Thanks!

Check out this link! this contagion is spreading faster than crotch rot at one of our christmas lingerie parties after the drinks have been going for hours:

http://www.eos-21.com/

Here’s to financial prudence! Like vultures, we will swoop down on the raging alcoholic permabulls when they keel over from cirrohis!

“…smells like victory.”

I think your are spot on many of your predictions. Just look at how spooked the stock market is with the prospect of these hedge funds collapsing. This is only the first of many that we will be hearing. Keep in mind most of these people have all their hope that this summer will bring in another bounce. Nope. Not this time. How it will unfold is anyone’s guess but bottom line housing is toast. All other things will be coming online for the 2008 elections. Can we say major campaign issue?

@anon12:36,

I’m not sure how far we’ll drop. The Fed would love to inflate the market away but prices are so overly high that even high inflation will do little to alleviate a house that is overpriced by 50%. What is overpriced? Take into account the current rental market, schooling, neighborhood crime, and prospect for appreciation.

@socalwatcher,

You know what I’m talking about. We’ve all seen it. Well the new cell phone law is coming out so maybe with the drop in housing tax receipts and the increase of cell phone tickets, the state will be fine.

@anon 3:41,

810 to 840 seems reasonable as a range. The properties that make me wonder are the one’s that have a 300 to 500 range. Ummm, okay. I choose 300. Next.

@brian b,

To your first point. The current administration is going to go down as one of the worst in history. You can’t spend frivolously and give tax cuts. Typical attitude of many people. Can’t afford it? Just go into debt. I’m totally for a strong military but spending $7.5 million for a gay bomb? Get this, the government spent this much money on a bomb trying to make enemy combatants go “off” on each other so to speak. They also did research on a flatulence bomb. Yes, good pork barrel spending. Don’t believe me? Check it out Gay Bomb.

And we’re not singling anyone out in particular. Democrats and Republicans are both equally responsible for this mess and both benefited in some shape or form from the housing bubble. We’re living in a plutocracy with major corporate welfare. What about no bid contracts for rebuilding in the Katrina zone or Iraq? You have to bid on eBay why shouldn’t companies for multi-billion dollar contracts?

In terms of regulations. We already have enough. What we need is ENFORCEMENT. Just look at the case examples of people fraudulently obtaining millions in mortgage debt and even brag about it! The public is still in the dark. But once their livelihood is at risk via employment or losing their house, they’ll be hungry for blood. Why do you think the SEC came about because of the Great Depression? Armchair politics. Idiots went over their heads gambling on Wall Street. Now instead of stocks, we have housing. Even some brokers I work with who work for large institutions don’t have a clue about deeds of trust, contingency clauses, or basic mortgage principles. The experts.

Your point is well taken. Yet blogs such as this one seek to reach out to people that do care. For those zombified by watching TV, what can you do? But those here can educated themselves and knowledge is power.

@californian,

Insurance is about managing risk over the long-term. If anything, we need to look at them and see where they are placing their bets.

@anon 11:22,

Nothing different from the past. If anything, it will flush out the frivolous token businesses and fringe money lunatics out. Just look at all the fly by night subprime operations dropping like flies.

@12:45,

No need to fear. If anything, those who actually manage their money well, diversify, and live within their means will do well. The problem is a large portion of our society does not live within their means and they’ll be going cold turkey pretty soon. I do see a recession – the one we had for a quarter before Greenspan dropped his pants and rates to the floor flooding the market with easy credit was stifled. Recessions serve a purpose. They wash out poorly run businesses. Its all part of the business cycle. Yet the cycle was not allowed to run its course. Why do you think they call him Easy Al?

Canada is tied to us by the hip. So is Mexico. Where we go they will follow. Plus, the EU is having their own property bubble and so is Australia. This credit bubble is global folks.

@anon 1:41,

Like I mentioned before, I think the EU is having their own credit bubble. Like jumping from one sinking ship to another. In terms of what to do with your money, you definitely want to keep some in short-term CDs, commodities, real estate in growing markets (min. for now), and oil. I still think that we are way too connected to oil. In California gas hit nearly $4 and people bought more! It didn’t do anything to our habits. Plus, oil is a core substance in plastic and other products, so we’re only going to place more demand here. And what about China and India? Think they want some oil?

But ultimately folks, focus on your main earning item, you. Ensure you have a solid career and future earnings potential. Ultimately you are the most valuable asset in your portfolio.

@ Adam,

Interesting perspective. Obviously our geo-political situation isn’t helping. Hopefully folks are smart enough to realize that this problem can’t be summed up in a one second speech of “lets get em.” Get who? Or “tax cuts for growth.” Who’s growth? Maybe that’s why they don’t teach the Socratic method in high school; they fear you might ask some hard hitting questions back.

ALL:

The market fell again today on fears of hedge funds imploding. The mortgage market is a behemoth. Over $7 trillion dollars of mortgages are held in the United States. And the market freaks when $100 million is sold off by Merrill Lynch? Just goes to show how we are standing on a third leg. This thing is already set in motion. We’ve just begun to see the fallout of the subprime market. Its only been 3 months since its imploded and this takes years to filter through the economic system. It’ll be an interesting year.

If the US economy is indeed heading towards a recession, how would you recommend protecting one’s investments? In particular, I’m concerned about my 401k. I’m still young, and I am mainly invested in aggressive domestic funds. I was considering moving some of my portfolio into a bond fund, but as a computer geek, I really have no idea what I’m doing when it comes to financial investments. And trying to save up enough for a downpayment on a 500k 1-bedroom condo with my fiance is plenty enough to worry about, without the danger of taking a hit on our retirement accounts.