[gandalf]

Surprised at you Piggs, blaming it all on land prices, permits and big bad CA government. Real estate is a regional business. This bubble is regional in many regards. Speculation in downtown San Diego, for example, results in skyrocketing real estate in — you guessed it, Antarctica. Not.

There are absolutely pockets in TX where prices got ahead of values. On balance, they didn’t appreciate as much as “Canary in the Coalmine” San Diego, and won’t suffer the same declines as a result. Compare with the S&L speculation and collapse in the 80’s which absolutely hammered the midwest. I can remember parts of Oklahoma with near ‘ghost towns’ due to S&L problems and the collapsing of oil prices (and associated speculation). Coastal regions were certainly affected, but less so.

[gandalf]

Surprised at you Piggs, blaming it all on land prices, permits and big bad CA government. Real estate is a regional business. This bubble is regional in many regards. Speculation in downtown San Diego, for example, results in skyrocketing real estate in — you guessed it, Antarctica. Not.

There are absolutely pockets in TX where prices got ahead of values. On balance, they didn’t appreciate as much as “Canary in the Coalmine” San Diego, and won’t suffer the same declines as a result. Compare with the S&L speculation and collapse in the 80’s which absolutely hammered the midwest. I can remember parts of Oklahoma with near ‘ghost towns’ due to S&L problems and the collapsing of oil prices (and associated speculation). Coastal regions were certainly affected, but less so.

[gandalf]

Surprised at you Piggs, blaming it all on land prices, permits and big bad CA government. Real estate is a regional business. This bubble is regional in many regards. Speculation in downtown San Diego, for example, results in skyrocketing real estate in — you guessed it, Antarctica. Not.

There are absolutely pockets in TX where prices got ahead of values. On balance, they didn’t appreciate as much as “Canary in the Coalmine” San Diego, and won’t suffer the same declines as a result. Compare with the S&L speculation and collapse in the 80’s which absolutely hammered the midwest. I can remember parts of Oklahoma with near ‘ghost towns’ due to S&L problems and the collapsing of oil prices (and associated speculation). Coastal regions were certainly affected, but less so.

[gandalf]

Surprised at you Piggs, blaming it all on land prices, permits and big bad CA government. Real estate is a regional business. This bubble is regional in many regards. Speculation in downtown San Diego, for example, results in skyrocketing real estate in — you guessed it, Antarctica. Not.

There are absolutely pockets in TX where prices got ahead of values. On balance, they didn’t appreciate as much as “Canary in the Coalmine” San Diego, and won’t suffer the same declines as a result. Compare with the S&L speculation and collapse in the 80’s which absolutely hammered the midwest. I can remember parts of Oklahoma with near ‘ghost towns’ due to S&L problems and the collapsing of oil prices (and associated speculation). Coastal regions were certainly affected, but less so.

[gandalf]

Surprised at you Piggs, blaming it all on land prices, permits and big bad CA government. Real estate is a regional business. This bubble is regional in many regards. Speculation in downtown San Diego, for example, results in skyrocketing real estate in — you guessed it, Antarctica. Not.

There are absolutely pockets in TX where prices got ahead of values. On balance, they didn’t appreciate as much as “Canary in the Coalmine” San Diego, and won’t suffer the same declines as a result. Compare with the S&L speculation and collapse in the 80’s which absolutely hammered the midwest. I can remember parts of Oklahoma with near ‘ghost towns’ due to S&L problems and the collapsing of oil prices (and associated speculation). Coastal regions were certainly affected, but less so.

[gandalf]

Cool calcs. Yep, problem was incomplete, not enough information. After all, 1/20th of a litter of eight is what? Maybe enough for a wing. With barbecue sauce. Mmmm….

Regardless, ucodegen, you did have the best analysis, and suppose Rus could consider naming Rooster after you, but then how do you name a pet Rooster:

‘Uco-de-gen’?

Seems to me it’s gotta roll of yer tongue like “Goddamn it TG! Would’ja shut up with the crowing already? It’s 4am in the goddamn morning, fer crist’s sake… Trying to get some sleep.” 😉

And besides, if Mary Ann and Ginger really are the GSE’s, you don’t want to get stuck holding the bag on that one!

[gandalf]

Cool calcs. Yep, problem was incomplete, not enough information. After all, 1/20th of a litter of eight is what? Maybe enough for a wing. With barbecue sauce. Mmmm….

Regardless, ucodegen, you did have the best analysis, and suppose Rus could consider naming Rooster after you, but then how do you name a pet Rooster:

‘Uco-de-gen’?

Seems to me it’s gotta roll of yer tongue like “Goddamn it TG! Would’ja shut up with the crowing already? It’s 4am in the goddamn morning, fer crist’s sake… Trying to get some sleep.” 😉

And besides, if Mary Ann and Ginger really are the GSE’s, you don’t want to get stuck holding the bag on that one!

[gandalf]

Cool calcs. Yep, problem was incomplete, not enough information. After all, 1/20th of a litter of eight is what? Maybe enough for a wing. With barbecue sauce. Mmmm….

