I was going to recap the latest in low-end Sunset Park, but bigger events seem rather more important. Hope you all saw this comparison of this stock market crash to others on Calculated Risk, from dshort.com (see originals for full chart). The S&P 500's over-50% fall from its peak might even impact buyers in 90402, no?
Karl Denninger repeated, but worth copying here,
The market and economy will not stop falling apart until:It's that simple, and all three must happen before we will see any sort of sustainable bottom put in. ...
- Paulson is fired and his policies cease.
- We have transparency in balance sheets - for every firm on the exchange. No exceptions. All Level 3 asset mark models and assets identified - period.
- Bernanke withdraws all his alphabet soup programs or is removed from office and his successor does, and the "crowding out" in the credit markets ceases.
The credit market was right and those who said it couldn't happen were wrong.
Yet it was another beautiful Santa Monica day! I'm optimistic that, although it will take time, out of this wreckage real estate prices will return to reality, and the new administration's focus on things of substance like investment in a sustainable energy policy will help rebuild the economy.
70 comments:
Your three points totally miss the root cause of this financial crisis. America has embraced socialism and elected a president who is so fiscally destabelizing that the markets are factoring him in before he takes office.
There is no bottom.
When you elect a former terrorist and marxist you've got to assume the markets are going to shut down as we know them. Nobody wants to do business in this environment. Many corporations and municipalities are just going to close up shop.
America has embraced socialism
You must be referring to the outgoing administration?
Sustainable energy? Energy indepedence in 10 years?
You have to be joking, right?
The new Obama administration is going to use that tried and true strategy used by Jimmy Carter.
We are going to experience another booming economy just like the Carter years!
Hey, did you see that the State is considering TRIPLING the car registration fee? And who said that Democrats don't know how to cut middleclass taxes....
This won't affect 90402 prices at all since everyone who is going to buy there is rich. The rest of the Westside are just sore losers--the prices everywhere else will drop another 65%.
Obama, the next great Carter!
" ... a president who is so fiscally destabelizing"
Well, that could only be G. W. Bush, who inherited a huge budget surplus from a Democratic administration and leaves us with a gigantic mess.
"When you elect a former terrorist and marxist ..."
A former terrorist?? A Marxist?? Which planet do you live on?
"America has embraced socialism ..."
You have no idea what you're talking about.
"Hey, did you see that the State is considering TRIPLING the car registration fee? And who said that Democrats don't know how to cut middleclass taxes...."
A state that's governed by a Republican administration, no less. I think you're confusing light and reft. Among most other things.
A-- state that's governed by a Republican administration, no less. I think you're confusing light and reft. Among most other things.
November 21, 2008 9:47 AM---
Can't you do better than that? The legislature has been Democratic forever and they are the ones creating all of the runaway spending.
Arnold is a RINO at best but even all of his proposed spending cuts have been rejected by the Democrats.
California's current budget problems are 100% the responsibility of the Democrats of this state.
The unions own the Democrats and we're all getting the government we deserve.
Quit being an absolute idiot since you can't lay the blame on Arnold.
"California's current budget problems are 100% the responsibility of the Democrats of this state."
The governor can always veto the budget. Then the legislature and the governor have to come up with a compromise. It's as simple as that.
"... and we're all getting the government we deserve."
That's the nature of democracy.
It is ironic that Arnold got into office vowing to reduce car registration fees, and now he's going to jack them way back up.
But as someone else said, Arnold is not a true Republican- in fact I'm not sure if there are more than a handful of true Republicans in elected positions today. I think the Republican Party has forgotten that you simply cannot outspend the Democrats, as we shall soon witness.
I for one blame the jews.
Surprisingly, I am going post something more relevant to this actual blog topic: It would also be interesting to see how the Dow fared from 34-37, or from 74-77, or 03-06. Every downturn has been followed by a rebound back to previous levels within 3-4 years. After the great depression the stock market rebounded 300% by 1936. Maybe this recent decline is different, but just goes to show that the panic and doomsday that you hear everywhere, is probably overexaggerated. Sure, we are in trouble now, but confidence will be restored whether we have a democratic, republican or green party president. The power lies with the people and with congress and there is a reason why this democratic system and constitution has prevailed for the past 300 years.
