Saturday, May 21, 2005

Looking For Scapegoats In The Housing Bubble

An odd line of thinking is popping up in the media these days, as reflected in this MSNBC story on young flippers. "Chris Schartiger may sound like a professional real estate investor, but he is in fact a 25-year-old investor and one of a growing group of young real estate speculators buying condos, often before they are built, and using them to turn a fast profit."

"For me, it was a no-brainer to go into real estate with the housing market as hot as it has been recently."

Indeed, the major media has cultivated that very notion for years, even as they now act shocked at all the 'speculation' that they described as 'investing' only weeks ago. This is where the media tries to pass off the bubble to a bunch of twenty-somethings.

"But next time he’s out looking to buy a condo, Schartiger might not find a welcome mat waiting for him. Seasoned realtors are concerned that these speculators are inflating the housing bubble by creating phantom demand. In many cases, these speculators are only putting down a small deposit that they are willing to lose if the market drops sharply. That leaves the developer with a property that he could have sold to a legitimate homebuyer for a lot more money, and now has to sell for a great deal less."

So who is to blame if the developer has to sell for less? "Thousands of new condos are going up, and they are selling for upwards of $1,000 a square foot."


At 9:30 AM, Blogger Ben Jones said...

There is a problem with the Blogger servers this morning. If you can't post, please check back.

At 9:50 AM, Anonymous Anonymous said...

There are a whole host of "aiders and abetters" in this tragic scenario:

1. The Fed (via low interest rates)

2. Fannie/Freddie (aka "sodom and Gomorrah") for providing way too much liquidity via MBA and holding mortgages directly

3. The private MBA and banks doing the same as above

4. The suckers who are buying the MBS issued by the above

5. The appraisers who are allowing themselves to be pressured into making outrageously high appraisals

6. Allt he speculators mentioned in the article

7. The "regulators", who only recently have decided to tighten down on the:

8. Mortgage companies who are making ever-more bizarre and over-the-top loans to pile in:

9. Every sub-prime hoser and their brother

10. Finally, the media who have breathlessly reported about all the 'instant millionaires"

Sad, pathetic, and will all end in tears. Luckily, all risk is "socialized" these days so the taxpayer will bail out all of these entities.

At 9:53 AM, Anonymous Rob said...

"So who is to blame if the developer has to sell for less?"

I for one will take responsibility for myself, even if I lose money by renting in a rising housing market, the same way that I think others should be responsible for themselves regardless of which side of the "trade" they are on.

The fact that housing is being traded like stocks by a very young generation is unsettling.

They are just trying to take advantage of the system as it is to make a profit, but have not lived long enough for a large correction to be a reality in their minds. This supports the 60 year cycle theory whereby a young generation, not having lived through falling markets, are much more worried abut missing out on profit opportunities than losing their shirts.

At 10:11 AM, Blogger realist said...

the article refers to the 25 year old chris as an "investor". the irs defines "investor" as someone who buys property and keeps it for "productive use" (rental income). chris is not an investor, he is a speculator. he can not legally engage in a 1031 exchange. if he was an investor, he could. the problem with today's real estate market is that we have far more speculators than investors. the prices of coastal properties are so high, that there is no cap rate worth investing in.

At 10:26 AM, Anonymous Anonymous said...

I agree with all you folks. Now is my chance to be be a real "DEBBIE DOWNER".

Lots of this new Real Estate in areas like
Las Vegas, Pheonix, Suburban Cali and Miami will be worthless once PEAK OIL hits. Start Educating yourselves folks. Some of this new real estate will be dismantled and recontructed closer to public transportation. The rest will never be occupied.

Hundreds of Billions in wasted capital bidding up worthless assets that could have been put to use helping us build an secure energy future. The inhabitants of Easter Island were better environmentalists.

Educate Yourself Now !!! Start Here:

At 10:32 AM, Anonymous Anonymous said...

I am familiar with the Peak Oil arguments and used to sell solar photovoltaics and am a professional energy manager.

