Posted on 02/29/2016 11:22:01 AM PST by Oldeconomybuyer
I knew it was a bubble too, but I didn’t expect it to CRASH and take two hundred grand off the value of my house. But I blame Clinton, Barney Frank, and the rest for that, not Trump.
Were they blaming him? He is not that all-powerful no matter what he or anyone else thinks. Not yet anyway.
I can’t speak as to percentages, but there were definitely analysts who recognized the housing bubble and talked about it before 2008. There was some talk of it even before we refinanced our house, which was 2005 I think. My parents moved cross country in 2007, so it was a regular topic of discussion that year.
Certainly not all analysts agreed with us that there was a bubble and it would inevitably pop, but many of them did.
I knew it was a bubble when I helped my daughter buy a condo in Culver City. Local prices were rising 24% per year. Realtors carried clipboards to track which units were still available because they were selling so fast.
My daughters plan when she bought was to stay in the condo for two years (to get the tax break) and then sell out and move back home. At the time she didn't realize that the tax break was pro-rated, meaning that she would get three-fourths of the benefit after 18 months.
At about eighteen months she sold the unit. The deal closed about a month before prices stopped rising and the buyers disappeared.
It should have been obvious to anyone who can do math that prices can't continue to double every three years indefinitely. They can double once in the first three years. They can just about double again in the next three years. There's no way they can double again for the entire marketplace. There simply aren't enough wealthy people to buy the houses.
How much money was lost and who lost it?
I knew of a guy who was making a couple hundred thousand per year originating mortgages. He was just raking in the money because buyers were lining up to get into the market.
When the market dropped, I'm sure he lost that income. But he had little or nothing invested to lose. When the business was gone he moved on to something else.
If that is what Trump did, then where's the problem? He provided some employment based on market expectations. The expectations were not met and the employment disappeared.
Trump himself probably made money when the money was there and reduced his risk prior to the crash, thus losing nothing and keeping his prior gains.
I certainly don't know how much money Trump has. But I would be incredibly surprised if it was less than I have. His enemies would like to have it both ways. Trump is greedy and takes advantage of people. And Trump is incompetent and people take advantage of him. So, which is it?
The truth I hope is a third alternative. It's not a "zero-sum game". Making good business decisions can make money for all involved and improve the lives of customers. Only socialists think otherwise.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.