Real Estate bubble bust may be worse than Dot Com bubble bust

the ceiling is set by people's access to credit, if the cand pay for it then they have no demand for it, see above.

Haha, I mean How can we get the money if you don't give us the tapes.

Or something like that.

"radar love"

-- get bent, Saturday, 12 January 2008 19:36 (2 months ago) Link

whoa, me 2. At least sometimes. I have a few custom wav files that I put on the phone in a wav-editing frenzy like two years ago, and I haven't bothered with since. I still change them sometimes (less and less often, tho) -- "Radar Love," "Do Ya Think I'm Sexy" (lol of course you do), something by Diana Ross but I never set it to that so I forget which one, the theme to "Curb Your Enthusiasm" (my longest-standing one, and it's perfect, and I thank whever the ilxor was that said on some old thread, "That has got to be a ringtone"), and a couple others that I forget even more than Diana Ross.

But "Radar Love" is a great one.

I mean this:

Dirk: Look, man, all we need is the tapes, all right?
Record Producer: No, you don't get the tapes until you've paid.
Dirk: In our situation, that doesn't make any fucking sense.
Reed Rothchild: Look, we can not pay for the tapes, unless we take the tapes to the record company, and get paid.
Dirk: Hello? Exactly.
Record Producer: That's not an MP, that's a YP, your problem. Come up with the money, or forget it.
Reed Rothchild: Okay, now you're talking above my head. I don't know all of this industry jargon, YP, MP. All I know is that I can't get a record contract, we cannot get a record contract unless we take those tapes to the record company. And granted, the tapes themselves are a uh um oh, you own them, all right, but the magic that is on those tapes. That fucking heart and soul that we put onto those tapes, that is ours and you don't own that. Now I need to take that magic and get it over the record company. And they're waiting for us, we were supposed to be there a half hour ago. We look like assholes, man.
Dirk: Let me explain to him in simple arithmetic. One, two three! Because you don't fuckin' get it, Burt! You give us the tapes. We get the record contract. We come back and give you your fuckin' money. Have you heard the tapes? Have you even heard them? We're guaranteed a record deal. Our stuff is that good!
Record Producer: Now I get it. Now I understand. You want it to happen... but it's not going to happen. Because it's a Catch-22.
Dirk: What the fuck does that mean? What is a Catch-22, Burt?
Record Producer: Catch-22, gentleman. Think about it.
Dirk: You know what I'm thinking about, man? I'm thinking about kicking some fuckin' ass!

haha kenan are you on the right thread?

Is this thread going round and round in circles or is it just me?

You're right. See you all here in 12 months, see where we are then.

But when it is bought with credit, isn't it more a case of something is worth what the bank will lend them to pay for it?

I think that the assumption that people will pay the maximum that they can borrow for just any house is flawed. there'll usually be a notion of value (even if it's just the individual's notion) involved.

I could have borrowed enough last year to pay 300k for a three bedroom semi where I live. Because i didn't think that there was any value in that, I didn't buy.

You're totally leaving out the fact that many people making a long-term investment will also want value for money, it's not just a case of taking out the biggest mortgage they can get and blowing it on an overpriced house.

I agree most with Jamie T's idea that there is a lot of latent demand out there, waiting for a bit of value in the housing market, even allowing for the fact that credit will be harder to come by in the next year or two.

so are we saying that people will buy things, if they want something and can afford it?

and that if people want things but can't afford it and they can't borrow the money to buy them, then they can't buy them?

and that if people can afford to buy something, but don't want it, or think it is too expensive for what it's worth, then they won't buy them?

this is ground breaking economics, guys.

A great deal of economics is stating things that are so bleedingly obvious we have forgotten what they are.

otm, and most bubbles involve mass hallucinations that basic economic truths aren't true this time.

really, i think we're wondering why people don't just follow those rules all the time, mostly.

so do we all know these rules here on this thread?

well, they're different for BTL, obviously

assume a can opener

thing is, it makes sense' to break the rules during a credit expansion as long as you cash in before the tide goes back out. this how populations get progressively more in debt under the illusions they are getting richer.

the boomers have ridden this wave pretty well. not sure who is going to pay for their retirement though

is it a good time for me to start lending people money?

what are the ways to make immoral cash during a recession?

is it basically to buy out people's stuff at rock bottom prices?

if you follow the rules then it should be relatively easy to know what the bottom is and when it will occur?

yep, xpost. if you can get the cash.

