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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory
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To: Mike Johnston who wrote (48980)1/7/2006 11:58:04 AM
From: westpacific  Read Replies (2) of 110194
 
""Think what would happen to the economy if housing prices dropped to fair value, meaning about 50%.""

They did this before in California, people were upside down but we got by..........

So I disagree.

A bubble burst would hurt the idiots that bought late in cycle and also the idiots that used them as ATMs.

Banks will fail, it will be a mess, but what is worse, this mess or a total system collapse. Ask yourself that.

I remember when I bought a place in 1995, banks were giving them away (15 in a complex of 125 units when I bought in bank repo), I bought a bank repo. for 125K. There were many folks that bought new in 1981 at around 200K. This was in Orange County, economy was booming.

Now that same place is 550,000K. How can you justify this price, you cannot.

It is insane. I sold it by the way recently.

West
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