Originally posted by Krusher
OK,
Point one
----->The jobs created are 50 percent crap.
I re-read your post and didn't see anything but your opinion so why bother.
----->The other 50 percent are slightly better than crap
(see above)
Well of course it's my opinion, that's why I posted it. And the reasons why you should bother are your own, but as you decided to argue my points I assume you had one. I find it interesting that although this is just my opinion you didn't say whether you agreed with it or not. A growth in jobs alone doesn't explicitately mean an "economic boom". It could just as likely mean there is a missallocation of resources that could hurt the economy.
Point two
----->The GDP is crap because of deficit spending
(Same as above but what the heck)
This is not the first administration to run deficits. Until your prediction comes true and the US economy caves in from this 3.6 (or so) percentage of GDP debt, this economy is no different from any other debt wise.
It doesn't matter if previous governments did it or not. What matters is that taking the growth of GPD out of context is meaningless. A growth of GPD alone doesn't explicately indicate an "economic boom". I could just as likely mean a government going into debt and hurting the ecomony by doing so.
B]Point 3
------> increased house value based on speculation is not good.
there certainly are speculators but for the most part it is a minor part of the over all market. More people own their homes now than anytime in history and the speculators are mainly in targeted markets like Miami etc.[/B]
Perhaps they are just in target markets, but even if that is the case they are still having an effect on the overall aggregate.
If there indeed people own more houses now then ever before than there must be quite a supply of housing. In which case the relatively huge increase in housing value must come from increased demand due to speculation.
Source:
http://en.wikipedia.org/wiki/Image:Barrons_shiller_06-20-2005.gifAlot of homeowners are tapping into the equitity they have in their present homes to buy another or spend on consumer goods.
Source:
http://bigpicture.typepad.com/comments/2005/05/as_prices_rise_.htmlWhat's more according to the, National Association of Realtors,
43% of entry level home buys put
no money down on the purchase of new homes in 2005. The amount of debt that is fueling this growth in housing is staggering. Remember actual demand is need coupled with actually having the money to service that need. And it seems to me that alot of people don't have the money to buy these homes.
The 90s had their share of dot com/stock market jackoffs. Even with the bottom falling out the last year of the prior administration it was still less than what was made.
Even so, that means that incredible amounts of wealth was misallocated for years in ventures that didn't pay off, all due to speculation. I would also be interested in knowing how much of dot com bubble was debt financed.
The doom and gloomers have been calling for the bubble to burst for 3 years. My reit still has the highest return of any of my investments.
All good things....
Detroit
"SIGNS OF SAGGING DEMAND: Houses everywhere, but few buyers to close sale
Overabundance of unsold homes in the region creates a burden on owners, market"
http://www.freep.com/apps/pbcs.dll/article?AID=2006603110319&template=printartPheonix
"Recently, it was reported in the Phoenix market that the number of homes available had jumped from apx3400 homes January 05 to over 30,000 this January. As we watch some of the markets around the country, looking for signs of "the bubble", this number was astounding."
"There has been a lot of talk of speculation in the Phoenix market, which made me wonder, how many of these homes are vacant. Of the 33,270 active listings, 14,601 are vacant."
http://globaleconomicanalysis.blogspot.com/2006/03/bubble-busting-phoenix.htmlFlorida
"The median resale price of a single-family home in Brevard County plunged by $15,300 -- from $234,400 in December to $219,100 in January, the Florida Association of Realtors reported Tuesday. That's a drop of 6.5 percent in a month.
The association also said the number of single-family home resales in Brevard fell 44 percent from 532 in January 2005 to 296 in January 2006. Condominium resales fell 43 percent from 144 in January 2005 to 82 in January 2006."
http://www.floridatoday.com/apps/pbcs.dll/article?AID=/20060301/BUSINESS/603010396/1003/rss03Orange County
"Sales drop, prices fall on homes last month
By Michael Levensohn
Times Herald-Record
mlevensohn@th-record.comFor a limited time only, you can buy 2006 homes at 2004 prices.
OK, that might be a stretch, but Orange County's median sale price dipped to $293,500 in February, the lowest it's been since July 2004 (median $280,500)."
http://www.recordonline.com/archive/2006/03/09/news-mlrealfeb-03-09.htmlAnd those are articles that just came out in the past week, I got them from here.
http://patrick.net/housing/crash.htmlI don't think it's any longer a question of if (or even when) it's going to pop, it is popping. And as for what effect it will have...
"More Americans are losing their homes
Risky borrowing is catching up with a number of homeowners across the U.S. Foreclosures rose 45% in January compared to a year ago, and experts only expect the pace to accelerate."
http://realestate.msn.com/buying/Articlenewhome.aspx?cp-documentid=338165
