[airics]

Originally Posted by geos

So, hopefully soon I'll be able to get a lovely mansion in Summerlin or some other lovely section for $50k

If that happens I will sell you the Brooklyn Bridge. Oh wait, I see you are a New York expert, you already bought the Brooklyn Bridge!

[olecapt]

Originally Posted by geos

As I understand it the housing crisis as been pretty much confined to the low/middle end. The infection is spreading to the high end now according to this: The Next Wave of Foreclosures -- Seeking Alpha

So, hopefully soon I'll be able to get a lovely mansion in Summerlin or some other lovely section for $50k

The vulnerable parts of Summerlin have already been hit very hard. Lots of 850K places for $400K or less. There will be a few option arms out that way but not many. There are lots of Alt-As but they may well lower their payment on resets.

But why don't we let this year's interesting scenario play out and then worry about next year's when and if we get there.

[tony soprano]

Originally Posted by olecapt

This guy was another carcass picker who found a technical way to bet against sub-prime mortgages at the correct point in time. He correctly bet on what would happen. He however showed no early understanding of the housing market. Those who had made the same bet in prior years lost their shirt. He timed it right.

The correct point in time. The correct bet. He timed it right. End of story. There's no money to be made shorting a market on its way up. There is no carcass to be picked in a market on the way up. Timing is everything.

Plenty of people saw this coming. It's been my experience that the people who sing the "no one saw this coming" chorus loudest are the ones trying hardest to rationalize poor decisions.

[olecapt]

Originally Posted by tony soprano

The correct point in time. The correct bet. He timed it right. End of story. There's no money to be made shorting a market on its way up. There is no carcass to be picked in a market on the way up. Timing is everything.

Plenty of people saw this coming. It's been my experience that the people who sing the "no one saw this coming" chorus loudest are the ones trying hardest to rationalize poor decisions.

I would suggest you have it exactly backwards. That these various vultures notice an opportunity and timed it right is good for the vulture and his clients. The fact that the Fed and the Treasury Dept and almost all of Wall Street and green eyeshape insurance companies like AIG did not see the train coming is the problem. We needed someone in leadership to blow it up before it blew up...and no one did.

So some few saw part of it coming. And even they did not get it all right (Schiff). But of those who could have done something? Nothing...

[tony soprano]

Originally Posted by olecapt

I would suggest you have it exactly backwards. That these various vultures notice an opportunity and timed it right is good for the vulture and his clients. The fact that the Fed and the Treasury Dept and almost all of Wall Street and green eyeshape insurance companies like AIG did not see the train coming is the problem. We needed someone in leadership to blow it up before it blew up...and no one did.

So some few saw part of it coming. And even they did not get it all right (Schiff). But of those who could have done something? Nothing...

I don't count on the Fed or Treasury to get anything right. If I did, I'd be in terrible financial shape. That said, there were policy makers that saw this disaster coming too, but they were drowned out by the vocal majority. It's very difficult to get out an opposing minority opinion when a majority are making money because of the bubble. Simply put, no one's interested in hearing the truth on the way up.

It strikes me as odd that you would label as vultures the people who recognized in advance the abuses and excesses of the housing bubble and risked their capital and professional careers on taking the other side of the trade. I think the vulture label might be more appropriately saved for those that enabled and abetted the bubble. Amongst others, that would include cheerleading realtors for example. You know, the ones that claimed there was no housing bubble, the ones that directed their clients to buy homes they really couldn't afford, the ones that instructed their clients to buy now before they were forever priced out of the market, the ones that did whatever needed to be done to close a deal, etc. It's pretty clear to me which of the above two parties more deserve the vultures title.

[geos]

Originally Posted by airics

If that happens I will sell you the Brooklyn Bridge. Oh wait, I see you are a New York expert, you already bought the Brooklyn Bridge!

Grow up.

[olecapt]

Originally Posted by tony soprano

I don't count on the Fed or Treasury to get anything right. If I did, I'd be in terrible financial shape. That said, there were policy makers that saw this disaster coming too, but they were drowned out by the vocal majority. It's very difficult to get out an opposing minority opinion when a majority are making money because of the bubble. Simply put, no one's interested in hearing the truth on the way up.

It strikes me as odd that you would label as vultures the people who recognized in advance the abuses and excesses of the housing bubble and risked their capital and professional careers on taking the other side of the trade. I think the vulture label might be more appropriately saved for those that enabled and abetted the bubble. Amongst others, that would include cheerleading realtors for example. You know, the ones that claimed there was no housing bubble, the ones that directed their clients to buy homes they really couldn't afford, the ones that instructed their clients to buy now before they were forever priced out of the market, the ones that did whatever needed to be done to close a deal, etc. It's pretty clear to me which of the above two parties more deserve the vultures title.

