The Housing Chronicles Blog: Comments from my post at LALand, Part II

Friday, April 11, 2008

Comments from my post at LALand, Part II

More comments from my guest blog post yesterday at LALand:


I thought this one definitely summed it up -

After reading the comments all that I could think of was lions, very hungry lions and Patrick Duffy. Did you warn him of what was to come. Will he read the comments.
Thanks for offering the lions a meal. They enjoyed it.


On your first point, you are being naive. Many public builders had divisions that were writing mortgages (Centex, and Lennar, for example). If they did not thoroughly investigate the lendees, that is really their problem and they have no excuse.

Also, excuse me if I have no sympathy for the builders on another point - They TURNED THEIR BACK ON THE AMERICAN CONSTRUCTION WORKER. I have spoken to many people who used to make a nice living working construction for houses. Those jobs are now of the 7 dollar an hour variety and are performed nearly exclusively by illegal immigrant labor. Now these American workers don't have the jobs they were skilled at, and the American government gets no income tax from these under-the-table laborers. Oh, and on top of that, all of the board members paid themselves handsomely as well as took generous amounts of stock options. If these companies need help, then they should have a private offering and the well paid board members can reinvest in their dreary business.


"It’s because of the issues with the credit market that
nonspeculators can’t sell their homes either."

Patrick Duffy makes the argument for "good" vs "bad" builders.
Dumb pity play. It doesn't matter what their motives were,
they were all chasing the inflated price of the market making
higher and higher profits per square foot of building. Now they
simply need to sell the unsold square footage in its traditional
profit range.

The price of building a home between
2000 and 2007 didn't increase much more the
general inflation. If builders chased the price of
land (which many did) then they were taking risks
that weren't prudent. They can now sell for the
actual cost per sq.foot and the actual value of land
and accept no profit or even a loss. Why is this so
difficult to understand? People lose money in
investments, everyday. This is exactly the same
scenario, just on a bigger scale. I say, let all markets
correct and only pour on Fed liquid to put out resulting
fires, not threatened ones. And when the trouble
actually hits, bailout those affected who had no part in
this RE run-up. Let the speculators get on the back
of the line.

Posted by: firesale | April 10, 2008 at 07:43 PM

We should bail out everybody who has ever made a bad decision, and make it retroactive to, say, the 1960s when a lot of bad decisions were made. The first thing I want is reparations for the useless humanities degree I earned. And I'd like to be bailed out for the countless bad investment decisions I've made over the past 20 years. I mean, why did I ever sell Intel, Dell and Microsoft back when they were in single digits? Why was I forced to do that? It was economic forces beyond my control that brought me to my sorry state. Oh, yeah, I'd like a bailout for yesterday's unfortunate decision to order the chicken marsala instead of the Kobe beef.

Posted by: Zeon | April 11, 2008 at 12:02 PM

ah, ah, ah BULLSH!T!!!!!!! Duffy calls out all the anti-bailout guys such as Gross for the need to "shoot (sic) from the brain rather than the hip" and states these comments are lacking in "rational discourse". This guy is so arrogant it makes me choke. Who is irrational?

Greed, ignorance, stupidity, any way you paint it, it is still not the obligation of the taxpayer to make up for any one of those pitfalls of private commerce.

And tell me again, how LTCM, the S&L bailout or the airlines are analogous to home builders? How is the failure of the weakest home builders going to create a cascade effect into a downward spiral for the US economy? I don't think so. These home builders can't build and sell any more homes regardless of a bailout.

All this would be doing is moving losses from private industry to ME! I got enough of my own losses, they can keep theirs.

Posted by: pathetic | April 11, 2008 at 12:32 PM


Funny... I don't remember the home builders paying extra taxes when the sales pace and profits were breaking all previous records. If we're going to give them a tax break now, that should come with a caveat that we get to tax the hell out of them they start feeding a bubble and destabilizing the entire economy. It's only fair.

Posted by: NoWayinLA | April 11, 2008 at 02:40 PM


Mr Duffy, to use a basketball term, you need to come strong in this house. That was some weak "stuff" you brought in here and predictably you are getting it swatted back in your face.

Posted by: Digitalian | April 11, 2008 at 09:49 AM


I did, however, get one comment in support:

"It’s because of the issues with the credit market that nonspeculators can’t sell their homes either..." Patrick is right about this. The market stopped dead in August because lenders stopped making loans. Now that lending has picked up somewhat, so has sales activity.

There is a simple reason why builders build homes: consumer demand. Whether those consumers are flippers or not, and even if the reasons for the demand weren't sound, there is no denying that there has been a huge demand, fed by easy credit, that has lead to lots of new homes.

1 comment:

reetajenet said...

Hollywood was our base camp for the beginning of our whirlwind tour of the Western bit of America. At the end of our first day in LA, we drove over to the Beverly Hills/Rodeo Drive area, parked and walked around.