Micro-economy - maybe an anachronism or just a dichotomy?

Status
Not open for further replies.
Pablo

Pablo

Joined
Oct 28, 2002
Messages
69,290
Location
Everson WA - Pacific NW USA
I can't speak for the USA as a nation but here in the PNW we seem to have a dilemma:

Look for a job and there are tons of applicants, for example:

"The nature of the job market right now sees a great deal of resume's from folks out of work being submitted for any given job requisition."

Yet, go look for a house:

"The economy is really bubbling, near full employment, plenty of buyers"

Someone is missing the facts or just an "oh really"?

[ June 15, 2005, 04:29 PM: Message edited by: Pablo ]
 
Lou Dobbs'l tell yea were heading for economic collapse. Steve Frobes will tell yea we've never been stronger! I'll I can say is everbody I and my parents know is in debt up to their eyeballs. I know 1 person that's my age who has no real estate experience to speak of, who recently acquired two no money down interst only forclosed homes that are very nice and this person doesn't have a freakin clue! There's too many of them out there.
 
Yeah, they say Ohio real estate appreciates slower than the national average because the population isn't growning in Ohio but everywhere you look they are building houses!!!!
 
Pablo - Yes, I have wondered that myself. Everywhere you look, on a personal level, things are worse than they have ever been, but the statistics say that things are all hunky-dory.

I'm not buying it either. Not trying to get political here, but we have seen a lot of statistical pencil whipping in the last five years or so, in all of the social indicators published by the government. I think, it is fair to say, at a minimum, that things don't add up. And when they don't add up over an extended period of time, they collapse.
 
quote:
Originally posted by John K:
Yeah, they say Ohio real estate appreciates slower than the national average because the population isn't growning in Ohio but everywhere you look they are building houses!!!!
Click to expand...
If that's people buying new houses and selling their old houses, it would be putting excess real estate onthe market. That could be exacebating the slow appreciation.
 
I'm looking for a new collision of factors. I think that former long stretches of decent economic times that were an ebb and flow type venting are a thing of the past. I think that we'll have a brief convulsive state and that will be followed by a continually dynamic situtation. Many chickens are coming home to roost. I truly expect to be swamped by the event(s). That's why I'm heading, as fast as I can, toward shallow waters.
 
I am not predicting doom and gloom.

I am however, saying there is not a lot of justification for current real estate prices. The loan regulatory practices were not changed by any recent presidential administration to my knowledge so this want to blame the current administration doesn't hold water IMHO.

I cannot fathom why an institution would stand behind an interest only loan to some home buyer making $35K/year buying a $450,000 home with 10% down - other than pure profit servicing the loan and the ability to turn property quickly after foreclosure.
 
quote:
so this want to blame the current administration doesn't hold water IMHO.
Click to expand...
Errr....help me out here, Pabs ...just who here said anything about "blame"??
confused.gif


Real estate is a main driver of the economy. It, as all other stuff we do of any meaning, does it with debt. You get one or two years of cascading prosparity for (typically) 30 years of debt and a hit to the money supply ..at low interest.

This is given the illusion of being an indicator of the byproduct of a good enconomy. I the process ...it was found to be a creator of a short term good economy ...driven by debt.

I think you're looking at the best masked death throws before the crap hits the fan.
 
Oh ..the statistical pencil whipping ..yeah ..that's been done for the past 20 years ..it started a long time ago. They redefine unemployment numbers and all sorts of things. Eveyone who's savvy understands that most of that crap (stats) are there to form market/populatin trends then they really report it.

Sorry ...I didn't integrate that as "blame". I consider it par for the course. I don't believe any of it. Anything from here on out is PURE smoke and mirrors ..jsut like it's been for several administrations.
 
Pablo - Please pardon me in advance, I don't intend this to sound patronizing. You are staring the problem in the face and noticing the inconsistencies. Don't let my diagnosis from the other side of the track keep you from looking at the big picture.

You were looking at the big picture, which is the right level, lending rules are small picture. "Not everyone can be a real estate agent" is big picture too if you apply that at a national level (no manufacturing, less tech, no sense of profound knowledge or what constitutes value, etc).

Keep looking and thinking, and trying to draw your own conclusion. Most importantly, look at what former Fed chief Paul Volker is saying, and wonder why he is saying it. And why it differs from Greenspan....
 
Yes TMW - I follow you - but why this insistence to blame the current administration? I tell you it started before that at the bigger picture level. It started in the 1960's. LBJ. The only thing done right was the grip on inflation in the 80's - but it came with the way to much government spending - money that we didn't have to spend.....
 
quote:
Originally posted by Pablo:
I can't speak for the USA as a nation but here in the PNW we seem to have a dilemma:

Look for a job and there are tons of applicants, for example:

"The nature of the job market right now sees a great deal of resume's from folks out of work being submitted for any given job requisition."

Yet, go look for a house:

"The economy is really bubbling, near full employment, plenty of buyers"

Someone is missing the facts or just an "oh really"?
Click to expand...
Pablo, my son is seeing that first hand in Silicon Valley. He is looking for a house, but the market is insane...where is the money coming from?

He is also trying to hire a couple of people for technical jobs. Lots of applicants, but few who are qualified, fewer yet who seem to want to really work.

To add to the dichotomy, the housing prices/demand seems to have peaked 6 to 8 weeks ago and employment is slowly picking up. Go figure.
 
Maybe as we fill the spaces in the USA - real estate begins to act like the stock market.....preceding the actual good news.

Here's another thing - I'm reading an interesting book on investing in real estate and financial derivatives directly with your IRA....(not REIT's)....makes me wonder - this plus all the reits...well IT does behave like the stock market!
 
pablo, our county came in as one of two in the state that shrunk in population over the last year (I sure can't see it). Housing prices still have gone crazy.

Low interest rates drove it IMO, Bush (i'm not blaming) wanted people to own homes (a good thing) and did kind of push the fed for the lowered rates. Also to spur spending in the economy. IMO the rates should have been slowly lowered, they went too fast and sort of created the frenzy that quickly inflated prices. Greenspan warned that it would happen, politics ruled. Reveiwing the new bankruptcy laws notice which 2 states have immunity from foreclosure for 1st time home buyers? Florida and Texas, hmmm, wonder how they got in there?
 
I'm sorry, this is scary. When you see stuff that difies rational explanation, you should be getting the hint that the short term fix is in ...and the long term consequences are just out of view. When you see any stampede ...it's wise to make sure you aren't moving near the back of the herd.

Housing cannot sustain an economy.
 
I see our long term overall problem as being one of apethy. I look around and talk to students at my college, and 90% of them probably couldn't name our vice president. Now granted, I'm a business student (accounting), but you still have to know math and statistics to successfully complete a business degree. The aggregate level of math competancy is LOW! There's a major lack of engineering/science students. I hear all these peeps say they're going to get their management degrees and make a bazillion as a manager! WHERE? But you ask them who the number one rap artist is or who won American Idol, and they'll talk to you about that stuff for hours. I know for accounting, there is a major demand for graduates who actually have good grades and know what the heck they're doing! I know this is a gross generalization but I really think it'll be a long term problem for the US.
 
Status
Not open for further replies.

Similar threads

E
  • Locked
Import Motor Oil Specifications
Replies
5
Views
5K
weasley
MolaKule
  • Locked
NASA and Mars Topics
Replies
5
Views
1K
Al
buster
  • Locked
Great Article on GM/Daewoo Engineering
2
Replies
35
Views
13K
Willy_G
MolaKule
  • Locked
Oil Prices - An Analysis
Replies
5
Views
2K
k1xv
Back
Top Bottom