the idiots who made the 2007 doomsday predictions?!?

little black arrow pointing down??

oh yeah!

steve, timing is everything - none of those things happened by the end of 2007 - therefore, you were wrong if you predicted those things to happen by end of 2007 - I was even more wrong than you, because I expected them to happen sooner than by end of 2007

50% down from the peak. There is no escaping it, no amount of money in the world that can stop the inevitable from happening.

On the rest of the economy I'm not a doom-and-gloomer, though it has slowed somewhat from the torrid pace I was working at for the first six months of the year. I think stocks are oversold on fear; I think international will be fine. But real estate and banking are a disaster with no short-term cure in sight. The only thing that can and must happen is for prices to revert to normal, prebubble levels.

Spunky, do I think it's better to buy or to rent right now? What do you think?

vverain - is it true that real estate is not a leveraged asset?

The idiocy I've read on this board!

"you were wrong if you predicted those things to happen by end of 2007"

I didn't predict those things by the end of 2007, but no one - as they say - can pick an exact bottom, especially in real estate, which is illiquid.

lowery- If you followed the advise of the "doom and gloom" posters would of you saved money, by not buying in 2007. I mean really, despite the continuing collapse in 2008 are you honestly saying that the predictions were wrong. Actually I went liquid ( US stocks ) on 10/16/07. I would say I timed the market almost perfectly. Yes I understand some would thinks that perhaps it was luck, however I will tell you that it was a well thought out analysis, of all things, the Miami RE market. So the doom and gloom for the financial markets began in 2007 and will continue for years. The RE in NYC is almost none existent. It started in 2007 and also will continue for years. Still faced with this financial disaster, people still try to hold on, to their optimistic outlook, as if this will get better overnight. I'll say this again it's like nothing anyone has ever seen. Dow will drop 40% ( 8400 ), at best I will start to dollar cost average, by cherry picking, when it hits 9500. As far as NYC RE. my prediction still stands -30% this time next year, everywhere in NYC. To say that none of this happened in 2007 can't be further from the truth.

Lowery: "steve, timing is everything - none of those things happened by the end of 2007 - therefore, you were wrong"

With market timing its is much better to be early than late. Bernard Baruch was 7 or 8 months early in calling the Great Depression, and he was heralded as the greatest market timer of all time, even though people thought he was crazy for 8 months.

I am going to enjoy when, one year from now, dco will have to come onto this board and admit that he had no analysis, all he did was push his biased agenda, and he was completely wrong.

LIC, I think you ay be right RE the analysis, However, he may happen to be right out of sheer luck. Sometimes the nervous nelly is right even when he doesn't fully understand why.

The financials have everybody blinded. Lets not forget that we still face a terrible threat of stagflation. The consumer needs quarterly checks from the gov't just to spend money. Oil is all time highs. Heating your house in the northeast will cost about $1200/month. The auto and airline industries have been decimated. I mean people come on and smell the stink. It's a triple threat. Dollar stinks, inflation/stagflation and a banking industry that is severely damaged.

The better question is. What is the next hidden danger right around the corner?

What if, as is likely LICC, in a year that is you?

I agree that timing can help. I predicted the fall in Miami, got out just in time, avoided 30% losses that will increase to 50% losses which, given how much things went up, actually would have been a wash for me: selling for what I bought for. I told a friend to bail out of San Diego and Miami at the same time; he didn't. He's screwed.

I don't think the stock market will drop 40%. In fact, I'm sure it won't. It'll test 11,000, maybe get to 10,000 (though I doubt it). International is oversold but fine: China still growing at 9% per year, Brazil's p/e is like 17 with 5% growth, tremendous natural resources, oil out the ying-yang, rapid institutionalization. Ditto Russia, Turkey has some problems but is Westernizing - anybody who saw Spain, Portugal, Greece in the 80's will know the power of integrating into the EU and what that does for an economy. Don't underestimate the power of wanting to get rich.

