Will the proposed Federal bailout Dodd and Schumer hurt us who have waited?

NEW -> Contingent Buyer Assistance Program
<p>theBigD,</p>

<p>I 50% disagree with your last statement. The stock broker in 2000 were promoting margin buying and borrow money buying. I do not think we are nearly that aggressive now.</p>
 
<p>IR,</p>

<p>You are right. I was not thinking about the loan brokers. Stated income is crucial for self-employed folks (people who own S-corp or like) where their income is after expenses. Neg Arm is just plain an unethical proposal.</p>
 
<p>NIR - Don't you love how we have broken down your name? Honestly I do not want you to leave this blog or feel as if you are kicked out but I am going to hard press you to answer my questions. I really do believe you add a bull's perspective to this blog and I agree it is needed. To be honest if we were to ever meet in person I am sure that we would get along very well. You would also see that I am a much more optimistic person than how my posts are. So please do not feel as if I am attacking you and do not take it personally.</p>

<p>1. Since OC has always averaged about 11% for con/RE/Finance/architecture type jobs. Do you feel that this could pose a problem for OC's job market when we are above 14%?</p>

<p>2. I agree with you that OC's job market is diverse. However since 2002 40% plus of the job growth has been in the RE industry. Does this pose a problem and how can it be justified? </p>

<p>2a. Since the industry has slowed where will these people transition to? Is there an industry that you know of that can compensate as well this industry judging by the past? I know that I have made the transition and it will be a few more years before I see the same compensation and possibly more. This means that at least from me revenue has been lost and I know many others that are in the same boat. Just a 10% loss in income can have a very large impact on OC's economy when the majority of job growth has been this sector. Please do not think of me as someone who was in tha business and is now bitter. I know I could have continued to do well in the business but I truly felt that my talents could excel in other ways.</p>

<p>3. If you notice in the spread sheet that I posted the amount of civilian labor force decreased from 1990 and did not see the same level until it was above that in 1997. Since we are losing the demographic of 25-35 year olds where is this going to be made up from? This population decrease is not a good sign and can been seen as a problem from the reports at Chapman from CEOs and business owners that the cost of living is what holds them back from finding talented workers willing to come here to work. </p>

<p>4. As history tells me it is about affordability that was the problem. If you like I can show you some Register articles from the 90s that show this was a major issue. This is what I believe was the reason for the down market. I was here in the 90s and I remember all too well how people in the industry struggled.</p>

<p>5. If the majority of job growth since 2002 has been education, lower payng healthcare and a portion being "professional" services (which could be tied to the RE industry, think IT guys setting up cool systems for RE agents and mortgage brokers.) How will these people afford a home in OC?</p>

<p>6. If sales are down 30% from 2005 to 2006 and currently we are down 25% from 2006 what about those escrow, title, appraisal, inspection and other various jobs tied to the industry? Where or what industry will they find jobs?</p>

<p>I know I sound like such a bear but I lived here in the 90s and I saw my dad lose his job. I saw my best friend's dad lose his job and unfortunately lose their house because they lived beyond their means because they believed they were always on the up and up. They didn't lose their jobs because of aerospace. They lost there jobs because the local economy was gone because of the lack of affordabilty. Seriously look at my blog or go to the Register and search their archives and you will see well before the job losses happened it was affordability that caused the problem. Add to the fact that aerospace lost jobs only made it worse. But when a highly talented group of people leave because they no longer feel as if they can afford to live here and live the life style they desire the economy suffers especially when they can't recruit the same talented people to come here. Very few other major metropolitian areas suffered like we did in the 90s. I have dug deep into what happened in the 90s and it wasn't the manufacturing jobs but the fact that the local economy was dependent on construction, RE, finance and other jobs related to it and most importantly affordability. My mom sees the same things she saw in the 90s and I can see the concern in her face when she reads the data and not just the headlines. I encourage you to do your research and to see for yourself the same optimistic lines I hear from you are the same as back then.</p>

