Nostradamus in the House. Looking at 4 Potential Scenarios for Southern California Housing.

I couldn’t resist the “in the House” pun but it is becoming apparent that people are placing their bets on what is going to happen now that the housing bubble is bursting. It doesn’t seem like there is any debate regarding that we are in fact, living in a bubble. Subprime lenders are realizing once rates went up, people just said screw it and let the mortgage notes role on in without payments. No complicated economic theory behind it, just common sense which seems less common as each day progresses. With the foreclosure process taking anywhere from 3 to 6 months, folks don’t seem too concerned about getting their credit ravaged like Barry Bonds at a Dodger game. I mean why would someone fight vigorously to defend a home that in all likelihood, isn’t worth what they paid for it. For honor? The person that gave the mortgage is likely no longer employed and the note is chopped up like sushi in the mortgage backed securities markets. It isn’t like your local WaMu personal banker is going to give you a call and say, “Hey Mike, is everything okay? What is going on?” The personal touch is gone. The more likely scenario is your going to get a legal letter from the lender in your mailbox saying pay up or else. Most people in subprime loans feel screwed so they are simply returning the favor to lenders. I mean what are they losing? Their credit? They are freaking subprime to begin with! Its not like they are feeling an emotional ache in their heart that their 580 credit score will drop to 400. And you wonder why the market is tanking? With $1 trillion in loans resetting this year, 2008 and 2009 we can expect much of the same.

So it is established that the housing market is no longer a viable rock solid investment. So what can we expect to face here in Southern California or any other large overpriced metro area in the country? In this article, we will use the clairvoyant power of Excel and run four likely scenarios that will occur here in Southern California. We will use the current median price, current income, and try to predict future scenarios. Consider it a housing premonition.

These are the key reference points we will use:

• Current Southern California Median Single Family Home Price: $502,000
• Current Southern California Media Income: $60,000*
• Los Angeles County Family Median Income: $43,518
• Orange County Family Median Income: $58,605
• San Diego County Median Family Income: $51,939
• Ventura County Median Family Income: $59,379
• San Bernardino Median Family Income: $43,179
• Riverside County Median Family Income: $46,885

(Source: Census.gov)

• Income growth of 5 percent annually.

*We’ll be generous and use an upper-limit since we are looking at the ENTIRE region.

Scenario #1 – Housing Goes up 10% Each Year for 5 Years

You may be thinking to yourself, there is no way this can ever happen. Well keep in mind that we did have 5 years and 2 months of 10+ percent year over year gains in Los Angeles County so not only can this happen, it did. In addition, before 2007 hit full stride, we had many housing pundits predicting double-digit growth! Each month after more and more negative housing news, they slowly scurried away and now they are silent in the dark green jungles of mortgage implosions. Irresponsible public policy and financial negligence led to this mess. But let us humor these heroes and take a look at how these scenarios would look if we let them run their course for another 5 years:

Median Home Price: 2012

year	income
2007	$60,000
2008	$63,000.00
2009	$66,150.00
2010	$69,457.50
2011	$72,930.38
2012	$76,576.89

While the current annual income to home price ratio is hovering around 8.3, by the time 2012 hits it will be approximately 10.6! Keep in mind we are also using a higher reported family income. If we were to use current Census data the housing to income ratio would be much higher. What will the mortgage cost look like?

10 percent down with 30 year fixed at 6.5 percent:

Budget 2012

Price	$808,476
Down Payment	$80,847
PITI:	$5,441
Net Income After Taxes:	$4,785

You think we have affordability issues now? Just wait if we hit this scenario. Let us take a look at a more conservative 5 percent annual increase.

Scenario #2 – Housing Goes up 5% Each Year for 5 Years

Now we are being more conservative. As a matter of fact, Southern California is currently up, 2.4 percent year over year. Housing bubble? Not here in the ever resilient SoCal market. Let us take a look at a 5 percent annual appreciation rate (which is more historically accurate):

Clearly this scenario seems more probable. Let us run the numbers once again with the 5 percent annual appreciation rate:

Budget 2012

Price	$640,693
Down Payment	$64,069
PITI:	$4,311
Net Income After Taxes:	$4,785

Okay, now at least we aren’t running into monthly household budget deficits. But the basic monthly nut will consume 90 percent of our net take home pay of the hypothetical median income family. Talk about taking it to the house. Let us now look at some more bearish predictions. First, let us examine a 5 percent annual decline.

