Karel Kriz wrote:
> In article <66624jF2huimiU1@[EMAIL PROTECTED]
>,
> Stan R <aus086@[EMAIL PROTECTED]
> wrote:
>
> > So how are the US-based correspondents coping with this?
> >
> > Both Charlie Cross and George Zimek live in California, which seems to
> > have been not only on the forefront of the green madness, but also
> > leading the pack on the residential property bubble.
> >
> > With $1 trillion of losses now becoming the "accepted" wisdom and with
> > literally tens of millions of Americans looking down the barrel of
> > negative home equity and the "jingle mail" option looking more
> > attractive by the day, how have you guys been affected?
> >
> > To be honest, Australia has had even more of a property bubble than
the
> > US and the blow up is only just beginning here - like in the UK & NZ
and
> > elsewhere. This will be exacerbated by the recent election of a
totally
> > inept Labor government (in Aus.) and I have no doubt many Australians
> > will be in for a rude shock when they discover property in fact does
not
> > always go up in value, nor are their jobs guaranteed to last forever.
> >
> > It will certainly be interesting to see how it all develops, given
that
> > "jingle mail" is not an option for Australians (the banks do have
> > recourse to your other assets if your home auction does not cover the
debt).
> >
> > The word "depression" seems to be gaining traction, however. If/when
the
> > $145 trillion credit derivative sector blows up, then it's all over
and
> > anything is possible.
> >
> > Stress levels at work over the last three or so months do make me look
> > wistfully at islands for sale in Tonga/Vanuatu, with no power, no
> > Internet and no phones, so as to get away from it all...
> >
> > Your comments would be welcome.
>
> Personally, the current depression/recession has not affected us. This
> is not so much by design, but by luck. We bought our house in 98 for
> $217,000. In January 2007 I could have sold it for about $620,000. Now,
> if I got $450, I'd consider myself lucky. So some of the equity that
> built up, is gone, but that's money we never had so we don't miss it.
> But in the height of the borrowing frenzy we nearly jumped on the
> bandwagon and made some half hearted moves to speculate in real estate.
> In those days, up to early last year, anyone with detectable signs of
> life could get a home loan. But, for various reasons, we didn't get into
> it and now we are actually thankful we didn't. One of the homes we
> almost bought, burned to the ground in last year fires.
>
> Our neighbor is a realtor and she has some horror stories of
> bankruptcies, foreclosures and suicides. It appears that Riverside and
> San Bernardino counties are most affected. I have a home builder client
> in Riverside County who stopped all work on new homes and reduced his
> staff to maybe 10 people from about a hundred. In Las Vegas, 50% of
> homes that are for sale, are empty - bought by speculators.
>
> I have no illusions. This will not turn overnight. So we hunker down,
> spend less and make no extravagant moves. The boat I was going to buy
> last year, will not happen. We've raised our fees a bit, gently, not to
> start losing clients. Personally, we'll be OK. The super rich in New****t
> Beach are not touched by this. Most of middle class will be OK. The
> people who will bear the brunt are the lower middle class who
> overextended themselves.
>
> The idea of an isolated island sound pretty good.
>
> K
Karel Kriz wrote:
> In article <66624jF2huimiU1@[EMAIL PROTECTED]
>,
> Stan R <aus086@[EMAIL PROTECTED]
> wrote:
>
> > So how are the US-based correspondents coping with this?
> >
> > Both Charlie Cross and George Zimek live in California, which seems to
> > have been not only on the forefront of the green madness, but also
> > leading the pack on the residential property bubble.
> >
> > With $1 trillion of losses now becoming the "accepted" wisdom and with
> > literally tens of millions of Americans looking down the barrel of
> > negative home equity and the "jingle mail" option looking more
> > attractive by the day, how have you guys been affected?