<p>Most importantly I want for you to answer my questions with some very sound reasoning and data to back it up. The sales tactic of not answering and diverting the subject or pointing out highlights doesn't work with me. It's time for you to give us some solid answers with data that backs it up. </p>
 
<p>graphrix,</p>

<p>I admit getting my own acronym brought a big smile to my face. Thank you.</p>

<p>I was around in the 90's job loses. It was very ugly. There were unemployment clubs everywhere meeting every day and evening. Everyone I knew had friends or family members unemployed. Are you seeing this NOW? People survived quickly, many good things came out, and these people are better of today. I know not see the press screaming "Unemployment"</p>

<p>High paying jobs in RE? You have got to be kidding me. Why don't you become a real estate agent or a loan officer and tell me if money just rolling in. Just asked the RE sale people how they live and you will know. I happen to be one of the successful ones, however, I belong to the minority group and can't even brag about my income.</p>

<p>When construction was in full force, good luck getting a handyman talking to you. Now they are available and is such a relief.</p>

<p>DATA, you want DATA, I do not have DATA. What good DATA are for if we do not even know the critical parameters, especially when it comes to buying a home, it's a emotional decision . </p>

<p>I will tell you one thing, Greenspan had all the DATA in the world and that did not help him to control the economy the way he wanted! Greenspan spoke with data in such a monotone!!!! Everyone was trying to extract what the heck he wanted to say. Me, I just watched his facial expression and his body posture to try to understand him.</p>

<p>Afordability issues! Are you sure? Do people not able to buy because they can't or they don't? Just ask yourself. I think the key to be able to afford a home is being frugal. Who wants to be frugal? You would have to learn to be frugal.</p>

<p>I would love to meet you one day. Not sure about getting along though; I am a female.</p>

<p>But, I do enjoy and appreciate reading your posts very much. I should read more about politics and business to gain more data knowledge now that you mention you want data from me.</p>
 
<p>NIR - You still didn't answer my questions from the previous post. I really would like to hear your opinion even if ou do not have an data.</p>

<p>No I am not seeing unemployment numbers like the 90s and really I hope we don't. The point I was making was that aside from RE industry related jobs the growth has come in lower paying jobs. Also RE agents and loan officers can make a lot of money but you are correct there are many do not. There are other jobs though in the industry that are being lost. Take an senior underwriter over at New Century that makes $70-$100k with bonuses. Where are they going to find a job? The choices they have for another lender is very limited because subprime lenders are not hiring. Could the take a job at an A paper lender for a 50% cut in salary? Even if they did get an interview the lender would be hesitant because they do not perceive them as a real underwriter since they approved bad loans. There are funders, processors, underwriting managers, regional managers and various other positions that are now gone and there are not many openings either. Another sore spot are the people who worked for the homebuilders. I know of several VPs that are looking for work. These people are paid very well and one VP I know made $500k in bonus income in 2004 and this person was in charge of a very large project that will be talked about more on this blog in the coming years. This particular builder has reduced staff by about 75%.</p>

<p>A home purchase is not just an emotional decision but a financial decision. Whether you are frugal or not if people cannot afford to buy they shouldn't. This is where the insanity of these prices doesn't make sense. Irvinerenter would you care to add anything here?</p>

<p>I think you should start reading about the economy and the data that comes out with it. It can only enhance your professionalism and you would be perceived even more as a trusted advisor. The reason I am an ubernerd with the data is because I subscribe to mortgagemarketguide.com. When I was in the business I wanted to know what, why, how and when interest rates were going to move. This helped me a great deal with my clients and most of the other LOs came to me for advice on rates. The ones who didn't ended up buying me lunch quite a bit.</p>

<p>I am not sure if your comment about you being female and us not getting along was to be snide or not. However I do have several female friends even if it seems I am posting a lot. I just don't sleep as much as I should.</p>

<p>Almon - I was still awake until around 4ish because I was having problems with my laptop and I was trying to fix it. Unfortunately I didn't and the 3 hours of sleep I got made for a very long day. </p>
 