Peak oil will not be the end of the world as we know it.

There will be money to be made in redeveloping suburbia to re-make them into livable communities with all of the necessary services.

The oil age will end just like the stone age did, but it won't be because we ran out of oil or stones.

At 10:41 AM, Anonymous jimbo said...

("For me, it was a no-brainer to go into real estate with the housing market as hot as it has been recently.")

I have seen many quotes lately from housing bulls claiming that investing in RE is a "no-brainer". Truer words have rarely been spoken, though I'm afraid not in the way they were intended.

Forgive me, but as someone who has invested for 30 years in RE and other asset classes, there is no such thing as a "no-brainer" when it comes to making money.

And in my experience, when a market gets far beyond its fundamentals (be it RE or stocks or whatever), selling said asset is the true "no-brainer." Buying more of the same asset is a "no-brainer" of another color.

At 10:43 AM, Anonymous Rob said...

Baby boomers, of which about 80 million are going to retire over the next 20 years, (if they can) are not going to be as sensitive to oil pricing, and therefore, I believe, provide support for housing markets that otherwise might be effected by peak oil production.

As far as air conditioning, I own a home in Arizona (am renting in California). Granted it is very well insulated, but the energy costs are low in the summer, and I don't need to heat in the summer.

At 10:44 AM, Anonymous Rob said...

don't need to heat in the summer....dah, I meant winter.

At 10:49 AM, Anonymous garyP said...

(chris is not an investor, he is a speculator. he can not legally engage in a 1031 exchange. if he was an investor, he could. the problem with today's real estate market is that we have far more speculators than investors.)

As someone with some experience in RE investing, I wonder how at risk some of these young "investors" are?

Most of my holdings are via partnerships. Each partnership is set up as a separate corporation. So each building is essentially its own company. The primary goal of this strategy is risk management and wealth preservation. Should one of our buildings or partnerships suffer a reversal or a litigation risk, the risk is limited to the assets of the corporation itself and does not extend to the assets of the individual partners (or shareholders.)

Setting up a corporate entity is relatively inexpensive insurance against loss. When I read stories about Playboy Playmates and 22-year-olds speculating in investment property, I wonder what steps they have taken to protect themselves. My guess is that the vast majority "own" these properties personally and are not shielding themselves under a corporate umbrella.

I'm afraid that many of them will learn the hard way that there's more to RE investing than buying and flipping. A rising market masks a great deal of risky behavior. When the market goes the other way, the risks become exposed.

At 10:50 AM, Blogger John Law said...

(Seasoned realtors are concerned that these speculators are inflating the housing bubble by creating phantom demand.)

any realtor who is only concerned should beaten with shoes! be scared to death

At 11:16 AM, Anonymous Anonymous said...

The oil age will end just like the stone age did, but it won't be because we ran out of oil or stones.

No life will not end. Must our current lifestyles probably will. Americans on average use 3-4 times more petro energy than Europeans. We use 23%+ of the worlds petro energy with 5-6% of the world's population. Unless you believe that global war is the way to secure another 20+ years at the max of our current habits then things will have to start changing very soon.

Please I am sure you are very smart. But please tell me where our next abundant energy source will come from???? Solar is great especially if you designed your home from the start to be off the grid. Geo-Thermal heat pumps can save 30-60 percent on energy costs based on where you live for existing homes. Hydrated Ethanol(5-10% water) and Bio-Diesel are great Ideas but even married with Fuel Cells and Plug-in Hybrids, they will have a hard time replacing Petro Fuels. It is highly unlikely they could ever scale them enough to replace anything more than 25-30% or our current driving/trucking dependancy. Tar Sands, Shale Oil and Liquidified Coal are all source of liquid
Petro Fuels but are incredibly poluting and will require huge sources of water. Forget about sending water to Las Vegas and Arizona, if you want to develop Colorado and Wyoming's shale oil. Even then they will unlike provide more than 5% or current annual petrol needs.