> >
> > To be honest, Australia has had even more of a property bubble than
the
> > US and the blow up is only just beginning here - like in the UK & NZ
and
> > elsewhere. This will be exacerbated by the recent election of a
totally
> > inept Labor government (in Aus.) and I have no doubt many Australians
> > will be in for a rude shock when they discover property in fact does
not
> > always go up in value, nor are their jobs guaranteed to last forever.
> >
> > It will certainly be interesting to see how it all develops, given
that
> > "jingle mail" is not an option for Australians (the banks do have
> > recourse to your other assets if your home auction does not cover the
debt).
> >
> > The word "depression" seems to be gaining traction, however. If/when
the
> > $145 trillion credit derivative sector blows up, then it's all over
and
> > anything is possible.
> >
> > Stress levels at work over the last three or so months do make me look
> > wistfully at islands for sale in Tonga/Vanuatu, with no power, no
> > Internet and no phones, so as to get away from it all...
> >
> > Your comments would be welcome.
>
> Personally, the current depression/recession has not affected us. This
> is not so much by design, but by luck. We bought our house in 98 for
> $217,000. In January 2007 I could have sold it for about $620,000. Now,
> if I got $450, I'd consider myself lucky. So some of the equity that
> built up, is gone, but that's money we never had so we don't miss it.
> But in the height of the borrowing frenzy we nearly jumped on the
> bandwagon and made some half hearted moves to speculate in real estate.
> In those days, up to early last year, anyone with detectable signs of
> life could get a home loan. But, for various reasons, we didn't get into
> it and now we are actually thankful we didn't. One of the homes we
> almost bought, burned to the ground in last year fires.
>
> Our neighbor is a realtor and she has some horror stories of
> bankruptcies, foreclosures and suicides. It appears that Riverside and
> San Bernardino counties are most affected. I have a home builder client
> in Riverside County who stopped all work on new homes and reduced his
> staff to maybe 10 people from about a hundred. In Las Vegas, 50% of
> homes that are for sale, are empty - bought by speculators.
>
> I have no illusions. This will not turn overnight. So we hunker down,
> spend less and make no extravagant moves. The boat I was going to buy
> last year, will not happen. We've raised our fees a bit, gently, not to
> start losing clients. Personally, we'll be OK. The super rich in New****t
> Beach are not touched by this. Most of middle class will be OK. The
> people who will bear the brunt are the lower middle class who
> overextended themselves.
>
> The idea of an isolated island sound pretty good.
>
> K
The only two remarkable aspects of the current financial
crisis are its root cause, and the way it's being ****trayed
in the media. It is quite astoni****ng to compare present
day perception of how capitalism is supposed to work to
the way Americans used to think 40 years ago. To most
people today, when one makes a profit from an investment,
that's capitalism, but when one loses money in a risky,
or ill-conceived economic venture, that's not capitalism.
That is some sort of foul play, and a reason for government
involvement (i.e. socialism). When people sign one of these
newfangled mortgage contracts knowing full well they could
not get into the housing market any other way, and that they
quite likely are not going to be able to make payments
two or three years down the road, they deserve what they
get, which is not necessarily and immediate foreclosure
followed by an eviction, as in the case of this young Stock-
ton couple, which decided to squat in their own home,
waiting for a government bailout:
http://tinyurl.com/3vhw94
And what about those who suffer the same market value
decline on their home, but decide to stick it out? And what
about the mortgage backed securities investors, who have
to take 20 - 30% losses according to the latest legislative
proposals. These are the same people who were scared
away from the stocks by the bankers' interest rate mani-
pulations, which led to the 8 years of "rational skepticism"
in the equity markets, which has been one of the principal
sources of overfunding the real estate market. Which led
to the current mess by financing homes which should
have not been built, and mortgages, which didn't make
any sense. The lesson from all this to most people should
be to realize that there is no shuch thing as a safe investment.
I think that is all our economy needs at this point. I also
think the leftwing media will do everything they can to keep
that realization from sinking in.
Does that make sense, Mr Kriz?
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