There are just a few things that are wrong here, some of which can be fixed, others will fix themselves. Stop ethanol, start drilling (obeisance to Kudlow), nuclear, wind, solar. The financials, within a few years, will have write-ups as they can determine a price for all the stuff they have on and off their books. But housing needs to deflate, and deflate it will.

There is no option.

dco, this time I think you are going over the top. There is no threat of stagflation - did you live through it? CPI at 15%, interest rates at 21%? Real interest rates are negative right now, we are no longer the sole source of worldwide growth. There is very little wage inflation and jobs, though wobbly, are holding.

China has 1.1 billion people, Brazil has 200 million, India has 900 million. They have modernized, liberalized, deregulated, and they have the power to pull us.

If T. Boone Pickens lived on Fire Island, he would be Steve.

If only I had his money, and if only I didn't live in Chelsea.

being 7 months off is pretty good - timing is dangerous - I thought Manhattan RE was overpriced in 2002 - I think the most obvious red flag in 2007 for Manhattan RE was the day that Bear Stearns had to inject billions of dollars of cash into two hedge funds - dco, concentrate on picking the bottom - you will have noticed by now that by the time "news" hits the "news" it's already history - looking back on what was the top, there was no one to call it, but there was plenty of optimism about real estate - now that all the "news" is banks being seized, GSEs being bailed out, WS layoffs, dramatic RE price reductions, look at it this way - it's already history - I think, dco, you're looking for an 80% drop in real estate prices - if prices drop 50%, you will miss opportunities if you're still waiting for an 80% drop - after NYC RE bottoms out, it's anyone's guess at what rate it will crawl back up, but I'd bet some areas will chug up the other side of the pit more quickly than others - and while obsessing over only the doomsday scenarios you may miss some important signs - I think Steve has the right idea about the neighborhood north of Columbia - but it was already "discovered." There are linen tablecloth restaurants on 12th Avenue near 130th Street, under the WS Highway. Further east, on Frederick Douglass, you already have plenty of evidence that the neighborhood was "discovered" by certain people years ago. When the pit hits its bottom and certain areas climb out, though, that may be an area of opportunity.

Somewhere in between pollyanna-ism and predicting The End Is Near is a good place to be. Things are never as good nor as bad as we think they are. Some people have been making dire predictions which can only come true in the event that no one who bought real estate will ever be employed again so long as they live and have no savings or family wealth AND have adjustable rate mortgages AND interest rates will explode in the immediate future. That's a lot of contingencies. Many jobs being eliminated in New York City did not exist five years ago. That is not to minimize the pain of layoffs, but you are not talking about a Great Depression scenario here. Not even a 1970s scenario. In the 1970s I wouldn't venture to walk down the side streets of Chelsea day or night. Let's not even talk about "East Village" (Second Avenue) or "Alphabet City" (Avenue B-ish) or the UWS in 80s. If I told you the things I witnessed living in "Clinton" (a/k/a Hell's Kitchen) you would probably think I was inventing them.

LICComent- Next July, I will most definitely admit if I'm wrong, however I expect the same the "crew" if I'm right. I'm a man of my word and expect no less from others.

The only thing I'm officially bearish on is real estate, and very bearish in the short- to medium-term. Long-term - 15+ years - it'll be fine.

Financials I'm short-term bearish but I believe that a lot of the write-downs will be write-ups in the medium-term. They will survive, albeit in an entirely different form: independent investment banks / brokerages will disappear since they will be regulated, their leverage will be limited, and they don't have access to cheap deposits like commercial banks do.

When that happens, you can kiss Wall Street bonuses good-bye, b/c commercial banks don't like to pay them.

stevejhx - "dco, this time I think you are going over the top. There is no threat of stagflation"

Dismal data on inflation and retail sales released on Tuesday flashed fresh signs of stagflation in the U.S. economy.

Total sales at U.S. retailers rose a less-than-expected 0.1 percent in June, as auto sales posted their biggest drop in more than two years, a Commerce Department report showed.
AP
--------------------------------------------------------------------------------

Also on Tuesday, General Motors said it would cut employment costs, sell assets and borrow at least $2 billion to bolster liquidity in the face of plummeting sales.

