06-26-2016, 04:59 PM
Pbrower2a Wrote:Ragnarok -- it is the speculative boom that is the true disaster. It devours capital that might be used just about anywhere else to better effect, and it quickly forces a ride down the curve of diminishing returns. Prices in the object of the boom rise, but but without a foundation in sustainable prosperity. Whoever is caught as the last buyer gets burned worst, but anyone else who got in during the boom gets to endure a loss.
You won't get an argument from me on that one.
1. I know first hand about the aftermath of the 1980's oil boom/bust. My first house was a half off fire sale foreclosure in Houston. I know this because for some odd reason, the mortgage holder sent a letter to the former owners stating that their current mortgage was about $79,000. I bought the house for $40,000. I have no idea why they sent that letter.
2. http://www.doctorhousingbubble.com/san-f...ouseholds/
Does this sort of thing look sane to you? It sure doesn't look that way to me. In this case again, I might add is that houses are the object of some crazy speculative boom. Of course you'll get the same refrain - "this time it's different".
Quote:Speculative booms cover much fraud. Some people see the paper profits as genuine growth and decide to take a secretive cut (embezzlement) so that they can join in on the sure thing.
Yeah, the S&L crisis in Texas was an example of that one. At least people went to jail back then, unlike 2008.
Quote:But the paper profits are themselves fantasy. When people quit believing in the Ponzi schemes the whole edifice becomes as useful as the old Packard plant in Detroit.
Sometimes mass foreclosures lead to blight ... You'd be amazed on how correct the above statement is.
http://www.lohud.com/story/news/local/ro.../84245420/
---Value Added 