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Like I said before Residential Real Estate is Falling to Free.

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July 27, 2010 – Comments (6)

1. The mathmatical calculation of RESIDENTIAL real estate is - going to change. Property is free if you just pay taxes, this is going to happen in all over the US.  Detroit has 80,000 empty buildings already, average home price there is $7000.

Cities View Homesteads as a Source of Income

http://www.nytimes.com/2010/07/26/us/26revenue.html?_r=2&pagewanted=1

If there are no jobs, higher taxes and the climate suxs (ie not FL, CA or HI) residential real estate is going to falling free.

Some more predictions from the Former Top Fool? Ok

2. The gambling "industry" built on home equity is going to contract massively. Las Vegas is going to have a massive amount of free real estate. Just wait. With out CA home equity Las Vegas is going on a diet.  My current view is Las Vegas will be the US version of Pompeii.

3. The finance "industry" is approaching extinction.

The current U.S. financial sector has been selected to reap enormous profits off a very narrow ecology of speculation, credit, risk and leverage. That parasitic specialization makes it highly vulnerable to extinction.

aligned with  Natural Selection, Finance and Extinction

http://www.oftwominds.com/blogjuly10/natural-selection-finance07-10.html 

aligned here:

     "The underlying reality is that the financial sector of the economy has got to shrink. It ballooned from about five percent of the US economy to about 22 percent over the last two decades -- mainly as a way to compensate for our declining real productive activity as we off-shored and outsourced and disassembled US industrial capacity. Capitalism only works when it operates in the service of productive activity. Trading mere paper certificates (or digital simulacra of them) in ever more "innovative" (i.e. abstract and  incomprehensible) ways is not a substitute for making goods. These practices reached such a grotesque level of unreality that they eventually poisoned what remained of our economic prospects. Now that their operations have been revealed as perfidious, these institutions have to be sliced and diced and, in some cases, punished, perhaps with extinction. It will happen anyway. The only question is whether civilian leadership can guide the process within the rule of law. In the meantime, the derivatives rackets that made up so much of the fraud -- especially the trillions of dollars vested in credit default swaps contracts -- are ticking out there like bombs placed by madmen, and may bring down the entire global money system before an orderly downsizing of finance can occur. "

http://www.kunstler.com/blog/2010/01/-a-lot-of-things.html

4. Warren Buffett well thought of now, will become hated as all the fraud, asset stripping etc... from Wall Street and DC become more apparent to the masses. 

5. Most Keyensians like most communists are going to disappear from public discussion / view.

6. The stock market is going to get cut in half, eventually.  Double digit dividends and single digit P/Es is what the bottom looks like.

7. Better then average chance, the Market will rally or stay up unit the Congressional election. aligned: http://www.oftwominds.com/blogjuly10/stocks-election07-10.html

8.  The residential and commercial real estate market is going to fall harder and harder (except farm land), again think near free in metropolitian areas, just maintain the property and pay the incredibile taxes.

9.  If China stops buying Treasuries, Social Security and medicare are toast.

10.  Gold and silver. When the all those realtors offices (ie Century 21, Remax, etc) become gold vendors and WalMart sells gold coins and bars, that is near the top for gold and silver. 

11.  Third party victory in 2012. Obama will not get the nomination unless he does a debt jublee. Jim Webb will beat Hillary Clinton to run as the Democratic cannidate.

12.  It is a depression. It maybe like this for decade. 

13. A professional economist will have the same professionial esteem as an astrologist or craniologist or Vodoo doctor. If you are studying this at college, stop wasting your time. Read Econ as a hobby, major in something useful.

aligned:

"The development of a profession of economists is an offshoot of interventionism. The professional economist is the specialist who is instrumental in designing various measures of government interference with business."
- Ludwig von Mises, Human Action

14.  Soccer Moms will become Preppers.  Your smart neighbors will get gardens and chickens. You should become their friends.

6 Comments – Post Your Own

#1) On July 27, 2010 at 10:30 PM, awallejr (82.72) wrote:

And like I said before.  Real Estate can be summed up in three words:  "location, location, location." While it sucks to be in Detroit, you aren't buying  homes for $7,000 in NYC and its surrounding area. 

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#2) On July 27, 2010 at 10:30 PM, whereaminow (42.76) wrote:

Detroit is the new Pakistan.  80 years of one party rule will do that to you.

David in Qatar

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#3) On July 27, 2010 at 10:43 PM, abitare (58.10) wrote:

awallejr,

NYC is going on a diet too. Just wait, asset stipping and finance, economic fraud are not going to sustain it for ever.

When New York City faced bankruptcy in 1975, Mayor Abraham Beame was unsuccessful in obtaining Ford's support for a federal bailout. The incident prompted the New York Daily News' notorious headline: "Ford to City: Drop Dead."

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#4) On July 27, 2010 at 11:10 PM, awallejr (82.72) wrote:

Actually NYC seems to be rebounding some.  Brooklyn home prices, for example, are rising.  Landlords are not offering the incentives they used to give to rent both commercial and residential property since vacancies are acutally declining, and demand picking up.

Stop comparing Detroit to the rest of the country.  Makes you sound like Alstry.  And what happened in 1975 has nothing to do with what is happening in 2010. "Big" apples to oranges.

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#5) On July 28, 2010 at 2:44 AM, whereaminow (42.76) wrote:

Stop comparing Detroit to the rest of the country.

But comparing Brooklyn to the rest of the country is somehow OK.

David in Qatar

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#6) On July 28, 2010 at 12:07 PM, awallejr (82.72) wrote:

David I have not compared Brooklyn to any place but Brooklyn. It was mentioned in response to Arbitare's comment #3. As I said, it is all about "location, location, location."  What happens in Brooklyn does not mean the rest of the country must follow, and what happens in Detroit does not mean the rest of the country must follow.  I suppose technically it becomes a de facto comparison by the mere mentioning of Brooklyn.  Better choice of words could have been used on my part, but I blame the scotch at the time of responding.  I suspect, however, you "could" care less ;p

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