Friday, November 28, 2008

This Thanksgiving I Give Thanks to All of You Who Made this All Possible

This post over at the Mess That Greenspan Made blog is down right scary -- by some estimates the potential cost of the bailouts will reach $8.5 trillion. Can we survive that? No way that is going to get paid back. Or this at Calculated Risk showing that the current bear market is the worst ever (on a percentage basis).

It seems to me that the genesis of this "crisis" was in the 1980s, the rise of yuppiedom, and has gotten progressively worse by an ever growing populous that more and more chose to finance their lifestyle with debt vs. wealth earned until it reached the point where people willingly paid ludicrous prices for houses, a college education, etc. For kids who came of age during this 28-year span, living on debt has been the norm. I feel the most sorry for them, the unwinding will be the hardest on them as they don't know any better. But for the rest of us boomers who have witnessed, and in far too many cases gleefully participated in, the entire life-cycle of this debt-investment craze, I have little sympathy. Blame Wall St., bankers, financiers, etc. all you want but in the final analysis no one held a gun to your head, no one made you agree to pay a stupid price for your house.

Really, is cheaper housing such a bad thing? Maybe it is for you who listened to the self-interested persuasion of a realtor/agent, you who bought in to the ludicrous pricing and was hoping to retire on the sale of a house. But think past yourself (if you're able). Think about your kids and your grandkids. Do we really want a future where so few can afford something as simple and as basic as a house? Do we really want to live in a nation so impoverished by desperate attempts to prop up prices that we know in our heart of hearts are insane, even still? Besides, we have truly important things to worry about, like a world wracked by global warming, the solutions to which will require personal sacrifice on a scale we of the post-war generations can hardly imagine, and an ability to think beyond our own selfish wants and desires.

But at the very least let's not ever forget the people who got it right, early, when action could have made a difference:



I hope you all enjoyed your Thanksgiving.

18 comments:

Doug Thorburn said...

I am floored that you, who holds in awe the credulity of buyers who helped fuel this bubble, believes in the church of global warming. That will be the next fraud to be exposed.

There's a lot of sites and articles (Liberty Magazine perhaps had the best) debunking the myth of global warming. But without looking at any statistics, consider the idea that puny little man could have any appreciable effect on something as grand as the climate, or that our little minds could predict climate warming or cooling with any degree of certainty when we can't even get the weather straight a week out. It's the height of hubris.

Matthew said...

Doug,

What color are the trees in your world there fella? You need to put down the shotgun, close the bible, open another book and educate yourself... that's all the reply your post deserves..

pedro said...

Someone really decided to put on their thinking cap, great going! It’s fantastic to see people really writing about the important things.

marinite2 said...

Hmm, I don't think I stated or implied that global warming is caused by mankind (even though I think it is).

Let me ask you Doug, let's pretend for a moment that global warming is a fact but it is determined that mankind had nothing to do with it. Does that mean we are off the hook? No, we will still have to deal with it. Let's further suppose that it is possible to reverse the effects of global warming to some degree, even if slowly, do you think we should not? Or is that too arrogant... better to just die off slowly than dare to regulate the adverse effects of climate change?

Lance said...

So, if everyone overpaid for everything ... Where did all that money go? Did it just disappear?

marinite2 said...

Looks like California is also asking for a bailout from the government. Are we just too special or what?

Thanks everyone for this mess.

Westside Bubble said...

There's a lot in common between housing bubble deniers and global warming deniers, no?

Speaking as a baby boomer, I saw two divergent trends, idealism vs. consumption. The latter won out over the last 20+ years. (Sigh.)

Doug Thorburn said...

Yes Marinite, we are off the hook regardless. Bjorn Lomborg, a respectible guy even if he is too a true believer, at least points out that it would be far, far cheaper to deal with the effects of global warming than to try and reverse it (if it exists at all).

If you are interested in my news article "packet" of info, I'd be delighted to share. Send me your real life address to mail it. You can email me at DougThorburn at DougThorburn dot com. Or, if you want just the best, I can fax you an article or two. It's not something that can be debated in a forum such as this. (Mathew is invited as well.)

BTW, as an aside, if you check out my work on the DT website, you can view my articles by subject--and you will find I spotted the real estate bubble in late '04. You'd actually find them very interesting and it's an area I know we already agree on.

Best to you--whether I hear from you or not, keep up the good work.

