An Utterly Serious Warning

[ecosophia]

There's an old Wall Street legend that came to mind today...

"In 1929, at the height of an economic boom in America, Joseph Kennedy Sr. (father of JFK) was working as a stockbroker on Wall Street. As the story goes, Joseph was walking around when he decided to sit down for a shoeshine. While polishing his shoes, the young worker gave Joseph some of his favorite stock picks. When Joseph heard the shoeshine boy giving out stock tips, he figured the party was about to end, and it was time to get out of the market. Joseph proceeded to exit his positions in the market and bought short positions that bet on the market going down. Shortly after that, the stock market entered a free fall." (Source)

The reason this came to mind is that I get therapeutic massage regularly these days, and my massage therapist mentioned today that she is getting into real estate investing. She's an extremely capable massage therapist -- but then I'm sure the shoeshine boy who did old Joe Kennedy's shoes was good at his trade, too. The rule remains the same: when people who have no previous background in investing start piling into some investment vehicle, a speculative bubble is in full swing, and will collapse catastrophically in the not too distant future.

I watched this same thing happen in real estate about a year before the 2008 real estate bust hit. When that arrived, everyone I knew who'd gone piling into real estate ended up in the bankruptcy courts. I also watched it in the stock market about a year and a half before the 2000-2001 internet bust hit, and a lot of people who'd put everything they had into interrnet stocks lost it all.

So, dear readers, if you find you're suddenly thinking about putting a lot of money into real estate investment, may I offer a piece of advice? You'd be better off shredding it all and flushing it down the toilet. Don't let yourself get suckered, because the market will sucker punch you.

Oh, and while you're at it, get ready for a whopping economic crisis, possibly as soon as this fall. The Dow Jones just hit an all time record, btw, and speculative investments are soaring while the productive economy lurches further and further into dysfunction. We're probably going to be in for a world of hurt within a year or so. Brace yourselves...

Comments

[open_space]

If this happens the Seattle housing market is going to be a digested food show. Everyone, and I mean everyone, that came with me for work "owns" a "house" upwards of $750K (how someone thinks paying that amount of money for a cheaply made house is way out of my capacity for understanding) that expects of them to work for the rest of their productive lives at the same pace, in the same growth market they bought it at. Ouch. I did a tarot reading about a year ago when someone I know just bought his place. The card for the market? The Knight of Wands, and I think its likely the knight is about to fall off that horse.

[(Anonymous)]

"digested food show"! that's hella funny.
x

erika

[(Anonymous)]

Agreed. Took me a second to process it and then I realized “oh, lol” - Croatoan

[open_space]

I was laughing out loud when I wrote it. Read Ecosophia enough and euphemisms become a past time!

[drhooves]

A friend of mine parlayed the Plandemic into relocating from his job in downtown Seattle into remotely working from a half million dollar home he purchased near the mouth of the Columbia River. He thought the prices were far more "reasonable" out of the city, but of course it's all relative - he's got some "ifs" in the calculation like my nephew.

I sold my house almost three years ago and have moved four times while renting. I thought there was a decent chance of a housing crash when I sold, but while history rhymes - this time may be a bit different. There's been lots of .gov support for the real estate and stock market bubbles, and I'm a bit cynical of Blackrock and other inside "investors" posting big losses if the market crashes. This economic downturn involves not just a deflationary credit collapse, but of course runs into resource scarcity while population numbers (even with Covid) have increased demand pressure.

A "reset" is coming - just not sure about the specifics.

[open_space]

So many ifs. People forget (or never notice) that taking a decision while in a good mood and feeling well doesn't mean at all you are going to feel the same while carrying out that decision (this is why sales people make you feel good and why manipulative advertising works). Sure, in the tech bonanza when recruiters pile up on your email inbox to get you in, in the richest country on the planet were even the thought process is comodified, things will look pretty sweet and easy going. Until they don't, your whole existence hurts and there is no end in sight... that's a really nasty way of understanding what privilege means and I think some people might experience it.

Nor would I say I'm 100% ready, just calm enough that I don't have that many hooks, all I worry about is my altar pieces and my books.

I wrote this yesterday in reply to the comment of the democrats holding it out until the next term and decided not to post it but here it is:

"Take this with a grain of salt, but I was feeling something moving here and there during the pandemic and then it felt as if, metaphorically speaking, we took an anesthetic, went on and it flared up as wars in Ukraine and the Israel-Gaza conflict without addressing the main issue, if we see the human world as an organism that is.

The way you put it though made me think if this impression I've got is the political sphere managing the damage and seeing who will take the blame once something bursts. When the soldier Aaron Bushnell protested by lighting himself on fire and more recently Maxwell Azzarello in NYC, one of the things I wondered in mild shock was: what is going on in the side of politics we don't see publicly lately for people to sacrifice their lives once they see how bad it is? And does it mean inflammation is getting close to showing as disease? If something happens in the economic or political spheres then at this point some people already know. What will they decide to blow up to cover their tracks? I don't know, but I sure hope they get caught"