Poulsbo (EB) - The Institute for Economic Reality, a one man think tank based in Poulsbo, Washington, has just upgraded its economic alert status. On Friday, February 23, 2007, at 0745 PST, the IER raised the alert level to CRASH-CON 3, and advised all interested parties to prepare for further deterioration of the national and local real estate markets.
Previously, the IER had been sitting on a CRASH-CON 4 rating, which is a general warning that the current market is unsustainable, and an eventual crash is forthcoming. With the heightened alert level, the IER is processing many hostile economic phenomena which will weigh heavily on the local real estate market.
The IER identified the rapid implosion of the sub prime lending industry as the main factor in the upgrade of the CRASH-CON alert system. An entire swath of borrowers/buyers is being removed from the potential pool of stupid parties to real estate transactions. Also, many sub prime mortgages are resetting and defaults are skyrocketing in many markets. This puts in additional pressure on an already building inventory of overpriced homes.
Dr. Eleua von Bloviator, the mind behind the mayhem, has predicted that the Spring and Summer of 2007 will see an unprecedented increase in available housing units for sale. With millions of vacant homes for sale through the winter, and builders reaching full capacity in production, along with many overextended owners looking to get out of their investment during the selling season, Dr. E expects inventories to reach panic levels.
The normally reclusive didactic curmudgeon warned of how his arch enemy, the Real Estate Industrial Complex (REIC), might spin the Spring and Summer data. "I have no doubt the REIC will sift the low sales figures for any bright spots and publish only that data. They will state the market is healthy, prices are rising, and their particular market is 'special' and immune from any economic reality. At the end of the day, it will be easy to identify a real estate agent at Wal-Mart. She will be the 40-something woman in high heels, driving a Lexus, yakking on a cell phone, and stocking up on Depends."
The IER is actively looking at the next level in the real estate finance food chain. Once any credible data presents itself that banks like Wells Fargo, or Washington Mutual are about to take a header due to insane lending practices (lending money to people that will never pay it back, only to make up the difference collecting fees), a CRASH-CON 2 rating will be issued.
The IER has contacted associate agencies regarding heightened alert levels. The Great Unwashed are only instructed to take precautions commensurate with CRASH-CON 3.
We now return you to your regularly scheduled "what me worry?" lifestyle.
CRASH-CON 5: Normally sustainable real estate market. Speculation is limited to dim-witted Californians paying too much for their "Bainbridge Island Dream Home."
CRASH-CON 4: Widespread speculation by your average Joe. Everyone thinks they are going to finance their retirement by speculating in overpriced real estate. No fear, and inflection points are not yet visible. The number of real estate agents grows in numbers that allow for Congressional representation. REIC says this is as affordable as it will ever get.
CRASH-CON 3: Inflection points are starting to coalesce. REIC gets very testy, and calls a bottom. Widespread abject stupidity reigns supreme. Catalyst for downturn solidifies. Bull mentality is at zenith. Most bears have capitulated and are now believing in the 'New Paradigm.'
CRASH-CON 2: Inflection point has passed. REIC gets violent. Money is evaporating. Inventory is very high. Huge swaths of land have been deforested to create "For Sale" signs. Californians are yesterday's news. Mainsteam Media finally gets a clue. REIC calls the bottom every other week. Major disembowelment of real estate finance.
CRASH-CON 1: Full-blown panic, despair, and financial ruination. People swear off ever buying another home. REIC all in witness relocation program or living in South America under assumed names. Foreclosures and REO are outselling the REIC. Nobody is calling a bottom. Former Bears are endzone dancing. MSM runs articles about how only idiots buy homes. People actually talk about something other than how rich they are becoming by investing in real estate. CNBC is now public access TV featuring Al Gore talking about something stupid.
8 comments:
Simply brilliant!
You forgot the part about Hilary becoming our next president.
:)
The last time the market tanked, I use to joke about running into loan officers in odd places like working in retail or fast food.
Yesterday, I needed my cell phone repaired and the sales person who led me to the back is also a real estate agent, working there for steady incoome.
>At the end of the day, it will be easy to identify a real estate agent at Wal-Mart.
Yeah, the beeeotch will be working there!
CRASH-CON 2 is coming up!
Wow, you nailed it Eleua.
That was hella funny! I thought I was a housing bear until I read some of your stuff. Bears never feed until the carcass has a chance to properly "age".
Go CRASHCON2!!!!
Eleua,
Doesn't it feel good to be right? Sweet vindication!
We'll have a few rallies along the way, but DOW 8000 doesn't seem like much of a stretch at all.
Since I can't decide between a future home in Capitol Hill, Queen Anne, Magnolia or Alki is the way to go, I'll just buy one in each neighborhood.
Pennies on the dollar my friend, Pennies!
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