Super Special Seattle
The topic of whether or not our area is somehow immune to a bubble was suggested by a reader. I made a very similar post back in September, but readership and participation has grown quite a bit since then, so now would be a good time to post it again.
As markets across the country begin to sputter and slow this spring, here in Seattle inventory continues to be low and prices are still climbing. This of course gives fuel to those that argue that the Seattle area is somehow special, and has unique characteristics that will protect it against any real estate price corrections. Although I agree that Seattle is a wonderful place to live (why else would I be here?), I also recognize that every locale has a list of unique characteristics.
However, I am still an open-minded kind of person, and I know full well that there are lots of people around that look at other markets in the country and see a bubble, but think that Seattle is either not in a bubble or has special protection against a bubble bursting (i.e. - price decreases). So, let's hear from you. Does Seattle have a secret ingredient that makes it special and immune to a price correction in real estate (Microsoft, Boeing, "limited supply," special desirability, etc.), or are we just behind the curve?
61 comments:
The economy in Seattle is relatively strong, so that has to be a factor. Although, it's uncertain if it is strong enough to keep the Seattle housing market going.
We're getting a lot of Californians coming up here, but we're also getting a lot of their jobs too. Google is opening up an office in Fremont. And I just read this the other day:
State ranks 4th in nation for venture capital investments
I'd have to say we are both special and behind the RE correction curve.
How are we special? We're the hub of exports. The dollar is only going down, so we'll make out like bandits. When the President of China stops off in your city (on his first trip to the US as President) to visit it's two biggest employers, you can bet that they're sales are only going up. Unfortunately, MS is aggressively offshoring its work, and the other major employers here (WAMU and Boeing) are already quietly dumping people. Yes, it's also very beautiful here, and the weather is very temperate, but it's also rainy and cold for much of the year (which I love, but most hate), and traffic is a f-ing nightmare.
We're also behind the curve:
As billions are lost in Florida, the east coast, Denver, California (okay, basically 80% of the RE value in the country), banks will have to tighten up lending practices.
Also, who's been buying property here lately? California RE is already correcting, so our buyers are going the way of the dodo.
Pretty soon, you'll have nothing but sellers whose monthy mortgage rises from $3K a month to $6K a month (thanks to the brilliant financial move of getting an ARM when rates are at their lowest point in 50 years) looking to unload on the impoverished locals and anyone whose job isn't outsourced to India. This in the midst of rising interest rates and tightening lending.
In short, Seattle will be hit late, and probably not as bad as Florida or Vegas. Nevertheless, it's still going to be a bloodbath.
This is interesting:
Key
Economic Measures Jumped in March
New home sales rose to an annual pace
of 1.21 million in March, up from
1.07 million the month before and 1.2 million in January. Sales were
strongest in the West, where they jumped 35.7 percent, and weakest in
the Northeast, where they rose 4.7 percent.
A 71.1 percent increase in orders for civilian airplanes and related
parts accounted for a big portion of the gain, but the increase in
orders was a robust 2.8 percent excluding the transportation sector,
which can be heavily influenced when customers place orders for planes
with Boeing,
I'm really beginning to think that Meshugy is a real estate agent. Most of the time, s/he is reasonable, but always, there's this fundamental overtone of "buy now!"
If you get your economic data from sources other than Meshugy, Seattle's job market is nothing special. Just like the rest of the country, Seattle has experienced a slight uptick in employment over the last year. Just like the rest of the country, a significant percentage of that increase has been in "housing-related" fields (and that's not good, when the bubble finally pops).
Yes, Google is opening a small office in Fremont (a SMALL office). What Meshugy doesn't mention, is that simultaneously, Adobe has been steadily decreasing the number of people at it's Fremont office. Oh well.
Again and again, people like Meshugy ignore the fundamentals: housing prices in Seattle have been skyrocketing over the last 5 years despite lackluster job growth, population decreases, and an otherwise mediocre economy. Even if you try to justify the boom with today's data, you still have to explain why houses were appreciating >10% YOY in 2003, when the local economy was in the toilet.
Don't kid yourself: the local market has a long way to fall.
Anon 11:58-
Please explain about Microsoft "aggressively outsourscing". Do you have a link? And thanks for the WAMU and Boeing links.
Seattle is not special nor are we behind the curve. The Seattle housing market is not as strong as it was one year ago. that is pretty much all we need to know.
