Wednesday, March 28, 2007

Bubble Economy Cartoon

25 comments:

  1. I think this would be an ideal thread for "lance" to finally back up his earlier statements with some facts.

    How about you show us the data on the "average rowhouses" you toured last weekend that have gone from $1 million to $2 million in the last 12 months?

    You could also just admit that you are a liar...

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  2. Interesting cartoon ... Interesting in that it only serves to confirm my observation that Bubbleheads have confused idea of home ownership. For bubbleheads it isn't a roof over their heads, but instead of way of making money. I.e., how is this cartoon tangent to the question of whether one should buy their home now or wait till a supposed burst comes along.

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  3. Lance,

    This cartoon illustrates, the point that bubble are not ways too grow rich but rather a way to grow poor.

    That is why I am against bubbles.

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  4. lance, you never would be able to "get" this cartoon. let me give you some help. simply put, hard work, industry and honest practice is the CENTURIES old way to wealth. borrowing you way to participate in a bubble always leads to ruin. creative financing (which you love so much) is a poison. for FIVE THOUSAND YEARS OF RECORDED history making money was hard work. For the last 10 years it is easy....you just don't get it. Be happy that you can post on this blog. you would not last TEN minutes on "bens blog".

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  5. Funny how Lance keeps avoiding answering that, innit it?

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  6. I think lance is answering it as best he can... but that is no reason to let him off the hook for lying like he did.

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  7. Lance's repeated statements to the effect of . . .

    "David, don't we FIRST have to have a "housing bubble fiasco" before we can try to lay blame to someone?"
    and

    "Bubbleheads have confused idea of home ownership."

    means we've still got a looooong way to go in this one. I thought that by now we were beyond the denial stage of the bubble, but lance proves otherwise.

    http://photos1.blogger.com/x/blogger/6089/1833/1600/81813/stages_7.jpg

    We've still got fear, desperation, and panic to go. I'll give everyone on here the perfect time to buy a house . . . when Lance becomes totally despondent and says 'housing sucks' or something to that effect . . . then it's time to buy.

    I don't believe I've read some BH here saying you should never buy a house, it's just not a good time now . . . not when you can rent for 1/3-1/2 the mortgage payment.

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  8. "consumers struggling with subprime mortgages to take to the streets"

    Yep, there going to take to the "streets" alright!

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  9. "We've still got fear, desperation, and panic to go. I'll give everyone on here the perfect time to buy a house . . . when Lance becomes totally despondent and says 'housing sucks' or something to that effect . . . then it's time to buy."

    Lance will NEVER say that. He will simply leave first.

    Don't forget you are talking about someone who is too full of themself to admit they were lying when they said they visited "average rowhouses" that had gone from $1 million to $2 million in the last 12 months even after getting caught in the lie.

    Everyone here knows he is full of crap and that he doesn't have any data to show what he claims... but he isn't man enough to simply come out and admit that he made it all up.

    If he won't even admit that... there is ZERO chance he will ever admit he is wrong about his whole reason for being here on this blog.

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  10. I speak to this point on the first two posts in my blog... I'd like to see what you think. I have also written to congress on this point. Its very easy to do via email (even though some intern probably just tabulates it as a Yes / No on the issue).

    Feel free to use the frame of my post (or the entire thing) if you want to write to your representatives in Congress.

    I'd also like to see what you think of my newest post, I devoted a good deal of thought on it and I'd like your input on the issue...

    http://financeguru-eternitus.blogspot.com/

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  11. David,

    Your asking for feedback in this post:
    "A Bailout for 'Homeowners' and / or Lenders? "

    But comments are disabled.

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  12. Sorry guys, but average selling prices in my part of town for average 3 story townhomes have indeed increased to around the $2 million dollar level ... and yes, as recently as 2005 they were closer to the $1 million dollar level. Yes, I know I said "last year" ... but since all the BHs keep saying prices went down from 2005 to 2006, I took it as a given that they were right. But I guess they were wrong. Very wrong since they are now more concerned that this million dollar jump be considered a 2 year jump and not a 1 year jump.

    In any case, as usual, Bubbleheads couldn't see the forest for the trees. Rather than understand that what I was saying was that rather than drop from their supposed "high" in 2005, houses in my neck of the woods have gone up in price right through to the stratosphere. Here I'd been spending (or rather "wasting") my time on this blog taking what I heard from BHs as actually containing a kernel of truth when a quick walkaround into a couple open houses on Sunday opened my eyes to the truth ... vs. what BHs really really want to believe is the truth.

    I'm not going to waste my time doing analysis for the BHs since that is not "the truth" they are looking for but rather for scraps of non-relevent details on which to hang their own wrong assessments. Instead I'll point you to a website to a real estate office that sent me a flyer in the mail yesterday with recent sales (and their sale prices.) On that flyer is listed these recent sales:

    1713 S Street: $1,650,000
    1517 Church Street #3: $1,300,000
    1738 R Street: $2,200,000

    I'm sure you can find more examples of the very very obvious price appreciation we've been experiencing since the supposed "high point" in 2005 simply by doing some searches in this real estate agent's website:

    www.TTRSIR.com

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  13. eternitus said...
    "I speak to this point on the first two posts in my blog... I'd like to see what you think. I have also written to congress on this point. Its very easy to do via email (even though some intern probably just tabulates it as a Yes / No on the issue).

