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: SouthFloridaGuy who wrote (102377)	9/27/2009 12:32:06 AM
From: gregor_us	8 Recommendations Read Replies (1) \| Respond to of 116555

Hi. Thanks for the response. In my original post I reluctantly used the Berkeley example as I thought it could draw too much attention to Berkeley, per se. What I was actually going for was the line of demarcation that I see between the Fannie/Freddie/FHA part of the market, which has government support vs everything above. Berkeley was my proxy because it has the flats in the SW vs the hills. But my point could have been made with many towns and areas. Here is the problem I see: there is zero wage growth in the US, and the professional class has been particularly hard hit because the volatility in their salaries is higher and more leveraged to the economy: advertising, design, law, media, finance--there's no bonuses here anymore and if they are, the distribution is to a smaller workforce. The high end has not bottomed. It's in trouble. Big trouble. It is sitting there in many gorgeous, beautiful, waterfront towns with commuting distance to east coast cities and this is what it's doing: it's not selling. I disagree with your analysis also of CA RE inventory. Yes, it's down. As I said, in my original post, I very much agree that the low end has been hot. It's been red hot. Especially in places like San Diego. Here's the problem: huge, huge shadow inventory is sitting in CA. The intertemporal missallocation policies of the govt are now coming to a close. Cars are done, and in many respects, so is the low end of housing. Thing is: Washington has nothing to give to the upper end and neither does the economy. As for London, the bubble was so huge that many professionals were pushed far out to the periphery of the GLA, and no, there is not "hotness" happening in the GLA. Most of that stuff is sitting safely below the transaction highs. Hey, at least this time I wasn't foolish enough to use the examples of Chelsea, Mayfair, of Islington! I have no doubt its still very lovely to grab a Cuban at Davidoffs, and walk through the secret passageway out to Green Park. I'm sure it all looks very fine indeed. After 2 martinis at Duke's, it looks even better! Cheerio, G