"After the great depression the stock market rebounded 300% by 1936."
Wow, I guess the Great Depression ended in 1936! You'd better get cracking and start rewriting the history books.
I guess my parents were mistaken when they talked about the Depression.
You have just proved why statistics or a little information can be worse than no information.
Panic? Who, me? Of course there's no need to panic. The Messiah has returned and he will lower the seas and cause hate and war to disappear from all of the lands on earth.
Who is this guy with all the conservative rage? What a fool. Your comments, at best, annoy us. The content of such rants has become so stale.
"The power lies with the people and with congress and there is a reason why this democratic system and constitution has prevailed for the past 300 years."
not anymore we've elected a president who's vetting his cabinet for gun ownership and establishing a civilian police force. marxism is not the word for this guy fascism is.
How many disgruntled Republicans are on this blog?
Fewer than the westside commies we're waiting to displace when they're houses are foreclosed on.
"Their" not "they're."
http://www.gallup.com/poll/106381/Obama-Education-Gap-Extends-General-Election.aspx
Well, I guess that if in March the USA doesn't dissolve like my last real estate LLC then the ranting anti-Obama posters on this thread will feel like they might have overreacted. That, or they will credit the Republican minority with keeping it all together.
"not anymore we've elected a president who's vetting his cabinet for gun ownership and establishing a civilian police force."
Wow, that makes you really wonder where you get your news from. 24 hours on Fox or listening to Rush Limbaugh? So many conspiracy theories wrapped into one sentence it's hard to believe.
Why are you reading this blog? You seem out of place here.
Anonymous 12:29pm, you got me - you are correct that the great depression did not end in 1936 (good job). By the time it ended in the early 40's, the market was up over 400% from the bottom, versus up only 300% by 1936. People much smarter than any of us have made a lot of money by not panicing and investing when everyone else is running from stocks.
Hopefully all the doomsdayers on here have already cashed in on their house and investments and have put all their savings in gold.
I hope some of you Obama supporters are between the ages of 18 and 25 and will have the privelege of serving in Barrack's civilian Army or whatever he's calling his mandatory boot camp. Enjoy!
"Wow, that makes you really wonder where you get your news from. 24 hours on Fox or listening to Rush Limbaugh? So many conspiracy theories wrapped into one sentence it's hard to believe."
Go check out youtube, the words come right out of Obama and Emanuel's mouths. Maybe you weren't listening closely and all you heard come out of Obama's mouth were the words "Hope" and "Change". Oops.
Although I am very interested in politics and was very active in a campaign prior to the election, I don't want to read political rants on websites where they're not relevant. I used to enjoy this blog when it focused on real estate. However, the lack of moderation on these off-topic comments is greatly reducing my enjoyment/visits.
"Go check out youtube"
Link please. I'd like to hear the words "mandatory civilian Army service" coming out of Obama's mouht. The only thing I remember was a call for voluntary civil service. See http://www.barackobama.com/issues/service/
"Although I am very interested in politics and was very active in a campaign prior to the election, I don't want to read political rants on websites where they're not relevant."
I agree wholeheartedly.
http://money.cnn.com/2008/11/21/markets/markets_newyork/index.htm?postversion=2008112115
So much for "... when you elect a former terrorist and marxist you've got to assume the markets are going to shut down as we know them. Nobody wants to do business in this environment ..."
LOL
>>"Yet it was another beautiful Santa Monica day! I'm optimistic that, although it will take time, out of this wreckage real estate prices will return to reality, and the new administration's focus on things of substance like investment in a sustainable energy policy will help rebuild the economy."<<<
This entire entry has to do with politics and the ridiculous assertion that "The One" Obama's plan for the economy is going to revive and save the dismal outlook for the future.
What exactly has Obama said about rebuilding our tattered state and national economy that is going to have any effect for the immediate future?
The State is flat broke and they are going to raise fees and taxes on EVERYONE. Let's see, who gets hurt the most from raising fees like the Vehicle License Fee? Or what about increasing the sales tax?
Well, it ain't the top 5%--it's the poor and the middleclass.
Obama has been conspicuously silent since he got elected and the market has tanked. Where is he?
BTW, there are millions of "Bitter, Bible clinging and gun toting" conservatives out there who despise Obama and the liberals that are ruining California and the nation.
