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This whole concept is lost on the MSM and the general public. I still hear and read comments all the time along the lines of “people who bought before 2003/2004 are safe; this crisis only affects recent homebuyers.”
I have almost given up teaching; now I just try to ignore the ignorance. WHen people challenge me about still being a renter, I just say, “wait and see.”
I have stopped talking about it with people as well. When I hear people talk about “now being the time to buy” I just say “OK”.
There is a general ignorance out there that the economy is going to magically bounce back in 5 months “just because”. Nobody seems to be able to explain why though. Is it the government’s wall street bail out? Is it because the economy always swings back and forth in 5 month intervals? Is it because 5 months just sounds like a nice round numbers? Is it because President Obama is going to raise taxes on higher income people? Is it because interest rates will be higher in 5 months?
I can’t seem to get anyone to offer an explanation so I have had to assume that the average person feels this way “just because” and when 5 months rolls around and things are still the same, they will be saying “OK 5 more months and then it will all be better!” Rinse lather repeat.
I wonder how many Japanese people have been repeating the same thought cycle over the last 20 something years.
AZ - I see the same thing.
Denial is a powerful emotion, and it is the only thing keeping lots of homedebtors making their payments right now.
The government is masterful at maintaining denial. Look at how the reporting and definition of a recession are carefully manipulated. It takes 2 quarters of economic contraction to meet the definition. The reporting is always delayed and revised, so it is often 9 months after the fact when a recession is finally acknowledged. By that time, things are starting to improve, and people can shift from denial to hope.
There is a double ignorance going on here though. It’s one thing to think that the economy will magically get better, but it’s another problem when you think that that will translate into house prices going back up.
There is an assumption that a strong economy is equivalent to high house prices. The house bubble produced an illusion of a strong economy with high house prices. The average Joe seems unable to unplug from the fantasy and see the man standing behind the curtain.
The goal needs to be stable house prices with a strong economy with less less reliance on debt.
In other words, the goal should be low housing costs and a strong economy. When your housing costs are reduced by 50%, that is more money in your pocket to go buy Ipods with. The economy won’t rely on people climbing the debt ladder buy toys because they will have cash.
Debt is the lubricant of capitalism. Are you suggesting we drain the debt? And if so, what will happen? I’ll tell you what will happen - the gears of capitalism will come grinding to a halt. But, you knew that already didn’t you?
“From each according to his ability, to each according to his need.”
Is this a phrase that you recite every morning? What exactly is your favorite color Dave?
Debt is certainly needed for capitalism to function. But at this moment in time, the government, banks and individuals are struggling with crippling, unprecedented debt. It’s one thing for someone that earns 70k a year to buy a house for 250k. It’s something altogether different for that same person to squeeze into a loan for 700k and just hope that appreciation will save his ass. AZD is absolutely right: we need to reduce debt and start living within our means. It’s going to be unpleasant. But this is the bed we’ve made. That’s not communist. That’s just smart and responsible. You, Kirk, are just stirring the pot, or rather unintelligent. I can never tell from your posts. But I’m going to stop reading them if you can’t manage to be civil. I don’t mind your dissent, right or wrong. I do mind when you make it personal.
Who is not being civil? I merely asked a few questions that most Americans want answered about their neighbors. And what does communism have to do with anything? I was talking about simple economics. Why does this forum always devolve into political arguments?
This insinuation that I engage in negative commenting really is a threat to our 1st Amendment rights and I think there should a law that prevents this type of tactic targeted against good Americans like myself.
“From each according to his ability, to each according to his need.”
That’s a Marx line that you quoted. So asking what any of this has to do with communism is disingenuous. I know your game now. And I won’t be drawn in.
I suggest no one waste their time with Kirk. He knows exactly what he is doing. His intentions toward this blog are malignant and he shouldn’t be encouraged or engaged.
HA…love you Kirk!
6/10
Decent trolling, I’ve seen better.
Yes, that quote was from Karl Marx, an economist who didn’t believe in personal debt. How exactly is this related to communism? Marx believed in income redistribution just like Barack Hussein Obama. Now, how exactly can you have income redistribution in the communist model which is a classless society? You can’t! Marxism has nothing to do with communism. No one here has accused anyone of communism.
I swear, some people see enemies lurking around every corner. There is no great game being played here. No attacks on personal character. This is simply an everyday conversation on a blog.
Now, my point, and perhaps I was too subtle about it, is that Marxism has been tried and it failed miserably. This idea from the anti-housing crowd here that this is the economic model to follow is just foolishness. There has not been one person here that has been able to explain to me how this model will get our economy back on track. Not one.