<p>NIR - I encourage you to read this: <a href="http://www.bloomberg.com/apps/news?pid=20601103&sid=aonDdgoWQ.pg">http://www.bloomberg.com/apps/news?pid=20601103&sid=aonDdgoWQ.pg</a> Ken Heebner runs CGM funds and has had an amazing record. Kiplinger has rated his funds year after year at the top. I am not making any investment recommendation but I have personally been rewarded investing in his funds. You should check out his track record and I mentioned his focus fund in one of the posts above. Oh I really should be in bed right now.</p>
 
<p>g,</p>

<p>Do you like the acronym I came up for you? I do. Thank you for the article. I like the way these guys predict numbers (I would too); they predit something that already happened, NAR does the same thing. Prices now is at the 2004 level, it's a no brainer to predict such. </p>

<p>I am very busy with sellings and listings in the last 3 weeks. No puffing here, just ask yourself how you feel now and that is how everyone is feeling.</p>

<p>I hope you can sleep more. To achieve this, you may want to keep your mind clear of DATA! Try it!</p>
 
I do have to agree with nirvinerelator that, for many people, buying a home is more of an emotional decision. Home builders prey on this mentality and advertise with well-furnished model homes and flyers with pictures of happy couples/families. They're not trying to sell an "asset" that makes financial sense, they're selling a "lifestyle dream". Sadly, most of the newer developments don't have nearly as many amendities as the older tracts (i.e. woodbridge). Buyers today pay more for less, and many are tempted into using toxic loans to afford it.





As for gold, stocks, and other investments, I do keep some gold & silver maple leafs & eagles, but wouldn't consider them as a primary investment.
 
a couple of thoughts on this current discussion:





stocks, bonds, gold, cash, RE, etc...


there's pros and cons to all of them so it's really not worth debating and picking each apart. if there was a perfect investment... well then everyone would buy it and drive the price up or smart arbitragers would swoop in and pick it apart. this is why modern portfolio theory advocates diversifying and i think most of us agree with that idea.





data! yes, homebuying is an emotional decision for each individual person. across hundreds and thousands of observations, you can "extract" emotion and isolate real trends and patterns of behavior. which is not to say that everything can be answered with numbers since we only have past history to rely on. just like every investment prospectus (at least any legitimate one) will say, "past performance is not indicative of future performance." actually, the only time i've heard that phrase used otherwise is in RE. "real estate ALWAYS goes up!"





local economy -- a good way to gauge the local economy is to look at office occupancy. maguire properties purchased a slew of la and oc properties from the former EOP portfolio. these were some of the most prominent commercial properties in oc. as it turns out, those properties were chock full of subprime lenders. city plaza (at the block of orange) was of course anchored by ameriquest. maguire owns the bldg that new century is headquarted and also that new glass tower right off the 405 at park place is there's as well. it was supposed to be 60% occupied by new. oops! down by spectrum off the 405 you will see 2 new towers almost completed. these are TIC's and they have not gotten any significant tenants signed yet either. if there are other booming industries that are going to absorb all those RE jobs and office space, we certainly haven't seen it yet.
 
<p><em>new glass tower right off the 405 at park place is there's as well.</em> </p>

<p>Not trying to derail this thread, but the fiance and I were wondering what this building was for? Commercial only?</p>
 
<p>g,</p>

<p>Yeah! That's it! I trully spent 30 minutes!</p>

<p>Anyway to make it short. I think the subprime and the housing booms were seasonal, so to speak; therefore, everyone jumped in it came from some where before. They can just fall back.</p>

<p>I know the subprime folks were bragging about collecting $20K per loan. I was just amazed! I was too busy bailing out the subprime homeowners by unloading their homes. Their rates were 8% for 2 years, then 13+% after 2 years. You wonder why we have affordability issue?</p>

<p>I know someone at New Century that got fired because he saw all the frauds going on and could not be part of it. And you are worry? Would unemployed criminals be an issue for the society?</p>
 
<em>"therefore, everyone jumped in it came from some where before. They can just fall back.</em><em>"





</em>Can you please further explain what you mean by they came from somewhere and they can just fall back?
 
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