    Feel free to use the frame of my post (or the entire thing) if you want to write to your representatives in Congress.

    I'd also like to see what you think of my newest post, I devoted a good deal of thought on it and I'd like your input on the issue..."

    Eternitus, I understand your concern and I too would feel it unfair for someone in similar circumstances to be afforded "rescue" from their own bad decisions ... especially not having made those same bad decisions myself. However, I think you need to keep in mind that by and large these people being considered for "rescue" are not similar to you in that they neither come from similar circumstances nor are all the opportunities and possibilities open to you open to them. Yes, it doesn't seem fair ... But it is a form of "charity" that society has always given its less fortunate members. You don't require that same charity as your already increasing accomplishment readily testify to. Give 'em a break and show some compassion rather than encourage mean-spirited actions against these less fortunate.

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  14. Hey lance... I take it then that you admit you were lying about "average rowhouses" going from $1 million to $2 million then huh?

    Oh yeah... and BTW... everyone knows there are some expensive houses in the district. Posting a list of several of them that have sold in the last few months or so doesn't say anything about appreciation.

    In fact... just because I like kicking you around...

    Take a look at the numbers for one of your three examples, 1738 R ST:

    In 2001 it sold for $1 million.

    On 5/24/06 it sold for $2.2 million. (the number from your flier, a more or less "normal" jump in price considering the bubble conditions in the area)

    THEN... on 8/24/06, three months later... it sold for ...

    $2.115 Million!

    Look up the numbers numbskull. One of your examples of "100%appreciation in the last 12 months" has already sold at a loss since the peak.

    http://www.washingtonpost.com/ac2/wp-dyn/homevalues/detail?txtKey=1292969&txtSearchType=SaleDetail&selGeneralUse=RESIDENTIAL


    Lance, if I were you I would stick to the strawman arguments. You look pretty stupid doing that, but not nearly half as stupid as you do trying to argue with numbers.


    "I'm sure you can find more examples of the very very obvious price appreciation we've been experiencing since the supposed "high point" in 2005"-Lance

    thanks for the laugh.

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  15. Yep, Lance just got even more nailed than usual.

    I'm actually a little surprised myself. I would've thought you could make the argument that at least rowhouses in the best parts of DC have gone flat and not declined. Lance showed what an idiot he is when he claimed they doubled, and the numbers showed he was lying.

    In fact, the row house in questions sold for 4 or 5 percent less in August 06 than it did in May 06.

    I guess according to Investor, using data doesn't add to the discussion, and we all owe Lance an apology for using facts to correct his lies. We're all really sorry Lance for not validating your delusions.

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  16. "Instead I'll point you to a website to a real estate office that sent me a flyer in the mail yesterday with recent sales (and their sale prices.) On that flyer is listed these recent sales"

    See, Lance, that real estate office may have left things off that flyer....like more recent sales for lower prices than the ones they listed...like that one at 1738 R Street....that's why you use independent sources of data to verify the data that salesmen send you...I'm sorry your parents didn't cover this.

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  17. Lance,
    It's not that I don't feel for those folks in trouble... I do. They thought they "had it made," but it turned out to be an empty promise. It's the kid who got coal for Christmas but on a much grander scale.

    However, no one facing foreclosure is a kid (Though, I'm not sure a kid couldn't have gotten a mortgage, if he really wanted to.) We're adults, and we have to live with the decisions we make. Just as ignorance is no excuse for breaking the law in a society of adults, neither is it at excuse for being played for a fool. I want to know how many of those people know every intimate detail of contestant in American Idol, but are clueless about their mortgage.

    As a first objection... Painting those people as victims only provides more impetus for irresponsible behavior... the type of behavior results in rampant misallocation of capital and price distortion (housing market) that puts our whole financial system at risk. The fear of financial collapse works to keep people from overextending themselves.

    Second... It's just completely unfair... taking money from every working stiff renter to fund some bozo who actually bought into all the hype and bought a McMansion that he couldn't afford. How do you justify a working man paying for someone to stay in a giant house he doesn't deserve to be in? I'll support a measure if the government subsidizes a house for every individual... that way, its fair.

    Third, its expensive.

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  18. Lance said...
    “Eternitus, I understand your concern and I too would feel it unfair for someone in similar circumstances to be afforded "rescue" from their own bad decisions ... especially not having made those same bad decisions myself. However, I think you need to keep in mind that by and large these people being considered for "rescue" are not similar to you in that they neither come from similar circumstances nor are all the opportunities and possibilities open to you open to them….”

    “Give 'em a break and show some compassion rather than encourage mean-spirited actions against these less fortunate.”

    That gives me a great idea “Lance”. If the government starts giving hand outs, I’ll just go out and obtain the largest home I can not afford, don’t make any payments, start the foreclosure process, then just wait for my government check….. Could I get some compassion over here?

