Listen to the cacophony of despair oozing out of the mouths of our mainstream media and politicians. It would be comical if not for the pathetic nature of it all. All these whining shills and self proclaimed experts seem willing to cackle about everything under the sun ... except for price. What do I mean, read on...
From the August 29, 2007 Financial Times, Barack Obama, Democratic candidate for US President, said:
Normally these borrowers could avoid foreclosure by refinancing their mortgages or selling their homes. The problem today is that they cannot refinance because no one will lend to them, and they cannot sell because the housing market has fallen. With some arguing that the effects of the worst subprime loans will not be felt until 2008 and 2009, this may be just the beginning.
What the F@!K do you mean "they cannot sell because the housing market has fallen"?!!!? No, Barack, they can sell; they just don't want to sell because they think they're guaranteed to make some money. Disgusting, truly disgusting. I do note that pretty much every other pandering fool running for President this year has made similar statements about the housing market and proposed bailouts. I was just picking on Mr. Obama because he was billed as some kind of fresh new direction for the country.
Overhead conversation at a popular local deli in downtown Mill Valley August 31, 2007, lunchtime:
[first guy] ...yea, we wouldn't be able to get the mortgage today we got last month!
[other fatter guy] What do you mean?
[first guy] We wouldn't come close to qualifying for our mortgage today. We got in just under the wire [smiling like the greatest fool]!
[other fatter guy] You and the missus should count your lucky stars, you got in just in time. I feel bad for all the young guys starting out now. They'll never be able to buy a home at this rate...
So let me get this logic straight. I bought a massively overpriced house I couldn't afford with a bullshit mortgage and I should 'count my lucky stars'??!! It doesn't take a genius to figure out that both dumbass guy and other dumbass fatter guy are assuming that PRICE will never go down.
Tuesday, September 4, 2007, paraphrased babbling lunacy from CNBC's morning show (which had slide whistle clown guy filling in along with Erin):
[big debate with lots of little heads in boxes on the screen arguing about housing and the Fed]...
[Jimmy the Clown] Mister Bernanke has zero credibility! There are people hurting out there!
[Rick Santelli] No, Wall Street wants to make this Main Street's problem so they get a quick fix!
[Jimmy the Clown, interrupting] I have neighbors who can't sell their [stifled expletive] homes!!! You have no...
[Rick Santelli, for once standing up to The Clown] NO! THEY **CAN** SELL, THEY JUST DON'T WANT TO LOWER THEIR PRICE!!! WELL, TOO BAD!!!
[All the other little bobbing heads] Oh no no no no no no no no! No one wants to see that Rick!
[Erin] My neighbors houses are selling, so I don't see why there's a problem [pondering her afternoon show which panders to get-rich-quick-dad-hucksters].
I don't have much to say about this spectacle. Only that I never really realized what wimpy, whining, mealy mouthed, cry babies the "Masters of the Universe" on Wall Street were until the past couple weeks. Geez, I mean, you're hardened investment bankers and hedgies, right? WTF? If you can't stand the fire... I'm sure that every hard working American who got rightsized, downsized, outsourced, and offshored right into a job as Wal-mart greeter is crying a river for your subprime MBS CDO credit debt long short macro dice roll fund losses. But good try. If Jimmy the Clown keeps screaming long enough you just might convince Ma and Pa that it's all their fault after all. I just hope you can sleep at night.
So, do prices ever go down?
Yes. Of course they do. You don't have to be in a little box on the TV screen to know that. Hell, we only bought our first California house about 11 years ago, in 1996, in Redwood City. We bought from a pleasant couple who'd bought before that in 1989. We paid about 9% LESS than they did, which factoring in inflation (which was a bit high then) and transaction costs, those guys took a pretty nasty loss. As I described in an earlier thread, that little house has appreciated almost 250% since then! WTF? And no, we sold it in 2002, so we didn't even get the real meat of that bubble.
Yes prices will come down. Whether all these screaming ninnies like it or not. Even with a bailout. Even with a Fed rate cut. It's over. No more $1.9mm in loans on less than $100K down to buy a freaking $2mm house. That fraud con is over now, and that means all those giggling fool friends of other fatter guy at the deli cannot afford your overpriced house anymore. You're stuck selling to folks who *can* afford your house, and they ain't gonna pay you no stinking $2.00mm for a $850K house.
I thought about drawing a graph. But I've been criticized so much for too much econospeak on my threads, so I'll just use a little improvised "ascii art" to help those stuck on the whole concept of dynamic price to visualize it all.
Follow these simple instructions and you will be able to sell your house!
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(it's an ax, signifying cutting...I'm considering the intended audience)
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