A big bailout, and other predictions for 2008

You didn't ask for them, but here they are: L.A. Land's predictions for 2008:

--At least one major financial company with exposure to the mortgage market will collapse in 2008, although the collapse will likely be disguised as a last-minute merger.

--Among the investors who will buy bundles of distressed properties will be foreign buyers, unleashing a wave of media coverage about creeping foreign ownership of America's housing stock.

--Washington will stumble toward an S&L-style bailout of mortgage-backed securities (Lou Barnes calls this "nouveau RTC"). The president, explaining the bailout, will say: "Let me make one thing clear: This is not a bailout." 

--The Democratic nominee for president will blame Republicans for failing to help struggling homeowners as the economy becomes a major issue in the 2008 campaign.

--Los Angeles homes prices, as measured by the Case-Shiller index, will decline throughout 2008.

--California Attorney General Jerry Brown will launch what he calls a major investigation into foreclosures and foreclosure scams.

OK, there they are, sitting ducks for your withering comments. Now I'd like to hear your predictions  -- the serious and the not-so-serious. I'll choose my favorites out of your predictions and make them into a separate post.

Comments

[formerlahomeowner]

Okay Peter, I am going out on a limb here and make a really brave prediction:

"There is no better time to buy a house than 2008. Buy in 2008 or you will be priced out forever" - National Association of Realtors.

Real estate prices in greater LA will drop by 30% in 2008 - me.

[pugtv]

Quiet everyone, the village idiot would like to speak ... ahem ... uh, Lefty, that's your cue ... lol

[Joseph...]

Trying to crank things up ha?

[Jonah1979]

Sounds like 07'....more of the same

[TakeFive]

My Prediction:

The banks and Fannie Mae will be so desperate to unload their REOs that they will give very, very generous financing to any halfway decent borrower - just like like in the 90's. Got mine in '96 for 3% down, no points, no PMI, and 45% below what the last guy paid. Everyday is Thanksgiving at my house.

"The president, explaining the bailout, will say: "Let me make one thing clear: This is not a bailout." "

You nailed that one!

[National Bubble]

Ok, I'll make 2 predictions for 2008.

California's economy goes into recession.
Home prices go down another 10% as measured by the Case-Shiller index

Happy New Year!!!

http://www.NationalBubble.com

[amir]

Yes, more declines in 2008.

Declines this year only started in the summer. The 10-12% declines we saw are only five months worth. Next year we'll have the same pace but for a whole year. I expect at least 20% declines, most of it after a horrific summer of little sales and the biggest inventory in 40 years if not ever.

2008 will cause builders and contractors to default, throwing their inventories back to the banks, and send prices even lower for 2009 when we'll see the recession everybody's talking about. Remember, in 2009, there is no politician to hear you scream.

[MyLessThanPrimeBeef]

My predictions:

And right after saying 'This is not a bailout,' the president adds, 'The war on housing decline is over. We won.'

Millions of subprime borrowers move into Hooverville, uh, sorry, Bushville in Washington D.C. after having lost their homes to foreclosure.

Angelenos, influenced by Hilary Rodham-Clinton, re-named Los Angeles 'Potemkin Village,' as they watch in horror at the plunging home sales and discover their so-called home prices are as real as Potemkin's Village.

After being exposed of outsourcing much of their work and amassing a huge army of underpaid workers overseas, lenders and servicing firms admit to having enough manpower in India, Pakistan and Afganistan, including covert Taliban agents, to handle the re-nogotiation of bad loans demanded by Paulson.

Major development in the coroprate goverance in America as more and more boards recruit ex-Chinese toy factory managers and descendants of the Japanese samurai warriors who rather kill themselves than staining their family honor by walking away with hundres of millions of dollars of compenation after inflicting their companies with billions of dollars of losses.

Nobel prize committee in Oslo announces the winner of the 2008 in Economics is none other than one of our own: the Oropezas in Corona, California, who apparently knew more about the pyramid nature of the world financial system than all the past Nobel prize winners in Economics combined working at the Fed and major financial instututions on Wall Street, including rating agencies such as Standard and Poor's and were able to out-wit and out-smart those geniuses.

[inland Empire]

Based on articles in the Times and on CNN stating that illegal aliens are leaving the US in droves, the housing market in the US (not just LA) will collapse completely because of lack of renters. This will force all of us to move to Mexico and work there because their job growth will be better than ours. We will be mowing their lawns.

