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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Wyätt Gwyön who wrote (18068)	8/25/2004 11:15:52 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

you should check the title of this thread. we are in a credit bubble right now and when it ends it will be the worst housing crash in world history, since there is an international bubble going on now. Whats interesting is that in the UK and Australia the FED acted to try and kill the housing bubble, here we cheer when idiots buy houses with 0% down. It will not even take a housing crash to cause SEVERE problems, a housing slowdown will send this economy spiraling. M

To: Wyätt Gwyön who wrote (18068)	8/26/2004 5:24:40 AM
From: Elroy Jetson	Read Replies (1) \| Respond to of 110194

I saw someone at dinner tonight that reminded me of the 1980s real estate market. I think the residential side is far more overvalued today, relative to incomes, than it was in the late 1980s. But one thing that made the late 1980s "seem" worse was the rampant syndication of commercial properties, both retail and office, as tax shelters. This time around it is more impersonal and disguised in the form of REITs. The person I saw at dinner put together syndications of commercial property at the age of 25. I know the total value of the properties he syndicated exceeded $35 million, probably far more, primarily with money from his parent's tax accounting clients. Even with 30% down-payments they all lost every cent - at least $10 million sent off to money heaven at the hands of one single 25 year old. The young syndicator filed bankruptcy and lost home, cars, everything. Today he is a marginal real estate agent working out of a low-rent office - even his website is down and out of service. Two other people I knew syndicated Residential properties. Both went to prison for being slumlords after they could not pay for their maintenance, and utilities after paying their mortgage payments on-time. Bad choice! In California and most states it's a Felony for a Landlord to allow the utilities he is responsible for to be shut-off for lack of payment. But the charges against both far exceeded these felonies. One of these felons had previously been the city attorney for Beverly Hills before he happened on the "clever" get-rich scheme of owning apartment buildings. The other had appeared in television commercial and at seminars for a well-known "get-rich" real estate guru. He was removed from the promotional material as a "success story" after he was sent to prison, filed bankruptcy 9 times and lost everything. How people fall on hard times and change their lives over "can't lose" real estate investments.