Can I make millions buying foreclosed homes with no money down?

the bottom is always beneficial to those with liquidity/cash rather than those that need credit and are unable to take advantage of lower asset prices

But there is no shortage of houses in UK - people are not in camps waiting for houses to live in

Apparently they're all still living with their parents

-- Tom D., Thursday, April 10, 2008 3:30 PM (1 hour ago) Bookmark Link

heeeeells yes

which deflates the "oh prices are x% down - i'll just buy more" argument

so house prices being high is what's sustaining our society's family bonds in the uk?

I sometimes get the feeling that Laxalt is opposed to anyone borrowing money to buy anything at all.

We will be back in the stone age if people stop borrowing money it's how money is created.

er well it's golden rule 3

3. when you take out a debt you will end up paying more than what you owed
Thursday, 10 April 2008 12:23 (5 minutes ago) Bookmark Link

Well no not exactly - though of course we are all paying back interest on loans that we ourselves don't take (rent is just interest paid back to bank via an intemediary)

Its an inevitability of a system in which money is created as debt, and at certain parts of the cycle its advantageous to ride that expansion. But I think that borrowing in general over the course of the 20th century (certainly post ww2) has really been a kind of peonage hidden behind an illusion of wealth - and that this has been progressively increased since the decline of industry.

We will be back in the stone age if people stop borrowing money it's how money is created.

-- Ed, Thursday, April 10, 2008 4:05 PM (8 minutes ago)

well, yes - its a pretty central plank of capitalism

basically, the way that the burden for this money creation has been shifted ever more onto ordinary people under the illusion of wealth creation

Surely UK corporate debt >>>> UK consumer debt though?

(Actually I don't know if that's even true, it's just an assumption I'd always made)

(Also this doesn't mean the burden isn't shifting, of course)

Since the early 60s (maybe before not sure) uk consumer and mortgage debt has grown hugely (or rather percentagewise equity has shrunk) - as i was trying to say on the uk thread a few months ago we are supposedly richer (through the expansion of owner occupancy) yet, collectively, we 'own' less (as a %) of our houses with each passing year.

the % of money created via mortgage debt has increased hugely since the 60s - ordinary people fulfill that function more than they ever did, under the illusion of becoming richer.

we are supposedly richer (through the expansion of owner occupancy) yet, collectively, we 'own' less (as a %) of our houses with each passing year.

clarify

Well each individual person may well gain more equity with each year. but collectively 'we' owned a larger percentage of uk equity in 1961 than we do today. (Granted, equity is a bit of an ephemeral and theroetical concept but still). This isn't that surprising because with every credit expansion we own more expensive homes, but we are putting down less and less to begin with, and paying off less and less (most recent gains have been prices rising rather than debt being paid off. how much debt is actually paid off in first 5 years? not much)

Its hidden by the huge rises in each bubble - but long term the amount owed to the banks, as a Percentage, of uk housing wealth grows each year, which means the publics share must be shrinking

(its also distorted of course because owner occupancy has been growing over the decades - go back to 1912 and mortgage debt must have been a tiny proportion as ordinary people didn't own houses, landlord class owning outright - so its swings and roundabouts)

Who is 'we'? The general public or property 'owners'? If you're talking about the general public then surely we own more now than we did in the past because only a few decades ago most people either rented privately or from the council. Or are you saying that amongst people who 'own' property the balance has shifted away from people who own outright towards people who are slowly paying off a mortgage? If the latter, isn't that actually a result of widened owner-occupancy?

"Ordinary people"

yes that is correct. widening owner-occupancy has increased the percentage of equity owned by banks hugely (and yes that is because social housing has been removed to help facilitate this)

"Ordinary people"

fair point, poor terminology.

working people?

Or "Hard Working Families", to use the crap terminology preferred by all the major political parties

;)

so what happened to those people who owned those houses outright? did they sell them to the banks?

we could always go with "the section of society that didn't own in 1923 but were more likely to own in 1972 and still more likely in 2000"