[SGVLUG] OT: housing and bear stearns

[Zack, James]

We bought our place last fall and are perfectly happy.  We bought in
Alhambra near SouthPas, we got a good deal on the place (about 10k below
similar units in the area).  The price we paid has held pretty much over
the last few months.  I think the real problem areas are those long
commuter communities, the 909 if you will, that will have the biggest
drops in home values.  I never thought those houses out there were worth
what people were shelling out for them to begin with.  We might take a
loss short term on our place but we would be happy living here for 10+
years so no complaints here.
 
Personally, I don't think we should be bailing anyone out, banks or
people.  What sort of lesson does that send?  If we bail out all those
who got into those situations, what benefit is there for those of us who
are responsible?  I'll take another stim check  :)

________________________________

From: sgvlug-bounces at sgvlug.net [mailto:sgvlug-bounces at sgvlug.net] On
Behalf Of Miguel Hernandez
Sent: Tuesday, March 18, 2008 10:04 AM
To: SGVLUG Discussion List.; sgvlug at sgvlug.org
Subject: Re: [SGVLUG] OT: housing and bear stearns


Yea, it's a bad omen looming on the horizon. Too many key things were
done incorrectly, imho. You had banks & banking institutions pushing
sub-prime loans on people who qualified for the better loans. That
sounds odd until you find out that the banks didn't care because if
(when) people defaulted, they could re-sell that debt on wall street.
Adding insult to injury to the beleaguered consumer was that the
government went to the aid of the banking institutions (partially
understandable as the banks are a large part of the economic backbone),
not the folks who lost their homes or are still stuck in bad loans.

I feel bad for those who bought recently, as Matti said. :(

--miguel


On Mon, Mar 17, 2008 at 6:28 PM, David Lawyer <dave at lafn.org> wrote:


	On Mon, Mar 17, 2008 at 01:45:08PM -0700, matti wrote:
	> Hi,
	>
	> this is off topic...
	
	[snip]
	
	> I'm guessing we will see what some people like to politely
call a
	> "market adjustment" is coming to the socal housing prices as
credit
	> tightens and some more banks fail
	>
	> glad I didn't buy a house in the last year or 2...
	
	
	This is part of a much larger problem: possible financial
collapse of
	the U.S. gov't but it may be years away.  With the gov't bailing
out
	companies who took undue risk, it may wind up that the gov't
itself
	can't keep going into debt anymore and has to go thru default
itself.
	No country has every gone into debt as much as the US (including
all
	forms of debt such as private debt) and not suffered financial
	collapse.  It used to be that a way to default was via
hyperinflation
	so as to make the real value of debts nearly worthless.  Old
postage
	stamps of Russia and Germany illustrate hyperinflation.  In
Germany in
	the 1920's it took billions of Marks to buy some of the postage
stamps
	(in my stamp collection) when inflation hit it's peak.  But now
the
	U.S gov't has issued a lot of debt in "inflation protected
securities"
	that can't be made to go away via hyperinflation.  The only way
to
	default on this debt is just to not pay it back.
	
	So while house prices in real terms may drop, in term of dollars
they
	may hyperinflate along with hyperinflation of everything else.
If you
	would like to read some hyperbole (that is often humorous) on
these
	and related problems  see Kunstler's (author of "The Long
Emergency")
	site:
	
http://jameshowardkunstler.typepad.com/clusterfuck_nation/2007/12/foreca
st-for-20.html
	
	Linux both helps and hurts our current account balance of trade.
It
	hurts since it reduces the monopoly profits that MS can bring
into the
	U.S. from other countries.  But at the same time, the fact that
Linux
	was mainly a U.S. phenomena helps improve the public opinion the
U.S.
	worldwide and this may help the U.S. get more sympathetic
treatment in
	economic matters.  For example, will the oil trade switch to
euros
	from dollars?  Iran has already switched and wants others to do
so
	also.  Iran may win this since outside of Linux (and some other
	things), world public opinion of the US is pretty low, and the
Bear
	Stearns bailout (and related gov't loans of "liquidity" to Wall
	Street, etc.) makes it worse resulting in a falling value of
dollar
	which leads to inflation as the prices of imported goods rise.
	
	I wrote about the problem of free trade years ago and did
	nothing for years with what I wrote.  It's now on my website and
while
	I've added to it but it's not up-to-date.  Many of the things I
	predicted are happening now, but others predicted the same (see
	the list of books on the subject).
	http://www.lafn.org/~dave/gov/collapse.html
<http://www.lafn.org/%7Edave/gov/collapse.html> 
	                       David Lawyer
	


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