When you draw comparisons, draw between Seattle '05 and Seattle '06.
Not between Phoenix '06 and Seattle '06.
BTW, people in Phoenix also think that their market is "just fine" in general.
Denial runs deep no matter where.
I'm not telling anyone to buy....not unless you can put 20% down and get a 30 year fixed. Even then, I'd be careful.
I'm just following what's going on..that's all. I'm not a real estate agent...I'm a musician.
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The answer is: no there is nothing special.
The one I hear most frequently is "there are more barriers to construction here" so there is limited supply. Yeah, tell that to Japan for the last 15 years.
"The dollar is only going down"
Thanks, didn't realize you had access to perfect future information.
It seems like a matter of faith to both sides of this argument.
The Real Estate Industrial Complex would have you believe there are 100K jobs/year every year for the next 10 years coming to Seattle, and those jobs are going to be the brightest, and most ambitious people in the country. I don't know whose butt that stat came from, but it is all over the REIC like mildew on a vacant house.
The REIC would have you believe that our area is going to be propped by X-Cal equity refugees, while at the same time saying that our economy is entirely self-sufficient.
The other side would have you look at every other bubble in world history and show how each and every one of them thought they were special, and they all imploded. They would have you look at the math and show that the REIC needs a rabbit out of a hat to keep this going.
Time will tell. I keep hearing how it "is different" this time. I think both sides agree that it is definitely "different" this time.
Ask yourself, do you believe the REIC has your best interests in mind when they are trying to sell you a house at historic highs?
Are we super-duper-uber special?
Perhaps...
Boston's market could never go down, due to all the colleges there, and all the land was bought up 300 years ago.
NYC's market could never go down, because it is the economic epicenter of the US, and there is no room to build.
DC's market could never go down because of the explosive growth, and steady paychecks of government.
Florida could never go down due to immigration and snow bird retirements.
San Diego could never go down because of the fantastic weather.
OC could never go down because it is the only decent place to live south of Santa Barbara.
The SF Bay area could never go down due to all the high tech jobs. Never mind that the ORACLE CEO says that San Jose will look like Detroit in 10 years.
Japan could never go down because there is just no land left and they have the second biggest economy in the world. They are net exporters and big savers.
Seattle can never go down, because...
I think Seattle is a special place and I like it a lot.
However, I decided against relocating to Seattle because it was not worth the financial sacrifice.
The last time housing declined seattle didn't experience a hit, mainly becuase housing was cheap here then.
However, in 2007 when the ARM's start resetting and we are in a recession things will change.
Big deal if housing sales are up this month in comparison to last month. Are they up in comparison to this time last year? No.
The "back on markets" have been fascinating for several months now.
The guess is that it's a reflection of sellers who needed to sell before they could buy. Many many sales falling through.
And the "Seattle is special " thing is making me sick too Dukes.
Because it's just not true.
I'm wracking my brains right now trying to think of one place in the whole wide world that is SPECIAL. Lot's of great places out there- all special in their own way.
Cannot think of one that is heads and tails MORE special than the others. The whole idea is BS.
Why are we even TALKING about this?
Dumb post, sorry.
Seattle is behind the curve, and may get hit less because it didn't go up as far as fast (thanks to the horrible job market from 2000-2003).
But there's still the risk of all these IO ARM loans issued here. Seattle ranked in the top 10 cities in 2004 and 1005 for ARM usage - 50 to 75% of the loans issued any given month were ARMS. If Seattle really were special people wouldn't have been taking out short term mortgages.
On the other hand, maybe the reason was because 50% to 70% of the buyers planned on staying in the place only a few years.
Hi Dukes...
How do you get those daily stats from NW MLS?
Thanks,
Mr. Sunshine
Meshugy's "job growth makes for a kevlar housing bubble" isn't justified.
Does anybody remember the last recession in 2001? Remember when Boeing laid off 30,000 employees and it took us much much longer than the rest of the country to recover here than in the rest of the country? China/Asia didn't move a few thousand miles closer via continental drift to insulate us against a U.S. economic downturn.
Maybe our 'robust job growth' is remarkable because we had to pick ourselves up from further down in the mud. Seattle is very very recession susceptable.
How much of this wonderful job growth is just the expansion of the REIC (Real Estate Industrial Complex)? 100K jobs each year? Can we support that many RE agents and mortgage pimps?