Regardless, ucodegen, you did have the best analysis, and suppose Rus could consider naming Rooster after you, but then how do you name a pet Rooster:

‘Uco-de-gen’?

Seems to me it’s gotta roll of yer tongue like “Goddamn it TG! Would’ja shut up with the crowing already? It’s 4am in the goddamn morning, fer crist’s sake… Trying to get some sleep.” 😉

And besides, if Mary Ann and Ginger really are the GSE’s, you don’t want to get stuck holding the bag on that one!

[gandalf]

Cool calcs. Yep, problem was incomplete, not enough information. After all, 1/20th of a litter of eight is what? Maybe enough for a wing. With barbecue sauce. Mmmm….

Regardless, ucodegen, you did have the best analysis, and suppose Rus could consider naming Rooster after you, but then how do you name a pet Rooster:

‘Uco-de-gen’?

Seems to me it’s gotta roll of yer tongue like “Goddamn it TG! Would’ja shut up with the crowing already? It’s 4am in the goddamn morning, fer crist’s sake… Trying to get some sleep.” 😉

And besides, if Mary Ann and Ginger really are the GSE’s, you don’t want to get stuck holding the bag on that one!

[gandalf]

Cool calcs. Yep, problem was incomplete, not enough information. After all, 1/20th of a litter of eight is what? Maybe enough for a wing. With barbecue sauce. Mmmm….

Regardless, ucodegen, you did have the best analysis, and suppose Rus could consider naming Rooster after you, but then how do you name a pet Rooster:

‘Uco-de-gen’?

Seems to me it’s gotta roll of yer tongue like “Goddamn it TG! Would’ja shut up with the crowing already? It’s 4am in the goddamn morning, fer crist’s sake… Trying to get some sleep.” 😉

And besides, if Mary Ann and Ginger really are the GSE’s, you don’t want to get stuck holding the bag on that one!

[gandalf]

Beginning of all this, I thought we’d drop 30% nominal, 50% real after adjusting for inflation, currency/debt devaluation. We’ve reached that point already. Now, I think things are going to drop another 20% in nominal terms, and more if the economy really falls out from under us, which is a real possibility. Oil shocks and commodities may tip the balance in that direction.

What really scares me is the financial scene. It’s an absolute mess. The leverage is frightening, asset values based on revenue streams that were never unsustainable. Levered up during growth and compressed down as we contract. The books just don’t balance. Widespread financial pain, foreclosures, bankruptcies and dislocation is unavoidable at this point.

I always think back, compare to the first job I had out of college working on an MBS trading desk on Wall Street, cleaning up after the S&L crisis, RTC days. It was my job to analyze and assess whole loan pool characteristics, help the traders figure out how to slice-and-dice the pools, packaging securities. The cycle we’re going through is easily 3-4 times worse, metrics I’ve seen.

So I think we’re going to see things continue to deteriorate for the next 2-3 years, with another 20% off current prices. Not sure what will happen with inflation. Helps debt issues obviously, though a serious contraction might result in deflation, which would exacerbate asset and debt pricing/value disparities. No good sides to this. We’ve run out the clock.

No areas immune either. I think this one’s going to hammer rich, middle and poor alike. Staggered effects on the wealthier areas, in part due to better loan products, in part due to Bush policies of wealth redistribution (towards upper quintile). But at the end of all this, there are going to be alot of wealthy people who ended up losing their shirts. Also, I think lots of retirees are going to get creamed, impacted by declining value of assets and savings.

[gandalf]

Beginning of all this, I thought we’d drop 30% nominal, 50% real after adjusting for inflation, currency/debt devaluation. We’ve reached that point already. Now, I think things are going to drop another 20% in nominal terms, and more if the economy really falls out from under us, which is a real possibility. Oil shocks and commodities may tip the balance in that direction.

What really scares me is the financial scene. It’s an absolute mess. The leverage is frightening, asset values based on revenue streams that were never unsustainable. Levered up during growth and compressed down as we contract. The books just don’t balance. Widespread financial pain, foreclosures, bankruptcies and dislocation is unavoidable at this point.

I always think back, compare to the first job I had out of college working on an MBS trading desk on Wall Street, cleaning up after the S&L crisis, RTC days. It was my job to analyze and assess whole loan pool characteristics, help the traders figure out how to slice-and-dice the pools, packaging securities. The cycle we’re going through is easily 3-4 times worse, metrics I’ve seen.

So I think we’re going to see things continue to deteriorate for the next 2-3 years, with another 20% off current prices. Not sure what will happen with inflation. Helps debt issues obviously, though a serious contraction might result in deflation, which would exacerbate asset and debt pricing/value disparities. No good sides to this. We’ve run out the clock.

No areas immune either. I think this one’s going to hammer rich, middle and poor alike. Staggered effects on the wealthier areas, in part due to better loan products, in part due to Bush policies of wealth redistribution (towards upper quintile). But at the end of all this, there are going to be alot of wealthy people who ended up losing their shirts. Also, I think lots of retirees are going to get creamed, impacted by declining value of assets and savings.

