Reply #20: yawn on binary thinking [View All]

[paulsby]

it's not a EITHER it's the big guy's fault or the little guy's.

it's both.

and they feed off each other, kind of like a feedback loop

the real estate bubble is like ANY bubble. see: greater fool theory.

people buy at ridiculous prices because they believe that in the future they can sell for even MORE ridiculous prices

and that works.

for a while.

then... it doesn't

it's been true for CENTURIES. bubbles are NOTHING new.

and just like the tulip bulb scandal, the 1929 stock market crash, etc. etc. the little guy played a big part.

google "bucket shops" in 1929 for example. JP morgan famously decided to pull his money out of the market when an elevator operator bragged to a rider about the killing he ( a low wage worked) was making in the stock market.

the real estate market was no different.
i recall CNBC interviewing two former vegas strippers who were making a killing in real estate.

same mentality.