Housing Bubble 1.0 - some thoughts

Posted On: Saturday - October 27th 2018 1:20PM MST
In Topics: 
  Global Financial Stupidity  Race/Genetics

I'd mentioned in this post a week ago, that I'd have something to say about some ancient history (now), the housing bubble of the early/mid '00's, call it Housing Bubble 1.0 (for a reason). It's in the comments under this unz article, not the article itself, where I'd read some discussion on that phenomenon, including a couple from Ron Unz himself. It started with the observation on Chief Spreading Bull, aka Squaw Elizabeth Warren of the Massachusetts nations in the white man's Senate, that she had said many things regarding that housing bubble and the bailout of the banksters (Mr. Unz uses the term, and I have no argument with that.)

There's lots more to say about those bailouts of big banks by the US Feral Gov't, but I'll confine this discussion to the ethnicity aspect that was brought up. Has Steve Sailer, linked-to here most often, over-emphasized the Hispanic aspect of the cause of the bubble in his many posts on the subject? He does know a whole lot about California, having been there a long time. There are lots of Hispanics in California, and it was one of the biggest of the bubble states (and is again now). Mr. Unz's argument was with the numbers, stating that blacks and Hispanics, as home buyers, were not any particular larger portion of this financial mess than one should expect by percentage of the population.

With all respect to Mr. Unz here, since, I am a "HEAVY USER"* of his web site, I’m not sure that he understands Mr. Sailer’s point on this. I say this, BTW, as someone who was paying close attention to the housing bubble-and-pop during that era, in a location where it was pretty big AND I didn’t read (or very rarely read) Sailer’s writing back then.

The point goes way back, maybe to the late ’70′s. The push to AA blacks (there weren’t many Hispanics back then, period) into loans that they were otherwise being denied started long ago. Everyone with any knowledge of ACTUAL free markets and common sense knew that no banker would turn down a customer who, on average for his “type”, would pay back the loan.

The local bankers knew what they were doing, so it wasn’t about racism. As we all know, that doesn’t/didn’t fly with the SJWs and even the proto-SJWs that were around back then. They wanted equal OUTCOMES. The big banks were coerced over the years by the Feral Gov’t to show better approval ratios (either higher YES/NO for blacks, or higher ratio of blacks/whites than previously). Just jawboning was not going to do it, so the Community something-or-0ther Reinvestment Act and other “anti-redlining” laws were made to hit the bankers in their pockets if they didn’t comply.

That was the start of the problem. I don’t want to speak for him, but I think Steve Sailer doesn’t maintain particularly that the housing crash was so bad just due to the raw NUMBERS of black and Hispanics. The point was that, once this coercion of the banks by Feral Gov into making unsound loans started, plenty of white people got into the act too. The bankers threw up their hands, said “WTF, Joel”**, and gave the 3% down, low-interest (specially ARMs) loans to whomever walked in. This was all helped by the fact that the US Gov, via the FED had forcibly lowered interest rates after the 2001 dot.com, 1.0 bust. It helped everything that housing prices were “going to always go up” (if the last 20 years were any guide in most markets). Nobody would lose, if that stayed true, no matter how just plain financially-stupid the loans were (say, 3% down to a landscaper making $20,000 on a good year, on a $375,000 McMansion in Temecula, … oh, but the rate may rise, but if you won’t be able to afford payments then, shoot, just sell it at a $80,000 profit, more money than you’ve been making mowing yards for that whole time, even if you undocumentedly cheat on taxes.)

I don’t put all of this on any one presidential administration either. It went from Carter (not sure if Reagan/Bush 88 really said much about it), through Clinton and George W. Bush. They all thought they were doing right, of course.

Now, just to emphasize to the reader that I WAS THERE, here are 3 anecdotes to explain my point:

1) A guy I worked with had bought 4 condo units in S. Florida just for an investment in ’06 or so. I only worked with him in ’08 when things were going down the tubes. He had already lost his ass, and the units (maybe whole building) weren’t even finished yet. Yes, he took the hit, but a) Our jobs were not high-paying but long-term stable. b) His parents bailed him out, but, per (a), I believe he was going to make them whole.

2) A friend bought a townhouse (TOWNHOUSE! not even a real house) in a medium-sized city for $550,000 in 2007, in a place where there was not the big, big bubble, but still, by 2 years later it was worth $350,000 according to him. He’s rented it out since, which worked out OK. However, when I saw it for the 1st time, before the crash though, I told him “I really wish you showed me this before you bought it. I’m telling you, it ain’t worth this much! ”

3) A friend’s ex-girlfriend bought 2 houses in Arizona a few years before the crash. That was all her lump-sum retirement money from a government job. Prices dropped like a rock, and she probably couldn’t even rent them out. She was bailed out by her husband, as I guess that’s the way now. (My friend is probably glad she’s ex-girlfriend.)

Oh, if it makes anybody feel better, these were all white people.

* It's a term that comes from the fast food industry

** I know, I know, not quite the movie line.

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