[MyLessThanPrimeBeef]

This just in: The co-winner of the 2008 prize in Econmics is...the guy who invented Collateral Debt Obbligation (CDO) and Structured Investment Vehicle (SIV), which is as lethal to your financial system as the HIV virus is to your health.

[Confused]

One more:

In 2008 there will be 50% yoy decline in real estate "professionals" in California.

[CD]

I predict that the 20.000 inmates about to be released by our governor will buy all the houses for sale in LA, including Mike and Lefty's. You are right , Boys,lets buy homes now before the crack-heads get them all. Come on down, crack or Kool-aid what is your pleasure today??

[Rob]

-Kate will finally settle on a 3-bed 2-bath craftsman near a park for 50% off peak prices. Sells the movie rights for full value.

-Tbone’s quest to eliminate the letter K from the alphabet will cause mass panic among loyal Sesame Street fans. Oscar the Grouch will settle it out of court.

-Lefty will buy a beautiful 4-bedroom condo in Metro LA!!!! For full price!!!!. And sing its praises all the way to his closed Countrywide bank !!!!

[MyLessThanPrimeBeef]

One more: Paris Hiton as part of her plea bargain with a patriotic traffic court judge, sells herself to one of the foreign sovereign wealth funds for $1 trillion in order to save Citicorp. from falling into the hands of people who make gibberish sounds like 'Bar bar bar.'

[mike]

i predict that the renters on this blog will continue to bash the people with the positive outlook well into 2008.......

[Rob]

-A large migration to states like Texas where Homestead laws will shelter those upside-down, tapped out, credit card maxed, three car homeowners who just "walked away"....

[MyLessThanPrimeBeef]

One of the major Fortune 500 American companies reveals in 2008 that in fact, Osama Bin Ladin and many of his followers have worked as customer service reps. at a Pakistani call center who is a recipient of many outsourced contracts from the USA, including companies that handle sentive information concerning persoanl privacy and national security.

[originalthinker]

Word on the street says "Lefty" lost his right arm on his last flip.

[Who Cares?]

All of the skeletons will come out of the closet in 2008, at least what's left of them. It's almost like s confessional, these big lenders/banks just want to get it over with. The worst will be over by 08 year end, because this media "assisted" news story of the housing market decline, will finally lose viewership and interest, as most intelligent people figure out that these declines have produced a good buying opportunity, especially for those with some cash reserves and an ounce of savvy. Finally, these blogs, rather, bubble blogs, which have contributed to the hysteria, and continue to do so, will fade and go bye-bye, just as the hot real estate market of yesterday did. I've found the Bubble Blogs and their regular commenter's entertaining, so I'll be sure to shed a few tears when their 15 minutes and constant state of doom and gloom are over.

[discoduck]

Any predictions for Santa Monica houses and condos? I'd love to get into the market but cannot afford at these prices. Sellers seem to be getting close to their asking prices still.

Any thoughts?

[Rich]

I see one thing coming for sure: in Spring of '08 everyone who's looking for prices to come down will get a scare when Spring turns out to be a brisk selling season (because of pent-up demand); prices will appear to have stabilized because larger numbers of homes in the affordable range will dilute the big loss sales; statistics for early Summer will reflect the Spring activity and make the talking heads at CNBC declare a bottom to the market; NAR will all but declare victory and a certain bottom; but foreclosures will continue and reverse all that as waves of the houses with the biggest price inflation get dumped into the market...

[TakeFive]

I predict this become the signature quote:

"It's interesting that the industry has invented new ways to lose money when the old ways seemed to work just fine"

Wells Fargo & Co. President John Stumpf

[Victor the Predicter]

Hey! Half of those predictions were mine (though I predicted privately that someone would promptly purloin my prognostications).

Here are my 2 Pesos:

1) Angelo will become ambassador to the Calabasas Pumpkin Festival
2) Blackwater will be called on to guard hedge fund managers
3) Hilary will be forced to rent when she finds out that the White House has been sold to a holding company with nebulous foreign ownership
4) Hyperstagflation will force us to push piles of financial engineers around in wheelbarrows and trade them for basic necessities
5) Thick walls will be erected around prime real estate to keep the starving hordes of real estate professionals at bay

[jb]

The govt will move to bailout the banks. We cannot let this happen. Someone more saavy than me needs to setup a website with a hitlist of politicians who support a bank (or mortage co or fb) bailout. We need to vote these people out of office.

WaMu, Countrypuke, and the like should fail. They had all of the tools and expertise to avoid this and instead bought and sold mortgages like crack dealers and addicts.