Without the REIC, Washington has almost no job growth.
The next time down, HELOC money won't be able to float the retail sector.
I think that Seattle is different from areas that are seeing big increases in inventory in a few ways. Seattle hasn’t seen the same level of speculation that places like Phoenix, Las Vegas, and Florida have seen. Also, Seattle hasn’t hit the affordability ceiling yet (although that is fast approaching) as places like California, Boston, NYC have.
We should remember that, despite some tough talk from regulators, mortgage lenders have yet to do any significant tightening of their lending standards. The greater fools can still get suicide loans, and as long as they believe that prices will continue to inflate, they will probably keep buying and feeding the local mania.
I am actually pulling for increases in asking prices because until the buyers start balking at prices—and inventory correspondingly increases—the bubble will just continue in Seattle. However, when lending standards finally tighten, there isn’t anything that will keep Seattle from being like every other collapsing bubble location.
Maybe the Seattle market is different. From what I hear some people say, it sounds as if there have been very few speculators up here, and new construction is very limited due to zoning laws.
It would be interesting to see data backing these claims up (i.e. how many speculators and building start trends). But I will just take these observations at face value for now.
If you are bored this summer, get the local fishwrap for Bainbridge Island and call on the numerous rental houses that are available. Be sure to ask about the owner, and you will find that most are out-of-state, own multiple properties, and have rarely seen their rental.
There is plenty of speculation. What do you think all that condo construction is all about.
eleua said: "call on the numerous rental houses that are available."
Sure, one would expect that rental properties were owned by investors (who else would own them?). But that doesn't necessarily give a good idea of how rampant speculation has been. It's not as if rental rates are dropping through the floor in the Seattle area. Just see how much $1500 a month can get for a 3 bed/2 bath house in Bellevue: not pretty.
Dukes-
I didn't mean YOUR post was dumb! I meant the "Is Seattle Special ?" post was dumb.
It is Tim I should apologize too. Sort of like the Italians say "Excuse me" before they insult you.
Sorry Tim, hate the post, hate the premise!
Anon 3:07
Seattle shot up all right. It just started earlier than 2000.
Summer of '96 or '97 stuff nearly doubled in Ravenna. Then it just kept going up from there.
By 2004, homes that sold in '95 or '96 for 180K were on the market for 1 million.
Yup. Right around the corner from where I lived. It was a terrifying sight.
I will never understand Americans going ballistic over 25 cents more per gallon of gas but falling all over themselves to buy a house that doubled in price in a year.
My sense is that rich people in Seattle have been over-paying for land with water/mountain views (like Kirkland) and waterfront. Condos are also over-priced, more from speculation. When you look at these markets, you definitely see a slow down and signs of a decrease.
When you look at land prices in areas with the better combo of commute, schools, and crime (the ideal for most families), they appear to be expensive but reasonably valued. For example, a 1/4 acre lot on Mercer Island with no view or waterfront is now ~$600k. The same size lot in the best school districts in CA (eg, Piedmont, Palo Alto, Daratoga, Fremont, San Merino, Palos Verde, Irvine) is usually over a million. You'll be able to justify $600k if you have 2 or more kids for many years. I don't see much of a price decrease for land in the better areas. And these prices set the bar for surrounding areas, which just keeps rippling outwards.
No or little speculation in Seattle ??
That idea is laughable!
Check out all of the empty houses with granite countertops that were bought within a year then back on the market.
They are all over the MLS.
And I've seen several that are definitely the last man in /holding the bag.
Dumps bought in summer of '05 for 575K trying to be unloaded since last Fall for 650K and falling.
You find them without even trying to.
There are some people out there who are getting MAJORLY burned.
Seattle didn't go up as much as places like Bay Area and New York so it is not going to go down as fast either. It is just common sense.
I continue to believe that there is a lot of money in the northwest. When the rich buys second and third homes, those are like cars to them. Chump change. Plus, low unemployment and low rates will keep the home prices from retreating much.
Yeah, what IS up with the granite counter tops? Is that a Seatlle thing? I think they're ugly.
Anon 6:58
So are you operating off the premise that just because a studio in Manhattan costs 1200K that makes Seattle cheap?
A 2 bed in SF costs 900K so Seatle is cheap?
Let me tell you, Seattle's base was a LOT lower than either of those 2 places.