So why isn't Obama crossing the aisle and extending his hand to the conservative Republicans?
This has everything to do with this and everyother RE bubble blog since "It's about the economy, stupid".
Obama wants to tax his way out of this mess but that won't work. We're in a recession and sliding even faster downhill. It's already affecting property values on the Westside.
Obama IS the issue. So where IS "The One" and what are his plans?
---"The Dow lost 10.4% in Wednesday's and Thursday's sessions, its worst two-day percentage drop in over 20 years, according to Dow Jones.
For the week, the Dow lost 5.3%, the Nasdaq lost around 8.5% and the S&P lost 8%."---
3:01: Wow, you're right, the Dow lost 5.3% this week.
That's the kinds of stock market change that shows that we're heading in the right direction!
What were you saying about Obama?
Here's a link for you 18 to 25 year olds:
http://tinyurl.com/6gkwvq
Rohm Emanuel has also been going around talking about this.
What, you never heard about this on the mainstream media? Even though it was posted on Obama's website? Gee, I wonder why...
http://tinyurl.com/6gkwvq
Well, that link proves nothing. It's to a blog which cites some text in quotes without reference or link. Very reliable indeed. If that's where you get your information from, I now understand why you're so upset.
I, on the other hand, linked Obama's website explaining his campaign platform. There is no word about compulsory service there, rather a proposal to incentivise voluntary service by tax credits etc.
"That's the kinds of stock market change that shows that we're heading in the right direction!
What were you saying about Obama?"
Have you actually read the CNN article? What it essentially said that the markets rallied because they approve of "Marxist" Obama's choice for treasury secretary. If that doesn't invalidate your point about the markets being wary of Obama, then what does?
Plus, the markets seems to be hugely in favor of bailing out the Big Three. Now, if that's not socialist, what is?
You just make no sense.
http://tinyurl.com/6gkwvq
Oh, and by the way- you promised a youtube link with Obama proposing compulsory civil service. I didn't want some conservative blog that just spins your right-wing rumors further. Where is it the youtube link?
I for one blame the muslims.
This comment thread shows the difficulty of keeping political topics from spinning out of control.
The larger economy directly affects Westside real estate prices, and the new administration (which is not even in office yet) will affect the larger economy, but not quickly.
That said, I created this blog to focus on local real estate, and don't want to lose that.
Downey Savings has been shut down by the Feds. Downey's failure was caused by their heavy losses in bad R.E. loans.
This has some bearing on Westside RE values.
This is just the start of a very bad year.
And what do you mean spinning out of control? You made the remark about Obama's energy strategy which even in the most optimistic light would take DECADES to affect our economy.
Can we say hypocrit?
"When you elect a former terrorist and marxist you've got to assume the markets are going to shut down as we know them. Nobody wants to do business in this environment. Many corporations and municipalities are just going to close up shop."
This is a good point. I wouldn't expect the market to come back until we have a less unamerican president to lead us. I'm planning on either four or eight years of double digit declines until America comes to its senses and elects a real American who understands our culture, values, and economy.
With this election we just bought ourselves an infinitely longer recession, along with all of the violence and dispair that implies.
" ... until America comes to its senses and elects a real American who understands our culture, values, and economy."
Bullshit. "Real American?" By which you mean, a rich old white guy? In case you didn't notice, real America preferred someone else over that kind of "real American" to lead the country. You're just sore losers.
I think this blog is not the right forum for political "discussions."
"Well, that link proves nothing. It's to a blog which cites some text in quotes without reference or link. Very reliable indeed. If that's where you get your information from, I now understand why you're so upset."
It was on Obama's website, he then took it down, no one from ABC, NBC, CBS, CNN, MSNBC, etc., reported on it because it makes Obama look like a facsist. So unfortunately, the only place to find it is from blogs that tell the truth.
And if blogs are so unreliable, why are you here getting real estate information???
You made the remark about Obama's energy strategy which even in the most optimistic light would take DECADES to affect our economy.
Major investment in transportation infrastructure construction, renewable energy projects, and building energy efficiency could begin in 2009 and ramp up from there.
I wouldn't expect the market to come back until we have a less unamerican president to lead us.
