Just taking a break from cleaning my neighbor's pool, lounging on my deck, enjoying a cold drink. I wonder if there really is anything to this whole real estate bubble theory some people are talking about? My condo is pretty nice. Good neighborhood. Nice weather. Couple miles from the blue Pacific. They have been going for $600,000-$650,000. Still, It's nowhere near as nice as the house I grew up in a few miles away. I wonder how much that's worth now? My parents paid $17,000, late in 1959.
It seems to me that the Japanese had a situation like this in the eighties. Yeah, I remember now, they were selling each other urban real estate, generating inflated equity, and leveraging the equity to buy more inflated real estate. I remember a Japanese real estate investor saying, with a straight face, that a several square block area in the center of Tokyo, was worth more than the entire state of California. It all came unraveled in 1990. Real estate values dropped like a shot. They had some problems with bad real estate loans, too. Not really a stock market problem. All the economic fundamentals were good. They did have to lower interest rates to Zero, where they pretty much are to this day and the Nikkei 225, almost two decades later, is still less than half what it was then.
It's not the same though. The Japanese economy is not the same as ours here in America. Do you want to know why?
THEY STILL ACTUALLY MAKE STUFF IN JAPAN AND SELL IT TO OTHER COUNTRIES! FOR A PROFIT!
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