tag:blogger.com,1999:blog-4921988708619968880.post8587339192168536739..comments2024-02-28T22:03:57.237-05:00Comments on The Automatic Earth: Debt Rattle, May 20 2008: US home prices will drop 80%Ilargihttp://www.blogger.com/profile/09698428009501267664noreply@blogger.comBlogger14125tag:blogger.com,1999:blog-4921988708619968880.post-21137652967623646782008-05-21T11:09:00.000-04:002008-05-21T11:09:00.000-04:0010kmargin, This is good historical information .....10kmargin,<BR/><BR/> This is good historical information ... but it's from the oil age, no?<BR/><BR/> We're massively overbuilt, values are tumbling, and municipalities will need property tax revenues. I think we're going to see a lot of homes selling for cash ... and that which accumulates in three to six months, so long as the buyer can pay the property tax..https://www.blogger.com/profile/03915219261001181341noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-85426843479299449642008-05-21T05:19:00.000-04:002008-05-21T05:19:00.000-04:00I agree with Stoneleigh and Greyzone's comments - ...I agree with Stoneleigh and Greyzone's comments - a 90% fall in house prices is quite plausible in some markets, especially if people are reduced to paying cash.<BR/><BR/>For example, there are suburbs in L.A and Sydey where a house sells for 10 times average annual income - people make $60k per year and a house is $600k. Supposedly the long-term, "normal" average is 3 times income, and prices Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-9360673506128463972008-05-21T02:24:00.000-04:002008-05-21T02:24:00.000-04:00Hello,Greyzone, I fully agree on the basic analysi...Hello,<BR/><BR/>Greyzone, I fully agree on the basic analysis. I see no way the U.S. will return to "normalcy".<BR/><BR/>I was simply noting that the remark by Baker was pretty fuzzy ("To bring them back to where they would have been without the bubble"), to the point that I would tend to disregard it.<BR/><BR/>Ciao,<BR/>FrançoisAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-53905778786212657972008-05-20T23:18:00.000-04:002008-05-20T23:18:00.000-04:00South Africa appears to be ready to go off like a ...South Africa appears to be ready to go off like a bomb; refugees from Zimbabwe are the issue. Not good and certain to get worse as Zimbabwe isn't going to pull out of the spiral they're in.<BR/><BR/>http://tinyurl.com/6mpoya.https://www.blogger.com/profile/03915219261001181341noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-71844233693684217192008-05-20T17:52:00.000-04:002008-05-20T17:52:00.000-04:00Greyzone,Last week I posted an article that talked...Greyzone,<BR/><BR/>Last week I posted an article that talked about Detroit homes for sale at $5000-$10.000, while their property taxes were calculated on prices over $100.000. The discrepancy was so great that in some cases the taxes were higher than the purchase price. <BR/><BR/>I didn't think of this when I wrote the comment piece this morning, or I would have referred to that as well.<BR/><BRIlargihttps://www.blogger.com/profile/09698428009501267664noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-41073588442428114932008-05-20T16:50:00.000-04:002008-05-20T16:50:00.000-04:00François,It seems that everyone is expecting a ret...François,<BR/><BR/>It seems that everyone is expecting a return to the "normalcy" of the 1990s. I would suggest that this might be an overly optimistic expectation because this financial crisis is not occurring in a vacuum. Instead, this crisis is coming on the leading edge of multiple, physical, global crises that threaten large numbers of humans. And by threaten, I mean their very lives, not Greyzonehttps://www.blogger.com/profile/03675706201111951125noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-74894369206625409532008-05-20T16:11:00.000-04:002008-05-20T16:11:00.000-04:00Hello,I am not great at math, but...Suppose the pr...Hello,<BR/><BR/>I am not great at math, but...<BR/><BR/>Suppose the price in 1996 is 100 and it increases by 170%. That puts it at 270.<BR/><BR/>To drop back to 100, it must fall... 62.97%, which is pretty close to 63.