I’m convinced that people vote for these bond measures with the same mentality they apply to their own personal finances. Credit = wealth.

We [collectively] do not fear debt any longer. This will not be good when it breaks.

2007 will see the first major “shock” of the housing market. I think the major shock will occur in spring of 2007 for the following reasons (some which you already stated):

1. Inventory - many are wondering how could inventory be decreasing and at the same time sales are dropping. You would think inventory would drop when sales occur. But what is happening is many sellers are letting listing expire so they can relist in the spring 2007 selling season. Guess what will happen when many think this way?

2. Rates adjusting - As you stated, over 1 trillion in ARMS will adjust according to the MBA. Not only will this put a strain on would be sellers but it also makes buyers think twice about buying.

3. Zero to negative appreciation - Why would you want to buy when there is no rush? If anything, the trend is that housing values are going down. So the rush of the last few years of missing double-digit appreciation is now gone.

4. Market sentiment - Only a year ago you would be hard pressed to find negative information regarding the market. Now, major mainstream media outlets are releasing negative reports regarding housing daily.

2007 is up in the air in my eyes. 2008 will be a better gauge of what has transpired in the market for the last few years and the faint tune of the piper is becoming louder each and every day.

This month, California has voted and approved $37 billion in bond packages that will improve the infrastructure of the state.

Argh! And I voted every single one of these damnable bonds down.

Welcome to 2006 – where debt is credit and up is down and monkeys fly out of rear ends.

With $2 Trillion plus ARMs adjusting upward, I think its safe to say that we will be seeing a lot of monkeys flying out of rear ends in 2007..

“The median income for a household in the county was $42,189, and the median income for a family was $46,452. Males had a median income of $36,299 versus $30,981 for females. The per capita income for the county was $20,683. There are 14.4% of families living below the poverty line and 17.9% of the population, including 24.2% of under eighteens and 10.5% of those over 64.”

LA County Wikipedia