Yes, I know the Germans in WWII had liquified Coal fuels, but the bulk of the German army need railroad or even horses to travel. Lots of German tanks and trucks were destroyed from the air only after they had ran out of fuel.

For the Next 50 years, Heavy and Light Rail will have to replace most urban and highway travel. Nuclear Power and Wind Power are also great ideas but like all the rest will require huge capital investments. So much for continuing to produce unnecessary and energy wasting consumer goods.

Not unless you believe in a Nutty theories like Abiotic Oil where is still huge enery
gap filling technology going to come from??? Fusion?? Great but lots of smart
folks have been working on this problem.
No simple answers with fusion unless you believe "Cold Fusion" can be made to work.
If we cancel all of our high tech but useless future wonder weapons like the F-22 we could devote the ten of billions on developing Fusion. Still we may have to mine the moon to get the He3 need to make low radiation generating Fusion work. That will take decades to get off the ground.

Yes, with a WWII style effort will will survive and live to prosper again some day, but perhaps not in the same consumerist wasteful lifestyle we have grown use to. The incredibly wasteful suburban lifestyle Americans alone have embrace will probably have to end. Short of plentiful Cold/Low Radiation Fusion energy, what could ever let us replace the
same relative low poluting energy abundance Oil currently provides us.

At 11:16 AM, Anonymous Anonymous said...

I have a concern...with FED lying and skewing CPI numbers, with FED lying about who is buying our Treasuries, with FED printing dollars...could it happen than, when housing market crashes, our dollars (We have in the bank by selling our houses and waiting) will become worthless because of massive inflation?

At 11:26 AM, Anonymous Anonymous said...

Anon 11:16

Good questions. I too would like to understand how the Carribean buying T-bills

At 11:28 AM, Anonymous Anonymous said...

11:16 anon,

I have the same worries about dollars becoming as worthless as real estate. That's why I am buying some gold and silver, hopefully they will work as a hedge against the massive inflation that is sure to come.

At 11:32 AM, Anonymous Anonymous said...

I have to disagree w/your analysis that Oil is going to go substantially higher. If you follow oil stock, the XOI, you can see that from a TA perspective, these have alread peaked. The trend is now down.

Not that this has to do anything directly w/the RE bubble, which is a different market altogether.


At 11:32 AM, Anonymous historybugg said...

(could it happen than, when housing market crashes, our dollars will become worthless because of massive inflation?)

That is certainly a risk. Smarter minds than I have written voluminously on this.

The problem we have is that so much of our debt (Treasuries) are held by foreigners (primarily Japan and China). The % held by foreign central banks has gone parabolic due to the trade deficit.

Paradoxically, foreign buying has kept our interest rates abnormally low and correspondingly has created an environment fertile for a housing boom.

If we devalue our currency intentionally to pay back our debts with cheaper dollars, our foreign friends will be less than pleased. If the dollar crashes of its own accord, it would be devastating from a global perspective.

One scenario i've read that some bright folks are suggesting is that, in the event of some sort of currency crisis, two classes of currency might be created. One type of dollar would only be used for domestic activity. The other would be an "international" dollar used for global trade.

This would keep our foreign friends from bailing out and we keep things relatively calm at home. The only problem arises when Americans are buying from abroad or traveling outside the country. In that case, our dollars would be nearly worthless.

Don't think it couldn't happen. It's happened in other countries. But this is obviously a "crisis" scenario.

Some savvy investors (Buffett ,Gates) are already accumulating other currencies (yen, euro, etc) or selling the dollar short as a hedge against such a crisis.

My guess is that, in the event of a currency crisis, we would see governmental currency controls placed on Americans---meaning that Americans wouldn't be allowed to hold foreign currency in any great quantity to protect against capital flight.

Of course, since most of our largest companies are already international in scope, most of them have very clever ways to circumvent currency controls should they arise.

But the avg Joe won't be so fortunate.