[producer08]

I predict a 80-130% drop in all, lower to middle upper class housing across the US, and 130% drop meaning that you will be paid $$$$ to take the property off the sellers hands.

Remember even after you buy a property you still have to pay monthy insurance, yearly taxes, upkeep.

I predict a 70-90% drop in the super rich luxury market across the US.

[Joseph...]

I agree with jb....

Lenders created this mess....They did not protect Investors, or Borrowers...It was all about the Bottom Line....

[Paul]

Any predictions for Santa Monica houses and condos? I'd love to get into the market but cannot afford at these prices. Sellers seem to be getting close to their asking prices still.

Any thoughts?

Posted by: discoduck

Forget it! Despite the housing downturn, areas that are still considered "hot" for LA will continue to sell at or near asking prices. Beach communities will always be "hot" in southern california, so even if prices were to decline somewhat, those areas will still be expensive. Now the SFV, AV and IE are other stories!!! Good Luck!!!

PS: Peter, Love the blog!!!

[Martin]

I predict 2008 will see Peter Viles honored as Prognoticators Magazine's Man of the Year. In second place will be Phil, that little indecsive critter who may or may not make an appearance on Groundhog Day.

[Keith]

I predict Kate will be played by Sandra Bullock in the movie, or possibly that gal from "Weeds".

Pete, I hope the LA Times rewards you for what is possibly the most entertaining part of their empire. I predict a prime parking spot emblazoned "P. Viles" on the very front row! Unfortunately it may decrease 20% in value over the next year, but if you hang on to it, you'll be okay in the long run.

[brettdl]

Predictions:

1. Equities will experience a real adjustment -- 20? 30? percent -- once the slowing housing market forces the struggling average American to stop spending money. That will further worsen the entire housing market.

2. The U.S. government will be forced to bail out Fannie Mae and Freddie Mac.

3. Countrywide will go belly up or be bought out by a foreign entity.

4. County, city and state pension funds will begin to announce there is insufficient funding for retiring Baby Boomers as property tax revenues continue to plummet.

[brettdl]

Oh, one more:

CNBC will discover Prime, Alt-a and second mortgages.

[Mike Barker]

Few, if any, investors can predict the bottom of a price decline in the stock market. The reason some investors make money there is because they wait until the market starts to rise. So it will be for the housing market. Difficult to predict when housing prices will hit bottom but easy to see when they start to rise again. That is the time to buy.

[Diegoorg]

I hope Lawrence Yun wins the 2008 Nobel Prize in Economics. I wish he would open a psychic hotline. I would call it every day.

[Ragnar]

see one thing coming for sure: in Spring of '08 everyone who's looking for prices to come down will get a scare when Spring turns out to be a brisk selling season (because of pent-up demand); prices will appear to have stabilized because larger numbers of homes in the affordable range will dilute the big loss sales; statistics for early Summer will reflect the Spring activity and make the talking heads at CNBC declare a bottom to the market; NAR will all but declare victory and a certain bottom; but foreclosures will continue and reverse all that as waves of the houses with the biggest price inflation get dumped into the market...

Posted by Rich

This seems to be a very plausible scenerio to me, although I am not sure where all of the pent-up demand will come from. Now just throw in a little earthquake and the SoCal housing market will turn on its head in 2008. Damaged properties will sell for way cheap while undamaged properties will command sky-high premiums, especially those in already highly desireable areas.

[just me]

Prediction for 2008 - By November, my family will start looking for something to buy in 2009 in the Clifford Street School District. We will be pleasantly surprised at what we can afford (1000 sq ft SFH--300k).

I have no predictions that have bearing on anyone else's life.

[tew]

As Charlie Munger would say "I have nothing more to add" [except to agree with Rich that we'll probably see a bear trap head fake (dead cat bounce) at some point].

[Enlightenment]

Predictions for 2008:
- The housing mess will cause voters to choose a presidential candidate they wouldn't choose if times were great.
- Home owners will burn their homes, or kill themselves, in the hopes their insurance will pay off their depreciated house.
- Suicides and divorces will increase in record numbers because of people can't handle the financial mess they created.
- The largest migration away from California in all directions.
- Record numbers of banking and housing related executives will be fired for causing too much damage to their company.
- Realtors will be sued because home buyers recorded the realtor making wild claims.
- Home owners will be sued for lieing on their loan applications.
- Prices will fall in beach communities, and lots of people in denial will have to eat their words.
- Housing bubble states will fall into recession and will be required to make drastic cut backs because of a drop in their tax base.
- Record numbers of businesses going under and mergers.