The Labor Department said producer prices over the last 12 months were up 9.2 percent, the biggest increase since a 10.4 percent gain in June 1981 when the United States was last mired in a low-growth, high-inflation period known as stagflation.

A regional manufacturing survey showed factory activity in New York contracted for the fifth time in six months and data in the report suggested producers were passing on higher prices to consumers, which could add further fuel to inflation.

The reports come ahead of Federal Reserve Chairman Ben Bernanke's semiannual monetary policy testimony before the Senate Banking Committee, which starts at 10 a.m.

"The PPI number is just outrageous," said T.J. Marta, fixed income strategist at RBC Capital Markets in New York. "What does this mean for Bernanke later today? Certainly he's got to talk about the risk to inflation."

On Wall Street, U.S. stock index futures remained lower after the reports, while the dollar held onto its losses.

U.S. government bonds, which generally benefit in times of economic weakness, added to earlier gains.

The data coincided with a report from General Motors Corp , which said it would cut white-collar employment costs by 20 percent, sell up to $4 billion of assets, and borrow at least $2 billion in a bid to bolster its liquidity by $15 billion through 2009.

Economists had expected government tax rebate checks to boost June retail sales more, despite the weak economy, but much of that seems to have been reflected in May's gains.

Economists polled by Reuters had forecast total retail sales to rise 0.4 percent in June after a 0.8 percent gain in May that was initially reported as a 1.0 percent rise.

Excluding autos, retail sales rose 0.8, which was also below the pre-report consensus of 1.0 percent.

Excluding autos, building supplies and gasoline, retail sales rose 0.4 percent.

RELATED LINKS
Bernanke, Paulson to Testify
Inflation 'Unacceptably High'
Inflation-Proof Your Portfolio
OPEC: Oil Demand Growth to Slow

U.S. producer prices rose a far larger-than-expected 1.8 percent on the month in June as energy costs soared.

If there was any good news on inflation, it was that core prices at the producer level, which exclude food and energy, edged up just 0.2 percent.

The New York Federal Reserve's "Empire State" general business conditions index came in at minus 4.92 in July from minus 8.68 in June.

Worryingly, its indexes of prices paid and received both rose to their highest since the survey began in 2001.

The increase in prices received may raise concerns that inflation is being passed through to consumers.

I just thought it was funny, I just found this article posted on CNBC. Actually it states "fresh signs of stagflation". So perhaps this is an instance we both maybe right.

Stagflation is at the consumer level, and there's no evidence yet that producer price increases are being passed along to consumers.

On an inflation-adjusted basis, oil is not that far above its previous highs in the 70's.

There is very little that the US can do about inflation by itself - it's being imported from China and India, and is due to increased international demand. Unlike Volcker, Bernake can't raise interest rates enough to reduce inflation without cooperation from other countries.

I see malraux doesn't want to post about his own post. Can I call him "Weasel Boy?"

He didn't respond when I critiqued his "Case-Shiller Analysis of the Prime Manhattan Real Estate Market" either, which since C-S only includes single-family homes ignores 99.1% of all of Manhattan real estate.

There's been a noticeable silence from spunky - do I think it's better to rent right now, spunky?! - and JuiceMan, and malraux, and vverain - is real estate a leveraged asset, vv?! - and the rest of the Bull Crowd.

I declare them defeated. The Dow has gone below 11,000 interday, and now hovers barely above it.

And yes, the Dow closed below 11,000.

malraux, come out, come out wherever you are!

For a man who claims to have flipped for millions at 15 CPW, you're mighty shy malraux!

stevejhx, I don't think malraux flipped - I believe he's renting his place out and more than covering his costs, if I remember correctly. Either way (and I've said this before, though I continue to appreciate your insightful, non-combative posts), do you sit around all day waiting for him to respond? How do you enjoy baiting and taunting so much? I'm still hoping this board can dispense with all that bs and return to what it was a few months ago.

bjw, I don't believe what he says about that or anything else he says.

steve:

Weren't you person I begged (BEGGED) to bet $1,500 measly bucks on your very own assertion that Manhattan real estate would (and I quote you directly from the earlier thread titled 'How aggressive are you these days?') "...Just wait - watch for a 25% price decline in 1 year, 50% in 2...", and you steadfastly and absolutely refused to put your money where your mouth was?