Why of course they are carrion eaters. Just a high level of road kill. They have spotted a substantial defect created in the system by greed and have chosen to make money from the death or dismemberment of the system involved.

What purer definition of a vulture could you find?

The RE Agent bit is pretty much pure sophistry. While the RE Agent is a neccessary link in the chain he lacks both the skill and the requirement to determine the suitability of a client for a given transaction.

There were of course the few who recruited the unsuitable and led them to their disaster. Such people are excretable human beings. But they were very few in number.

More typical was the classical CA broker who had been helping people buy houses past their rational income limit for 25 years. And all those years it worked. Did the same thing in 2004 and 2005 and screwed up the client. And they do have some responsibilty...but not a lot. The worst and most consistent offenders I saw in Las Vegas where the builders and their mortgage partners. Their contribution far overshadiwed that of virtually all RE Agents...and note that in general they are not RE Agents.

Nah the RE Agent were mostly bit players other than the few who engaged in it as a primary practice. And those few deserve to go to jail...but they won't.

[JohnG72]

What if the market does this?:
/ \_
__/ \
\ __________
\____ /
\______/

Does it then really matter that someone missed the "valley" in the context of comparison to the current market?

Of course trying to time the "bottom" perfectly is preposterous for a number of reasons. I'm not sure I read where anyone is saying its possible. But the overall indicators point towards a continued downward trend. And then the likeliness of a rise in interest rates combined with continued high unemployment point to a period of stagnation. Based on these factors I'm pretty certain that prices in non traumatized areas will continue to fall and that they will remain at some point of stagnation or very slow growth for an extended period, perhaps a few years.

[olecapt]

Originally Posted by JohnG72

What if the market does this?:
/ \_
__/ \
\ __________
\____ /
\______/

Does it then really matter that someone missed the "valley" in the context of comparison to the current market?

Of course trying to time the "bottom" perfectly is preposterous for a number of reasons. I'm not sure I read where anyone is saying its possible. But the overall indicators point towards a continued downward trend. And then the likeliness of a rise in interest rates combined with continued high unemployment point to a period of stagnation. Based on these factors I'm pretty certain that prices in non traumatized areas will continue to fall and that they will remain at some point of stagnation or very slow growth for an extended period, perhaps a few years.

I have seen a half a dozen instances of stable or rising prices. Sun City Summerlin for one. 89134 outside of Sun City for another. Did a price chart for this year of places in the NW RNPs with 3000 to 4000 SF and find relatively low volume but price rising slightly.

So no I see no indication that places outside the foreclosure areas are still declining. Looks more like that went back to 2003 and are picking up from there.

The banks appear to be taking the foreclosed area to 1980.

[tony soprano]

Originally Posted by olecapt

Why of course they are carrion eaters. Just a high level of road kill. They have spotted a substantial defect created in the system by greed and have chosen to make money from the death or dismemberment of the system involved.

As sure as people made money during the inflating of the bubble, others will make money during the bursting of the bubble. That's the nature of free markets. There is always someone else on the other side of the trade. Attempting to villify those that profited by identifying the substantial defects in the system ahead of the crowd, obscures the defects themselves. By way of analogy, did GM fail because of the individuals that sold their equity and bonds short, or did they fail because of poor management, overcapacity, onerous unions, and poor product offerings?

The RE Agent bit is pretty much pure sophistry. While the RE Agent is a neccessary link in the chain he lacks both the skill and the requirement to determine the suitability of a client for a given transaction.
There were of course the few who recruited the unsuitable and led them to their disaster. Such people are excretable human beings. But they were very few in number.

More typical was the classical CA broker who had been helping people buy houses past their rational income limit for 25 years. And all those years it worked. Did the same thing in 2004 and 2005 and screwed up the client. And they do have some responsibilty...but not a lot. The worst and most consistent offenders I saw in Las Vegas where the builders and their mortgage partners. Their contribution far overshadiwed that of virtually all RE Agents...and note that in general they are not RE Agents.

Nah the RE Agent were mostly bit players other than the few who engaged in it as a primary practice. And those few deserve to go to jail...but they won't.

Did that come from a NAR handbook? We realtors were but hapless pawns doing the bidding of our evil builder and lender overlords? It's interesting that the same people that hold themselves out as having the necessary training and expertise to navigate what is for many people the single largest transaction they'll ever make, lack the skill and requirement to determine the suitability of a given transaction. Hey, it's not required of me. It isn't my job to determine if this transaction makes sense for the buyer.

Your perspective that no one saw this disaster coming becomes clearer to me. I recognize that it could be difficult to reconcile selling housing at horribly inflated prices with the knowledge that others saw the meltdown well in advance. I'm sure it's probably much easier to try and convince others that no one could have possibly predicted this.