This is not true.
Debt makes the results of capitalism evolve faster. Without debt, you just move at a lower pace. Capitalism does not need debt to function.
Capitalism did not work in real life. The end of the 19th and the early 20th centuries did show us just that. Given any opportunities, corporations will enslave the workers.
That is why communism tried to flourish. Communism also functions perfectly in an ideal world. Unfortunately, the world is far from ideal.
Under capitalism, the elitists can enslave the workers by controlling the government through corporations. Under communism, the elitists can also enslave the workers by controlling the government directly.
So, both extremes don’t work in real life. One of the first countries to establish itself right in the middle went down in flames in WWII.
Kirk, Kirk, Kirk,
Yes, some of us appreciate your over-the-top parody of a rightwing nut. As in your Palin parody: “This insinuation that I engage in negative commenting really is a threat to our 1st Amendment rights.” I GET IT. But reasonable people are stirred to argue with the straw (wo)man you stand up, and the comment thread is hijacked for your entertainment. However.
Please be more respectful to our host and to the ideal of the internet making people smarter, not angrier.
just to jump in this reminded me of a great YouTube clip of Milton Friedman and the (left wing) talk show host Donahue
http://www.youtube.com/watch?v=RWsx1X8PV_A
really good stuff.
FOOD to your point both capitalism and communism are not ideal but whatever we have here is the best we can do as we are only human.
You won’t have Kirk to kick around anymore, because, gentlemen, this is my last comment here.
“You won’t have Kirk to kick around anymore, because, gentlemen, this is my last comment here.”
I hope that one is a joke too.
Thank God. I can hear the signal-to-noise ratio going up already.
Commies under the bed! Look out Kirk!
It’s all funny money. Nothing wrong with pushing paper. The government has turned that into a high art.
“There is an assumption that a strong economy is equivalent to high house prices.”
I run into that thinking quite a bit too. I’m talking about semi-intelligent people who think that all that has to be done is somehow re-inflate house prices and the economy will get back in shape.
I am constantly baffled at the economic ignorance of the public with regards to housing.
“I am constantly baffled at the economic ignorance of the public with regards to housing.”
I also find this astonishing.
It’s not just WRT housing. I recall an advertisement which portrayed somebody who “… [knew] how to calculate a P/E ratio[.]” as a savvy investor.
Or was that a subtle joke? Do people say “Half the population is below average” because they get the joke there? I doubt it, in both cases.
At least this set of owners understood that you generally had to sell the property to realize the profits. Rather than just increasing both your debt and your monthly payment unsustainably.
That’s a truly impressive set of transactions.
Looks to me that the false painting gets even falser above the “Customer Fireplace”, whatever that is. Anyone have the right mirror - and wants a mirror above your fireplace?
I guess one of the owners actually put some money back into the house, even if the results are not to my personal taste. The profits they took (last one excepted of course) are much more to my taste. I wonder if any of that stuck, or was it all lost by rolling it over into toys and more expensive properties and eventually ending up one of the greater fools when it all came to a stop?
It looks like that might have a TV above the fireplace.
Then I guess it is also a faux fireplace? or a faux TV? Yeah, yeah, I grew up in a place with winters. I know Southern Cal doesn’t have or need real fireplaces, or if they are real, they are not to be actually used.
I wouldn’t have thought to put a TV above a fireplace though. Too high up on the wall, unless you watch while standing up.
And what on earth is a “Berber shag carpet”?? I thought there was “Berber carpet” (flat, with a woven texture, neutral colors) and “shag carpet” and never the twain shall meet???
This is a lot of pergraniteel for a 1500 square foot house.
A crime ... a crime I say!
I always had this question; I have never owned a home so I don’t know exactly how MEWs are distributed:
Is it a “Credit Card” and a line of credit, where you can just charge stuff at the mall, a lump sum check or a book of checks?
I would assume, people who REFI and get a lump some check, would put the check in their bank and hopefully save some of it and not spend all of it… But if MEWs are handed out in Credit Cards, then usually people just charge up to the limit…
I think most HELOC’s have a book of checks in order to access funds…
no worries, Ipop told me this baby is going into escrow in a jiffy after multiple offers.
I don’t mean to be mean, but that elevation is a fugly one. And the whole over-improved looked. One day, interior decorating students will look back at these pictures and describe the period as “Late Irvine.”
How about that tile work in the tub/shower? Migrane inducing!
This would be a nice house for about $200,000. It’s hard to believe this 1500 square foot house in the flatlands in an unspectactular neighborhood went for nearly $800,000.
