Housing doom and gloom - ENOUGH already !!

Just saw today that condo prices in San Diego have dropped 25% in the past year. These are official numbers that are published, so the actual is prolly worse. This place is in free fall (in the condo market anyway).
 
Quote from Cutten:

Note that France has worse budget deficits and worse government policies, yet they are not mired in a borderline recession. Why not? Because they had no real estate bubble, unlike the US.
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Huh? where do you come up with these "facts". Prices in France have doubled this decade. Keep in mind that French prices are in appreciating Euro's. That means as priced in dollars values in France have TRIPLED!
 
Quote from Pa(b)st Prime:

Huh? where do you come up with these "facts". Prices in France have doubled this decade. Keep in mind that French prices are in appreciating Euro's. That means as priced in dollars values in France have TRIPLED!
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A double in a decade is a little over 7% per annum appreciation - hardly a bubble.

As for the exchange rate, French houses are higher in dollars, but then so are French incomes, land prices, and building costs. The only impact will be on buyers who use dollars - a tiny fraction of the market. Thus the net impact of the exchange rate is minimal.

If you don't think the US had a real estate bubble, what in your view is causing the current slowdown and possible recession? And if you think France had a real estate bubble, why aren't they having recession concerns to anywhere near the same degree as the US? Why are no French cities seeing 30% price falls like Miami (despite the ever-cheapening dollar making it more affordable)?
 
What makes you think America has done anything more than double this decade? You act as if we made a Tokyo type move. lol. Sure the "Sun Belt" rose at 20% for a few years running but many northern cities didn't rise at all. Ala' Detroit.

Europe is hanging tough for the same reason NYC and the Bay Area are still strong. Under supply. Why are the mkts in Miami, Vegas and Az tepid? Mucho inventory vis a vis massive construction. America is aging. Older folks-not tied to local economies for jobs-prefer warmth. SoFla, SoCal, Az,TX and Vegas will stop building for a while. Supply/inventory will slowly shrink. Prices will then rise as retired America continues to migrate South/West.


I laugh about this with a bearish friend in Chicago all the time. We've each found articles about the impending L.A. real estate crash. These pieces have appeared in the NYT (even an early People mag) in 1979, 1983, 1991, 2007........Each sell off turns into new highs several years later. Why? Because fiat currency is monopoly money when gamers decide to pay out on Free Parking.

I've been pretty emphatic about my macro views Cutten. Market risk going forward isn't a 1930's collapse in prices. Market risk going forward is an Argentinian response to debt causing a cup of coffee to be $14.

Quote from Cutten:

A double in a decade is a little over 7% per annum appreciation - hardly a bubble.

As for the exchange rate, French houses are higher in dollars, but then so are French incomes, land prices, and building costs. The only impact will be on buyers who use dollars - a tiny fraction of the market. Thus the net impact of the exchange rate is minimal.

If you don't think the US had a real estate bubble, what in your view is causing the current slowdown and possible recession? And if you think France had a real estate bubble, why aren't they having recession concerns to anywhere near the same degree as the US? Why are no French cities seeing 30% price falls like Miami (despite the ever-cheapening dollar making it more affordable)?
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Quote from Pa(b)st Prime:

"... Market risk going forward isn't a 1930's collapse in prices. Market risk going forward is an Argentinian response to debt causing a cup of coffee to be $14.
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I wish "deflation now" were most likely. Bad as it would be, we would wash clean, repair, recover, and change policies.

The BIG INFLATION you envision is not only much more likely, it's also much more devastating. Most Americans will be bankrupted by it, and when "recovery" does come, it won't be bankrupted Americans "bouncing back"... it will instead by savvy foreigners whose currency was not destroyed who will pick up US assets on the cheap and get wealthy in the recovery.

Bottom Line.... America is being spent into oblivion and GIVEN AWAY by criminally negligent and greedy US Federal politicians.
 
Quote from gnome:

I wish "deflation now" were most likely. Bad as it would be, we would wash clean, repair, recover, and change policies.

The BIG INFLATION you envision is not only much more likely, it's also much more devastating. Most Americans will be bankrupted by it, and when "recovery" does come, it won't be bankrupted Americans "bouncing back"... it will instead by savvy foreigners whose currency was not destroyed who will pick up US assets on the cheap and get wealthy in the recovery.

Bottom Line.... America is being spent into oblivion and GIVEN AWAY by criminally negligent and greedy US Federal politicians.
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You, and many people, are failing to consider something that is not obvious:

America is now a value.


Because of the currency debasement it is now worth it for international companies to start outsourcing to the US. Our infrastructure hasn't deteriorated, and we have arguably the best physical infrastructure in the world. We also have the largest volume of elite universities and scientists - students come here to learn more than they do elsewhere.

Back in the early 2000s the company I worked for started "best-shoring" to Australia because they could pay a software engineer 60k AUS/yr to do what they were paying a US engineer 60k USD/yr. The cross was ~1/1.5 USD/AUS.

People are so hell-bent on what they are being spoon-fed(sub-prime, inflation, etc.) they aren't seeing at least one of the moves that the administration is making - and they are making it in a calculated and deliberate manor. Sub-prime was a fraction of a fraction of total mortgages. Not good enough? Throw in a million "possible" affects on prime mortgages and let the fear speculators go-to-work in the blogs and op-ed sections. Soon the media is going to say people that own homes free-and-clear are in danger of having the banks take them away because of $4 gas. Christ, enough already......


The US is now positioned toward the top of the global marketplace not because of a single new invention or technology(a-la the PC, etc.) but because we are a solid place to do business. If the govt can clean up corporate taxation then significant growth will return.

But hey, what do I know, just cause I've been shorting google since the end of january.



Regards,
 
yes U.S. has a value , thats being sold out by our gov. and stupid ASS pres. and his dumbASS father who got the ball rolling. does anyone remember george sr. talking about " THE WORLD ORDER ". THAT WAS ABOUT GIVING AWAY OUR SOVERINTY.

BGP

P.S. WHERE'S MY SPELL CHECK ? below it only shows (submit or preview)
 
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