Let's hope it doesn't come to this...

At 11:58 AM, Anonymous rala2 said...

I find it revealing that so many of these twentysomething real estate speculators use the term "no-brainer" to describe their decision to enter the real estate market. My interpretation is that the rapid rise in house prices, coupled with the fact that "everyone else is making a fortune", is sufficient justification for these young people to abandon any critical or rational thought processes or research into their new profession and just take on ludicrous levels of risk and debt based on little more than blind faith and herd psychology.

No brain indeed.

At 12:08 PM, Anonymous Anonymous said...

I know not to feed off-topic posters but I can't resist.

Peak oil poster:


Read William McDonough's book Cradle to Cradle and look up a concept called the McDonough paradox.

I don't have to over-worry about Peak Oil because you and other sky is falling types are doing it for me.

We both know it will get resolved. I don't know how and neither do you.

Markets and humans are pretty good at adapting to dislocations and we are due for some large ones (housing bubble, global warming, earthquakes, peak oil).

I can go on positioning myself for the inevitable dislocation and re-allocation of capital to catch some in my basket.

At 12:52 PM, Anonymous Dimitris said...

I hate when these "peak oil" sky is falling people start getting involved with the housing bubble. They are totally different markets. First, there is no peak oil and secondly there is a housing bubble. Peak Oil is a myth funded by Cheney and company so they can make profits. Folks, it's pretty simple. Bush gets into office, price of oil goes up, dollar falls. Guess who bought oil this oil earlier? People who had dollars. The chinese got screwed in this whole deal because they are the ones now buying oil w/ the cheap dollars they hold. (Remember, they are the second largest importer of oil). So, what's the trend now? Well, look > dollar is going up and oil is going down. Why? because it has to, the oil money is going back into the dollar. What does this mean in terms of a housing crash? Well, the FED is now tightening the supply of dollars and raising interest rates. Who will this benefit? Those who have cash. I think there is going to be a recession coming along with deflation and a housing crash. And yes, we will have a strong dollar. What does this mean? The rich will be enjoying a huge yard sale in the next 3 - 5 years!

At 1:01 PM, Anonymous Anonymous said...

Interest rate forecast:

Bill Gross, head of PIMCO, the biggest bond fund manager in the world has a new piece out on his website:

"If we had to forecast (and we do), we believe a range of 3 - 4½% for 10-year nominal Treasuries will prevail during most of our secular timeframe (3-5 yrs)"

If he's right, there may not be an increase in interest rates, and that would remove one of the scenarios most here are expecting, that rising interest rates will throw many recent buyers into foreclosure due to the widespread use of ARMs and IOs.

I'm not sure I buy this, but I thought I'd throw it into the mix so things here aren't completely one sided.


At 1:02 PM, Anonymous Anonymous said...

To JeffINAZ who said that oil had peaked. Not if you look at a long term chart:$XOI,uu[w,a]daclyyay[df][pd50,2.5!b200][vc60][iUb14!Le12,26,9]&pref=G

At 1:22 PM, Anonymous Anonymous said...

1:01 DenverKen -- you are right -- many of us are counting on higher-moving interest rates to force marginal debtors out of their homes. Nevertheless, it seems quite possible that tightening the lending noose on speculators, which seems finally to be starting, will cause there to be far fewer Greater Fools with funding and that could start prices downward in several areas.

At 1:58 PM, Anonymous Anonymous said...

A couple of responses.

William McDonough - Smart guy who tries to be environmentally conscious. But designing solar suburban office parks in does not help the Peak Oil crisis if lots of folks are still going to be driving 30 miles to get there.

Why is Peak Oil important to the Housing Bubble. Because as economies start to stagnant as corporate economists get nervous about longterm growth, investment opportunities, rising incomes etc... there is the high likelyhood that trying to stimulate the economy through cheap money will not encourage business investment but will only result in the massive bidding up of existing assets. That is what we are seeing with the Land and Real Estate bubble according to many PEAK OIL theorists.

