Ask A Super Genius - Housing Bubble

[FrozenOut]

Part 1

Part 2

Part 3

Part 4

[yaakov]

they're brilliant videos.

Its amazing really that we ever delluded ourselves into thinking houses were this wonderful investment.

[Smell the Fear]

He is a smart guy, he is talking sense.

BUT why do so many Americans have to conform to the a-hole jock stereotype?

[Trixta]

He seems a bit mad he didnt jump on the real estate bandwagon earlier.

Also, a rise to 262 from a benchmark of 100 isnt a 262% rise. I started taking everything with a pinch of salt from then.

[BoomBoom]

Super geniuses aren't what they were. Proof were it needed that IQ tests demonstrate nothing more conclusive than an aptitude for IQ tests. As a sigma society member (Mensa with bells on) I can report that many people with high IQs understand very little about how the economy really works, or why the HPI/credit bubble/etc cannot continue.

[BandWagon]

The bank DOESNT WIN no matter what. They are not equipped to own property. For each one they lose like that, they have to make dozens more to recoup. What if the property is trashed?

GREEDY ASSED BORROWERS did this to themselves

I think you have to look at all sides of the story. People were borrowing too much because they thought house prices would only go up and they'd get rich.

Mortgage brokers sold mortgages because they wanted their commissions, estate agents sold over-valued houses because they could.

Mortgage companies faciliated the debt because it was easy to securitise and move off their balance sheets and they could get the income without the risk.

Investment banks created CDO's because the margins were great and there was enormous demand for the product.

Ratings companies put AAA stickers on products created by the investment banks. "He who pays the piper..."

And at the end of the chain pension funds and investors were buying AAA rated securities that payed well above prevailing rates because they couldn't lose, and hedge funds leveraged to invest in AAA rated CDO's that payed 9%, until the defaults began.

To me the real problems came about from the buyers of debt not truly understanding the risks they were buying.

Prudent risk management went out the window.

[lets get it right]

Given the lunatic nature of the USA's legal system - how long before people start suing realtors and brokers?

"He told me it was a sure-fire investment"

"He told me to lie about my salary"

"I am seeking punitive damages of $10 million because he took the American dream away from me."

[dredwerker]

He seems a bit mad he didnt jump on the real estate bandwagon earlier.

Also, a rise to 262 from a benchmark of 100 isnt a 262% rise. I started taking everything with a pinch of salt from then.

Is it simply a 162% rise then?

[Nationalist]

That "super-genius" isn't so clever. He seems to think that if the housing index goes from 100 to 262 it's gone up by 262 percent! (Nope, it's gone up by 162 percent.)