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Ladies And Gentlemen… Dow 25,000!
January 10, 2009 12:14 PM   Subscribe

Ladies And Gentlemen… Dow 25,000! A few years ago, some financial wizards thought the good times would go on and on and on. The mega-market could bring Dow 30,000 or Dow 36,000. Maybe the real estate boom will not bust.
posted by Yakuman (52 comments total) 2 users marked this as a favorite

 
Somewhere, a young man laughs, HA-HA!
posted by stavrogin at 12:18 PM on January 10, 2009


Oh, here he is.
posted by stavrogin at 12:19 PM on January 10, 2009 [2 favorites]


This time... it's different!
posted by PenDevil at 12:25 PM on January 10, 2009 [1 favorite]


I'll see you, and raise you.
posted by terranova at 12:27 PM on January 10, 2009


Somewhere, a young man laughs, HA-HA!

Some one beat you to it.
posted by Blazecock Pileon at 12:45 PM on January 10, 2009


When David Lereah writes a book on it, you know it's over.
posted by PenDevil at 12:47 PM on January 10, 2009


Let's not forget 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. Best customer review: "Customers who bought this item also bought: Your Yugo Will Run Forever and How to Set the Land-Speed Record With It."
posted by enn at 12:50 PM on January 10, 2009 [5 favorites]


“An important book, whether you agree with the author (as I do) that housing will remain an excellent investment or are convinced that home prices are poised for a plunge, David Lereah lays out a compelling vision of housing as a continuing positive investment—and how you can profit from real estate if you already own the home you live in, are looking to move from rental housing to an owner-occupied home, or want to use real estate as an investment.” —DAVID BERSON, CHIEF ECONOMIST, FANNIE MAE
posted by Xurando at 12:54 PM on January 10, 2009 [1 favorite]


enn: "Let's not forget Why the Real Estate Boom Will Not Bust - And How You Can Profit from It..."

You thought there was a chance we'd forget about the last link in the FPP during the first six comments?

Also, a couple of articles and a few books from the dotcom boom? That's an FPP? Deletion reason: LOLHINDSIGHT
posted by Plutor at 12:58 PM on January 10, 2009


That Lereah guy certainly had some form. His previous book was
"The Rules for Growing Rich : Making Money in the New Information Economy", published in 2000.
posted by Skeptic at 12:59 PM on January 10, 2009 [1 favorite]


Ah, now I see that PenDevil had beaten me to it...
posted by Skeptic at 1:00 PM on January 10, 2009


And Plutor, hindsight is not the correct word. A lot of people across the world were perfectly aware that there was a bubble and that it would implode sooner or later. I certainly was, and I'm no economist, nor particularly investment-savvy.

It is thus of historical interest, not to mention cautionary for future generations, to remember all those idiots/crooks who said (not for the first occassion): "But it's different this time!"
posted by Skeptic at 1:07 PM on January 10, 2009 [2 favorites]


On the other hand, there are plenty of people (some on Metafilter) who will happily tell you today that we're in for an unending depression of catastrophic proportions. I wouldn't listen to these people either.

It's almost never as good or as a bad as it looks. Until it is, of course.
posted by Justinian at 1:09 PM on January 10, 2009 [1 favorite]


mmmmm, schadenthreade.
posted by fleetmouse at 1:14 PM on January 10, 2009 [3 favorites]


Realtor Chief Economist: “I spun” (David Lereah)
posted by Xurando at 1:16 PM on January 10, 2009


there are plenty of people (some on Metafilter) who will happily tell you today that we're in for an unending depression of catastrophic proportions.

The economy's going to get better in the short run but the free ride we've been getting for the last 200 years from artificially cheap energy is going to come to an end and we'll be stuck up the creek.
I have no faith in 'science' and 'human ingenuity' coming in, Deus Ex Machina-style, to keep huge numbers of people from starving, either.
posted by dunkadunc at 1:20 PM on January 10, 2009


What I find most surprising is that I haven't heard any stories of people making the big bucks out of this bubble.

Seeing as the only thing the banks/mortgage-brokers checked was your credit score being above a certain number (600-700 FICO), it would've been ridiculously easy to make crazy money. Buy 10-20 properties all at once through different brokers/banks so that the banks wouldn't see each other's loans in your credit report, then sell it for a tidy profit a few months/year later. Instant Millionaire.

In the event that this was undertaken after mid 2007, one would've lost considerable value in the homes, and as long as you bought it in a state that allowed walk-outs (most of the bubble states), you mail all the keys back to the banks and just get a hit on your credit for 7 or so years, without any need to repay the loans.