Then you stated later in the same thread after much back-and-forth (and I quote directly again) "...I'll take the bet, malraux, but April 9, 2010: prices down 50%. To make it easy, take the West Village. Current median psf: $1,633. $800 on April 9, 2010..."

As I then stated verbatim in the same thread after yet more back-and-forth "...Okay (sigh), what about $1,500, with streeteasy.com holding the money? Just so that I can have the pleasure of showing what an idiot you are in two year's time? SURELY a man who claims to make 60% on his money per annum would part with one day's wages, if nothing more for the pure enjoynment of not looking like a little bitch in front of all the other people following this thread? C'mon, weasel-boy, or trust me, NOBODY is going to believe ANYTHING you have to say about what you earn, what you return, or your market opinions ever again. One day's (supposed) pay. That's all...."

You still didn't take the bet after all that. $1,500. As you won't put your money where your mouth is, I think you're hardly in a position to state "I don't believe what he says about that or anything else he says." Having people believe you is about saying what you'll do, AND THEN doing what you said. Making pronouncements, then being called to the floor on them, and STILL being unwilling to put a measly $1,500 where your mouth is exhibits louder than any words you could write following this exactly how much we should believe all the opinion you spew all over these boards.

So. $1,500. "April 9, 2010: prices down 50%. To make it easy, take the West Village. Current median psf: $1,633. $800 on April 9, 2010." Your words, verbatim. In, or Out?

With regard to that bet, when you get people doing this: http://www.streeteasy.com/nyc/sale/319411-coop-350-bleecker-street-west-village-manhattan - that totally skews the medium. Who cares what people are asking, that bet should maybe of been with regard to psf sold. Assuming that correctly priced apartments are sold and taken off of street easy, you are asking to bet how many people are unrealistically asking way to much money for their apartment vs realistically priced apartments. These idiots who price too high will let their places sit on the market for 6 months to a year. You end up with a totally skewed medium based on something that has nothing to do with the reality of the market. How you could go on and on about such a dumb bet only highlights your stupidity, and how incomprehensible it is that someone of your intelligence could own something that costs more than $100, let alone $10 million. Incomprehensible.

dmag2020, that's a really good point. Perhaps Malraux is supremely confident and thinks that even with the handicap you mention, he'll still win. Or... perhaps not. =p

$1500 sounds like way too little for a real estate wager. A single NY housing futures contract down 50% would be around 30K. I think you may need to up the stakes in order to interest such a serious player!

pretty crappy out there in the stock market, in times like these, definitely better to be in a more stable investment like gold or real estate. Definitely not "BULL"ish on real estate in Manhattan as you might define a BULL, but still if you have money to park, best to do it in real estate or commodities like gold than in other things like stocks. Agree?

Heading for "stable" things when the bad times are clearly underway already is generally a bad, bad bet. Even leaving out the RE crash potential, these are the times that the stock market generally does best.... after its had the crap beaten out of it, and interest rates get lowered. The stats on that are pretty dramatic... avg. return in the 20s after such problems...

And, if nothing else, when everyone is saying "you should get into X", its usually the time to get out of it...

Not to mention, "stable" should not be an investment goal if you're including in that a stable negative return after inflation...

"and you steadfastly and absolutely refused to put your money where your mouth was?"

See, malraux, the difference b/t you - a charlatan - and moi - me - is that I DON'T KNOW precisely when a certain event will happen in the future. Like Dow 11,000. You want me to say, with precision, that x will happen on y at z hours. Can't do it.

So - do you apologize for the 11,000 Dow comment?

"that totally skews the medium"

"Median," but the comment is correct. Your "bet," mon malraux, was and is unsustainable.

