Depression... the Prozac kind

[aaron]

I work at mid-size, public tech company. My colleagues are mostly between 25 and 40. Over the months...

"The other guy was laid off. I am fine."
"I was able to refinance my mortgage for 4.5%"
"Gas is cheaper"
"Obama has a plan"
"I see in the news that we have bottomed"
"I can even get a discount on a new car"
"The credit card companies will stop raping me."
"My rent went down."
"I bought a foreclosure, cheap."
"Our stock is up."
"I just bought ___________" (fill in the blank with useless Chinese crap)

It is hard to explain to people how bad things are and how bad things might become. They appear fine. In fact, as far as your average, employed American, things are better than they were last year. I was chastised the other day for being "wrong" and full of doom and gloom. I have to admit it is still bothering me.

Unfortunately, very few people seem to care about the economy outside their own, personal little world. I am the silly one who cries the sky is falling. If I mention a few numbers, eyes glaze over. I know we all took math in high school, but nobody seems to be able to add. Inflation is a foreign concept. It is meaningless. Unemployment? That is for the other guy to worry about. Corruption? Obama is fixing that. Banks? They are fine now, and are even repaying TARP.

It all makes me wish things would collapse into the likes of the Great Depression. Nobody cares! They do not care that we have huge deficits. They do not care that people are losing their jobs. They do not care that their stocks dropped (they will come back). They do not care that they we have seen no improvement in our lives for a couple of decades. They do not care that 50 million Americans cannot afford to visit a doctor. They do not care that we are fighting two, un-winnable wars. And, do not get me started about the FUTURE - it is not real.

God, even a million foreclosures has not resulted in anything.

Before there is change, people must care. I have a bit of hope, that over the next year there will be large numbers of people who care when their unemployment benefits end. But, I doubt it.

I could go on and on, but it just depresses me.

[Thailandnotes]

Re: Depression... the Prozac kind

“Makes you wanna stop and read a book!” Bob Dylan

Stayed up way past midnight reading "Outwitting History" by Aaron Lansky.

“His mother had been a Yiddish librarian in a small Ukrainian city from the 1930's through the 1950's. Every week Moscow would send libraries a list of the latest banned books they were suppose to destroy. Every library had a special fireplace in the courtyard just for this purpose.”

[cjppjc]

Re: Depression... the Prozac kind

Maybe you are wrong. Maybe I am wrong. Maybe alot of the "doom & gloomers" here are wrong. Relax, buy something. You'll feel better.

[Kadriana]

Re: Depression... the Prozac kind

Well, my Mom lives in a typical middle American town of 20,000. 3 middle age men committed suicide in one week. All three had lost their jobs with in the last 6 months. If that isn't a sign that things are getting bad, I don't know what is.

[swgprop]

Re: Depression... the Prozac kind

It is hard to explain to people how bad things are and how bad things might become. They appear fine. In fact, as far as your average, employed American, things are better than they were last year. I was chastised the other day for being "wrong" and full of doom and gloom. I have to admit it is still bothering me.

You can't force them to take the red pill.

[ThePythonicCow]

Re: Depression... the Prozac kind

I work at mid-size, public tech company. My colleagues are mostly between 25 and 40. Over the months...

People won't start noticing until reality smacks them upside the noggin.

Tragedy is when I cut my finger. Comedy is when you fall into an open sewer and die.

-- Mel Brooks

[flintlock]

Re: Depression... the Prozac kind

Well its human nature to think " It won't happen to me" and to try and be optimistic and avoid "unpleasant thoughts". Throw in the fact that the younger generation has seen pretty much nothing but economic blue skies their entire adult life and that explains it.

I think some of the gloom may be oversold, but for the most part, people need to wake up. A lot have, but more have not. My brother is a home builder and is in complete and total denial. He is willing to put his entire economic well being at risk holding on to a $1.4 million dollar home that is really only worth about $1 million in this market. He probably could have sold it for a small profit last year if he had cut the price $200k or so. Instead he actually raised it!. Now its worth even less and he's got another $75,000 or so in carrying costs to add on to his cost. So he's lost another $275,000+ on paper since last year, with no end in sight. For some irrational reason, he thinks housing will bounce back in the future and he'll get close to his asking price!:rolleyes: He put a lot of his own money into it, so its not like he's planning on just walking away. Any attempt to talk to him about it results in " tsk, tsk, you just don't understand".

My point is, people in some industries had it so good for so long, they can't fathom that the party is over. They refuse to believe it was all just part of a giant Ponzi scheme. Sorry, but I don't think things are ever going back to the way they used to be. But from what I can gather, the majority of people do.

[FRED]

Re: Depression... the Prozac kind

Well, my Mom lives in a typical middle American town of 20,000. 3 middle age men committed suicide in one week. All three had lost their jobs with in the last 6 months. If that isn't a sign that things are getting bad, I don't know what is.

That is a horrific story.