Either we have a group of shady people really smart at laying low, or everyone that bought houses really did drink the Kool Aid and after they did this, bought even more homes with their profits.
posted by amuseDetachment at 1:21 PM on January 10, 2009


amuseDetatchment, you may be interested in the saga of Casey Serin.
posted by Flunkie at 1:40 PM on January 10, 2009




I fully expect to see Dow 25,000 and 36,000 in my lifetime. Hell, I expect to see it hit 100,000 before I retire.

It was around 800 on the day I was born, a little over 30 years ago, it's doubled 4 times since then (at it's peak). Let's say it doubles twice in the next 15 years-- that's down 32 thousand right there. In 30 years, let's say it doubles 4 times, that's Dow at 128,000.
posted by empath at 1:51 PM on January 10, 2009 [1 favorite]


Short term, the market fluctuates. Long term, it goes up.
posted by empath at 1:52 PM on January 10, 2009


And these books were satires? I for one am not laughing.
posted by pwally at 1:54 PM on January 10, 2009


I gits my corn pone an my 'pinions from the same place I gits my meth. I bumped into Ted Haggard down there last week an he was gittin some corn ponin' too.
posted by PeterMcDermott at 1:58 PM on January 10, 2009


Is it physically possible to build a pile of consumer waste high enough to reach the moon?
posted by Burhanistan at 2:13 PM on January 10, 2009 [4 favorites]


The Long Boom: A History of the Future, 1980 - 2020
By Peter Schwartz and Peter Leyden
Wired Magazine
Jul 1997

We're facing 25 years of prosperity, freedom, and a better environment for the whole world. You got a problem with that?
posted by Auden at 2:52 PM on January 10, 2009


They were all fools but we knew better, right?
posted by Postroad at 2:57 PM on January 10, 2009


They were all fools but we knew better, right?

I've found that even if you know better you still get screwed, so it doesn't really matter.
posted by synaesthetichaze at 3:15 PM on January 10, 2009 [2 favorites]


What I find most surprising is that I haven't heard any stories of people making the big bucks out of this bubble.

Did you not notice all the hype about "flipping houses" in recent years?

Buy 10-20 properties all at once through different brokers/banks so that the banks wouldn't see each other's loans in your credit report, then sell it for a tidy profit a few months/year later. Instant Millionaire.

The minor problem with this is that a pattern of lying on loan applications (for instance the part about the home being a primary resident) will probably be pursued as fraud.
posted by smackfu at 3:17 PM on January 10, 2009


This is why I don't make predictions.
posted by brain_drain at 3:30 PM on January 10, 2009


Wasn't one of the authors of these kind of "the boom won't end" books a McCain economics advisor?!
posted by markkraft at 4:21 PM on January 10, 2009


Ahh... here he is!

Except, of course, he thought the Dow would go to 36,000!
posted by markkraft at 4:24 PM on January 10, 2009


When people were still arguing if there was a housing bubble or not, sometime between late 2005 and mid 2006, I made a list of all the people in Metafilter saying there was no bubble, no crash would come. Some made very good arguments. Sometime in 2007 I killed the laptop where I kept the list, and now I am too lazy to compile it again.

What I am trying to say is that you don't need to be an economist, a published author or to have a dog in the fight to be full of hubris.
posted by dirty lies at 5:18 PM on January 10, 2009


Does anyone have a link to a list of economists who have not been totally discredited by recent events? I suspect it's very short.

Oh, all right. A link to a list of discredited economists with samples of their most foolish statements would be more fun.
posted by shetterly at 5:24 PM on January 10, 2009


dirty lies, we cross-posted!
posted by shetterly at 5:24 PM on January 10, 2009


"The Rules for Growing Rich : Making Money in the New Information Economy", published in 2000.

1) Create a "community weblog"

2) Charge $5 a person to join

3) ?

4) Profits!
posted by ZenMasterThis at 8:12 PM on January 10, 2009


He was a gay and impudent and satirical and delightful young black man -a slave -who daily preached sermons from the top of his master's woodpile, with me for sole audience

What? The US had slaves 50 years ago?
posted by damn dirty ape at 8:46 PM on January 10, 2009


98 used from $0.01.
posted by T.D. Strange at 8:50 PM on January 10, 2009


Does anyone have a link to a list of economists who have not been totally discredited by recent events? I suspect it's very short.