[Spam]

You should have a space for us to comment on that stupid lady profiled in the Times right before Christmas who was about to lose her home.

[mark g]

There will be a new definition for "Sweat Equity":

"The value of my home and the loss of equity is causing me to sweat profusely."

[Michael T]

I saw a complete fixer in Palos Verdes Estates accept a full price offer yesterday after 8 days on the market (over the Christmas holiday, I might add). It seems the beach and the upper areas have gone down about 8% from the peak, but it's not disasterville, like is constantly predicted on this blog.

My prediction is that the naysayers on this blog will continue to live cheap,petty little lives even after they manage to buy the property they've always dreamed of.

[Robert Laughing]

"This is NOT a bailout!" HOW FUNNY!!! And listening to the National Ass of Realtor (no vested SELF-interest, there!) is like hearing Mozilo at Countrywide telling SEC and us, "I had NO inside information upon which to accelerate my stock sales by 50%...it was my financial advisor's advice....I'm 100% innocent."

[robert No longer in L.A.]

Better hope this war spending doesn't bankrupt the US of A; $17 billion for IED-proof trucks in Iraq, that the military discovers, it doesn't want! + $130 million per F22 (yes, that is for EACH copy - but no space aliens yet on the radar, and it can't 'find' Bin Laden either) + WHEN (not 'if') Boeing closes the Long Beach assembly plant for tankers/freighters) you will see 1990-1995 ALLOVER AGAIN as engineers flee to Georgia and Texass from So Cal....ooops, the party has left California. Be prepared, Scouts!!!

[RichW]

"My prediction is that the naysayers on this blog will continue to live cheap,petty little lives even after they manage to buy the property they've always dreamed of."

More often than not, a fool and their money will soon part ways. Are you so jealous of us who are intelligent and financially successful that you refer to us as "cheap" and "petty" ? Beats being an idiot like you who thinks it is smart to buy at the peak of a bubble. Oh, and by the way, I already own my "dream" property.

[Cal]

My dire 2008 predictions:
Mortgage insurance companies will start imploding constraining mortgage credit further (especially hurting the Fannie/Freddie market).

30 yr fixed rates hit 7.5% as investor back away from the mortgage market altogether.

Dateline NBC report reveals a mafia - National Association of Realtor connection and reveals David Lereah was blackmailed into writing "Are You Missing the Real Estate Boom? " and "Why the Real Estate Boom Will Not Bust - And How You Can Profit from It: How to Build Wealth in Today's Expanding Real Estate Market ". David Lereah is soon found dead in a tragic car accident stabbed 87 times and has a horse head in the passenger seat next to him.

Foreclosure activity plateaus.

BofA decides it doesnt want to be the "bad guy" servicing a lot of subprime loans and decides not to buy Countrywide.

My "optimistic" 2008 predictions:
Fannie/Freddie have their 30% extra capital requirements lifted allowing them to buy more mortgages.

FHA modernization replaces subprime lending as government backed way of keeping the housing market inflated.

So. Cal sales start showing slight year over year increases in August 2008 and each month forward.

Resale inventory plateaus.

Lawerence Yun is replaced by a new economist named Sal. When asked what his last name is by reporters Sal lets everyone know that it is in their best interest not to ask too many questions. Everyone is encouraged to buy a home whether they want to or not. Home sales surge.

[Michael Snyder]