Matthew said...

I can feel the tension in those home prices in Marin.. yes, that straining and stretching sound right before the snap, which will reset prices about 15-20% lower than what they are right now... That's right, that straining and stretching is going on right now, as I'm writing.. a quick check of local listings and prices confirms this... they are still a joke, but I see many more desperate ploys to entice an offer..

Wait until CA unemployment hits 10%(already 8.2% last month).. lets see that 3x2 in San Anselmo sell for $800K then..

Yo, you better buy now or be priced out forever... For, if you don't, you will never be able to participate in the American Dream (nightmare) that my colleagues and I have defined for you... Ya'll..

What a wondrous contribution to society and this nation the Real Estate Industry has made… my heros…

marine_explorer said...

..the rise of yuppiedom, and has gotten progressively worse...

Exactly the reason why I consider the societal aspect more troubling than whatever write-downs emerge at the moment. Has the public grasped it yet, even those "hipsters" who seem just as easy prey for scams as any "flyover country yokel"? As long as their clique smartly stampedes en-masse into the fraud, they'll talk up their "financial acumen".

So I wonder--what exactly prompted America into this blind rush into financial ruin? Or, was it more like an gradual indifference and slow descent into economic entropy? As long as "I got mine", why give a damn about leadership, foresight, and good business strategies or ethics--at all? Let somebody else clean up this mess, while I get bailed out...all of which will be thrown on the backs of our children. Nice.

Lisa said...

I check Zip Realty once or twice a week, and I can report that the majority of new listings in Petaluma, and now also parts of Marin, are labeled either Short Sale or Foreclosure. Just wait until next year, when the AltA/Option ARM bomb goes off.

I agree with Matthew...we're about to see the next big leg down in prices here.

Matthew said...

Another proud day to be an American capitalist with this Bernie Madoff business today.... boy, oh boy... he even conned his own people, which is a new one, I think.... or is it anymore?... hell, I don't know.. Everyone that can be conned should be conned, I guess, especially the wealthy, if you can manage to get it out of them.... yea, that's the ticket.. conn them all, but look good and talk slick while you are doing it… drive a nice car too if you can help it… honor be damned.. money, wealth and perceived wealth is all that matters…. If $100 million was the heist of the last century, what will this little $50B bilking be called ? Maybe we’ll get an update to the term “Ponzi scheme”… who knows, a “ A Bernie Scheme or Bend-Over” or “Madoff Mutilation” may emerge from this.

Isn't or wasn't it all a just ponzi scheme, especially housing? Yes, it's quite amazing... my kids are getting a whole life's worth of lessons in just this past year.... good for them.. I hope they listen and learn... there are more every day though, so we all need to pay attention.... like an iceberg, for all the fraud visible and uncovered to date, I’m guessing it’s merely a fraction of what has transpired and continues to transpire each day down there on Wall of Shame Street and elsewhere across country..

Wonder when Sir Alan will be writing his next book? What about Henry and Bernie B? What will they write about? Perhaps they can write about their position less than 12 months ago when they declared that "the housing problem is contained to that supreme mumbo jumbo stuff"… no need to worry about the broader economy… rock solid.. (or words to that effect)... yes, our brightest economic minds at work…

Less than 11 months later they held a gun to the entire country's head and told us all to pay up $700Billion now or the whole thing scheme they helped create and manage collapses…. wouldn’t be surprised to find out everyone in Henry and Bernie’s inner circle were placing sell orders shortly after their press releases… I trust nobody anymore… especially some overpaid half-wit hawking houses and mortgages….

Better get in soon or be priced out forever now….

As this scam of all scams continues to unfold, expect another 15-20% haircut in the next 10-12 months here in Marin and elsewhere... 1999-2000 prices, here we come….

Matthew said...

supreme mumbo jumbo stuff = subprime mumbo jumbo stuff...

sorry, I was on a roll...

Matthew said...

Ask MSNBC's Rick Santelli when the scam started ? (1999/20000) I believe he's used the term scam as well in fact. He's one of the few guys on TV worth listening to, IMO..

marinite2 said...

Marin prices down -28.2% in November YOY.

marinite2 said...

Forgot the link:

http://tinyurl.com/4oxhlt

Orlando said...

Don't worry the senators don't really care they aren't in any hurry to help, they have the best health care and are well payed, "Let them eat cake"

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