And we could be heading back to where we started.
So yeah, if you want to lose a whole lot of money, go out and buy a house in Seattle for below current SF prices.
But it could possibbly fall back to a place you've never dreamed of if you are not familiar with local prices and where we were when this whole thing started.
"low unemployment and low rates will keep the home prices from retreating much. "
Well...
high unemployment and high interest rates will cause a whopper of a retreat.
Without the REIC, Washington has almost no job growth.
..
Still making wild claims, sailor?
OK, I said no job growth, but the REIC accounts for 55% of job growth in a direct fashion. Then, if you add the retail that is propped by the HELOC money, that has to grab the lion's share of the rest.
So, while I erred by saying "no" job growth, the job growth is almost entirely due to a direct or indirect consequence of the REIC.
Sorry I didn't meet your exacting standards, Mr. Anonymous.
I wonder how much of the remainder is Aboriginal gaming.
Anon,
I guess the state government just pissed away over $1B in a tax surplus. They now have a $3/4B deficit staring straight at them, and this is a time of record state tax inflows (thanks again to the REIC).
So, when this blows, the deficit will even be worse. I guess they won't be lowering your property taxes as the value tanks.
Throw that log on the fire of the raging inferno of plummeting property values.
I saw this in Texas where property taxes go up while property values go down.
I'm so glad we are so special.
Many folks on this blog have tied Washington State's housing market to California's. I agree that's probably at least partially true.
Here's the latest DQNews analysis of the CA market:
California March Home Sales
Market stress indicators are still very low: Down payments are stable, speculation buying is moderate, there are no significant shifts in market mix and default rates are rising, but still low. Earlier increases in non owner-occupied purchase activity and flipping activity have leveled off. The use of adjustable-rate mortgages has dropped the last three months.
Crimeney, I have been waitng for this opposite question to come up. I commented on the origanal long ago when there where few commenters here.
And here it is:
Seattle has that certain something... I think the French have a word for it... and it's more than the sum of it's parts - gestalt.
... Mt. Rainier (or Tahoma if your respect chief Sealth and the natives who lived here before), the wonderfull play of waters that divide/take and give tot he land, The salt and fresh water bodies so close to one another, the views from the rolling hills, the spirits of the only sedentary hunter gatherer society...
... what Seattle is ... is so far removed from the value added realtor double speak and beyond what language can describe. It is a feeling of imersion in the place. The looming glaciers on the volcanoe. the two mountain ranges east and west, olympics and cascades, the penninsula, the moderate and mild weather, the drizzle fog and mist of winter, punctuated by the bright and long summer days - Seattle is very far north. The very name Seattle - derived from chief sealth. It is unique to find a major city named after one of the conquered native people. It's like we almost conencted to them before they were wiped away, like they live with us as a ghostly continuation....
... and overcomming mediocrity & wild green nature with technology and brilliance. Not just overcomming in displacment, but the nestling of high tech amogn those green rollign hills and trees. Until late Seattle wasn't to strip malled or paved. Yes the forests were taken and huge stumps stood as reminders for a while. But always an element of that patently green seattle life force has remained...
... and without our economy what would we be? Wealth in nature is bliss. Boeing made planes out of trees.
microsoft made billions out of thin air. And if the hint of biotech ever stops faltering and becoems a profitabl reality - most profitable it will be...
... Seattle is all this and so much more. Though I admit it's sweetest times have faded. But corruption collapses, and nature and sweetness will return.
... Seattle is also the genisis of so many things when America become modern and contemporary. from the emergence of symbols during the worlds fair, seattle embraced the future and adopt it as apermanent landmark - so many other places disgarded their worlds fair grounds. Elvis road the mono rail.
Then there is Seattle being sweet suburbia and trendy 90s.
Northgate shopping mall? The malls that now span america - it was first.
Pulled from aberdeen Seattle catapulted Nirvana to a national scene. Strabucks, selling cups of cofee with ambiance. Seattle takes something old and worn out and makes it new, it is the green cacoon giving life to novelty...
... Silicon valley and california may have been where the real action was, but Seattle was the focus of attention for the cyber geek culture - that brief time when the bookish to a fault were cool. Now the hype is gone. But a more sober reality remains. A respect has returned after a dip in confidence. But Seattle has lost much since the turn of the century. Boeing headquarters moved away. microsoft outsources. even the simpsons said "oh, let spretend it's the 90s lets all move to seattle and use slow modems".
