Housing Bubble, credit bubble, public planning, land use, zoning and transportation in the exurban environment. Specific criticism of smart growth, neotradtional, forms based, new urbanism and other top down planner schemes to increase urban extent and density. Ventura County, California specific examples.
The Real Morons of Orange County: Why America's most reckless real estate investors come from Irvine, Calif.
Leveraged investments in CMOs have caused a great deal of pain everywhere from Wall Street, where they helped sink two Bear Stearns hedge funds, to Australia. But the locals also ate some of the toxic effluent produced by Irvine's debt factories. In June, Irvine-based Brookstreet Securities ran into trouble after it allowed customers to buy CMOs obligations on margin. It shut down completely on June 30.
Brookstreet's rapid demise is an object lesson in how highly leveraged investments can turn sour quickly. Another Irvine-based operation, IrvineHousingblog, brilliantly drives home the same point with daily dispatches. The blog is a guide to the seventh circle of real estate hell—people who buy houses on spec with no money down. A typical entry chronicles the purchase price, tracks down the amount of debt on the property, and then calculates how much each party—the buyer, the first mortgage holder, the second mortgage holder—stands to lose assuming the seller receives the asking price. My favorite thus far is the house for which somebody paid $1.29 million in May 2006, putting down only $91,000 in cash. Today it's on the market for $850,000, a whopping 34 percent reduction in about a year.
8 comments:
First and Murst.
First Loosers!
btw. This is just a reaction. the REAL move hasn't begun... yet.
for fucks sake, no posts for a half hour and I get beat by seconds..fuckit, I'm going to bed.
Tony Soprano gets whacked in a drive by mursing.
The Real Morons of Orange County: Why America's most reckless real estate investors come from Irvine, Calif.
Leveraged investments in CMOs have caused a great deal of pain everywhere from Wall Street, where they helped sink two Bear Stearns hedge funds, to Australia. But the locals also ate some of the toxic effluent produced by Irvine's debt factories. In June, Irvine-based Brookstreet Securities ran into trouble after it allowed customers to buy CMOs obligations on margin. It shut down completely on June 30.
Brookstreet's rapid demise is an object lesson in how highly leveraged investments can turn sour quickly. Another Irvine-based operation, IrvineHousingblog, brilliantly drives home the same point with daily dispatches. The blog is a guide to the seventh circle of real estate hell—people who buy houses on spec with no money down. A typical entry chronicles the purchase price, tracks down the amount of debt on the property, and then calculates how much each party—the buyer, the first mortgage holder, the second mortgage holder—stands to lose assuming the seller receives the asking price. My favorite thus far is the house for which somebody paid $1.29 million in May 2006, putting down only $91,000 in cash. Today it's on the market for $850,000, a whopping 34 percent reduction in about a year.
More:
http://www.slate.com/id/2171235/
Sympathy yes but still only a prelude to what is going to happen. Psychology is shifting and vol is back baby!
Caught a quick glance on CNBC of some specialized index that drop around 9% yesterday. Wow.
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