Posted on 10/02/2007 7:27:22 AM PDT by ex-Texan
I am not buying yet. The pricing is going to go lower. The downturn is a snowball (as your demonstrating) in some areas and a wimper in others. My home value in Southeast Maine has gone up slightly his year, because it was flatlined during the boom. I will be looking to buy at the end of 2008, at what will be the worse housing conditions we have seen in our lifetimes. That means bargains galore.
No but I'm surprised at how he has suddenly become quite anti Bush. Since everything is so partisan and since he is now retired and way old, it makes what he says very suspect.
Too many people own outright, like me, or are not fools with their house purchases, like all of my friends, or rent, like my oldest son for this to account for that big a percentage of the economy. I'd have to say the total percentage of the economy involved with bad loans and housing decisions is much smaller than health care.
It wasn't. Three and a half years ago, well before the peak, a friend who does business at a very high level warned me of the coming disaster. He told me to get out of my house and rent until the blood dried a little, then buy at the bottom of the market. Smart man.
You are lucky to have such a smart friend.
Look at the overall housing market, and the market for new homes. Lots of foreclosures on the market decreases demand for other resales or new homes. Developers and builders will suffer, and this will affect the building materials industry. Housing is a huge sector, and has a big impact on the overall economy. You may have a good loan now, but if you were to be suddenly transferred or need to sell for some reason, it would be difficult to sell your home, and you might not get a great price for it. Not a problem if you have a lot of equity, but if you don’t you can run into a problem. (I fave some friends in this situation now.)
You might be right about the significance of housing compared to healthcare. I don’t really know. Unfortunately neither sector is doing very well right now.
ex, put me on your ping list!
I know this is a change of the subject and I don't want to seem contrary but, the health care industry is doing great. It accounts for 1/6 of the economy. Demand is sky rocketing such that providers can name their price. That's the definition of a sector doing well. I believe you are confusing the politics of the sector with the economics of the sector.
These are indeed negative factors beginning to brew the perfect storm of a major global recession. And if things do heat up to true regional war in the ME vs. just proxy we may see a total collapse of the financial system. This would be restored within months, but the economy will take years to recover.
If Hillary gets elected, expect a black Tuesday event as she will raise the capitol gains tax and Wall St. will have a massive selloff before a 30% or normal capitol gains rate of 40% goes into effect.
Don’t expect it to be ‘the sky is falling’ from the mainstream media or financial experts in 2008. A lot of stimulus, including a bailout of homeowners will occur. This always happens in struggling sector or another but this time the bailout will be big. However, it is still but a band-aid. The damage done is on a global scale. Greenspan is correct, much of the previous economic growth came from home values and collateral from banks based on such values. It’s a TRILLION dollar problem and we have just begun scratching the surface. Those at the top made billions going in and are making billions exiting.
Google Netbank. See the first real innocent casualties of this debacle. If you had $5M in Netbank, you would have just had $2M of your hard earned wealth instantly erased. I would go postal and this is just the beginning.
What to do: Stop spending money on a rich lifestyle. Cut up the credit cards and pay down the debts. Save money in banks but spread them out to what the Fed insures up to $100k. I have killed much vacation planning, lowered the Christmas budget to $700 for a family of four (usually spend $2k). If you have a decent job, now is not the time to go exploring the next bigger and better thing. Refinance at a new lower rate but don’t take the cash out for remodeling. Cut corners everywhere. I like to think of the story in the bible of Joseph who was abused by his brothers and sold into slavery to Egypt. He became the second in charge of the known world in the empire of Egypt.
He was given a dream to store up seven years of grain during tremendous produce years for a seven year famine. We are two years away from the seven year famine.
Because, families do not stay in homes for a lifetime anymore. We are a transitory society, moving as the job opportunities dictate. Why pay for a house that will last a lifetime when you can get one that will last 10 years, and you will be long gone.
“Our brilliant Founding Fathers foresaw it, but their vision was inadequate to prevent it.”
No they built in an adequate way to stop it dead in it’s tracks if necessary. It’s called the Consitution Right to Bear Arms. The elites know this is the only real thing stopping the corrupt political engine from realizing ultimate socialist utopia. They have worked overtime on this for 20 years and cannot end-around this despite unlimited stealthy attempts to circumvent We the People.
They also know the day they actually find a way to accomplish this is the first day of the American Revolution part two. Our military would unlikely be on the side of the corrupt politicians trying to crush 60 million gun owners.
“I know this is a change of the subject and I don’t want to seem contrary but, the health care industry is doing great. It accounts for 1/6 of the economy. Demand is sky rocketing such that providers can name their price. That’s the definition of a sector doing well. I believe you are confusing the politics of the sector with the economics of the sector.”
More or less you are correct, I am in the Lifesciences business as a marketer. The entire sector is very good. Some segments such as big pharmacueticals are struggling for higher growth and have seen 3-4% in the last couple of years, less then the double digits seen in the 90’s but when your talking billions, it’s still all good :) I got into it a couple of years back based on research and that is paying off big now. I guess I am just glad I am not in the mortgage or real estate business although I know people who made a killing and it seemed like such easy dough for a long, long time.
I was referring to the increasing push for Government intervention in healthcare, and the very real possibility that Hillary may be in a position to create HillaryCare.
If you followed that advice 3.5 years ago, you got screwed.
My house is worth less than it was last year, but a lot more than it was 3.5 years ago.
The problem with naysayers is that the market ALWAYS comes down sometime, so they always claim they were “right”, just off on the timing a bit.
But timing is everything. When is the right time to sell out of an inflated market? Right before it crashes. When is the right time to buy back? When it hits bottom.
So tell me, if you sold 3.5 years ago, missing 2.5 years of great gains, when do you buy back? In 5 months, 1 year, 2 years? How will you know when you are at the “bottom”?
A Time machine?
Scary thought, that.
A whole different way to view the situation is to look at my home town of Cedar Rapids, Iowa. The city stays the same size year after year but there is a new health care business opening every few months.
“Cultivated mind is the guardian genius of democracy.”
The people of this country by and large cannot be bothered to learn about their country and protect the institutions that made it great.
My generation (80’s baby) from what I have seen in school is split in such a way as to ensure the continuation of an oligarchy. 80% don’t care about politics or history, of the 20% that do only a small sliver at the top are well read and can analyze and debate ideas. They split into factions getting the other 20% to line up with them and the anytime they can whip up the other 80% they win a debate in school.
All those banks were crying when they were making money off the housing market.
Real estate, like politics, is local, so your mileage may vary. Point is, not everybody was blind-sided by this collapse.
2 trillion dollar market and going to become much bigger. The catalyst in my humble opinion was when man first cracked the genetic code of ourselves. This was what, 1995 or 1996? The medicines now coming on this understanding have little side side effects and massive upside.
Treatments are becoming far better and can keep someone relatively healthy until very old age. However, I would love to see more cures. To do that, a network of philanthropists must be created focused on funding companies with cures. Check out ProNai for example.
Big pharma doesn’t want cures, treatments are 20 times more profitable to keep someone on them for decades and so your average investor knows cures are a lousy ROI and don’t invest. I also have a great solution through legislation - open up the Canadian drug market to the US consumer. With competition comes fair pricing and it is the price of meds driving the majority of absured health care costs.
“Let’s resolve the immigration crisis, cutting off the flow of illegals, and replacing it with a flow of deserving, capable, legal immigrants”
Bingo!
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