Lots of folks here are RE bears who are convinced that if they wait long enough they will be able to profit by investing
in bankrupt and distressed RE down the road. Lots of folks here are very smart about looking hard for value and are concern that today's stock market is still
overvalued. However if PEAK OIL is true lots of this RE will never be worth anything nor will lots of US companies. Will a home in Las Vegas or Pheonix subdivision that is miles from potential public transportation be worth anything? Even if you could aford the Air Conditioning, do you want to have to walk miles a day in 110+ heat in a post -automobile economy. Will folks be flying to Las Vegas???

Look what I am saying is this. First all if there is going to be mountains of distressed RE to invest in the near future, does it not make sense to invest first in only that RE that is viable a post PEAK OIL economy. After all for every guy who gets burned when the bubble burst there is somebody who gets burned trying to catch the proverbial falling knife.

If there is a Peak Oil future ahead of us,
and lots of folks predicting it are not crazied Chicken Little's but very sane rational folks, then lots of new RE will be worthless. It will only be good for disassembly. Please take the time to check out the links I have provided above.

If folks visiting this blog are sitting on lots of cash anticipating investing in Post-Bubble RE, would it not be smart to invest a portion of your cash with a Peak Oil scenario in mind?

At 2:16 PM, Anonymous Anonymous said...

I have a trusted buddy who explores for oil for a biggie. He is not worried. Perhaps it will turn out that the worry has more to do with the unexpectedly fast growth of the Chinese and Indian economies. Their demand for oil may not have been factored in when the corporations decided their exploration strategies. It would be very unprofitable to spend what it takes to discover/confirm today all the oil there is. That is cold hard economics learned long ago.

At 2:34 PM, Anonymous Anonymous said...

I have a trusted buddy who explores for oil for a biggie. He is not worried.

Ask your buddy how come there have been no new large oil discoveries since the North Sea and the Alaskan North Slope. And that was in the 70's and those fields are already in depletion. The South China Sea, which was the last really big hope, was a bust. The medium size gas fields that were discovered there are claimed by 7 nations (Vietnam,Thailand,China,Cambodia,...) who will have to somehow work out a treaty before development.

The only place on earth that has hopes of relatively large deposits of Oil is Central Asia. A part of the world that is
total F**ked politically. Besides China and India is a lot closer to that Oil than we are and have a much better shot at the oil than we do.

Look over half the world's discovered oil is still in the ground. Peak Oil means that that Oil will be increasing more difficult and expensive to recover. Also the total energy yeild from the Oil and Gas will decline. The likelyhood of maintaining annual production levels will be impossible to maintain even while many decades of oil will still remain in the ground. That means a world where the total oil production is declining by a couple of percent a year instead of increasing.

At 3:01 PM, Anonymous Anonymous said...

Hello, fellow bubble bloggers!
Chip and DenverKen.
It is very simple. Interest rate rise is not, historically, associated with bubble bursting. If you will study previous bubbles you will see that. I did. It is rather lack of the next stupid guy and profound change of public perception.
However, after this bubble will burst, either landing hard or softly, sometime in the future will be a recession. As a result of burst or not. Immiediate or later. It is something wich we cannot avoid. Recession is inevitable. I think we all agree on that. It is a part of the economy and we know that nobody, even "powerfull" FED, will not eliminate future recessions.
That is why those I/O and ARMS borrowers will suffer the most. And this is the argument people talk about when raising concerns about future high level of foreclosures among those uninformed and disilusioned buyers.
Most of them can't afford those payments already. Otherwise they would be in fixed rate. And most of them bought, "because prices are going higher, so we have to buy now, either to have a home of our own or to make money on appreciation".
One word to Peak Oil guy. You are probably right it will happen and it will cause pronounce change in our lives, but it seems to me, that you are a little bit to "religiuos" about it. Energy problem will be resolved this way or another. We not going to live with fireplaces as the source of heat and ride horses. And since this is a RE bubble blog and I dont see any connection, I myself, welcome rather constructive counteropinion about RE than Peak Oil preach. Therefore I, myself, consider You a troll.
Respectfully, Mike C., Chicago.