Yes seattle is ove run californians are oftne blamed, but people come from all over, but it will wane, there will again be a bill board that reads "Will the last person leaving Seattle please turn out the lights"
And well sit there in the dark, me, chief sealth, and jimi hendrix playing songs no one has heard before.
LOL..! That was good Anon...
Yes, it has a darker side. Bums, homeless, kids wth nothing to eat, neglected people out of place.
Down town can be ugly, and public transportation is unsafe - physically and biologically.
And traffic, I-5 and 405 are often parking lots real and true cars sitting in one place iddling for 5 minutes and moving for hours at 5mph or less.
The meth epidemic really began in the northwest. The peninsula is notorious - the movie "walking tall" even exposed it.
But, to stay closer to topic: Real estate. Yes prices are high. It's very expensive to live here. Though less it seems like more than the Bay area. the low prices only draw in californians. It will probably collapse, only if lines of communication
and ports are shut down.
Really it is part of so many breakaway fantasies, cascadia, ecotopia, state of jefferson, salmon nation. It makes a perfect little country- which i think it may be someday.
*Gag* Take that crap to your creative writing class for further editing.
If you are rich, you can afford to overpay and in the process, drive up the costs for everyone. It may not be fair but that's the way it is. As long as the jobs are there, the "outrageous" payments will be made. You need high rates (not just 5-6%) and high unemployment to crash this party. Both of those take time to develop.
anon 11:22 - 11:48
WOW!
...and people think I need medication
"You need high rates (not just 5-6%) and high unemployment to crash this party"
Agreed....in part.
IF (and that's a BIG if) you were able to keep interest rates low and real (not gov't reported) unemployment low, you would not get the cratering in prices that I predict.
You would get exhaustion in the bubble, which would knock prices down to where the bubble began ('02 prices).
Unfortunately, that is not the way bubbles work. If the bubble was not real estate, but something else that caused real estate to flourish (tech stocks), you would get a reduction, but not a cratering. If your bubble IS real estate, then that bubble has sucked in all the supporting phenomenon into its unholy vortex, and when it blows, the supports blow with it.
As I've said before, the REIC accounts for most of the job creation in Western Washington, so when it dies, all those newbie jobs are going to vanish. That will cause a tightening spiral for real estate.
Second, you have an environment that is very conducive for interest rates to hit double digits. This will kill MBSs and employment.
There goes your housing prices. I predict mid-90s prices.
Oh God Eleua, I hope you are right.
Mid 90's prices would put things exactly where they need to be.
Can you imagine, people actually being able to afford a home the good old fashioned way?: By getting a job, working and paying for it? I mean actually paying down the principle!!!
How the heck is a 20 year old supposed to even DREAM of owning a home?
If this keeps up, we are trully headed for "Ghetto Nation"- a place where everyone has lost hope of ever succeeding through honest work, crime is rampant, wealth is stuck in the hands of a few and they are living scared all the time because the people who percieve (rightly) that they have no future hate the rich with a passion.
Talk about gated communities.
The housing situation MUST be righted. It is absolutely crucial for the well-being of this country.
Anon 10:19 06/04/27
I have no idea who you are, but you are so correct.
Recessions are necessary for the continued economic health of a society. Once we get into the business of bailing out bad businesses and stupid people, we will get nothing but bad businesses and stupid people.
Alan Greenspan bailed out everything from 1987 to the present housing bubble. Capacity swelled and margins shrank. Capital flowed to peasant/slave nations in search of margins through labor arbitrage, and now our economy has been gutted.
We are now just a nation of financial speculators and entertainment junkies, while China, Japan, India, and SE Asia have our manufacturing base (real wealth production).
In search of margins at home, we imported peasant labor, and have dilluted our cultural identity, and put at risk our ability to survive as a cohesive nation.
Now, we are, as you correctly identified, creating a nation of ghettos and gated communities. I've lived in Latin America, and it is very scary.
Add in the 40% of Americans that are supported by the government, and the $9T debt (during times of peace and prosperity), and you have very few options to choose from - all of them bad.
Goldwater got it right. Economic collapse is the only way to jettison the welfare state, and the entitlement mindset. The sooner, the better. If we had our recessions in '88, and '98, we wouldn't be in this trouble.