Scenario #3 – Housing Goes down 5% Each Year for 5 Years

Even at a 5 percent decline annually over 5 years, we now see the median house price hit $388,438. Many in Southern California haven’t seen the fabled $300,000 mark in many years. Can it be possible that we have a blast from the past? Let us break down this scenario:

Budget 2012

Price	$388,438
Down Payment	$38,843
PITI:	$2,613
Net Income After Taxes:	$4,785

Now this is looking more reasonable. And all we saw was a 5 percent annual decline over 5 years. Not exactly a horrific crash or bubble bursting. In this scenario, the monthly housing nut will only take 54 percent of our net income. Seems like we are approaching a more realistic and reasonable environment. For the heck of it, let us do our maximum doom and gloom scenario of 10 percent annual declines for 5 years. After all, we did see 10+ percent increases for 5 years (sometimes even 20+ percent annual gains) so why not on the downside?

Scenario #4 – Housing Goes down 10% Each Year for 5 Years

Now most folks cannot imagine this scenario. Are you telling me we can actually be in the $200,000 range? If we follow the above scenario that is where we will eventually end up. $296,426 doesn’t even get you a studio apartment so how can it ever purchase a single family home? Let us see how the household budget works out:

Budget 2012

Price	$296,426
Down Payment	$29,642
PITI:	$1,994
Net Income After Taxes:	$4,785

We actually have a monthly payment of under $2,000. Now, the housing nut only takes up 41 percent of the median family’s net income. Keep in mind in more prudent times, most financial advisors recommend that housing not consume more than 1/3 of your household income (some go with net and some use gross). Either way, even with our massive decline of 10 percent year over year for 5 years, we are finally reaching parity with ancient financial standards.

I hope the above gives you an idea of how ludicrous it is to expect 10 or even 5 percent continued annual appreciation rates. Unless income starts going up by 10 or 15 percent a year, the positive scenarios will simply not happen. There are two questions that I’ll throw out:

1. Do you think housing will slowly decline or will it happen faster and more abrupt?

2. Do you think interest rates will go up? Because if rates do go up, the above scenarios will make it even more difficult for the average family to purchase a home and not stretch their budget like Gumby.

Related Articles:

The Housing Tipping Point

10 Real Homes of Genius in 5 Southern California Counties

The History of The Los Angeles Housing Bubble

The Foreclosure Story: $130,000 Income and Going Through Foreclosure

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The History of the Los Angeles County Housing Bubble (2000 – 2007). Proudly a County of a Renting Majority.

Take a long and hard look at the chart above. Sometimes a picture is worth a thousand words or in this case, worth half a million. Many would be housing buyers have felt the angst of never being able to afford a home in Southern California. Anyone sitting on the sidelines for the past seven years has seen the largest historical run-up in housing and probably felt helpless at each consecutive jump in prices. “Housing has gone up 20 percent year over year,” became a monthly media sound bite embedded into the psyche of any California resident. We start out with a median price of $200,000 seven years ago and currently see median home prices of $520,000 in Los Angeles County. This double-digit year over year appreciation started in February of 2001 and didn’t end until April of 2006. That means housing never dropped below 10 percent yearly gains, (sometimes reaching gains of 26.6 percent) for 5 years and 2 months.

Even as we are facing massive meltdowns in the subprime and now prime mortgage arenas, why in the 30 mile zone world is LA housing still going up? Welcome to the world of shady statistics, exotic mortgages, and good old fashion greed.

Lies, Damned Lies, and Statistics

Los Angeles housing has always been relatively expensive in comparison to the rest of the nation. Let me define the word always. When I say always, I mean from 1970 and beyond. Similar to real estate agents saying real estate always goes up. Yet something happened in the last decade that sent housing prices in the Southland into the Al Gore stratosphere. I remember reading a book by Robert Allen called Nothing Down and thought to myself as I read it many years ago, “this sounds fantastic but this is relegated to the late night infomercial circuit with tanned gurus in Hawaiian shirts pimping real estate seminars at 2AM.” Go figure that a few years later, nothing down went mainstream. Not only was nothing down mainstream it became a staple of the housing bubble.

