you can find a decent road it’s not too bad. However, I am thankful that I have enough money and income that I don’t *have* to buy a house here. It’s not horrible, or dangerous, but I wouldn’t buy a house here.
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