Why might anyone not admit or refuse to believe that the bubble has burst? For the past year, I’ve been talking about 
the bubble bursting and for the year leading up to it, I’ve been warning that a “correction” is imminent.
All we need to do is look back to the stock market in 1999. Everyday I would wake up and sit at my computer, looking at the stock market from the day before. Then when the market opened, I would buy a stock or two and sell it an hour latter. I’d make between $3,000 and $5,000 every morning and do the same thing at the end of the day! This went on for several months. It was clearly absurd! Everyone knew the stocks were overvalued but the frenzy was upon us! I had never traded stock personally in my life. I had always used a broker. Now I didn’t need one! (FSBO stock trader) I didn’t even need to pick a “good” stock. (speculator investor) It seemed as though I just needed to buy something early in the day and sell it a few hours later. Easy money!
How is the above example any different than what has happened to our real estate market! We were seeing upwards of 15% appreciation a year! My personal home doubled in value in 5 years! I would often ask people, “Would you buy your home back for what you were asking for it?” They would laugh and say “Not a chance!” Hence the need for a correction!
CNN, this morning, finally admitted that the bubble has burst! Not that we didn’t already know this! I believe that the reason most people didn’t want this “news” to become public is because of the self fulfilling prophesy it would become! If buyers knew that the bubble was bursting, they would stop buying. This would begin what is now upon us!
Comments(4)