Saturday, August 25, 2007

Saturday Morning Run

Monday, August 13, 2007

Economics 101 -- take your lumps

Bonddad breaks down whats happened and what is happening with the markets. My interest started when I looked at housing prices and peaked when i saw the clip above.

Taking to cuz yesterday he brought up the term "moral hazard". The idea is that if you find yourself bailed out from a bad place after making a risky decision that you are only going to take greater and greater risks until everything falls apart. Though, until that happens everything is puppy dogs, rainbows, and icecream. Funny how lawyers are familiar with this term?

My man barry over at big picture has more on this concept.

So, if the fed drops enough money on the markets through either an interest rate drop or an actual drop of a bunch of money many people this thing will be easily solved.

My man Bonddad thinks, and I think kentistan agrees, this is not an effective solution.
Until more information is available on the scale of exposure to complex debt derivatives created in the U.S. subprime market and sold worldwide, analysts said it will be hard to restore a lasting investor calm.

Urbandigs think that the most likely outcome of this whole thing will be a temporary flatening of manhattan realestate prices.

In short, there are plenty of vultures flying around waiting for Manhattan real estate prices to dip.

Manhattan sure but what about previously fringe areas like Billyburg, LIC, and even the EV? Have these hoods passed the tipping point to be as stable as midtown and the UES, UWS in a nationwide housing slump. I am not so sure, but then again i have been consistently wrong for the past 7 years.

What do you think?