Shoot the Messenger
Mike "Mish" Shedlock
April 17, 2006
Mike Morgan is telling me that
his email basket is filled up with responses from the Wall Street
Journal article Hot Homes Get Cold In Once-Booming Markets Such
as the Florida Coast, Housing Sales Languish. April 12, 2006;
Page B1
I was pleased to beat the WSJ
to that story by several days in The
dreaded "D" word surfaces Sunday, April 9, 2006.
Here is the latest report from
Mike Morgan:
I've received a variety of
emails and voice mails from people all over the United States
today in response to a very minor mention of my name in the WSJ.
75% of the communications are people that think I am a sleaze
for selling junk to my clients. Little did they know, my clients
are fine. We warned about this more than a year ago. Anyway,
take a look at the email I received below. If that doesn't drive
home the seriousness of what is just only beginning to unravel,
I will send you a dozen more emails I received . . . like the
email I received from the Dad of a young wife that is getting
a divorce because the husband lost it all at the craps table
in Vegas strike that I meant to say the husband lost
it all buying flip properties in Vegas. By the way. She has 2
young babies and is moving back home with Mom and Dad. Or the
email from the couple (68 and 70) that were getting ready to
retire to Florida in 3 years. Guess what? They'll retire, but
the husband lost so much money buying straddled foreign exchange
derivatives on Italian lira strike that I mean to
say five spec condos in Naples (Florida) to make some extra money
to buy a special retirement home, that they are not going to
retire in the style they thought. They still haven't sold the
condos, so they are in for a big surprise. As he put it in the
email, the 40 years of trust built up in that marriage has been
wiped out. He wanted to know what I could do to help him. I'm
not the Easter Bunny.
I bought an $850,000 a year
ago on a little less than a quarter acre of land and with barely
2000 sq ft. under air. I made the "wise" choice to
purchase it with no money down! This home was just on the threshold
of my affordability... even with the wife working. Oh did I mention
I have an ARM mortgagte... so now my payments are going up up
up! S@@@... we are paying more for the same house... but not
building any more equity! This sucks! Then the wife comes home
after just sending the daughter to the orthodontist to get her
teeth fixed, and declares ... "Tom, did you see that the
Klevelands just put their house up for sale?" "No,
I din't, I thought they really loved the area"... so with
a little digging, I find that they are asking $800,000 for their
home... and it is just about the equivalent to ours. Then your
mind races... what is going on? Then you realize 3 months latter
that their house is still up for sale, with a neon light
above the realtor sign, that says REDUCED (to $750,000)... not
only that, but there are now 20 other for sale signs up in your
neighborhood... THAT IS WHEN THE SHOCKING REALITY SETS IN...
you will never get that $850,000 out of your house, and all the
interest you have been paying is just that... a fart in the wind...
and sallys orthodontist bills are pilling up, and our credit
card is maxed from all the new furnishings we decorated our $850K
home with... not to mention that there are rumors at work, that
the company is sending more jobs to India, to save a buck, and
you panic. Now I am staring aimlessly into my newly adjusted
mortgage bill thinking, "HOW THE F@@@ DID I GET MYSELF INTO
THIS". So I will sell my useless home at a loss..upside
down and all, move to a region with cheaper homes, maybe a "fixer
upper" take a lower paying job with a commute and sell the
sports car and the boat, so I can with a clear conscience look
at little Sally with a mouth full of wires and crooked teeth
and smile, all the while thinking, ok, now how the f@@@ am I
going to pay for her college! I was one f@@@@@@@ idiot... I hope
no one besides my wife ever finds out. This has just about destroyed
my marriage. Oh, one more thing. Did I mention I bought another
home in here as an investment flip that we closed on four months
ago. I can't sell it for what I paid. I can't even find a renter.
I haven't had a showing in more than 2 weeks.
If you want to either buy or
sell in Florida and want to know what is really happening, give
Morgan Florida a call.
Stories like those are just
starting. There will be more and more of them, and more than
likely those affected will blame the media and messengers like
Morgan. I have proof of that already. Here is a snip from the
WSJ article above:
Some Floridians blame the
media and even Wall Street for scaring people away. Mr. Linsley
recalled a headline in a local paper declaring that the local
housing market was overvalued. The headline type was so bold
that it looked as if the nation had just declared war. "The
media is killing the investors," Mr. Linsley says.
To Mr. Linsley I have some
questions for you.
- Where were your complaints
when the media was reporting about people like yourself snapping
up 2 and 3 units at a time after a multi year boom in which prices
had already doubled?
.
- Where were your complaints
when the media reported that some people were camping out all
night just to get in line to buy a condo?
.
- Was the media not reporting
on that too?
.
- Shouldn't that have been some
sort of sign of a top?
Perhaps Mr. Linsley if you
want to know who is to blame for the crash, then I have four
answers for you, one in the form of a question:
1. The Fed by slashing interest
rates too far.
2. Fannie Mae and loose lending
standards everywhere.
3. Congressional policies to
make housing affordable. Those programs are now backfiring.
4. I suggest you look in a
mirror and ask yourself "What the heck was I doing fueling
a bubble like that by buying three houses at the peak of insanity?'
The Fed and Fannie Mae and
lending standards provided the money, but you Mr. Linsley pulled
the trigger. I have no doubt that sometime down the road when
bankruptcies start soaring, there will be a Congressional investigation
that ends up blaming everyone but those responsible.
To everyone: On behalf of the
Easter Bunny, enjoy the holidays.
April 13, 2006
Mike Shedlock "Mish"
email: Mish
http://globaleconomicanalysis.blogspot.com/
321gold Inc
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