At 4:10 PM, Anonymous Anonymous said...

just in my opinion... greenspan has already found his scapegoat... and he's starting to set it up right now... and it's just brilliant... my prediction is that he's going to blame this housing bubble on you! The consumer! he's going to come out and say that this housing bubble was caused by consumers mis-using their home equity... and then he will say... and now here are the new guide-lines/laws for the usages of home equity... and then poof! the maestro retires to speeches at Columbia and Yale and Harvard... and a worldwide book tour...

At 4:24 PM, Anonymous Anonymous said...

Look what I am saying is this. Folks here are smart enough to recognize a bubble when they see one. If and when the RE bubble bursts there will be literally thousands of distressed properties to pick over.

Would it not be prudent to give exta attention to those opportunities that are most viable in a PEAK OIL scenario.

Otherwise you could fall into the other trap that bursting bubbles bring, the Falling Knife. What I am saying is that not all these potential RE bankruptcies maybe viable properties in a world where travel and energy costs are prohibitably expensive for even a short run.

I do not think that makes me a troll.
There are lots of PEAK OIL theorists who have spent a lot of time writing about the
Real Estate bubble and have many insights into it. In fact they studied US Housing
trends long before they started to study

At 5:53 PM, Anonymous Anonymous said...

I think 4:24 did the best he (read as he/she) could to dig himself/herself out of the quicksand. Guess he also now knows that oil issues will be much more appreciated on a different blog. I think those who need to will heed his caution that commuting and perhaps insulation need to be considered when buying the properties our less fortunate brethren bail on.

At 5:56 PM, Anonymous Anonymous said...

4:10 Anonymous -- I find it entertaining, though as dark humor, that the President wants Alan to stay on longer. Could it be that he wants AG to be around when we realize the bitter fruit of his labors? Also, I see that the Fed guy who actually concocted the low interest-rate solution is, quite convenietly, retiring.

At 6:42 PM, Anonymous Anonymous said...

3:10 Mike C. -- thanks for the useful insight. Makes a lot of sense.

At 6:47 PM, Anonymous Anonymous said...

To say Peak Oil would make some houses worthless is way too dire. Some people don't need to travel for work. I work at home and if an exurb house cost 1/3 or 1/4 of what an inner city house did, I'd probably buy one and live there because it would still make economic sense for me personally. People would adjust to $10/gallon's $6/gallon in England today. People, and hence the economy, find ways to adjust to big changes. And some will make a lot of money on the change.

I have spent years reading the sky is falling theories of one type or another. I used to buy into them, but have observed they rarely come to pass.

At 9:17 PM, Anonymous Anonymous said...

a poster stated

"One scenario i've read that some bright folks are suggesting is that, in the event of some sort of currency crisis, two classes of currency might be created. One type of dollar would only be used for domestic activity. The other would be an "international" dollar used for global trade."

Another name for that is called DEFAULTING. It would provide the ultimate solution as 1. foreign debts get paid down cheaply. 2. no one ever lends you a nickel again

I hope these "bright folks" are not speculating in this bubble. If so, we are really in trouble

At 6:08 AM, Anonymous Anonymous said...

To Oil Peak guy.
If this is your argument, it is well taken. However, it doesn't matter. Because, if we all right and burst of bubble will happen soon, we have very troublesome economic times just around the corner. Picking up foreclosed RE and reselling them with the profit is up to 10 years perspective. Energy problems associated with Peak Oil are much longer perspective.So, once again I dont see connection here.
And dont worry. Even people on this blog will not buy foreclosured properties mushroomed after this bubble, unless they are prof. investors like myself. It will be to scary. Even I am not sure if I will be doing it. I will be observing and participating in economic developments rather.
Mike C., Chicago

At 10:04 AM, Anonymous Anonymous said...

