patrick.net

I dont see how many of you here think that housing prices going down 50% is going to do you any good if your standing in a soup line.

The housing market of Hong Kong and Japan went down more than 50% but there were no soup lines. (Both cultures drink soups)

The economy can most definitely take a 80%+ drawdown in the housing market without taking much permanent harm.

Peter P: The ability th threaten to do any of the things on my list is serious political leverage, whether they do these things or not. The blue states can only act to slow their decline; The transfer of power is inevitable. In the end, CA will get what it wants. The Great Lakes will get what they want (except MN, WI, and perhaps IL). Texas and the South East will dominate. The Ivy League/Mayflower/Kennedy crowd is finished as a political force, but they will kick and scream the whole ride down.

Joe smooo:

"I see the run up in the Nasdaq and now the REAL ESTATE as reflection of Boomers needing to prepare for retirement."

On the money. Read "Bulls eye investing" by John Mauldin for a detailed analysis.

Joe smooo:

The Boomers' revolution has failed. Their values (to the extent that they have any) will not persist. The housing /stock bubble are real and will wipe many of them out along with their pension funds. And remember, in the long run, we are all dead. They will be too.

I do think that the next 50 years will be very dark and unpleasant. Any talk of innovation being able to propel us forward is pure silly valley propaganda.

The ability to thrive on the demise of others will be highly valued.

Interesting how we seem to all flock to certain locations and call real-estate limited…

Even in the Bay Area there is no real shortage. There may be artificial rules to halt growth, but the potential capacity is very high. The Bay Area can easily accomodate another 8 million people with some infrastructure changes.

I hate the growth laws. I am not a fan of conservation, it is the "I have got mine so screw you" attitude in disguise.

Peter P, Joe Shmoo, Sorry for the doctoral thesis. I have a lot of time today . (So do the voices).

Yes

Fuck! The forces of evil ate my rant. You would have been impressed had it not disappeared. Is Patrick really a front for Howard Dean. Dammit. I may have to show up for Sushi to set everyone on this board straight!

Did you use > in your post? Everything behind > will be eaten.

Is Patrick really a front for Howard Dean.

Huh?

Sorry, I meant everthing behind < will be eaten.

Also, it is prudent to copy and paste a copy before submitting long posts.

Thanks for the tip. I'll re-rant this evening after a good long soak in the hot tub. It will put me in the right frame of mind.

"For the second consecutive year, Massachusetts lost residents. Observers say the reasons for leaving range from cold weather and soaring housing costs to a high overall cost of living, scarce job opportunities, tax rates and general rudeness. Business leaders worry a shrinking labor pool, and the willingness of more young workers to leave Massachusetts."

Am I a prophet, or what ;)

Am I a prophet, or what

Yes you are!

I have nothing against the Dems, but Deep Blue states like MA and CA may be in Deep Trouble very soon.

I do think that the next 50 years will be very dark and unpleasant. Any talk of innovation being able to propel us forward is pure silly valley propaganda.

The ability to thrive on the demise of others will be highly valued.

_smile_

Come now Peter. I'm all for doom and gloom, but let's not bet too hard against american innovation. Look what we've done with mortgages, in only a few short years!

It is a measure of how spent I am on this topic that y'all can riff on the boomers and I fail to raise a cudgel in the exchange. Summary: they are old, they are broke, they destroyed the culture, ruined our cities, and they are saddling my generation with sharecropper levels of debt.

On the other hand, some of their music was OK.

_collapses in heap_

Cheers,
prat

Come now Peter. I’m all for doom and gloom, but let’s not bet too hard against american innovation. Look what we’ve done with mortgages, in only a few short years!

I guess a little innovation and creativity is harmless. :)

Blue states, red states…..It’s made-for-TV-soundbite-divide-and-conquer- short-attention-span crap. If CA fails, lots of red states will hurt. If TX fails, lots of blue states get hurt.

Very true.

Peter P says:
The housing market of Hong Kong and Japan went down more than 50% but there were no soup lines. (Both cultures drink soups)

The economy can most definitely take a 80%+ drawdown in the housing market without taking much permanent harm.

Exactly. I would argue that a housing market drop would actually be beneficial for the economy, since all of a sudden new home owners would not have to refrain from buying vacation travel, furniture or decent food anymore to make the mortgage and property tax payments.
The sooner, the better.
That is, if the drop does not coincide with nasty events like bank crashes or currency crisis.

TWIT: It's fun to disagree with you. I will light a candle by my shrine to General Lee for you. ;)

(Actually, I do a have a portrait of him in my living room. My Mother inlaw in VA has some possessions that make a truly impressive shrine. The Smithsonian would be hard pressed to do better)

"Rather Eurocentric, wouldn’t you say?"

No. The Kondratieff cycle is an emergent pattern. It would emerge given the same laws of economics in any century, on any continent, or any planet, regardless of culture. Kondratieff was writing about the global system. However, complex systems tend to organize themselves as fractal patterns. Once Karl Marx applied Charles Darwin to sociology, the stage was set for Kondratieff to view economies as emergent complex systems, regardless of culture, time or place.

I am quite certain that large national economies can run an internal cycle at the same time that they are a single particpant in the global cycle. It is the internal US cycle that I am modelling.

RE: China, it is certainy large enough to run an internal cycle, but I need to look more into how central planning effects/distorts the cycle. On the global level, they are definitely a rising challenger from a balance of power perspective. Their ability to drive commodity prices proves that they are part of the gloabl Kondratieff cycle. However, I must confess, I have been looking at North America more, because it interests me to a larger extent. I'll move one level up in the pattern at a future date.

Much more to follow when I get around to posting my master work. I'm going to argue that the conservatives will use the same strategy to bring down their internal enemies (blue states) that they used to bring down the Soviet Union. Centrally planned and managed economies (welfare states of any kind) inherently create what is known as a "stable disequilibrium." These sysems slide in protracted decay and can be caused to spontaneously collapsed if stressed. That's why the Soviet Union broke apart. That's what the quote above about Massachusetts suggests--stable disequilibrium.

When I was in school, I had several profs that had served in presidential cabinets. They are definitely sophisticated enough to look at domestic politics in such terms. In fact, some of them were around to refine cold war strategy over the years. A few of them even knew Goerge Kennan personnally.

Would they harm blue state economies to increase their own power, even if it temporarily harmed their own? Yes, I think so. That's where nationalism comes in, and nationalism is a reason that the Lee discussion is far more relevant than it appears. Do I sound crazy for bringing up things that happened 140 years ago? I hope not; It's the scale that my analysis fits. Wait until I bring up the Cavalier/Puritan rivalry. There are plenty of people in the horsey set in VA that are still bitching about getting justice for their murdered king................

--Deo Vindice

Well, the trade deficit situation is also a stable disequilibrium. Will the bursting of the housing bubble cause the whole system to collapse? It does seem plausible.

Housing bubble is also a stable disequilibrium, isn't it? ;) Interesting.