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So Tex...still refusing to back up your claims with real data? This is the third time I've asked. I'm willing to consider your points but give me some hard evidence in the #'s.
Oh hi. I was curious about this claim that real estate is a "Ponzi scheme," since my limited grasp of both Ponzi schemes and real estate seemed not to bear out that claim. So, here we go. Here's the history of the Ponzi scheme:
"Ponzi" Schemes
Ponzi schemes are a type of illegal pyramid scheme named for Charles Ponzi, who duped thousands of New England residents into investing in a postage stamp speculation scheme back in the 1920s. Ponzi thought he could take advantage of differences between U.S. and foreign currencies used to buy and sell international mail coupons. Ponzi told investors that he could provide a 40% return in just 90 days compared with 5% for bank savings accounts. Ponzi was deluged with funds from investors, taking in $1 million during one three-hour period—and this was 1921! Though a few early investors were paid off to make the scheme look legitimate, an investigation found that Ponzi had only purchased about $30 worth of the international mail coupons.
Decades later, the Ponzi scheme continues to work on the "rob-Peter-to-pay-Paul" principle, as money from new investors is used to pay off earlier investors until the whole scheme collapses. For more information, please read pyramid schemes in our Fast Answers databank.
Here is a definition of a Ponzi scheme:
"A fraudulent investing scam that promises high rates of return at little risk to investors. The scheme generates returns for older investors by acquiring new investors. This scam actually yields the promised returns to earlier investors, as long as there are more new investors."
I have concluded that because real estate does not originate with one organization or "schemer" and investors are not "promised high rates of return at little risk," the claims, by whomever made them, that investing in real estate is equivalent to a Ponzi scheme are pretty much just hyperbole borne of a bit of ignorance about both real estate investing as it relates to the individual homeowner and also the history of the Ponzi scheme.
Thank you for an interesting discussion.
Thank you, Thank you, and Oh, did I say Thank you? Finally someone with some REAL intelligence puts out a good post! But watch, someone will find a way to argue this to be you living in a disillusional state because you don't see real estate as the "Ponzi scheme of the late 2000's". ORRRRR, they'll not respond at all because that's what happens when they don't know how to defend it! Thank you, again-FMV
Thank you, Thank you, and Oh, did I say Thank you? Finally someone with some REAL intelligence puts out a good post! But watch, someone will find a way to argue this to be you living in a disillusional state because you don't see real estate as the "Ponzi scheme of the late 2000's". ORRRRR, they'll not respond at all because that's what happens when they don't know how to defend it! Thank you, again-FMV
You may want to read the last paragraph again before jumping up and down!
Schemer: Alan Greenspan and the Fedeal Reserve Board with artificially low interest rates. Not every Ponzi schemer is without influence to avoid jail time. The Social Security Administration runs a very elaborate Ponzi Scheme with Ida Fuller (SS #1) being the biggest recipient (getting a handsome 23K for only putting $24 into the system), yet noone need be arrested.
If invsters were not promised such a high rate of return, why the sudden spike in flipping among noobs?
What is your problem? i have repeatedly said when I post it's about my market which I know well and I even said I dont speak for the rest of the nation. yet you continue to try to antagonize me and other's by sating we dont care about other areas? Why? You need to step back.
What is your problem? i have repeatedly said when I post it's about my market which I know well and I even said I dont speak for the rest of the nation. yet you continue to try to antagonize me and other's by sating we dont care about other areas? Why? You need to step back.
Quite the condtradiction- I have been told, repeatedly, by Humanoid, that "He doesn't care"!!! Read the posts! Maybe you do care about the rest of the 49 states among us and if so, I'm sorry. Antagonize is the last of my intentions. I am trying to seperate the CA posts from the rest of the nation! You are the one who needs to step back. I am only giving my opinions and information on our area and the rest of the nation as I and many others are experiencing it. What nerve did I hit? Would still like some actual answers to what I say, as opposed to being accused of being disillusional and an antogonist. I believe I even said in my last post to you, "I mean no disrespect". I'm am simply tired of this continous "bahsing" of the real estate market from a "disgruntled buyers standpoint". I'll say it over and over and over- real estate is NOT and NEVER was overpriced in much of the nation as in CA. SO stop leaving the impression that ALL of it is, as this is literally the impression that ALL the references you and the "doomers" post to say such. That includes Humanoids "macroeconomics" theory, how the economy is in the dumps as well and how it will continue to be. These posts have nothing to do with CA. This is a generalized opinion about the entire nation in relationship to the real estate market. I am allowed to have my opinion and give my examples of such to show arguement to the other side of this mess. If you don't like what I post, fine. But don't tell me to back off because I might have posted something you dont' want to believe or hear. Thanks.
However in Syracuse I'm looking at houses to buy that are nicer than the one I am renting, and will be paying less per month, even including taxes and insurance with a 15 year mortgage.
'I am only giving my opinions and information on our area and the rest of the nation as I and many others are experiencing it. What nerve did I hit?'
That I am trying to do the same for my area CA, give my opinion, and you get upset everytime we do. That's the nerve.
'I'm am simply tired of this continous "bahsing" of the real estate market from a "disgruntled buyers standpoint".'
fyi..I am a home owner and landord. Looking to buy a 3rd home sometime when my area hits bottom. What's this? A new breed? A homeowner doomer? Oh th humanities.
One of the factors I haven't seen anyone address in the first two pages is the effect of population explosion. More people means less land per capita and, presumably, higher prices for land and thus for housing.
However...that also depends on the economic status of the new people. The nation has not merely not been keeping up with population growth but losing jobs. (It's been said that the nation needs 150,000 new jobs each month to keep pace with population growth, and a great many of those jobs need to be solid middle class jobs, so when the media reports a loss of 50,000 jobs for a given month, it's actually a loss of 200,000 jobs for that month.)
So, will our nation's third world rate of population explosion help stabilize home prices? I'm guessing that it wont have too much of an effect since the nation's job market is in the crapper without a job-filled recover in sight (as opposed to a jobless "recovery").
I am trying to seperate the CA posts from the rest of the nation!....I am only giving my opinions and information on our area and the rest of the nation as I and many others are experiencing it....I'm am simply tired of this continous "bahsing" of the real estate market from a "disgruntled buyers standpoint". I'll say it over and over and over- real estate is NOT and NEVER was overpriced in much of the nation as in CA.
Hey, in your discussion with SoCal Bottom Rider, you lose points by claiming that the real estate crisis is CA vs. the "rest of the nation." Most of Florida is just as bad as most of California, Nevada isn't far behind, parts of the midwest are dropping, etc. etc. Even in my area, prices have dropped by 10-15% already, and more is on the way.
In fact, Case-Shiller's reports show that the vast majority of the markets in the country are in a severe price decline, perhaps unprecedented since the Great Depression of the '30s. If it were only California, there wouldn't be this much fuss about it. Recall that 15 years ago, there was a real estate pullback in CA, but it was pretty much limited to that state and so wasn't nearly so worrisome as the current, much broader problem.
To all who complain that "all real estate is local," and that not all areas are experiencing price declines, fair enough. That's true. But not to recognize the broader context of mostly falling markets across the country is just a form of wishful thinking.
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