Something about Mondays ... two weeks ago the Dow was down 504 to 10,917. Now it's down 777 to 10,365, the biggest-ever one-day point drop. (MarketWatch image)
The bears continue to be right. Christopher Thornberg on KPCC's AirTalk today ("The Politics And Economics Of The Bailout" - he's not listed but I heard him) makes sense about what it will take to return to sustainability.
Monday, September 29, 2008
An even-worse Monday
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6 comments:
Oh man, an investment banking buddy of mine just came over to my office and boy did he look lost. I feel for him because he's a mate, but not because of what is happening to him. For instance, he has been telling to me about the bottom in financials all the way down. I would be in the poor house if I had even listened to him one time. As it turns out, he didnt listen to himself. They never do. They need people to buy at certain levels on the way down to fill different gaps (it seems, to protect larger shareholders).. Anyway, he thinks we need this bailout to prevent complete and utter financial ruin for the USA. I DON'T BELIEVE A WORD OF IT. Banks are a dime a doze and after all the equity is quashed another bank can assume it's assets at the fire sale price, transition its back office stuff, and be off and running. banks would have you believe anything and will go down in flames yelling the same crap about the bailout because it is absolutely, positively in their best interests to source stupid money from the fed. If you could sell all your crap to your good friend who is spending some other suckers money, would you? You would if you were a greedy career banker. These people make nothing, they just skim. Screw them. Sorry about the rant.
This will have no effect of the prices in 90402. They aren't making any more land and the wealthy will gladly pay a premium for the good location and schools.
The bottom has been reached for 90402.
90402 isn't Lancaster--there's still lots of people out there making $1,000,000+ a year who can easily afford 90402 and sustain the prices.
Don't be fooled by any of this.
Of course if you believe any of this rot, I have some AIG stock that you can use to start your fireplace this winter in your $3,000,000 starter in 90402.
Sorry? Amen!
We are in a position to buy in the 90402. But we're not going to until prices fall significantly. Here's why.
Anyone who expects their income to persist for 30 years is frankly insane. The world is changing with great rapidity -- particularly for big earners. And while things can go up they can also come down.
If general economic uncertainty increases, we might reasonably expect: (1) people become less willing to get 30 year mortgages, (2) people become less willing to stretch their % of AGI ratios, and (3) senator o, who i ardently support, will be raising top-scale taxes (and likely limiting deductions), and it's hard to guess how much.
As the poison works through the financial system, and we return to balance, the absurdity of the assumptions underlying current prices will become ever more apparent. Prices got nowhere to go but d-o-w-n.
i agree a thousand percent but where are the sales in the 90402 that are down all i see is peak pricing for land in 90402
wasssssup ?
I've read and taken to heart many of the ultra-bearish rhetoric on places like doctor housing bubble and mr mortgage, but even though I agreed with their general notions, I didn't feel that we could head into anything like the great depression. However, seeing how things have been unfolding over the last couple of weeks, I'm beginning to see things much more pessimistically, now.
I have this image of people that have been saying 'my neighborhood's immune' and the like. I picture someone blowing on a balloon, with their face turning purple, just trying to keep in inflated. At some point, they they run out of breath and the entire balloon rapidly deflates as it's bouncing around the room.
I had thought that there was a chance of an orderly decline, but this will be swift an disorderly. It will take time for the system to pick up the pieces, worldwide, after this is over.
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