As politicians clamor aboard the bail-out bandwagon real estate values will continue to plummet at an ever increasing rate as mortgage interest rates continue to climb in spite of the Fed's continued quarter point march to zero savings in America.
As saber rattling continues in the Middle East oil tops the hundred dollar a barrel mark bringing four dollar a gallon gasoline and with it the complete collapse of real estate values in the Inland Empire and Antelope Valley.
lefty will think it's a great time to buy!!!
By the end of the first quarter credit card defaults will reveal the sub-prime debacle as the "tip of the iceberg" as a tapped out consumer finds their meager resources unable to meet the demands of daily life as the costs of food, fuel and interest consume what's left of their shrinking after tax pay-cheques.
A flood of new taxes, fees and fines will assault home owners and small businesses as panicked local governments try to make up for the loss of their predicted windfall from increasing property taxes.
lefty will think it's a great time to buy!!!
Come summer the WGA will still be on strike as the AMPTP continues it's lockout protesting the high cost of union labor. With illegal immigrants now comprising a third of LAUSD's student population, the school district will be forced to cut teacher salaries in order to pay for additional administrative staff to help with the transition to Spanish as a primary teaching language. As a direct result of the same problem the last remaining trauma centers will be forced to curtail services.
lefty will think it's a great time to buy!!!
By summer's end the Bush administration will be hitching up another bandwagon for a "consumer credit bail-out" plan to help the poor distressed credit card companies charging thirty percent to "sub prime" customers with "low credit scores." Now they too are suffering from spiraling defaults driven by their predatory practices.
The "trickle down" jobs in the retail sector that replaced all of the high paying tech jobs out-sourced under NAFTA will dry up as the consumer engine grinds to a halt. And as the economy teeters on the brink of depression at election time....
lefty will think it's a great time to buy!!!
The Royal Families of Dubai and Saudi Arabia form a consortium and buy the Federal Reserve in a last desperate grab at Federal dollars by Dick Cheney...
Well; maybe that's a little extreme, and for once I do really hope I'm wrong. (except for lefty) Reganomics was a doomed policy driven by short sighted greed that's now on Federal life support. I just hope it doesn't take us into a depression with it's death rattle.
My wish for the new year is a resonance of integrity and awareness that will translate into a return of confidence and stability in the marketplace.
Happy New Year!!

[Uncle Billy]

Michael,

From what I've seen, PV is a special market with a strong family component and homeowner's that tend to own their homes with the intention of keeping them long term. Very few come on the market, and values might very well hold up there better than even the rest of the coastal communities for these reasons.

[MyLessThanPrimeBeef]

Well, the visions are coming fast and furious.

In the coming year, I see Francis Fukuyama writing a sequel to his 'End of History,' titled, 'End of End of History,' in which Capitalism, which triumphed over Communism in the late '80s and early '90s of the last century thus ending the sad and murderous history of competing ideologies which had continually plagued mankind for as long as people could remember, is itself defeated, by something out of, of all places, Russia, called 'Mutual Aid,' advocated by Peter Kropotkin in the 19th Century, thereby ending the end of Mr. Fukuyama's own history.

[MyLessThanPrimeBeef]

I just want to clarifiy one thing about what Enlightenment wrote regarding the largest migration out of California in all directions. That was after realtors started telling people they didn't make oceans like the Pacific anymore, causing fervent speculation and homesteading of waters off the left coast.

[Cal]

Bruce Norris over on Jon Lansner column:"There’s some talk about “pent up demand.” What you have is pent up inventory and a dearth of demand. If a consumer couldn’t own in 2005 or 2006, how are they going to own in 2008? If they couldn’t qualify in the boom years, what makes us think they are able to qualify now? If they weren’t convinced of the merits of owning in 2005/2006, what will persuade them that 2008 is a better time to buy as the asset declines in value? "

The whole thing is a good read regarding his predictions, I just always love hearing the pent up demand argument. There is a pent up supply coming on the market, much of the demand is leaving California or unable to buy. Realtors tend to not want to think about such things.

http://lansner.freedomblogging.com/2007/12
/27/investor-eyes-housing-slump-zapping-prop-13/

[Victor the Predicter]

As we fall further (farther?) down the rabbit hole, let's revisit the role of mortgage insurance in this here debacle. I had predicted previously that we would see the rise of mortgage insurers (MI) as a result of a plunging real estate market. Much as I don't like to see whole industries take long baths, I like even less when I'm wrong. But am I?

Will the mortgage insurers come out of this even stronger? One would think that MI will become very important to lenders going forward as a way to mitigate their own risk now that simply selling their loans hasn't worked out too well.

We've had a glimpse of who these MI's are, but if fortunes are to made and lost on them, who rates them? Seems like A.M. Best, based in New Jersey has a firm monopoly on this industry. Who is A.M. Best? We catch wind of them once in a while when the strength of an insurer is discussed. According to this article

http://tinyurl.com/39azba

Best is a veeeeeeeery private little company. Apparently the only time any financial or information or glimpse into their operations has been revealed was when a senior exec sued them after being offered $8 a share at retirement, versus the $65 per share he thought they were worth. Notably neither Best nor the SEC seem to think there's any conflict of interest inherent in being paid by the companies that they are rating -- for the privilege of being rated.

We've all seen how the Moody's / S&P / Fitch scam worked, and how their stamp of approval was key in sending an entire economy into the crapper.

There are only 7 sec certified ratings agencies. They apparently have the power to move all markets. A.M. Best and the few people that really know them, don't seem to think they are hiding anything. I predict that we'll learn more about them as 2008 progresses. By the way, if you can't trust the rater of the ratings agencies -- U.S. Guvment -- do you take it a step farther (further?).

