Housing Market Crash

Here is an article about Bob Shiller, a guy who "predicted the demise of the housing bubble."

I predicted the bust too... Why aren't they writing articles about me? I started this blog in 2007... I found a post from September talking about the housing bust.

I distinctly remember telling people to get their money out of real estate and into stocks in early 2005, right in the middle of the bubble. I also remember thinking that the bubble was going to pop as early as 2004, which was a couple of years off.

So why are they not writing articles about me? First off I am not an economist. Secondly I did not make millions of dollars off of the housing bubble and bust. If I had thought to short CDOs and MBSs I certainly would have done so, and likely made a pretty penny.

My complaint isn't really about why they aren't writing articles about me. I just don't see what's so special about predicting the housing bust. When you have people taking out huge adjustable rate mortgages it seems pretty common sense that when rates adjust people are going to start to default. That is exactly the argument I was making in 2005.

Instead of celebrating people who have common sense maybe we should be ridiculing people who got caught up in the frenzy and spent their live savings on investment properties to flip? People can be really stupid. Myself included. I did the same thing in the dot com bubble. But I learned my lesson.

Credit Crunch

If I knew enough about exotic derivates to have been able to go short mortgage backed assets I would be a very rich man right now. I've been telling everyone who will listen that exactly what is happening now was going to happen for about 3 or 4 years now. I had arguments with people on welfare who were putting all of their welfare checks towards real estate in the hopes of making a quick buck. When people on welfare are speculating on real estate you KNOW there is a bubble.

I knew that this whole mortgage thing was going to happen. I did not know how it would affect the hedge funds and investment banks, but all of the retail stuff happened pretty much exactly as I thought it was going to.

My parents bought a new condo a little over a year ago. They took out an interest only mortgage because they expected to be able to pay the mortgage off in full as soon as they sold the house they have been in for the last 30 years. Of course they are not able to sell that house so have been renting out the new one and losing money on it, I might add.

The only problem was I was expecting this meltdown to happen a bit sooner than it did. The real estate bubble popped pretty much right on schedule but I thought this mortgage meltdown would happen much sooner after the bubble popped.

It seems like the Fed is trying to shake out the bad mortgages, which is theoretically a good idea, but if you think about the poor people who are going to lose their houses it doesn't seem like such a good plan anymore.

I also did not expect the crash to have this effect on the stock market. I thought that money would go into the stock market as real estate became a less good investment. But the MBS crisis went a lot further than I thought it would.

Thanks hedge fund idiots who have been investing way more money than they have in MBS's. Due to your ridiculous overuse of leverage and investments in MBS's that any idiot could see were going to default you've turned a downturn in real estate into a crisis that is effecting the whole world.