The real estate bubble of the early 2000s followed closely on the heels of the dot-com bubble of the late 1990s.
In diners, bars, and across kitchen tables, we were consumed by two words: real estate.
Sending your kid to college? Don't stick him in a dorm; buy a house or condo and bring in a few friends as renters, if necessary.
By the time graduation rolls around, the equity in your purchase should cover the 4 years of tuition and then some.
"Real estate is red hot," went the familiar TV ad.
The announcer encouraged us to cash in on the equity in our homes and take that long put-off European vacation.
We never had to worry about a day of reckoning because our home equity was going in one direction - up.
We came to look at rising real estate values as a given, almost an entitlement.
Until the music stopped.
Will we ever learn? Probably not.
In 1637 in Holland, tulips - yes the flower - became the object of a speculative frenzy.
This became known as Tulip Mania or Tulipomania.
The prices of the bulbs began to skyrocket, aided by an early version of a derivatives market, where an investor would buy futures contracts on bulbs not yet planted.
At one point the price for a single bulb exceeded the annual income of a skilled craftsman by 10 times.
And, as with any speculative bubble, the prices eventually crashed.
Although it has become a subject of debate among economists as to just how severe the tulip mania was, the story nevertheless stands as a metaphor for speculative excess.
It's getting tedious listening to politicians carping about victims.
A victim means a heartbreaking story, and a heartbreaking story means a press conference, and a press conference means valuable vote-getting face-time for the politician.
Remember the great Mighty Mouse: "Here I come to save the day!" Mighty Mouse would feel comfortable in Congress.
These trying times are less about injustices and predators and victims, and more about a nation of people who didn't want to hit the slow button.
We were all too busy enjoying the party that we didn't notice the house was on fire.
So while the newspapers and TV specials talk about the injustice of this mess - and a story about Mr.
and Mrs.
Jones from Dubuque who are facing the loss of their home makes for compelling copy - the truth is a lot more complicated.
Meanwhile, I'm putting my money in tulips.
In diners, bars, and across kitchen tables, we were consumed by two words: real estate.
Sending your kid to college? Don't stick him in a dorm; buy a house or condo and bring in a few friends as renters, if necessary.
By the time graduation rolls around, the equity in your purchase should cover the 4 years of tuition and then some.
"Real estate is red hot," went the familiar TV ad.
The announcer encouraged us to cash in on the equity in our homes and take that long put-off European vacation.
We never had to worry about a day of reckoning because our home equity was going in one direction - up.
We came to look at rising real estate values as a given, almost an entitlement.
Until the music stopped.
Will we ever learn? Probably not.
In 1637 in Holland, tulips - yes the flower - became the object of a speculative frenzy.
This became known as Tulip Mania or Tulipomania.
The prices of the bulbs began to skyrocket, aided by an early version of a derivatives market, where an investor would buy futures contracts on bulbs not yet planted.
At one point the price for a single bulb exceeded the annual income of a skilled craftsman by 10 times.
And, as with any speculative bubble, the prices eventually crashed.
Although it has become a subject of debate among economists as to just how severe the tulip mania was, the story nevertheless stands as a metaphor for speculative excess.
It's getting tedious listening to politicians carping about victims.
A victim means a heartbreaking story, and a heartbreaking story means a press conference, and a press conference means valuable vote-getting face-time for the politician.
Remember the great Mighty Mouse: "Here I come to save the day!" Mighty Mouse would feel comfortable in Congress.
These trying times are less about injustices and predators and victims, and more about a nation of people who didn't want to hit the slow button.
We were all too busy enjoying the party that we didn't notice the house was on fire.
So while the newspapers and TV specials talk about the injustice of this mess - and a story about Mr.
and Mrs.
Jones from Dubuque who are facing the loss of their home makes for compelling copy - the truth is a lot more complicated.
Meanwhile, I'm putting my money in tulips.
Source...