Reply #5: Nice nickname [View All]

[PurityOfEssence]

Yeah, I remember that too. It's just crazy what people are doing and what the values are these days. We sold our old place in East Hollywood and moved to Silver Lake (about a mile and a half away) at the end of '03, and scalped as we got at that time, things have just gone nuts.

An 891 square foot two-bedroom shack on the other side of this block went on the market about two months ago and was snapped up immediately. Mind you, it has a nice view, but no front yard and only a smallish one down below in back. It was listed at $659K, and I'm pretty sure they got at least that.

People we know are doing ARMs (insane, since rates can only go up) and some are doing no-down, interest-only loans. A little bit of disruption in rates and the job market, and there's going to be an awful lot of pain.

These maniacs are looting the past (by not keeping the infrastructure up) and looting the future by piling on huge debt. The only thing that keeps it from looking like the disaster it is is the over-inflation of housing values. It's this magic money that's sustaining what consumer spending there is, and when everyone's tapped out, there will be nothing left. There are very few adequately-paying middle class jobs anymore, and all basic costs are going up.

It's like the steamboat race in the old W.C. Fields movie "Tillie and Gus" where they run out of fuel and start tearing apart the superstructure to feed the boiler; as they cross the finish line, there's little left but the hull. We're scavenging and cannibalizing everything and everyone in society so we can have one last flaming joyride. It's like being in an overcrowded car of joyous partiers laughing at the wild antics of their drunk driver, and nobody seems to see the brick wall.

("Tillie and Gus" was directed by Francis Martin, and written by Walter DeLeon, Ray Harris, Rupert Hughes, Grover Jones, Francis Martin and William Slavens McNutt.)