Easy to believe - when you’re spending someone else’s money, why worry about the price? Even more the case when the higher the price, the greater the profit when it goes up by whatever percent. If someone gives you money to gamble in a Vegas casino where you can have any win but not the initial stake, it’s not such a bad strategy to take as much as you can get and place a big bet.
Now when it is your own money, the story changes a bit.
$140/sf
What’s up with the sinks in the bathroom? Are they sideways? Look at where the handles are located…. very strange…
Dano
I have never seen that before either. It is very strange.
WHAT THE HELL IS THAT?
No, really. It’s in the bathtub as well. It’s as non-functional as can be. What the hell? Is this some weird ideological thing that demands that your faucets be sideways. or what?
All that MEW and still a builder original stove and microwave.
When the MSM talks about 2000-2004 vintage home buyers being ok, what they fail to realize is that everybody who bought then, refi’d later. We’re all vintage 2006/2007 because of this phenom.
I wonder which owner went hog-wild on the stone and the faux painting? Owner #3, probably? Owner #4 might have justified the price due to all the “upgrades”.
I assume the flat-screen tv was in the space above the fire place.
The ongoing effort to totally screw the responsible and give the irresponsible a free pass:
http://www.newsday.com/services/newspaper/printedition/saturday/news/ny-bzcred015907148nov01,0,2060183.story
“Big banks have formed an unusual alliance with consumer advocates to urge the government to allow huge portions of credit card debt to be forgiven, a turnabout from recent years when the banking industry lobbied strenuously to make it harder for consumers to erase their credit card debts in bankruptcy.”
Absolutely disgusting.
I hope there will at least be some sort of backstop to limit cramdown recipients’ future access to credit, or at least SOME modicum of punishment, but I’m not holding my breath.
No risk, all of the reward.
Honestly, at this point I feel like a stone fool for playing by the rules.
My parents live in this part of Westpark. This whole area got extremely overvalued as you can see by this listing…I still can’t believe this property went for nearly $800k and it backs up to Harvard Ave.
IR, sorry to nit-pick but I noticed the title to this thread is “Purple Cool Aid”...shouldn’t it be “Purple Kool Aid”?
Yes, It should, and now it is.
You’re the man, IR.
“This insinuation that I engage in negative commenting really is a threat to our 1st Amendment rights and I think there should a law that prevents this type of tactic targeted against good Americans like myself. “
Wonder if he’s a Mc Cain supporter.
Oooohh Kirk I could not more agree that making insinuations about you based on a multiplicity of undeniable physical evidence should be a crime.
If only we could think of a punishment horrible enough to follow up any conviction thereof.
And thus OUR 1st Amendment rights must be removed in order to honor Kirk’s. For America’s sake.
I love the people who think there is “pent up demand” and that the market will come roaring back. Yeah, just look at the stock market (which is FAR more efficient than residential real estate).
It’s closing in on a decade after the last bubble. And prices are nowhere near the last bubble price. So, yes, housing prices will come back. If you have decades to wait…..Otherwise, just sit back, rent, and enjoy living at a discount from what the “owners” pay.
“Of the four owners shown in the property records going back to 1996, none of them paid down their mortgages by any amount.”
I’m printing out this post and will attach it to future correpondences I know I’ll be making to politicians who ask me to bail out all the “poor people” who are losing their homes.
The inside of this palace looks like crap.
Of the four bathroom palaces I’ve been involved with, only one spent any money on a good quality fan. I guess they thought their bowel movements didn’t stink.
3045 sq ft lot size. Bwahahahaha!
Irvine: it’s a realtor’s Disneyland. This place proves it. It is a regular Snow White’s Castle of granite and tavertine.
All the tile in the bathrooms will need to be redone. I don’t know who redid the plastic enclosures that once graced this palace, but the least they could have done was pick tile with a MATCHING color to go with the sinks.
When we redid our plastic shower enclosures (which are fine in a $220K house but not in a $450K house), I spent hours trying to match the tile already in place and the grouting as well. Taking a little extra time works nicely.
And wtf is up with the plastic shower curtain? Couldn’t they pop an extra $400 for a glass shower door????
“This insinuation that I engage in negative commenting really is a threat to our 1st Amendment rights and I think there should a law that prevents this type of tactic targeted against good Americans like myself. “
Wonder if he’s a McCain supporter.
Sounds more like a Palin Kool-aid drinker to me.
You can’t criticize my nasty comments or else you tread on my rights. Talk about PC in the extreme.
controversial topics:
religion, politics and now real estate
recent buyers get in a bunch when I mention knife catching