I took this as parody, especially in light of this being a housing bubble blog, said housing bubble being a result of the outgoing administration's financial policies.
I think this blog is not the right forum for political "discussions."
So it seems, and the reason for my earlier comment about returning to real estate topics.
"...said housing bubble being a result of the outgoing administration's financial policies."
By which, of course, you mean Carter and Clinton, correct?
Watch "Burning Down The House: What Caused Our Economic Crisis?" on youtube.
Please, Westside, don't let this blog degenerate into inane political bickering. I believe most of your readers come here for real estate, not right/left arguments and obnoxious trolls. Please shut down or moderate these comments.
"By which, of course, you mean Carter and Clinton, correct?"
Hahaha. So if it was so malicious what these administrations did, why didn't Reagan & Bush reverse those policies? They had plenty of time to do so.
You make no sense.
"It was on Obama's website, he then took it down, no one from ABC, NBC, CBS, CNN, MSNBC, etc., reported on it because it makes Obama look like a facsist. So unfortunately, the only place to find it is from blogs that tell the truth."
Well, that's not the story that you originally spun. You claimed there was a youtube link showing that Obama wants to instate compulsory civil service. I'm still waiting for that link.
"And if blogs are so unreliable, why are you here getting real estate information???"
There is a big difference- blogs like the one here provide a (hopefully, reasonable) discussion of the real estate situation based on publicly available, verifiable data. And not the propagation of fear and hate based on rumors and hearsay.
>>. Please shut down or moderate these comments.<<
Yeah, start with this guy's post!
If you people who are complaining about political posts by posting a political post would just stop posting political posts, then we won't have any more political posts.
"The Lord" Obama's RULE will absolutely have an effect on Westside housing prices. When "The One" starts taxing the stuffing out of most of the posters on this blog who are interested in Westside housing, you can be certain that higher taxes (income, capital gains, ect ect) will put a dent into the purchasing power of said posters.
But of course Obama is starting the "Reid Polosi" Car Company! Yessir, they're going to make zero emission vehicles and put millions of Americans back to work!
Who said that government couldn't produce jobs!
Anonymous @ November 22, 2008 5:40 PM:
Why don't you stop bitching?
In case you haven't noticed- your ideology was just devastatingly defeated in the last election. People are sick and tired of you and the politicians of your ilk. It's not exactly that we end the Bush years in peace and prosperity. You had your chance in the last 8 years, and you screwed it up mightily.
So stop whining.
"In case you haven't noticed- your ideology was just devastatingly defeated in the last election."
You mean the most fraudulent election in US history? The one with the highest rate of voter fraud ever recorded? You mean the election where these "new" voters broke 4 to 1 for the guy who had represented and fund raised for the organization that committed the fraud? The one where that guy still only eeked out a win by a few percent? That election?
I for one blame the blacks.
"You mean the most fraudulent election in US history? The one with the highest rate of voter fraud ever recorded?"
Evidence, please.
"... the guy who had represented and fund raised for the organization that committed the fraud ..."
Ah, you must mean John McCain, the guy who gave a keynote address at their convention in 2006:
http://www.youtube.com/watch?v=oJ9wy2MI1NI
Oops.
dude, I caught some killer waves at County Line this morning.
oh sorry, is that OT
P.S. Oh, and of course: we're still waiting for that youtube link. So please post that, along with verifiable documentation by an independent and trustworthy institution or organization, which documents your claims about voter fraud.
no, I'm serious. County was breaking! Just ask anyone. Don't think it's on youtube though
This is how Obama got elected:
http://howobamagotelected.com/
Look at the well informed Obama voters. Funny that none of them knew who Nancy Pelosi, Harry Reid or Barney Frank were.
But they all knew that the RNC paid $150,000 on Sarah Palin's wardrobe AND that Sarah Palin had a pregnant teenage daughter.
Only one of these Obama voters knew who Bill Ayers was.
All of the Obama voters said that Sarah Palin said, "I can see Russia from my house."
Of course Palin never said that, Tina Fey did, but, hey, it's close enough, right?
Most of the Obama voters said that the Republicans were the majority party in Congress.
None of them knew that Joe Biden had to drop out of a presidential race because of a plaigarism charge.
And of course, none of them knew that Obama said that spreading the wealth around was a good thing.