"So. $1,500. "April 9, 2010: prices down 50%. To make it easy, take the West Village. Current median psf: $1,633. $800 on April 9, 2010." Your words, verbatim. In, or Out?"

In for the 50%, out for the exact date and time. K?

Or do you not apologize for the Dow 11,000 comment on 12/31/07, when it happened today, 7/15/08, nary 150 days later?

Its true... now that the dow has hit 11k, we're talking foot in mouth city....

BTW - again - in for 50% total decline, not in median and mean values, but using the Case-Shiller method on the same unit. Otherwise, the mix of units for sale skews the numbers.

But not on x date at y time.

Oh! I forgot! What about apologizing for your analysis about what Case-Shiller said about Prime Manhattan Real Estate, when in fact it says nothing since it only includes single-family homes, thus ignoring 99.1% of Manhattan property?

"And, if nothing else, when everyone is saying "you should get into X", its usually the time to get out of it..."

And the opposite is true as well.

Absolutely... meaning now would be the time to get into the stock market (more people saying get out in years - a broker friend said he's seen more outflows this week then in YEARS)...

And, nationwide, now might be the time to get into the RE market because everyone is running screaming from it.

But, Manhttan, no... we're nowhere near capitulation. That there are still arguments...means we have some time to go before one should even consider putting in a cent.

good point- actually excellent point.

once the arguments die down, then we should start the buying.

and we certainly have a while to go with the arguing...

might be time to pick up a reasonable vacation/retirement home in Phoenix

Phoenix?

Have you ever been?

Yuck.

weren't there tons of people here saying that renting is better than buying because you could use your down payment in the stock market? That would have been genius over the past year. Or 3 years frankly.

TimmyH, there was a lot of talk by myself saying that renting is better than buying because you could use your downpayment in Gold- not the stock market.

I would have never recommended putting your downpayment into the stock market. If you had put it into Gold last year as I advised, your would have not only protected your assets- you would have made money.

Timkins, there are lots of places within the stock market rather than the headline numbers where you could make a fortune.

Golly gee, you could have made 24% on BAC since yesterday if you'd had the wherewithal.

talk by you or by yourself?

Stevejhx hates BAC. Remember?

Why would someone "invest" in gold. Gold is merely a store of value.

Making 24% on BAC, for 1 day, very impressive yes. Now $22. was over $50 within the past year.

TimmyH, you "invest" in Gold because as it's "store of value" attribute becomes more and more "in demand", and given that its supply is relatively static, it's price in terms of fiat currencies appreciates.

And that is top of the inflationary appreciation it gets by default from fiat currency debasement. Gold has appreciated in all currencies, not just one or two.

fiat currency ... you truly are a treat

"stevejhx hates BAC. Remember?"

I hate the company, but I'll buy any stock that makes money.

"Gold is merely a store of value."

Gold is NOT a store of value. Gold has no more value than mercury.

"Now $22. was over $50 within the past year."

I know - I sold it at $63. And Merrill at $75.

"fiat currency ... you truly are a treat"

All currencies are fiats. And so is gold. It's only worth what somebody will pay you for it in cows.

Anyone here been paid in cows recently?

You could be paid in cows. Or, if you trade commodities, pork bellies.

Deride if you like, but know the fundamentals.

Have you been paid in cows?
Is that some sort of bestiality thing you have going on?

Timkins, if I lived in Appalachia and somebody offered me the option of being paid with two cows or a Hummer, I'd pick the cows.

Don't you live in a rental building in Appalachia? Which is lower?

Oh great- we got another winner here with TimmyH folks. Straight to the ignore button. =p

Goldie on the other hand, I do respect (even though he/she likes to poke fun at me) because of the level of intelligence demonstrated. We apparently just have differing views about Fannie/Freddie et al. Same with the JuiceMan and LIC. And of course, our dear friend spunky. BFF. =D

Who's goldie?

and i present... Goldie

http://www.streeteasy.com/nyc/talk/discussion/4277-why-fanniefreddie-is-so-stupid-but-will-probably-happen

The feeling is mutual MMAfia, I'm glad to see we can keep things lighthearted.

lol!