Truth Behind The Housing Bubble – Is Froth

Jolie tipped to become Bond girl

Actress Angelina Jolie is being tipped to become a Bond girl in the upcoming movie in the franchise, 'Casino Royale'.
According to Ananova.com, Jolie is reportedly in talks to play the part of Vesper Lynd, a Russian double-agent.
actresses who were reported to be interested in starring in 'Casino Royale' include Jessica Alba, Uma Thurman and Rachel Stevens.
Daniel Craig was announced as the next actor to play James Bond at a press conference in London last Friday.
Craig and Jolie previously starred opposite each other in 'Lara Croft: Tomb Raider'.

Truth Behind The Housing Bubble – Is Froth

A couple of weeks back, I was having lunch with some real estate industry folks when one of them, a developer, asked me why the media were so focused on the "bubble."
"You know," he said, "the more you talk about something, the more likely it is to become a self-fulfilling prophecy." The developer quickly added that he did not believe in the bubble.
That afternoon, I was channel-surfing and landed on Fox News, where a few of the shouting heads were suggesting that the bubble was, in fact, simply a creation of the media.
I'm not sure who these experts were - the cable news shows must be collaring people in suits at bus stops to keep their schedules filled. I watched for the whole six minutes of discussion and still couldn't figure out how they came to the media-conspiracy conclusion. Since they were on TV, where everything is right and true all the time, they probably knew what they were talking about.
A couple of days later, a broker I know faxed me something about an entrepreneur who had been making lots of money with his "Mr. Housing Bubble" T-shirt. Somewhere down the page was a quote by a real estate expert I know who contended that the bubble idea was invented by stockbrokers trying to scare real estate investors back into the stock market.
At first, I thought it was really funny, until I repeated it to two people whom I consider so level-headed that I'd be willing to balance glassware on them. Both replied that they wouldn't be surprised if that were true.
Think of a problem, and there's a matching conspiracy theory. Look at the number of people who thought "The X-Files'' was fact-based, who believe that the folks on "Gilligan's Island'' remain stranded, and - well, you name the difficulty and there's got to be someone or some group causing it.
Have the stockbrokers been influencing the media to fabricate a bubble? You can believe it or not. I'll admit I don't, not being a big believer in conspiracies. But I promise that if I'm wrong, I'll be the first to acknowledge it.
No matter how much we try to look at residential real estate as a national phenomenon, it remains local, or at the most regional. California and the Middle Atlantic are both on coasts, but there are different economic and social factors affecting how and where housing is built, bought and sold there.
It's not the same everywhere.
Between 1995 and 2000, the dot-com boom propelled residential development in San Francisco. Vacant buildings either became residential lofts or housed dot-com companies, which gave the landlords - who spent their own money retrofitting warehouses and factories to the needs of computer geekdom - stock options instead of rent.
Few of these Web creatures made money, a flaw that finally proved fatal when, in April 2000, investors looking for some return began pulling their money out of tech stocks. It also meant there were a lot of empty buildings and landlords holding a lot of worthless paper.
There might have been some good news for the artists and others whom the dot-coms had displaced had they been able to reclaim their former homes. But the tech boom had pushed housing prices beyond reach. And prices have increased since. Although some estimates are that 300,000 jobs have been lost in the Bay Area since 2000, wages for those that remained were high enough, and interest rates low enough, to sustain high prices.
The Office of Federal Housing Enterprise Oversight has reported a "deceleration" of housing-price increases nationwide. That means housing prices continue to increase, but not at the same pace as last year or 2003.
Harvard's Joint Center for Housing Studies doubts that the bubble will burst, noting that the housing boom is now 13 years old while decrying the fact that the boom has made home ownership unaffordable for an increasing number of Americans.
Economist Dean Baker is a bubble advocate. When the bubble bursts, according to excerpts from his "Housing Bubble Fact Sheet" reported by Rismedia, the collapse will have a larger impact than the stock-bubble collapse.
Why? Because housing wealth is far more evenly distributed and the bursting bubble likely will throw the economy into a recession and require a federal bailout of the mortgage market. It could lead to a loss of 3.6 to 4.5 percentage points of gross domestic product.
Given how far out of line house prices have grown from fundamentals, Baker said, there is no way to avoid enormous economic damage when the bubble collapses. However, the sooner house prices drop, the less damage there will be.
Or not.