Comments on: Who Gets Stuck With The Dead Cow? http://housingdoom.com/2008/12/30/who-gets-stuck-with-the-dead-cow/ Sat, 11 Feb 2012 07:12:54 +0000 hourly 1 http://wordpress.org/?v= By: John M. http://housingdoom.com/2008/12/30/who-gets-stuck-with-the-dead-cow/#comment-15255 John M. Tue, 30 Dec 2008 18:50:39 +0000 http://housingdoom.com/?p=1929#comment-15255 twist - Calculated Risk is covering this story (and the CR commenters are off to the races). Bill's comment: <a href="" rel="nofollow"><em>"I know a couple with this problem - no one wants the house."</em></a> twist -

Calculated Risk is covering this story (and the CR commenters are off to the races). Bill’s comment: “I know a couple with this problem – no one wants the house.”

]]> By: Yossarian http://housingdoom.com/2008/12/30/who-gets-stuck-with-the-dead-cow/#comment-15254 Yossarian Tue, 30 Dec 2008 17:27:49 +0000 http://housingdoom.com/?p=1929#comment-15254 Linenoise: Completely agree. This is exactly the type of blindness that Taleb talks about in 'Black Swan'. One can still see it almost everywhere... predicting the future based on several older datapoints. This type of analysis works when society or the economy is in a constant mode, especially a growth mode. 'Everyone is a genius when the market is up'. But, at very serious inflection points, judgement and anectdotal information become key. And that drives analysts nuts. Even the good ones. Even CR at Calculated Risk was calling the recession 'mild' three months ago, saying, "I just don't see it'. Now, the serious debate is how deep into the 'teens the unemployment rate will be, and when and if (yes, if) the US economy will recover. Linenoise:

Completely agree. This is exactly the type of blindness that Taleb talks about in ‘Black Swan’. One can still see it almost everywhere… predicting the future based on several older datapoints. This type of analysis works when society or the economy is in a constant mode, especially a growth mode. ‘Everyone is a genius when the market is up’.

But, at very serious inflection points, judgement and anectdotal information become key. And that drives analysts nuts. Even the good ones. Even CR at Calculated Risk was calling the recession ‘mild’ three months ago, saying, “I just don’t see it’.

Now, the serious debate is how deep into the ‘teens the unemployment rate will be, and when and if (yes, if) the US economy will recover.

]]> By: Linenoise http://housingdoom.com/2008/12/30/who-gets-stuck-with-the-dead-cow/#comment-15253 Linenoise Tue, 30 Dec 2008 16:53:54 +0000 http://housingdoom.com/?p=1929#comment-15253 I used to get in arguments with my friend over exactly this sort of thing. He looked at the numbers, saw that subprime mortgages alone accounted for a small part of the economy, and thus nothing would come of it. I saw this as a potentially society-changing event. My grandparents lived through the great depression - even now they don't spend money, save/reuse everything they can, etc etc. In this crash, what happens to the kids growing up in homes where parents can't afford to get divorced and always argue over money? What happens to people who get laid off, can't find work in the area, but can't get rid of their house so they can move to find a new job? Perhaps renting will be seen as the "smart" move in the future - companies will lay you off at the drop of a hat, and you're easily mobile if you rent. Any major shift in thinking, and entire business models are dead, no matter how much money the government throws at them. The people who thought this wouldn't spread just looked at numbers (and not very well, at that) - they forgot people were involved, and people don't fit well into equations. I used to get in arguments with my friend over exactly this sort of thing. He looked at the numbers, saw that subprime mortgages alone accounted for a small part of the economy, and thus nothing would come of it. I saw this as a potentially society-changing event. My grandparents lived through the great depression – even now they don’t spend money, save/reuse everything they can, etc etc. In this crash, what happens to the kids growing up in homes where parents can’t afford to get divorced and always argue over money? What happens to people who get laid off, can’t find work in the area, but can’t get rid of their house so they can move to find a new job? Perhaps renting will be seen as the “smart” move in the future – companies will lay you off at the drop of a hat, and you’re easily mobile if you rent. Any major shift in thinking, and entire business models are dead, no matter how much money the government throws at them.

The people who thought this wouldn’t spread just looked at numbers (and not very well, at that) – they forgot people were involved, and people don’t fit well into equations.

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