<BR/><BR/>That being said, I wonder if the general rise in home prices (the long-term channel shown in the graph) does not put the percentage required to drop back to 1996 prices atAnonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-79276207256886248282008-05-20T16:01:00.000-04:002008-05-20T16:01:00.000-04:00Stoneleigh,Some people just don't want to believe ...Stoneleigh,<BR/><BR/>Some people just don't want to believe what is happening in real estate markets. But let me relate this true tale. Back during the Texas Savings and Loan debacle a nice lady in Austin, Texas who also had about $150,000 in cash waited for prices to settle where she expected them to turn. And she waited and waited some more.<BR/><BR/>When she finally bought (and she bought lotsGreyzonehttps://www.blogger.com/profile/03675706201111951125noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-49010353744516274032008-05-20T15:59:00.000-04:002008-05-20T15:59:00.000-04:00Anon 79644789567438956r47385936487The article says...Anon 79644789567438956r47385936487<BR/><BR/>The article says:<I>"Before the mid-1990s, he said, house prices moved up roughly in line with inflation. But since 1996, they have gone up 170%"...</I><BR/><BR/>If a price rises 170%, it ends up being 100+170=270%. To get it back to 100%, therefore, 170% must be subtracted, or 62.96% of 270. <BR/><BR/>I am thus guilty of and/or endowed with Ilargihttps://www.blogger.com/profile/09698428009501267664noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-70144432489166165812008-05-20T15:26:00.000-04:002008-05-20T15:26:00.000-04:00Ilargi, you claim in The Automatic Earth of May 20...Ilargi, you claim in The Automatic Earth of May 20 that ""If prices in 2006-7 were 170% higher than they were in 1996, then they would need to fall 63%, not 40%, to come back to reality."" Is this a new definition of mathematics to better fit your prophecies? 100 is 58.9% of 170, therefore if 170 goes down by 41.1%, it is 100. Reality check: 100 is more than one half of 170, therefore 170 needs Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-31030829295506645652008-05-20T13:33:00.000-04:002008-05-20T13:33:00.000-04:00Made tiny for your viewing pleasure, but its a mos...Made tiny for your viewing pleasure, but its a most excellent Reuters article on squatters.<BR/><BR/>http://tinyurl.com/5qcqd6.https://www.blogger.com/profile/03915219261001181341noreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-57287140079232689222008-05-20T13:31:00.000-04:002008-05-20T13:31:00.000-04:00Hello,Was on TOD (19 May Drumbeat) and people were...Hello,<BR/><BR/>Was on TOD (19 May Drumbeat) and people were talking about hyperinflation. So I chimed in, trying to explain why we are looking at deflation. Someone came back, saying no, look at M2 and M3, which are both up sharply.<BR/><BR/>So I started writing about the Japanese looking at M values in the 1990s and not realising that the money supply (credit) was in fact decreasing. Then went Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-56310953818535567992008-05-20T13:22:00.000-04:002008-05-20T13:22:00.000-04:00Hi, just dropping in to share a CNN story about a ...Hi, just dropping in to share a CNN story about a 67 year-old homeless woman. It is sad, but she did make some extremely poor choices, such as spending 75% of her monthly take home on rent.<BR/><BR/><A HREF="http://www.cnn.com/2008/LIVING/wayoflife/05/19/homeless.mom/index.html?eref=rss_topstories" REL="nofollow">CNN Homeless Mom</A>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-4921988708619968880.post-74468323656626332742008-05-20T13:18:00.000-04:002008-05-20T13:18:00.000-04:00I posted this comment on the bond market on yester...I posted this comment on the bond market on yesterday's Debt Rattle, but some may not have seen it, so I'm reposting it today:<BR/><BR/><I>A few people have asked our view of the bond market, given that we have posted warnings of potential upheaval.<BR/><BR/>To be more specific, what I expect is a decoupling between long and short term interest rates. The Fed has been cutting short term rates, Stoneleighhttps://www.blogger.com/profile/15099878430757036461noreply@blogger.com