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Rich folks can no longer maintain the lifestyle to which they had become accustomed.
http://www.nytimes.com/2010/07/09/bu...e&ref=homepage
No surprise really.
Rich folks can no longer maintain the lifestyle to which they had become accustomed.
(Not a good sign for the rest of us.)
That's one reason why people lose their jobs.
I don't think it will hit this area very hard. California was just obscenely overpriced. My son lives in LA and I'm just appalled at how expensive homes are out there (in the good areas) even AFTER the devaluation. , they pay almost $3000 a month rent for a modest little 3/2 built back in the 50's.
and/or because property values have dropped, they are simply dumping their "bad" investments
I guess business owners and investors are really thriving in the Obama economy.
Sounds about right. I haven't priced house rent for a while, but I'm guessing they start at about $1200 month here in the Portland metro area. That would be for a very modest house also. I'm guessing they are 1/2 to 2/3rds the LA area for an equivalent place.
Could be. The article suggests some just can't pay for it, but the trigger for strategic default could be any price in principle.
So they will have to sell off their stuff, flood the market, prices go down, little guy who is busting ass to one day be rich will find deals.
wait wuuuuut../robot voice *rich people are evil...rich people are evil..."
There's always the option of "short selling", but don't you get ram-rodded by the IRS when you do that?
In principle, yes.
In practice, (near) historically low interest rates and until very recently, a federal tax credit for new home buyers, have been propping up RE prices.
More correction in RE would almost surely mean more recession. Maybe a lot more. The political and economic price still to be paid for a realistic correction in RE values, would be steep IMO.
You Lie, Darrin,
Obama didn't write the richie's, or anybody's, mortgages, nor did Obama up the economy.
Last edited by boutons_deux; 07-09-2010 at 11:32 PM.
They only correct so far...I was in homebuilding during the last big crunch with the RTC. You reach a point where used inventory is substantially cheaper than the cost to build the same unit new. New construction grinds to zero. Demand eventually sucks up existing supply but it takes years. Then the homes jump in price again when the only alternative for growth is new construction.
Says who? This ain't no ordinary recession.
You are correct. Plus, Obama's anti-business agenda will just make it worse.
But.....we will eventually survive it. We soon will be reaching a point where housing will just be too cheap and a great buying opportunity.
The US is eventually going to have no choice but to inflate our way out of this federal budget mess. When Helicopter Bernanke starts throwing money out the doors those houses will hold their relative value with inflation when a lot of other investments won't.
Just because Obama admin has implemented/enforced regs vs big business doesnt mean hes anti business. Sure, big business wants the whole pie, but its not in the voters best interests to let them have it. We already see what they do when they get it (massive CEO salaries, move jobs overseas, create crises that nearly sink the nation, and fill our gulf with oil).
If the economy is a gas pedal:
- business community/republicans want it pegged to the floor, even if the engine will blow
- voters best interests dictate we need to look at things like mpgs, rpms, and what happens if we get a ticket.
So just because Obama is trying to stay around the speed limit means he drives to slow? I think we need to watch our rpms or our kids wont have a car to drive to high school.
And if you disagree with me your wrong!
Oh please...Obama is pro business?...
Look, wall street and "big" business don't drive the American economy.
Small business is the big job creator and economic engine in the US.
Myself and every other small businessman in the US is looking at this administration and are scared less of the damage they are planning to do to our economy. We already know capital gains are going up, regular tax rates are going up, the death tax is coming back...plus they are planning on ramming cap and tax through during the lame duck session before all the defeated congressmen leave Washington.
Those are all business killers and job killers.
This is the most anti-business Presidential administration I can remember in my lifetime.
What a dumb !
or "you're"
Oh please...Obama is pro business?...
Look, wall street and "big" business don't drive the American economy.
Small business is the big job creator and economic engine in the US.
Myself and every other small businessman in the US is looking at this administration and are scared less of the damage they are planning to do to our economy. We already know capital gains are going up, regular tax rates are going up, the death tax is coming back...plus they are planning on ramming cap and tax through during the lame duck session before all the defeated congressmen leave Washington.
Those are all business killers and job killers.
This is the most anti-business Presidential administration I can remember in my lifetime.
My small business is growing. I just hired my first employee. I am not scared of Obama at all. At least the guy is bright which is more than you could say for the last one. The "Death Tax?' You are worried about that ? It has nothing to do with job creation or the economy as a whole.
If I worry about anything it is the rise of corporate power which works against the little guy struggling to start a business and making it viable. Entrenched economic interests use government to suppress compe ion. Taxes are going to go up. Having a war and charging it to VISA (Iraq) will have that effect. That wasted money on an unneeded war could have been used to prime the pump and re-charge the economy but I guess blowing money killing people is no crime or issue for you.
Your first sentence = cant read any more of your bull . Point out where I said Obama=probiz? Your re ed, your better off surrounding yourself with conservatives I suppose.Oh please...Obama is pro business?...
Look, wall street and "big" business don't drive the American economy.
Small business is the big job creator and economic engine in the US.
Myself and every other small businessman in the US is looking at this administration and are scared less of the damage they are planning to do to our economy. We already know capital gains are going up, regular tax rates are going up, the death tax is coming back...plus they are planning on ramming cap and tax through during the lame duck session before all the defeated congressmen leave Washington.
Those are all business killers and job killers.
This is the most anti-business Presidential administration I can remember in my lifetime.
Your rebuttal to a policy discussion is vocabulary correction? Stick it out with the right wing bud
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