An economics presentation at Humboldt State University. Special guest lecturer Dr. Christopher Thornberg of Beacon Economics discusses the current housing bubble and its effects on California.
BRENDAN
Comments
“People don’t think…” So very true. At the peak, people are so SURE that prices will go up, they stop thinking, and stop analysing. They feel comfortable buying, because they can see that the crowd is buying, and the crowd must know what it is doing, Right? Wrong. The crowd is a mindless beast, bent on excess.
the bubble didn’t burst because people suddenly realized paying so much for a house was insane.ARMS reset,people with bad credit shaky income could not make payments FORECLOSED,at this point the party was OVER, banks lost liquidity and had to tightened credit,the artificial housing demand created by Easycredit dissapeared so prices had to fall.If no one foreclosed the bank would’ve kept lending and people borrowing,offcourse that is not feasible when you’re lending to anything that moves.
“Bubble are irrational markets. Asking a forecaster to tell you when a bubble is going to end is like asking a pshycologist what a crazy person is going to say next…”
X-D ROFL!!!
He’s talking mainly about real estate economic theory and using California house prices as an example.
Boom then we have bust. Inflation gets too high u get high interest rates, which slows econmy and can bankrupt people and as a result a recession. Simple.
This is exactly what I have been predicting! How can a 3 bed 2 bath home in So. Cal that was worth $250,000 in 1996 be worth $900,000 in 2006?? It just doesnt add up! There has to be a major correction with a family of young professionals making well over $100,000 a year can’t afford to buy a home within 40 miles of thier job due to inflated home prices!!
Well, it looks like you’re alone in your opinion. Guess you’re smarter than everybody else.
I know neighborhoods with appreciation of more than 20% a year. Are you stupid or something? Only an idiot would buy any house and expect it to go up.
Obviously his guy’s video is aimed at dumb people and stupid college students.
He sure makes it seem like he knew what was going to happen before it did.
He’s an economist, it’s his job to study what happened.
Spot on, if you think he’s wrong buy now and see how your “investment” is doing next year.
This is all deliberately manipulated by the Federal Reserve and Internation Central Banks.
Watch Money Masters and learn
It is funny. He says all of this after the fact. If he is such an expert in housing trends he would make a trillion dollars in 5 years.
I guess he didn’t make money of the recent boom and is pissed off. LOL
I don’t even think what he was doing can be called endorsement. More like hallucinating. He had just flat out lost his marbles when he said that.
It was like saying that it was better to sell your stocks in Marck of 2000.Hindsight is always 20/20 but he endorsed ARM’s at the worst time now they are 25 billion a month resettig at much Higher rates!
I am not going to buy, waiting for the price to drop below 100k.
When Greenspan a.k.a. MR. BUBBLE said looking back people would have been better with ARM’s I knew we were in trouble.
Common sense always takes over at some point. This economist is right on.