Peter Schiff (youtube channel) is a good place to start. He has predicted more badness to come, and (almost) everybody still denies it.
posted by flif at 10:13 PM on January 10, 2009


"When people were still arguing if there was a housing bubble or not, sometime between late 2005 and mid 2006, I made a list of all the people in Metafilter saying there was no bubble, no crash would come."

Some people, who ought to have known better, were denying it a whole lot later than that...not to mention the ones openly "calling the bottom" in housing and banking last September...
posted by Asparagirl at 10:28 PM on January 10, 2009


I caught a little of Schiff's video, but when he said bubbles die off of their own accord, I realized I don't share his faith.

Among capitalist economists, Robert Reich has an impressive track record.
posted by shetterly at 10:44 PM on January 10, 2009


Just keep in mind, that a good percentage of the people yelling about gloom and doom as far as the eye can see are talking out of their asses, too.

I got in to the market a few months ago for the first time in my life, right as everyone started screaming that the sky was falling. I'm down 5%, but I'm not retiring for the next 20 years, so I'm not particularly worried about it. I just know that I'm buying 'near' the bottom (maybe not 'at' the bottom), and I'm just ignoring my statements for the next 2 years or so.
posted by empath at 10:47 PM on January 10, 2009 [1 favorite]


There is a great video of Schiff being mocked by now-discredited economists here.

And a mildly amusing video of Reich bashing Bush here.
posted by shetterly at 10:49 PM on January 10, 2009


Schiff is kinda full of it, though. The idea that all government can do to help people is be smaller conflicts with a ton of historical examples where interventionism helped greatly.
posted by markkraft at 11:51 PM on January 10, 2009


I have friends now who are convinced this will all blow over, the housing market will recover and more, and we will all get back to "normal" soon (soon meaning 'next couple weeks or so.')
posted by elwoodwiles at 12:44 AM on January 11, 2009


Also, don't try to call the bottom. Buy when you can afford to get in with whatever you can afford to lose.
posted by elwoodwiles at 12:45 AM on January 11, 2009


Short term, the market fluctuates. Long term, it goes up.

How are your investments in Babylonian potteries going? Or Aztec transportation stocks? Or Greenland Viking agricultural production?
posted by alasdair at 7:09 AM on January 11, 2009 [1 favorite]


"The Market", not "a company" or even "an industry".

The world economy is not doomed, and the people saying so are no better than the people calling dow 36,000 in 1999. People are still working, technology is still being advanced, and so on.
posted by empath at 8:12 AM on January 11, 2009


Seems to me the economy is based on adding value to things. How can value be added at an exponential rate indefinitely? Heck, can it even be added at a linear rate indefinitely?

Seems to me that at some point the economy must</I flatten. Nothing grows forever.
posted by five fresh fish at 11:55 AM on January 11, 2009


It hasn't in 10,000 years.
posted by empath at 12:41 PM on January 11, 2009


Wealth comes from labor and energy. As long as we continue to find ways to make labor more efficient or extract more energy from available resources, the economy will grow. Advances in computers, robotics, nuclear, solar, wind energy, etc, should keep 'the economy' growing long into the future. The only thing that would cause it to collapse would be running out of fossil fuels before we develop alternative energy sources, but if that happens, you'll have a lot more to worry about than your stock portfolio.

When the Roman empire collapsed the world economy didn't stand still -- the Arabs and the Chinese (among others) kept advancing technology and commerce forward. Even assuming "The American Empire" collapses -- India, China, Korea and Japan should have no problem picking up the slack. South America has a lot of opportunities for growth as well.
posted by empath at 12:46 PM on January 11, 2009


Even assuming "The American Empire" collapses -- India, China, Korea and Japan should have no problem picking up the slack.

I think it's safer to assume the American Empire has already collapsed. It's just gonna take a while for it to all hit the ground and the dust to clear.
posted by five fresh fish at 5:12 PM on January 11, 2009 [1 favorite]


For instance, empath, you say "wealth comes from labor and energy." The USA has fuck-all for energy reserves, and exported most of its labour. Not only that, but umpteen hundreds trillions have been stolen: by war contractors who don't know where the money went, to massive payouts to the wealthy, to pissing it away on useless war projects that go nowhere, etcetera.

Each and every US citizen is in debt to the world to the tune of, what, a hundred and fifty thousand dollars? Good fucking luck with that, guys.
posted by five fresh fish at 5:15 PM on January 11, 2009 [1 favorite]


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