Just as we cast a doubtful eye when the JD Powers announces that a Nissan is rated the "Best looking car of 2007," maybe we should be using x-ray vision to look into the financial ratings agencies. (interesting aside... insurance companies are very competitive lenders in the commerical real estate world. In a recent talk, Paul Krugman of the NYT alluded that the commercial re world was beginning to feel the early tremors of decline).

Interesting to note: BuffetMart seems to own a large part of the casino... Berk. Hath. is the majority shareholder of Moody's. Remember, he's the big insurance guy. Watch out for those quiet ones! General re, one of the largest reinsurance companies, is wholly owned by Buffet's Berk. Hath.
Once the simple stuff like mortgages and insurance starts gettin fancy with mortgage backed securities and reinsurance, watch out.

So much to learn, so late a date to learn it.

[Victor the Predicter]

Um, speaking of Buffett and insurance... it was announced this morning that Berk. Hath. was approved as a muni bond insurance company after an expedited approval process. It's expected that as others like MBIA get further downgraded, the new Buffett enterprise will get a big shining AAA.

Also, if you want this to get any trippier prediction wise... forbes reports this morning that:

"Also on Friday, Berkshire Hathaway agreed to buy NRG N.V., the reinsurance unit of ING Group said for about $435.7 million in cash"

Buffett likes to buy businesses with "moats" around them -- that provide them a very defensible distance from other companies. Seems like he's learned that he can build his own moats as well!

[butterflysoup]

Maybe Jerry is trying to make sure Kathleen can never run for office again.

[Hollywood Hills Since 96]

There go all the Chicken Littles and the people who sold their houses in 2001 SURE that the market had peaked (and HAVE to make up for the 6 years of gain they sat out of) and the people who are haters 'cause they can't afford a house in this or any market. Uh, here is a REALISTIC prediction. IF the overall and local economies go into a downturn and IF the writer's strike drags on and IF the credit crunch continues, the steep declines will continue. That's A LOT of "IFs." Last time we had a "sky is falling" real estate crash, here are the FACTS: the market (depending on the exact month's you track) fell 22% to 25% over 6-7 YEARS. That's only 3-4% a year. Assume this one is twice as bad, we fall 6-8% a year. The question is "how long does it last." Um, while most of the market is down, notice that LA county fell just 6%, 1/2 of the overall rate for the region? Anyone read the Atlantic article on "Superstar cities?" LA, NYC (which is still UP for the year). SF. More people want to move here than we can build for, the cost of building is high, land in the good areas is gone. Long-term, can't lose. Also, when people can't get their price, they PULL the house and don't sell it. Most people don't "have" to move. Banks will work with you, turn your 30 into a 40, etc. That's a fact. Also, sub-prime? Uh, not so much with median home price over $500K in LA County. So... If you are planning to live somewhere in LA for 2-3 years, yeah, probably hold-off. If you're looking for an additional "investment" home, yeah, hold off. If you're looking for a house to actually own and love and live in for 5+ years, go for it. Negotiate hard, get as much off as you can and dig in. I just got a BIG jumbo loan for 5.75% with minimal "buy down" on the rate. Actually went DOWN from the 6.125% I was paying 5 years ago. And I'm an "Alt A," not even an "A." People forget, if you bought on the TOP of the last peak, sure, you were bummed in 1996, but you were EVEN by 99 and you're up 100% or 200% today, just 15 years later. If you bought on the bottom in 1996, you're up 400%+ and you're just laughing as you give back "paper profits." And, uh, NO, I don't work in real estate. I'm just a guy with the "long view" who's watched his parents make money on some of their houses, lose on some, reap the rewards of the mortgage tax deduction and followed in their footsteps. I bought in 1997, 2003 and 2007. Overall, I have no fear. And the thought of the $600,000+ I got to write off on my taxes would make plenty of paper losses go down pretty smooth. And the losses on 2007 would only serve as write-downs against the gains of the other two. So stop looking at the sky and being afraid to jump in on the last legal loophole left in our tax codes.

[dominic]

I predict that all of these comedy writers will go back to work. Their comments will be surely missed.

[jk]

Hollywood Hills...

Paragraphs are your friend!

[David Raether]

I agree with the following two predictions:

1. A major financial institution will go under... or be "purchased" or "merge" at the moment before failure.

2. House prices in LA will drop 30%