Real Estate Market / Inflation / Recession / Depression

[Bob from down south]

Originally Posted by CosmicWizard

WARNING: If you are are addicted to Doom and Gooom, do not read this article. The hint of optimism in it will spoil your day!

Here's a brief quote from an article in Fortune magaizine titled: This crisis could have a happy ending

And there's the rub. I believe that in order for the market to achieve a sustainable advance that is above the mean, we are due for some unforeseen positive event or events. Think about it. In the 1990s stocks went way up because of an unanticipated revolution in technology, i.e., networking and the Internet. In this decade we had a slew of unexpected negative events - bookended by 9/11 and this current meltdown. At some point, and it may be a few years from now, we will likely be subjected to an unforeseen positive.

I have to raise the BS flag here.

Aw, c'mon wiz, the NASDAQ crash of 1999-2000 showed in unequivocal terms that the meteoric rise of the tech market in the 90's was NOT due to the information revolution nearly as much as it was a mania-driven bubble fueled by the deadly combination of irrational exuberance and excessively cheap money. The NASDAQ peaked at around 5300...today--9 years later--it's below 1400. In inflation-adjusted terms, it's still down close to 90%. No, sorry, but holding out the tech bubble as something positive is positively ignorant on the part of this author.

I prefer to look at this market in the context of the 1920s, where we saw the inflation/bursting of twin bubbles, first the real estate manias in the midwest and Florida in 1922-25, and then the stock bubble, which ended in a spectacular two-day crash in Oct 1929. The twin bubbles of the NASDAQ (1994-1999) and the nationwide but especially the CA-NV-FL-AZ real estate bubble (1995-2006) are eerily similar to the events that set the conditions for the First Great Depression from 1929-1941.

And thanks to Congress, the Gramm-Leach-Bliley act, passed at the urging of the Robber Barons of Wall Street like then-Goldman Sachs CEO Henry Paulson (you know, our current treasury secretary) stripped away the regulatory protections that were put in place to prevent another 1929-style bubble and crash.

And that leaves us at today, with the S&P down nearly 50%, and trust me, poised to go considerably lower still.

I have no doubt that things will someday improve, but we've got a hard-knocks lesson to learn (again) that I think will take 10-15 years. And I hope that we won't see WW III in the meantime. Would not surprise me at all if the Israelis nuke Iran's uranium processing facilities before Jan 20th, because I think they are very nervous about the Palestinian company that BO has been keeping the last few years.

Anyway, the referenced article is an example of blind optimism based on selective memory. The 1990s tech bubble was a train wreck, not something to hope for again in the future.

[CosmicWizard]

Bob, I warned you that reading this article would spoil your day. Sure enough you're waving your BS flag now! I hope you didn't get any on you. I would apologize for raining on your parade, but I did warn you, so I offer no apology.

[POhdNcrzy]

Jazzlover, okay maybe I spoke to soon about that complete collapse of the Colorado ski resort industry you had sort of fancifully predicted a few weeks back....

9NEWS.com | Colorado's Online News Leader | 3 Colo. ski resorts suffer layoffs


Apparently out-of-state bookings for Nov., Dec. and beyond are way, way off, hurting more remote Colorado ski destinations such as Steamboat Springs.

What if there was a powder day but nobody showed up to ride it? Now that's a gloomy proposition indeed. But I imagine the lynx, elk and snowshoe hares wouldn't mind. Oh well, just remember, if you can't afford toilet paper, you can still wipe your a*s with a spotted owl, but you have to catch one first....

[sterlinggirl]

Originally Posted by POhdNcrzy

Oh well, just remember, if you can't afford toilet paper, you can still wipe your a*s with a spotted owl, but you have to catch one first....

The bunny works better.

[Bill343]

Originally Posted by POhdNcrzy

Jazzlover, okay maybe I spoke to soon about that complete collapse of the Colorado ski resort industry you had sort of fancifully predicted a few weeks back....

