FYI - Fang was quite a good Ferrari driver in GPL.
WOW! Someone has a pretty long memory!
Actually, I used to be a pretty good Ferrari driver in real life. That is until I sold my baby earlier this year. It was the smart thing to do and all.... but I miss that dang car every single day.
Maybe if the economy does dump for a couple of years I will get the opportunity to buy her back at a more realistic price.
As to the real estate thing, I have bought 7 houses in the past 6 months and have contracts on 2 more. Its a ton of work finding the gems among all the garbage and then managing the rehab projects but ending up with $50K in a nice 3 bedroom, 2 bath home located 5 minutes to downtown Atlanta and rented for $900 a month just HAS to work out longer term. I hope. Some of these houses I plan to keep long term, some I am going to sell to other investors who agree on the opportunity but have no time nor desire to do all the leg work.
The Fed announced today that it will be buying up commercial paper included non-asset backed. This is going to be yet another $500 Billion + Fed program. Ouch.... monetary supply is SOARING.
But... we still do not know if all of this Fed liquidity is going to make it into the hands of actual consumers. The Fed has already pumped over $1 Trillion into the system and it has done NOTHING to expand credit availability (the exact opposite has happened). Banks have simply used the Fed funds to offset massive asset value degradation in order to maintain solvency ratios, they have not been lending it out to Joe consumer. Unless this changes and banks DO open up the spigots then I do not see how the Fed will manage to push the liquidity into the hands of consumers and thus promote spending and upward price movement. Typically, a huge increase in monetary supply would drive inflation at the consumer price level. But not if the Fed cannot get the cash into the hands of the consumer.
Every way I look at this it always boils back down to one simple reality: Housing prices are too high.
Until housing prices get back in line with incomes and we see a bottom clearly defined in housing and inventories get cut in half or better... there will be no recovery regardless of what the Fed does or whatever bailout plan Washington decides to push next.
In many markets, housing is already there. In the largest and worst hit markets (Kalifornia, Florida, Nevada, Arizona, the northeast, DC area, Seattle area.... yes, Seattle... that RE bubble is just now starting to pop and has a long way to go) there is a long way to go before the median house price is back in line with the median income.
Fang
