I don't really know exactly what to do. I guess I'll diversify among a couple of banks and maybe invest in something else too. If you can pull your cash from under the mattress at the right time, I think this market collapse could be quite advantageous. But things should never have reached this point. It's ridiculous that the situation has to get to the point of a complete economic meltdown before a correction occurs. One could blame Alan Greenspan and the Federal Reserve or other aspects of the government. While this may have merit and I'm sure many will, I don't blame them. One could blame the mortgage companies, and to the extent that they loaned what they couldn't cover, they deserve tons of blame. But the heart of the problem, in my opinion, is the most nefarious collection of miscreant scoundrels that currently stake out a place on the economic landscape - real estate agents.
One of the things I like about working in computer science is that I imagine that I'm doing my part to obliterate this profession. I want to make the entire idea of real estate agents obsolete. I want the entire profession crushed and it's foul practitioners relegated to the status currently enjoyed by "interviewers" during the Spanish Inquisition.
Let's consider how these feckless creeps affect life. Tradition dictates that real estate agents receive a commission on the sale of property, usually 7%. This means that if you want to buy an expensive, difficult-to-afford thing like a house, you'll have to work 7% harder to get it. Thanks to real estate agents. This means that you'll be making mortgage payments for an extra 25 months on a 30 year loan just for your real estate agents' invaluable help. How invaluable is their help? In my experience, their help is entirely without value.
When buying or selling a house, these jackasses obstruct my access to centralized databases. This cartel with the MLS has fuelled the entire profession for 30 years. Once the emerging competitors (zillow, craigslist, etc.) achieve a critical mass, it is my fond hope that all real estate agents will be homeless, sheltered from the cruel elements only by poetic irony. Other than acting as very expensive gatekeepers to the MLS, real estate agents seem to do very little. They can't market a house using the web worth a damn. I've been involved in several projects where *in my spare time* and *for free* I use the web to market a property far better than a real estate wanker will.
You'd think that with such a brazen plan to rip you off that they'd at least be at your house everyday to help you clean and mow the lawn, etc, but, really, has anyone ever heard of that?
Think about the numbers for a second. If the median home price in the US is around $200k, then the shifty agents are going to pocket a whopping $14,000! At $20 per hour (I'm being generous) one would expect to have a dedicated advocate working an exclusive full-time job for 4 months. But is that the reality? No. I'd say the typical investment is far less than a brain surgeon who removes a tumor from your head. Who do you think makes more?
One thing that I found tedious about the book "Freakonomics" was that it presented the factual conclusion that real estate agents do not generally act in their customers' best interests as if it were some kind of scientific breakthrough when, in fact, it should be readily apparent to most primates. The book goes into detail regarding the obvious regarding that, but consider this different way real estate agents screw you. Imagine you're looking for a house and a good deal doesn't exist, but a *great* deal does. Say you want to spend $250k and the real estate conman finds the perfect house that's easily worth $250k, and it fulfills all your needs, but imagine the price is $25k. This kind of thing can happen. Are you going to be delighted to pay a dime on the dollar? No, because you will never find out about a truly great deal. The fact is, if a house is really, *really* a great deal, the real estate agent will have the first shot at it and buy it themselves.
My proposal is this - get it into your head that real estate agents taking a commission is bad. Very bad. Bad for me, bad for you, bad for everyone. If they want to mow my lawn for $20 to help me sell my house, fine, but don't ask for $20k and leave the grass uncut. Whenever possible, support alternatives to real estate leeches. Use Zillow, and on-line "For Sale By Owner" services (you know your agent isn't going to check there). If enough people finally get it that these devious charlatans are bad news, they will simply cease to exist. It's really that simple. And people will be free to buy real estate with out pressure from some cretin with a severe conflict of interest. Maybe that can help curb future cycles of idiotic price increases and false hopes of a quick path to riches.
"Baby, baby drove up in a Cadillac
I said, Jesus Christ! Where'd you get that Cadillac?
She said, balls to you, daddy.
She ain't never coming back!"