9NEWS.com | Colorado's Online News Leader | 3 Colo. ski resorts suffer layoffs


Apparently out-of-state bookings for Nov., Dec. and beyond are way, way off, hurting more remote Colorado ski destinations such as Steamboat Springs.

What if there was a powder day but nobody showed up to ride it? Now that's a gloomy proposition indeed. But I imagine the lynx, elk and snowshoe hares wouldn't mind. Oh well, just remember, if you can't afford toilet paper, you can still wipe your a*s with a spotted owl, but you have to catch one first....

I suspect that companies like Intrawest. which is a Real Estate company that uses skiing as a vehicle to sell real estate, will get hammered in this economy. Resorts Like Loveland/Abasin/Monarch that cater to locals and don't depend on selling overpriced condos. will fare much better. However in the paranoid spirit of this thread, let me say that none of this will matter once the Apocalypse occurs and we all roam the mountains and plains in Mad Max fashion searching for food and gasoline.

[Sockeye]

...and projects like Red McComb's proposed ski village at Wolf Creek won't even get off the ground. Good riddance, you megalomaniacal pigman pri*k.

[jazzlover]

Originally Posted by Sockeye

...and projects like Red McComb's proposed ski village at Wolf Creek won't even get off the ground. Good riddance, you megalomaniacal pigman pri*k.

Amen to that.

[Bob from down south]

Here's an interesting one with local flavor:

Thousands flock to pick free vegetables on Colo farm

Future's soooooo bright!!

Debt is dumb

[jazzlover]

Kunstler's latest blog (James Howard Kunstler 11/24) is pretty insightful, and should really set people thinking (once again) what "suburban" and "recreation" Colorado may just look like in pretty short order. I still find some of his over-the-top hyperbole a little grating, but his calls for the past few months have been eerily predictive. A couple of snippets:

All the activities based on getting something-for-nothing are dead or dying now, in particular buying houses and cars on credit and so it should not be a surprise that the two major victims are the housing and car industries. Notice, by the way, that these are the two major ingredients of an economy based on building suburban sprawl. That's over, too. We're done building it and the stuff we've already built is destined to loose (sic) both money value and usefulness as the wrenching transition goes forward.

And . . .

I hate to keep harping on this -- but since nobody else is really talking about it, at least in the organs of public discussion, the job is left to me -- we have to get cracking on the revival of the railroad system in this country, if we expect to remain a united country. This is such a no-brainer that the absence of any talk about it is a prime symptom of the zombie disease that has eaten away our brains. Automobiles (the way we use them) and airplanes are utterly dependent on liquid hydrocarbon fuels, and you can be certain we'll have trouble getting them. You can run trains by other means -- electricity being state-of-the-art in those parts of the world that do it most successfully. I know that California just voted to create a high-speed rail link between Los Angeles and San Francisco. It's an optimistic sign, but it shows more than a little techno-grandiose over-reach. High speed rail would require a mega-expensive re-do of the tracks. We need to scale our ambitions for this more realistically. California (and every other region of America) would benefit much more from normal-speed trains running every hour on the hour on tracks that already exist than from a mega-expensive, grandiose sci-fi program that might not get built for ten years. The dregs of the Big Three automakers can and should be reorganized to produce the rolling stock for a revived railroad system.

Colorado, despite whatever other virtues it may have, is absolutely unprepared for a future that will no longer be centered around the automobile and suburbia, along with construction/real estates speculation/recreation economy that it has facilitated--probably less prepared than most anyplace else in the United States. Colorado has not even really started to sink into the recessionary/depressionary mud yet--and already its transportation (read: highways) system is a budgetary wreck, its pubic retirement system is hemorrhaging cash, and its "recreation" industry is already showing distress. And this is just the beginning . . .

[Bob from down south]

Another very interesting read, from a survivor of the collapse of the Soviet Union, comparing our readiness for the approaching economic train wreck to the Russians' readiness in 1990 when the bottom dropped out of their world.

Closing the Collapse Gap

I found it fascinating, and at the same time, hauntingly illuminating.

Of course my neighbor, fixated on $1.51 gas in Colorado Springs, absolutely believes things are all better now.