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  19. Lance said "However, I think you need to keep in mind that by and large these people being considered for "rescue" are not similar to you in that they neither come from similar circumstances nor are all the opportunities and possibilities open to you open to them. Yes, it doesn't seem fair ... But it is a form of "charity" that society has always given its less fortunate members. You don't require that same charity as your already increasing accomplishment readily testify to. Give 'em a break and show some compassion rather than encourage mean-spirited actions against these less fortunate."

    Lance's true colors come out. . .

    What kind of communistic/socialistic bs crap is that. "From each according to his ability to each according to his need" right lance.

    Straight from the Communist manifesto.

    Hey lance . . . I've got a brilliant idea since you think that they "deserve" more . . . why don't you sell your 2.1 mil townhouse and give the proceeds (even half) to those who need it more than you-the FBs. You don't want to do that . . then SHUT YOUR PIE HOLE.

    If you do, good for you. However you, nor does government have the right to take MY tax dollars and spend it on some FB.

    It is not JUST, RIGHT or AMERICAN to FORCE taxpayers to foot the bill for someone's stupid mistake.

    Hey I'm all for charity, I give at least 10% to charity, but it is not right for me to force someone else to pay for others mistakes.

    People think, "I don't have to worry about xxxx (hurricane Katrina, or my mortgage, or a disaster) b/c the gooovernnment will bail me out"-what a bunch of bs.

    We've become a country of weak, irresponsible, whinny, it's never my fault government will take care of me cowards.

    Hey you made your bed now deal with it, like everyone else, if you can get some good soul to help you out great, but don't force the taxpayers to do that.

    And we wonder why we can't win a war in Iraq.

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  20. Lance said...
    ...it is ... "charity" .... Give 'em a break...."

    What about people similarly less fortunate who don't take out mortgages that they cannot afford? Why should they be further prevented from home ownership, while those who took out mortgages that they couldn't afford get to keep their homes?

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  21. I do have an idea for a "fair" bailout...

    Option 1..."Free" Money

    In exchange for a grant from the government, they agree to a 100% tax on capital gains upon sale or transfer (on death) of the house.

    Or Option 2...

    50% capital gains tax and they agree to pay any bailout funds back with interest after a 1-year grace period. The money will be treated as deferred taxes payable to the government, and failure to pay is punishable by imprisonment, garnishment, fines and all that other good stuff.

    The second option would help those folks who couldn't foot the bill due to a temporary problem.

    These solutions make sure that we keep the FBs in their homes, but deprives them of benefits of home ownership that they don't deserve.

    What do you think?

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  22. eternitus said...

    "These solutions make sure that we keep the FBs in their homes, but deprives them of benefits of home ownership that they don't deserve.

    What do you think?"

    I suspect your ideas are far more generous than anyone in the government would ever propose. In cases such as these, government "largess" is normally limited to something like "lenders must add the unpaid interest to balance owed". I.e., the government rarely gives away money (or conversely foregoes revenue) but instead shifts the burden to the trade ... allowing them to make a bigger profit (albeit at a later date) from the whole deal.
    If you can find cases that disprove this, I'd be interested in seeing them. Even one of the largest corporate bailouts in history (Chrysler Corp. back in the 80s ... or was it the 70s) employed similar machinations to allow the government to "help" them rather than giving cash. Which of course is a good thing given that Daimler-Benz came over and bought them once they ware profitable ... In sum, I think you are assuming way too much in regards to actions to "help" them. It'll be help in cutting them a break from the exact terms they agreed to, but in the end they'll be paying every cent they owe ... and then some! And honestly, to rally against terms being eased to allow these people to pay at a slower rate is mean-spirited. It's shows no compassion.

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  23. eternitus:

    Option 1 would let them keep their houses until death. Option 2 is better, but still rewards them with an opportunity to keep their houses, simultaneously further shutting out more responsible prospective FBs.

    I do like the part about "...imprisonment, garnishment, fines and all that other good stuff." Perhaps that should apply to failure to pay mortgages in general (well, probably not the imprisonment part).

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  24. The bubble labeled 'Public Office' needs to be moved over to the right side.

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  25. Option 1 would let them keep their houses until death. Option 2 is better, but still rewards them with an opportunity to keep their houses, simultaneously further shutting out more responsible prospective FBs.

    I do like the part about "...imprisonment, garnishment, fines and all that other good stuff." Perhaps that should apply to failure to pay mortgages in general (well, probably not the imprisonment part).


    The best option, take 20% of the McMansion stock, in the worst areas that McMansions are build (like in shoehorned shithole neighborhoods, NOT out in the nice farmland), make that stock of housing the section 8 housing for FBs, and if an FB can't afford to go back to renting, they'll be assigned to one of these dumps with 9 other families and charged by what they can afford after an extensive audit. Then the other 90% of the new housing stock will be mowed down by the FBs in their spare time and for rent money, and returned to it's pristeen open country setting (aka, back to farmland). Then when that's all done then can opt to work on the farm that someone with actual saving bought later on at a reasonable price.

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