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<p>LOL!! Amen.</p>
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<p>We looked around at bigger houses in 1999 after paying off our mortgage. It was the time of the tech bubble and there was giddyness in the industry. I went out and saw the prices and just said that these houses aren’t worth the asking prices. Of course prices rose and rose and rose for another six years. In the end, it didn’t really matter. We’re happy with what we have.</p>
<p>Most of my coworkers knew enough to be careful as our industry has had its ups and downs and we were pretty close to layoffs in the 1980s. The young kids that we hired didn’t know about layoffs and economic downturns. Many overextended themselves on cars. Yes, cars. When layoffs came around in 2002 and 2003, the old timers weren’t that worried because they had socked it away. The kids were worried because they’d never been in that environment.</p>
<p>I used to be a frequent visitor and contributor to The Housing Bubble Blog. What we predicted in 2003, 2004, 2005 came to pass. It was amazing to actually watch the housing market fall apart. We knew the fundamentals and what should have happened but were amazed at how long the bubble was extended before the collapse.</p>
<p>“The Housing Bubble Blog”
Was that Micheal Burry’s blog?</p>
<p>No, Ben Jones.</p>
<p>I used to read that blog. Great blog.</p>
<p>ah yes, thanks.</p>
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<p>Most predictions come to pass if you wait long enough.</p>
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<p>Do you have some empirical evidence of that?</p>
<p>While on the one hand I agree that the high income folks who put their cash back into the economy is a good thing, that said, I also think more people should save for that unforseen rainy day. At his income level, he probably had a nice golden parachute when laid off, but he probably didnt anticipate the value of his house and stock protfolio tanking simultaneously (he probably saw his house purchase as another investment, and was diversifying across real estate and the market). Not making any excuses for him, as we have saved more for our 2 as he did for his 3, and at a much, much, much lower income (and as a 2 income family), but I don’t see him as making terribly poor financial decisions. Agree that he probably expected to pay for college with a combination of savings and general cashflow, or possibly selling something from his stock portfolio. He sounds like he was diversified-- just got financially crucified. He probably had GE stock options at his income level that he may have planned to use to pay for college, and they are probably under water blowing bubbles right now. Sounds like he planned for his kids to be full pay at JHU. I have more respect for him than for those who can pay more than they claim.</p>
<p>That said, we have saved and invested carefully. We will own our home free and clear this month (yay!), and we were in the middle of an expensive remodel when my H got laid off. He was unemployed for 9 mos. Not only did we have the $ saved for the remodel, but we were simultaneously paying for second s’s college. We have never had a dime of need-based aid, and together earn only a fraction of what that GE guy made. We still managed to live off my income (self employed, so not guaranteed or predictable) and savings, fortunately requiring us to touch very little of savings. I can’t help but compare our situation to his. We lived through a job loss, had committed expenses, and didnt turn to the university for aid. It can be done.</p>
<p>I do feel badly for the family with handicapped kids. She had a right to have a nice place to live for her family, Sounds like she’s had a rough go of it.</p>
<p>After reading that article, I think that I am going to save some more for my kids college…just in case.</p>
<p>“The lesson I always take away from these kinds of threads is to never, ever, ever be the subject of a newspaper article about paying for college.”</p>
<p>Really, why would anyone subject themselves to that? Of course, the wealthier family will probably do fine. They will find a way for the kids to finish college, if their interest rate is low they can probably find a way to continue paying the mortgage, and the job situation may get better.</p>
<p>On the other hand, the 26 year old will probably never get mom and dad to keep shelling out money for her arts career, and unless the handicapped kids dad gets a paying job soon to supplement the mother’s income—they have lost the great deal that they had. Too bad they couldn’t get their mortgage reworked to something they could afford–I thought that the restructuring program was supposed to help people in that situation.</p>
<p>[Wall</a> Street needs a talk with grandparents: Michael Carey | adn.com](<a href=“http://www.adn.com/2010/01/26/1111714/wall-street-needs-a-talk-with.html]Wall”>http://www.adn.com/2010/01/26/1111714/wall-street-needs-a-talk-with.html)</p>
<p>Good article, if only. But I do think our grandparents were more likely to kick the dog-we don’t…our dogs nowadays are pampered princesses.</p>
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<p>[Infinite</a> monkey theorem](<a href=“http://en.wikipedia.org/wiki/Infinite_monkey_theorem]Infinite”>Infinite monkey theorem - Wikipedia)</p>
<p>That isn’t empirical evidence.</p>
<p>“The way I read this article is that they had saved almost a million dollars, for college and down payment towards their house.”</p>
<p>It is highly unlikely that they saved the 650K downpayment for their current house.</p>
<p>They likely got that hefty downpayment from the proceeds of their previous house they sold to upgrade.</p>
<p>Most of us who are 50 plus years old bought our first houses when they were worth much less, even in this market. I know at one point our home was valued at 1.35 million, and the downpayment on that home was about 150K, which we got from the proceeds of our first condo that we bought in 1984.</p>
<p>In other words, there was a point when our house had increased in value over a million dollars.</p>
<p>We’ve only got a 100K mortgage on a house that is currently worth almost 900K. I can assure you, we did not save and put down 800K on it, and if we bought a new home and put down 800K on it, we didn’t save that chunk of change, it came from the increase in the house value.</p>
<p>I just called H because I was curious - original downpayment on first condo that we bought for 112K and sold a year later for 210K - 15K.</p>
<p>Now 26 years later that 15K has grown to 850K. Food for thought.</p>
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<p>Give me time, give me time.</p>
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<p>I’d rather go with statistics. At any rate the predictions made back in 2003, 2004, 2005 were pretty much spot on and it didn’t take very long to play out. I made predictions on gold and energy in 2001 and those panned out too. My perspective as a trader isn’t give me time - I don’t want to sit in a dead or losing trade for long periods of time. I’ve tried that. It sucks. If I’m wrong, I take my losses and move on. I do see people that sit forever in a bad trade. It tears them up over time.</p>
<p>““banks will no longer lend to home buyers without the income to support repayment,””</p>
<p>They say it like it’s a bad thing?!?</p>