A nation that is built on speculation, consumption, and cheap gas, while at the same time overextending their military and balkanizing their citizenry needs a major shift in policy and practice, or it will end.
I predict that the stores of wealth (stocks, bonds, real estate) will devalue, while living essentials will skyrocket in price. Wages will stagnate, or sink. I also predict that globalization will shift into reverse, as the West circles the wagons. Free trade will be rolled back, and immigration, in all forms, will be halted.
The gov't will default, in some fashion, on the $9T they now owe their bondholders.
There will also be an all-out war in the Mid-east, as the West grabs the last cheap oil, and Islam thinks they have us on our knees (fortunately, the Arabs can't threaten us with any credible nuclear exchange, and they have no Naval power projection).
Oil will spike, and then crater on global economic output declines. China will fare far, far worse than we will.
The western economy will rise out of the ashes, and start over agian. People will hopefully learn the lesson that you can't borrow/tax yourself to prosperity, and that making less, to make more is nothing more than Wall Street B.S.
Meanwile, the REIC is the last peg holding all this up. When it goes...
I'm not convinced that China will fare "far far worse than we will" if oil spikes.
China's done a pretty good job of running around to all the oil hot-spots in the world for the past 2 years- Venezuela, Saudi Arabia, etc.- and extending the hand of friendship and mutuality. And now they're cozying up to Iran. A few days ago Russia and China invited Iran to join their military/economic organization (called the "Shanghai-----"something, forget what).
Til now, it's included China, Russia, the -Stans (minus Afghanistan). It's a huge swath of countries that share borders. Iran's on the outer edge.
I've been thinking China could be paying less for oil at some point than Western countries. Then I saw on the news their friendly invitation to Iran to join their club. Perhaps that's one way to pull it off.
Just a guess, but they are usually ahead of the curve when it comes to problem-solving.
They also may be ahead of us when it comes to alternative fuels. I know they are taking that seriously. And they have TONS of coal- dirty but does the trick.
China will be very interesting to watch.
If push comes to shove, China lacks the naval power necessary to sustain a supply line 1/3 of the way around the world. If they were to get oil, it will be with the permission of the US. 50 years from now, that may be different, but the world's oceans are just an American lake.
But Eleua, look at a map, isn't China connected to Iran via land?
I'm not saying it would be easy, but I think it's possible and China is a very "can do" society when they've got a goal in sight.
While the US, it seems to me, just wants to continually stick with the status quo of what's worked for us in the PAST, even when it's OBVIOUS it's not working anymore! The problem is, the world's changed and we have not. Worse than that, we seem to have the mindset of "it's impossible". A "can't-do" society.
If all we've got left to get what we want is brute force, then we are really cooked.
I'm still betting on China, and it's alliances with other nations. They are doing a stupendous job of running around the planet in the roll of underdog to our percieved brutishness making "friends" everywhere they go while we add enemies to our list all the time.
I predict that the stores of wealth (stocks, bonds, real estate) will devalue, while living essentials will skyrocket in price. Wages will stagnate, or sink. I also predict that globalization will shift into reverse, as the West circles the wagons. Free trade will be rolled back, and immigration, in all forms, will be halted.
Did you consider writing a movie script, sailor? You do heckuva job scaring pants off the folks here. You do store some gold there, in a bunker, don't you?
Well, I never considered writing a movie, but I'll give fiction a whirl...
The US continues to prosper by going $40T in debt, speculating their homes 15%/yr and above the amount 90% of American households could afford at 100% expenditures, with 0% interest rates.
The 77,000,000 Mouseketeers all retire filthy rich by selling their McMansions to GenX grommet-heads. Everyone else builds our stuff, and we trade paper back-and-forth and all become bazillionaires.
We all live in peace and prosperity forever and ever. The FED keeps the goldilocks economy going forever, due to a "new paradigm" in economic theory. Recesssions are a thing of the past.
Everyone wants to be us. Everyone wants to have our children.
Congress cuts taxes every year for generations, while promising a whopper package of entitlements to the 77,000,000 Mouseketeers, and every peasant that can get across our borders.
American wages stay high while we have free trade with 3 billion people that think $5/day is living the good life.
How do you like my fiction?
"If all we've got left to get what we want is brute force, then we are really cooked."
True. I never said we weren't cooked, I'm just saying that if we have to throw some weight around, nobody will be able to stop us.