---"...your ideology was just devastatingly defeated in the last election. People are sick and tired of you and the politicians of your ilk...."---
So, what will Obama do for America? Well, he's going to make work for millions by having people fill in pot holes and mend bridges.
Kind of like FDR II! Everyone knows that government can create wealth and jobs better than the private sector.
11:35 AM:
---"Bullshit. "Real American?" By which you mean, a rich old white guy? In case you didn't notice, real America preferred someone else over that kind of "real American" to lead the country."---
I'm with you, man! And I know what will make Santa Monica a better place--MORE BLACK PEOPLE! The problem with Santa Monica and this blog is that there are only WHITE PEOPLE here!
We all know that Santa Monica needs racial diversity and instead of having just a token black guy for President, Santa Monica (especially 90402) should put its money where its mouth is and build affordable housing and give that housing to black people from South Central L.A. and Compton!
There are too many white people on this board, too!
Yessir, this will bring harmony to the Westside!
Anonymous @ November 22, 2008 9:37 PM
You must have misunderstood me: I had asked for "verifiable documentation by an independent and trustworthy institution or organization, which documents your claims about voter fraud." Not another link to a partisan webpage, and a racist rant.
And that Sarah Palin had no clue what she was talking about (as could be seen on TV during her Couric interview), the woman who was supposed to become our VP- that's much more scary than some random Obama voters (or actors posing as such) showing innocence. Don't you agree?
Oh, and it's amusing- on the website that you linked, there is another link to a news story about Zogby refusing to repeat their poll with McCain voters. Aha. That's fair and balanced for you?
Well, I'm still waiting for the youtube link with the Obama announcement of compulsory civil service ...
Oh, I just looked up the questions on the Zogby poll. They took the form of a multiple choice political knowledge test, stating a "fact" and asking them which of the four major candidates (Obama, McCain, Biden, Palin) the statement applies to. For example:
"Which of the four [candidates] said his policies would likely bankrupt the coal industry and make energy rates skyrocket?"
"Which of the four [candidates] started his political career at the home of two former members of the Weather Underground?"
"Which of the four [candidates] quit a previous campaign because of plagiarism?"
"Which of the four [candidates] won his first election by getting opponents kicked off the ballot?"
What kind of questions are these? Their veracity is more than debatable, yet they are apparently represented as factual to the respondent. Is that your notion of a reasonable questionnaire? This makes this poll highly dubious.
Oh, and about the Tina Fey episode: in her interview with Charlie Gibson, Palin did say that "you can actually see Russia from land here in Alaska", not that she can see Russia from her house.
"There are too many white people on this board, too!"
There is only one person too much on this board, and that is you.
Please stop your right-wing bickering and let's refocus this blog on real estate. It's just annoying to us to see every comment section on every recent entry in this blog headed by another one of your tirades.
Don't you know, "Dissent is the highest form of patriotism"?
It's our patriotic duty to resist the economically disastrous plans of The One.
"Don't you know, "Dissent is the highest form of patriotism"?"
Yes, I agree in principle. But I'd prefer it if you could voice your dissent elsewhere. This is not the right forum.
Here are screen shots from Obama's web site. If you don't believe this, then so be it (although I will ask you a question, where exactly do you get your news from, if blogs are unreliable? From CBS, NBC, et al., those unbiased sources?):
http://www.prisonplanet.com/obama-website-scrubs-mandatory-community-service-call.html
this is sooooooooooooooo boring
Details of President-elect Obama's national service proposal have nothing to do with Westside real estate prices or the national economy's effects on them.
Don't feed the trolls, and I will delete future off-topic posts.
"Don't feed the trolls, and I will delete future off-topic posts."
Thank you, I'd appreciate it. The political rants on here are taking overhand.
delete delete delete .....
Back to the original post.
Looking at these four great bear markets I noticed something:
Once they were down ~50% the risk of an additional 50% decline was pretty minimal.
"We're still waiting for the youtube link that you promised, supposedly proving that such a national service will be established."
That's not me you're waiting for--I didn't post that comment.
In case you haven't noticed, there are more than one anti-Obama poster on this board.
This post has been removed by an anonymous blogger.
This post has been removed by an anonymous blogger.
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