Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: TH who wrote (5503)	5/3/2004 6:05:58 PM
From: Jim Willie CB	Respond to of 116555

yes, I now think GreenMan believes his own lies if he buys into the notion that this round of inflation will stick because it is founded within the bond and real estate arenas, then he must therefore believe his own lie the bond market and the housing market are much stickier but they are also prone to declines THE KEY IS UNWINDING OF BOND DERIVATIVES THEY ARE LIKE A TRULY MASSIVE COILED SPRING like any coiled device, stand clear when the pressures are released, things break, people killed / jim

To: TH who wrote (5503)	5/3/2004 10:11:33 PM
From: mishedlo	Read Replies (1) \| Respond to of 116555

Mazepa on the FOOL talks about housing It seems the media is fueling this nonsense that Real Estate prices are never going to fall. In my lifetime I have seen 3 Real Estate bubbles in the Toronto area. Each one ended with Real Estate prices falling. The first was the house my Grand Parents lived in. There was a time they could have sold it during the 1980's for 350 k and bought a beautiful large house in a more desirable location. That same house fell in value to around 150-200k and it finally took a 150k renovation and the current bubble (20 years later) to bring its current value to 500k. In 1990 during the exodus out of Hong Kong many were coming to Canada to escape the fear of Communism. Real Estate prices in Vancouver went through the roof. If you didn't have 500k you couldn't buy a pot to p!ss in. Later many of these same folks left Vancouver to return to Hong Kong when things didn't get as bad as they thought it would with the Chinese takeover. Real Estate prices dropped. I own a piece of property outside of Toronto (about 25 minutes). In 1990 I have an offer letter from a Real Estate Agent for well over 7 figures. Unfortunately I couldn't sell. Today that same property is worth half with no hope of ever reaching the 1990 price. In 1992 my Mother purchased a Condo in a very exclusive area of Toronto. The sellers sold it for 50k less then they bought it for in 1990. So you see Real Estate prices do go down. It's just that the Real Estate Mafia (agents) don't want you to know that. Their commissions are much larger when you are paying twice as much as the house is really worth. Real Estate prices are what they are is because today you don't need to have collateral or a down payment. You don't need a job or good credit. Once a long time ago Banks had requirements that had to be met before they would loan you 400k. Today all you need is a pulse. Interest rates are at there lowest level in over 50 years. You can now borrow twice as much money as you could have 5 years ago for the same Interest payment. It is an artificial environment that has been created through low interest rates (Gov facking around) and the desperation of banks to increase business regardless of what the risk is. People are oblivious to the fact that they are somehow going to have to pay off the 500k they borrowed in the next 20 years before they retire. But that is the furthest thing from there mind. They think they are going to turn around and sell this property they bought for even more (and some will). But eventually it comes to an end. The only ones who make it out smelling like a rose are the Real Estate Agents and the Lawyers. Regards....