3/4 of the old Soviet nuclear arsenal will die in their silos, and they know this. China could plink off all their nukes, and we would still be able to complete most of the NFL season.
While you may think that I may be partial in saying this, it is true that the rest of the world's navies combined would be nothing more than an annoyance to the US Navy. We control the flow of oil around the world. I doubt China could put a pipeline through the mountains and across all of Asia. That would be the greatest engineering feat in world history. Also, one cruise missile would erase 50 years of progress on that pipeline.
If China gets any oil, it is with our permission.
The US has numerous problems. Military supremacy is currently not one of them. It is irrelevant during these peaceful times. If we ever go to prison rules, it will be everything. Rome lived 700 years off their military might.
Hi Eleua-
Well, you may have a point!
I guess I am more optomistic at heart than you!
Of the 2 scenarios:
1) China kicks our A$$ economically and we revert to the good old days of living within our means, and possibly becoming a society that actually produces again,
OR
2) we freak out and start bombing everybody, everywhere, in a vain effort to maintain supremacy from here to Kingdom come,
I choose option #1. Give somebody else the crown, we'll get over it eventually. And, in my optomism, I really believe this country could be a hunky dorry place to live if we'd get off the military kick.
I know we are totally enthralled by our own weapons. And will not give up easily on this.
Sometimes I pray that the world would intervene against us, as the world intervened against Japan in WWII and turned them overnight from war mongerers to pacifists.
So that's where I'm coming from- those are my rose colored glasses that I choose to wear.
Ridiculous, I know. A pipe dream.
But we can always dream, right?
Just like the guy who buys a house this year at the top of the market and insists RE never goes down. We've all got our blind spots.
That the US coulg get off of bombs and back to "life", that's my dream.
I agree with the "wouldn't it be nice" thoughts. Unfortunately, the world doesn't work that way. Never has, never will.
It would appear that Iran is trying to commit suicide. Once they have a viable nuke program, Israel will take it out.
Guaranteed.
I saw an interview with one of the x-head-of-state for Israel (name escapes me), and he said that the one lesson they (Euro-Jews) learned from the Hitler was that when someone threatens your extinction, you take them seriously.
Iran continues to do that on a daily basis. It is breathtaking.
Israel has at least 200 nuclear warheads, and the ability to get them anywhere in the region. All the Arabs/Iranians combined would not amount to much against Israel - unless they were nuclear.
Take it to the bank that Iran and Israel are on a collision course. Will the US get involved? Yes.
Iran scares me because they are not Arabs. They are more European than Arab, and are much more promethean in their thinking (the Arab mind is completely fatalistic).
It will be interesting.
Seattle is going to be late into any financial situation. The city is primarily left brain dominant. Emotions do not see a pending boom any more than they see a bust. They will sustain a bubble beyond all rational evidence of its existence and will hold it more during its downfall.
I have numerous friends that are extremely aware of the bubble and the obvious evidence of a price reduction. They have been aware of it for a couple years now. But, that aside, they are currently shopping for a home. Not because of any rational reason but just because they have hit their patience limit. This kind of emotional thinking will only exacerbate the eventual.
The upside to this left brain dominance is that with all of these people thinking with the heart, the pain will be even greater causing the fall to eventually be even harder.
This bubble IS actually "unlike any other". How often did you hear people talk about the NASDAQ bubble before it popped? This bubble is now mainstream conversation. Because of that it will not follow a natural correction cycle.
Prepare for a long, windy, slow trail that emotionally picks up steam to its eventual double black diamond slope. People in this area will be hopping onto the trail the entire way even if they can see the cliff in front of them.
Pepedaniels,
Great observation. FYI, Boeing is so passe' these days. Today's rain-soaked bubbleonians think it is Microsoft, tech, finance, and our own smugness that will save us. Somehow, being able to view water and mountains on a clear day, while choking in traffic will pay the mortgage. It's as if they think views pay cash dividends.
I can think of no uglier place then New York/Newark, yet it is one of the priciest areas of the nation.
One of my favorite proverbs is:
"Pride proceeds destruction, and a haughty man goes before a fall.
It's as if Solomon had Seattle in mind.
I'm curious on people's thoughts regarding political constraints on our market supply such as getting on application through the system or available buildable land due to growth policies. I am sure both sides to the issue have some thoughts, but after reading all of the posts, very little was said about both.
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