[lbo-talk] housing bubble?

[Wojtek Sokolowski]

Jordan:
> I said there was (typically) no margin call.  If you get stuck in a
> limit down futures contract, you can get wiped out in ways that are
> (again, typically) not possible with houses: you can't be forced to sell
> your house _just because it's value goes down_ ...

So basically you argue that stox have only the exchange value whereas houses
also have a use-value that may compensate for the possible loss of
exchange-value.  Marxist! :)

You do not seem take into account the differences in transaction costs
(taxes, mortgage interest, maintenance, etc.) associated with these types of
assets - these are negligible for stox and quite substantial for real
estate.  If your stox loses value that is bad, but you can keep the devalued
stox at no additional cost hoping it will rebound in the future.  It ain't
so for real estate - you still have to pay mortgage, taxes and maintenance -
and these can push you over the edge before your asset appreciate again.

Wojtek