[doom&gloom]

Re: Depression... the Prozac kind

I know not one, not two, not three but FOUR couples in the throws of trying to sell off their spec houses:

1) told him in spring 2007 to "dump it" for whatever he could get. response
was "i'll wait till next spring if this one des not work out". Spring 2008, they
have already started renting it. Spring 2009 he sees me and says "Wish I'd
have listened to you. You were absolutely right. We may own it forever and
have to keep renting it (at $5k/month!!!) to cover costs. Price: $1.5M

2) Built a house with another couple. Told him not to do it at all. Did it
anyway. Last spring I encouraged him to dump it at any cost. Said he'd
wait till THIS year and see. Saw him this spring. Cut the price $200k to
match all the competition that had come down around $200k. Still has it.
Now his wife is working again (unhappily). Price: $2.15M

3) Couple built a spec house to be THEIR house to live in until sold. He is
a 'spec' builder who just managed to get out of his last spec house. I was
able to talk him out of starting another spec house early last year. BUT...
they still ave the one they built. The couple is not married, the house is in
her name. She has all the assets, he has basically nothing. Carrying costs
on the place are now..... $15k/MO! YIKES!!!! Trying to sell it with no one
even coming to look at it. Blames the lazy realtors. Location is not all that
good and it has minimal views to boot. I told him to have her transfer all
HER money to HIM thru construction bills, and she should just go BK on it
before she is financially wiped out. Price: $2M

4) Not reallly a spec home, but a couple I know just HAD to buy a new
home before they sold their old home. Original price on old home was
$1M. Renovations another $750K. Selling price: 1.75M. NO takers.
So now they rent it to cover the $.75M mortgage payments and the
$1M they paid in cash for the house earns them nothing.

This chit is happening all over the country. People are being bled slowly dry
on 2nd homes, rental condos, etc. Another couple I know has a load of
apartment units, all bought when prices were higher. Loan rates are fine, but
with rent competition, they are making -- almost nothing. And this is ion a
TOTAL of something like 30 units. At least they are not negative.

Yet another guy I know has several rental houses, one of which stood empty
for 6 months. His return on that unit for the year is negative. Total return on
all units for the year as a result is barely positive.

When the Alt-A's start blowing skyward in defaults, the rents these people
get will be even worse than now. More pain.

[flintlock]

Re: Depression... the Prozac kind

I notice a common denominator here in our stories. Notice the rather large home prices? $Million plus. I found it amazing how much money people became comfortable spending on homes. Most of that was only due to the idea that they were "investing" in a home and that it would always go up in value. Throw in tax benefits and they considered it a no brainer. More than 5 years ago I remember discussing with people, " How the heck do people afford such high priced homes?". Turns out they couldn't. Anyone waiting on the Ponzi scheme to be restarted had better be willing to wait a long time. Without lax financing and a robust economy, it can't happen.

Saw this article about trying to move mega homes in a down market.

http://www.tampabay.com/news/busines...cle1011570.ece

I completely agree with this statement:

"Why would you buy someone else's house for $25 million? You'd build your own house. Those are monuments to yourself."

With these types, its not really about the money. They are making a statement about themselves when they build a home.

[don]

Re: Depression... the Prozac kind

I notice a common denominator here in our stories. Notice the rather large home prices? $Million plus. I found it amazing how much money people became comfortable spending on homes. Most of that was only due to the idea that they were "investing" in a home and that it would always go up in value. Throw in tax benefits and they considered it a no brainer. More than 5 years ago I remember discussing with people, " How the heck do people afford such high priced homes?". Turns out they couldn't. Anyone waiting on the Ponzi scheme to be restarted had better be willing to wait a long time. Without lax financing and a robust economy, it can't happen.

Saw this article about trying to move mega homes in a down market.

http://www.tampabay.com/news/busines...cle1011570.ece

I completely agree with this statement:



With these types, its not really about the money. They are making a statement about themselves when they build a home.

A guy I walk with occasionally at the park told me of his visit to his son's new Tahoe "cabin". 17 rooms, 5 fireplaces, three stories tall. He doesn't live there, it's his weekend getaway. His year round digs are in Blackhawk, land of sports stars, media moguls, etc. He was considering building his Tahoe house as a tribute to himself but his 8 year son pointed out he would be in college before it was completed. Needless to say, the proud owner is a FIRE-man.

[doom&gloom]

Re: Depression... the Prozac kind

he he... FIRE-man! he he...

Forgot one. I know a couple, mega millionaires trying to sell a mega house
on waterfront w/enclosed pool etc. Started the listing at ... $34 million.
Not sure where it is now, but in the mid-high 20's.

Like it was said above, why buy someone else's place for the knnda money.
Granted, it has 250+ feet of lakefront on Lake Washington (Seattle), but you
can buy up 3 lots next to each other for maybe $8-15mil depending on the
lots and location, get the same frontage, and build your own monument to
your largess afterwards and STILL get away with less.

[aaron]

Re: Depression... the Prozac kind

hey, I cross Lake Washington into work everyday. If gold goes up to a million an ounce, maybe I'll pick me up that place. Tell them not to worry!

[LargoWinch]

Re: Depression... the Prozac kind

Let's not forget about the devastation caused by Central Banks.

One day; it will be "Game Over" for them.