Sunday, May 13, 2007

what bubble?



A cheap post.

A cheap excuse to put up a picture of li'l solipsist.

Little gaffer has blown a bubble, and is blissfully unaware. His belly is full, he's warm, and he's dreaming. He is not thinking of tomorrow, wouldn't dream of things ever being any different. He is unable to - mostly from lack of experience.

It kinda made me think of the home-buying hordes - unaware of the bubble that is about to pop right under their noses.


OT: I saw gas at $1.30/L this weekend. That's gonna dig into those mortgage payments of those who commute to and fro' the valley. Discretionary spending is getting squeezed, and will be reflected in the economy very soon. We just don't have that kind of money.

6 comments:

casual observer said...

It was just thinking that by the time li'l solipsist is ready for retirement, some of the people that took out mega mortgages recently, may just be paying them off.

An entire lifetime in debt, how sad. Hopefully, by the time this little guy is ready for his first home purchase, the RE market has returned to some reasonable level of sanity.

Gas @ $1.30/litre, wow. Good thing inflation is low, otherwise, I might be concerned.

wizardofozziejurock said...

I've got plenty of money to pay for gas...I'm not a homedebtor.

I love the hypocrisy of these people and politicians who go on about high gas prices and price fixing when the increases are absolutely miniscule compared to house prices. There's a 900-pound gorilla in the room and they're trying to swat a fly. Let's hope that fly doesn't land on Mr. Gorilla.

Poor l'il solipsist doesn't realize it, but with every puff of wind in his diapers, he's being forever priced out of the housing market. I made a similar mistake as a baby and completely missed out on the whole free love thing.

solipsist said...

casual - the gaffer will never retire - he's gonna have to take care of his equity-less parents.

I'm waiting for the first-born mortgage - wherein we sign him away to buy a tool shed in an alley to live in.

wiz - it's not just the gas. Fuel prices affect all of our purchases, from food to commuting. Fuel has gone up well over 30% in the last year.

My biggest business expense is fuel, and in the last while, I have about $150/month less to spend on shelter, etc. Multiply that by 18 million (rough number of adults in Canada), and the result is billions per month taken out of discretionary spending (a simplistic illustration). That is going to affect the economy.

I'm sorry you missed out on the free love. I enjoyed that immensely.

Anonymous said...

Mini-solipsist will have NO problem surviving in his future world.

With a charming face like his, it should be easy enough to marry money, rather than earn it.

Imagine, he cannot even talk yet, but he is telling us all, in his own way, that THERE IS A BUBBLE, AND IT IS GONNA BURST.

Smart AND cute, what the heck!

Theorem said...

Okay, so the gov't is happy to give tax breaks and even refunds to those who purchase more fuel efficient vehicles, hopefully this can help a few people avoid the gas hike crunch a little.

However, I have an argument that the gov't should be giving me a tax break for living downtown within walking distance of work. Hence, my car is pretty much parked all the time. Fix the gas problem and at the same time fix the housing prices.... am I onto something here or just spouting nonsence?

casual observer said...

"I have an argument that the gov't should be giving me a tax break for living downtown within walking distance of work. Hence, my car is pretty much parked all the time."

I believe you get an indirect tax break by not having to pay for all that gas.

"Fix the gas problem and at the same time fix the housing prices.... am I onto something here or just spouting nonsence?
"


If the Central Bank stepped in earlier and raised interest rates in order to prevent the huge speculative bubble in RE, we wouldn't need anybody to fix housing prices. Having said that, my hope now is that they don't try to prolong the downturn.

Many bad things can happen when the gov't tries to save people from themselves. Just let them take their medicine, without trying to sugar coat it. The market will correct on its own.

It's not like they've stopped building any more houses. Eventually, the market will run out of people that can afford to buy them, or that refuse to buy them at insane prices.

I think a large reason for the RE bubble is because the gov't tried to step in and protect people from the stock market bubble collapsing in 2000. All that cheap credit was just too tempting for people.