Graffiti Towers – Harbinger of LA Residential Real Estate Crash?

THE VIEW FROM HERE – People are most optimistic that prices will forever increase just before the crash.  That was how it was for the Wall Street Crash in early October 1929.  The same holds true for the Crash of 2008 due to Wall Street’s subprime rate frauds.  When pre-crash confidence is high, too many people borrow and spend money thinking the boom cycle will be forever. Others foresee the coming crash.   There are, however, always doomsayers who make their living crying wolf, but few can correctly extrapolate events to warn of a real crash.  In 1999, Sen. Byron Dorgan (D-ND), for example, warned that the repeal of The Glass-Steagall Act and the legitimizing of Credit Default Swaps (CDWs) would collapse the real estate industry and drag the rest of the economy with it.  Sen. Dorgan was no false prophet; he simply saw the folly of repealing Glass-Steagall to allow investment firms to own commercial banks and to allow Credit Default Swaps would result in disaster.  Dorgan thought it would take about eight (8) years; he pretty much hit the nail on the head.  Average Joe’s cannot distinguish false prophets from the sagacious.  People heed those who emotionally satisfy them....