Anyway you can “spam block” that before it happens. It’s tolerable now, but likely to get increasingly worse.

I respectfully disagree with the idea that it IS in the interest of society that housing hit the buttom as quickly as possible (and we do agree that it will go down before it goes up).

Lets say that todays 200K house has to go down to 150K before we have hit the buttom, and in 10 years it will get back to 200K again. Obviously for you it is best if it falls (quickly) to 150K (say tomorrow) and then starts a slow recovery. However, for individual homeowners, banks and government the quick fall means that they have to deal with the total loss right away in a single year. Compare that to a loss of 10K per year for 5 years to end at the same price of 150K. It is a heck of a lot easier for a person to create savings and increased income by 10K/year for 5 years than it is to fill a hole of 50K in one year. That goes for banks and government to. As a matter of fact the difference between surviving it or getting killed by it, may actually be whether you have to deal with 50K in one year or can deal with it over 5 years. So even though our human brain has been encoded to think that it is better to just “take the pain and get it over with” reality is that sometimes it is better to drag it out.

I will also take issue with the assumption that the sellers who refuse to deal with the reality that their house is worth < 200K will somehow be more prone to deal with the reality that it is worth 150K. Everybody who can refuse to sell will refuse to sell until the price has come back up to almost the highest price they ever believed it could have been sold for back in 06-08. It is the same mental state that gets most small retail investors to hold onto a “good” stock all the way down and back up again. What you eventually will see is that people who are not forced to sell their house below that price, will instead rent it out rather than sell it “low”, even it it means that they will have to rent in another town that they are moving to. As a matter of fact I outright own my house and if I had to move to another city I would rent out my house, and then purchase a new house in the new city at the time I belived that city had hit the buttom (exactly like you). I would not sell the old house until I belived that we had gotten the bounce back and reached stable prices again (and that we were not heading into hyperinflation, in which case in might just hold onto the old house for another decade).

It just broke past. How many suckers will that draw in?

Dōmo arigatō, Mr. Roboto!

HCF

Executives of big banks don’t have to face reality.

Margin calls don’t apply to them.

I would bet that most of the speculators don’t even think they are speculators! What people need to know is that we are ALL speculators. We make a guess (hopefully educated) on the future and make a few bets…

I love the old adage: “An investment is a trade gone wrong.” For most people (minus the value investors who do their homework), this is sadly true. We just have to fess up on our intent and nothing does that better than the cold shower of reality!

HCF

… I was taught the dividend growth model in B school as the primary method for valuing equities.

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That was then, this is now. The textbooks still need to be updated, but equity valuation models should be very different when the new books come out.

Today you have the internet, throw away cell phones, anonymous email addresses, assert bases worth tens of billions of dollars, ignorant reporters, half-witted investment analysts, agreeable regulators, gullible investors, unbelievably wealthy Uncle Stupid, and exchange traded funds that are said to make it much easier to move markets than ever before.

There are still people around who believe that a possible 10% reduction in oil usage will result in a 60% reduction in price. They call it demand destruction and still think peak oil is going to jump out from behind a tree and eat your dog while you’re walking it. As the WSJ noted today, they still confuse hoarding with consumption.

Then you have a large loser class who only sees the one flower growing within a stinking mass of feces and assumes the feces is in a period of spontaneous transformation into something beautiful.