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Good Morning Minyanville!!


Uhhmm Zucchi looks to have gotten up on the wrong side of bed . . . again!


True to my recent sense of timing, as my fellow professors were going to town on the homies for the better part of yesterday, I was going through a catch-up binge of conference calls.

At risk of "dumbing down" the discussion to the lowest common denominator, my sense is that at this stage of the housing bubble we are well past the realm of any type of risk / reward, cost / benefit, rent / own analysis. While I will never be able to empirically prove this, my impression is that the remaining marginal buyers are jumping into real estate to keep up with the "Jonses", much like anyone with a pulse would not have been caught dead without an online brokerage account in March of 2000. And just like traders dove into the fastest trading / lowest denominated stocks because they could buy more of those and therefore it must have meant that they were bargains, so today the focus of the homebuyer is on the lowest possible monthly payment, notwithstanding the size of the underlying mortgage and / or what piece of real estate that mortgage will get you.

When it all blows up the ugly difference will be that for the "Commerce Ones" of yesteryear there was a market to liquidate the margin call, whereas for those who "purchased" that super-duper, win / win, blue-light-special monthly payment" there won't be a way out, and everyone up and down the homies food-chain (lawyers excepted of course) will be left holding the bag.

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