Thanks Mike C. in Chicago.

By the way I am in Chicago(Ravenswood) as well. I am quite sure we are in agreement that there is massive a Real Estate Bubble brewing here in Chicago.

You seem very shrewd. However, not everyone on the blog has your same insight. As one of the great writers on speculative bubbles , John Kenneth Galbraith would say for every person who takes a beating when the bubble bursts there is somebody who get killed diving for the proverbial falling knife.

When the RE bubble bursts, there will be Realitors looking for folks who have been sitting on cash to jump prematurely on to a collapsing market. In fact Realitors will be pounding on their doors. Those folks could get burned just as badly as if they invested at the height of the bubble.

If Peak Oil is true, then that growth fund, value fund or even Bond fund one is
investing in could take a massive beating as well. If you are sitting on cash, investments or just got an IRA which you are hoping to use to invest 10 years down road on a home what doe you do?? And lets face it the longer one must perserve one's capital, the more likely that you will have to weather a Peak Oil scenario.

In a Peak Oil scenario things that were seriously undervalued a few years could be worth a lot in the future. Check out the
chart for Uranium for example. Somebody else believes that Nuclear Power will be making a comeback after twenty years.
What about Railroads or Railroad right-way
properties. What about Coal, Aluminum, bicycle manufactures, fuel Cells, recyclers..... On other hard previously hot "Car Culture" dependent stocks like Fast Food franchises could take a massive beating, they could be great shorts. Personally as an individual investor I have no ideal how you could protect your investments in a Peak Oil scenario.

Your best bet I believe would be to find a
stock mutual fund where the professional management team is anticipating Peak Oil. But where are such funds??? I think it would be crazy to try and "Pick Winners". Putting a portion of one's investments in such a Bear fund would seem to me to be smart hedge.

Look I am not a troll. I am trying to ask
serious questions. I am trying to look at all the angles and engage other intelligent minds. I am trying to help myself and my parents invest their money wisely. My aging parents have debated selling their home. Unfortunately Indianapolis has been down market for a couple of years now. But, my folk's suburban home is good location for a post
car dependent future, so their are some what lucky.

It is time in my opinion to widen the discussion to cover a number of related issues.

At 12:00 PM, Anonymous Anonymous said...

"We use 23%+ of the worlds petro energy with 5-6% of the world's population"

Nice start would be the 2 (anti-SUV) and self proclaimed "staunch environmentalists" Senator and Mrs(Heinz)Kerry - setting an example for all and getting rid of that 30 million dollar GULFSTREAM 5 JET which on an avg short-hop burns about 3000 lbs of Jet fuel A

I am sure as true "friends of the earth" they will consider this soon

At 5:58 PM, Anonymous Anonymous said...

OK. Now I really hear You and you dont sound that religious. It was my suggestion on this blog to widen discussion. And I am listening every body bearish and considering quiet uncommon moves now, like buying bulk low nominal silver coins in case of complete default od USD and associating unrests. I know it is extreme, but it is small investment. And it is in case I will need to buy bread and I could not have any other currency. Because one cannot walk, in rioting city, into a store with brick of gold. This is how far I want to prepare myself.
I have read about Peak Oil and I, myself, dont think that this is a biggest problem we may have in upcomming years. People in many countries are living without excess use of energy. We may have to use public transportation instead of SUV. And things like this. But I think we should not concentrate to much on Peak Oil, because this is very long perspective. I know we probably at the Peak now and we going down with the production, but in next 10 years it is not going to be that big of the problem. Its price is going to be higher , but not 100 times, so it is not may concern and I think it should not be yours. We should rather think how to protect ourselves against "possible"(?) post RE bubble depression in next 2-3 years than be scared by shortage of oil, because there will be no shortage of oil. It will be shortage of cheap! oil.
Your friend, Mike C., Chicago


Post a Comment

<< Home