[gandalf]

Beginning of all this, I thought we’d drop 30% nominal, 50% real after adjusting for inflation, currency/debt devaluation. We’ve reached that point already. Now, I think things are going to drop another 20% in nominal terms, and more if the economy really falls out from under us, which is a real possibility. Oil shocks and commodities may tip the balance in that direction.

What really scares me is the financial scene. It’s an absolute mess. The leverage is frightening, asset values based on revenue streams that were never unsustainable. Levered up during growth and compressed down as we contract. The books just don’t balance. Widespread financial pain, foreclosures, bankruptcies and dislocation is unavoidable at this point.

I always think back, compare to the first job I had out of college working on an MBS trading desk on Wall Street, cleaning up after the S&L crisis, RTC days. It was my job to analyze and assess whole loan pool characteristics, help the traders figure out how to slice-and-dice the pools, packaging securities. The cycle we’re going through is easily 3-4 times worse, metrics I’ve seen.

So I think we’re going to see things continue to deteriorate for the next 2-3 years, with another 20% off current prices. Not sure what will happen with inflation. Helps debt issues obviously, though a serious contraction might result in deflation, which would exacerbate asset and debt pricing/value disparities. No good sides to this. We’ve run out the clock.

No areas immune either. I think this one’s going to hammer rich, middle and poor alike. Staggered effects on the wealthier areas, in part due to better loan products, in part due to Bush policies of wealth redistribution (towards upper quintile). But at the end of all this, there are going to be alot of wealthy people who ended up losing their shirts. Also, I think lots of retirees are going to get creamed, impacted by declining value of assets and savings.

[gandalf]

Beginning of all this, I thought we’d drop 30% nominal, 50% real after adjusting for inflation, currency/debt devaluation. We’ve reached that point already. Now, I think things are going to drop another 20% in nominal terms, and more if the economy really falls out from under us, which is a real possibility. Oil shocks and commodities may tip the balance in that direction.

What really scares me is the financial scene. It’s an absolute mess. The leverage is frightening, asset values based on revenue streams that were never unsustainable. Levered up during growth and compressed down as we contract. The books just don’t balance. Widespread financial pain, foreclosures, bankruptcies and dislocation is unavoidable at this point.

I always think back, compare to the first job I had out of college working on an MBS trading desk on Wall Street, cleaning up after the S&L crisis, RTC days. It was my job to analyze and assess whole loan pool characteristics, help the traders figure out how to slice-and-dice the pools, packaging securities. The cycle we’re going through is easily 3-4 times worse, metrics I’ve seen.

So I think we’re going to see things continue to deteriorate for the next 2-3 years, with another 20% off current prices. Not sure what will happen with inflation. Helps debt issues obviously, though a serious contraction might result in deflation, which would exacerbate asset and debt pricing/value disparities. No good sides to this. We’ve run out the clock.

No areas immune either. I think this one’s going to hammer rich, middle and poor alike. Staggered effects on the wealthier areas, in part due to better loan products, in part due to Bush policies of wealth redistribution (towards upper quintile). But at the end of all this, there are going to be alot of wealthy people who ended up losing their shirts. Also, I think lots of retirees are going to get creamed, impacted by declining value of assets and savings.

[gandalf]

Beginning of all this, I thought we’d drop 30% nominal, 50% real after adjusting for inflation, currency/debt devaluation. We’ve reached that point already. Now, I think things are going to drop another 20% in nominal terms, and more if the economy really falls out from under us, which is a real possibility. Oil shocks and commodities may tip the balance in that direction.

What really scares me is the financial scene. It’s an absolute mess. The leverage is frightening, asset values based on revenue streams that were never unsustainable. Levered up during growth and compressed down as we contract. The books just don’t balance. Widespread financial pain, foreclosures, bankruptcies and dislocation is unavoidable at this point.

I always think back, compare to the first job I had out of college working on an MBS trading desk on Wall Street, cleaning up after the S&L crisis, RTC days. It was my job to analyze and assess whole loan pool characteristics, help the traders figure out how to slice-and-dice the pools, packaging securities. The cycle we’re going through is easily 3-4 times worse, metrics I’ve seen.

So I think we’re going to see things continue to deteriorate for the next 2-3 years, with another 20% off current prices. Not sure what will happen with inflation. Helps debt issues obviously, though a serious contraction might result in deflation, which would exacerbate asset and debt pricing/value disparities. No good sides to this. We’ve run out the clock.

No areas immune either. I think this one’s going to hammer rich, middle and poor alike. Staggered effects on the wealthier areas, in part due to better loan products, in part due to Bush policies of wealth redistribution (towards upper quintile). But at the end of all this, there are going to be alot of wealthy people who ended up losing their shirts. Also, I think lots of retirees are going to get creamed, impacted by declining value of assets and savings.

[Author]

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