Lending standards took a major dose of laxatives and let out a major wave of dirty mortgages. Hence, the name “toxic” loans we now hear. At least that makes sense because these mortgage products were full of you know what. In addition, all the stats used by mortgage lenders incorporated skewed statistics and made up incomes. If you think stated income is ridiculous then you have not lived in Los Angeles. Stated income was the future baby! Why does the bank need to know how much I make? Why are they nosy and trying to dig into my business? When I say I make $500,000 I really mean it even though I have no idea where my W2s are. I’m not even sure if I work but we’ll let Wall Street worry about that. It was an implicit agreement of you sign here, and we’ll put you into this over inflated home. If people on the streets were conjuring up their incomes, what about the companies providing these people the mortgages? Well now, we are taking a deeper look at what really went on and opening the Christmas gift from hell. It turns out that Nothing Down doesn’t bode well in the mortgage game. Why is that? People will generally fight like riled up hyenas if they have skin in the game. If you had to put 20 percent down on a piece of real estate you will do all you can before having the house foreclosed. However, with zero down most folks are more than happy to walk away from their massive mortgage obligations. Heck, the lending institutions are doing this right now in their 11^th hour. We all know that every large metro area is declining and facing massive jumps in foreclosures.

Wacky Median is Still Going Up

No negative housing information seems to make a dent on the resilient LA median price index. The prices keep going up. Again, the devil is in the details. Sales volume has dropped off a cliff and has been in free fall mode for over a year. Yet a home that doesn’t sell cannot be factored into the overall sales data. Therefore, what we see is homes in prime areas such as Beverly Hills, Brentwood, Santa Monica, and Palos Verdes skew prices even higher because these places are still selling. Lower priced homes aren’t selling therefore they are not included in the overall sample size. And the sales sample size is shrinking as we speak.

Then we have homeowners addicted to five years of double-digit gains unable to reconcile that they can no longer sell their home for peak prices. They feel entitled to peak prices because they say so. Can it be that housing prices were inflated by exotic mortgages and general greed? Why else would people be so eager to jump into a home that they could rent for half the price? The new paradigm of housing included double-digit appreciation until the end of time. Well the end of the time arrived in summer 2007.

Why Did Los Angeles Go Up and Other Areas Did not?

This may come as a shock to you but we have sun here in Southern California. Actually, we own the exclusive rights to it. Therefore, prospective buyers had to pay a sunshine tax to live here. Florida has sun too hence their run-up in real estate. This may seem simplistic but most metro areas in the US are now overpriced. Some are overpriced by 10 percent and some are overpriced by 50 percent. LA wasn’t the only place with a mad run-up in prices.

We also have a very mobile population. The majority of folks spend a good portion of their day on the 5, 10, 210, 405, or any other freeway you can think of. A very small portion of people see housing as a long-term investment here. The general culture does not think of buying a home, raising a family, and retiring all in one place. In fact, we have a culture where you play the Russian matryoshka doll game; you know where each little doll is nestled in a larger doll? Well people purchase homes here to trade up. Each consecutive purchase brings you a larger home with an equally larger mortgage. Each added member to the family is reason to purchase a larger car on a new lease. This is how many families operate in the Southland.

Yet the squeeze is being put on the middle-class of the state. Rising gas prices, car costs, healthcare, food, utilities, and housing all cut into the operating budget of the family. Like the couple earning $130,000 and lost their home to foreclosure, many families are realizing they are suffocating on servicing their debt. The grim fact may hit many families like a ton of bricks that they were using credit to stay afloat. Now that credit is becoming more expensive to obtain, they are realizing the true nature of their spending habits. Many families are also feeling the pinch of a declining dollar. I’m not sure if John and Susie Public are too concerned about a falling dollar or inflation. You just hear them ramble about, “damn, prices are always going up!” I’m hoping that people start asking the next question and look into the reason prices are going up. And many folks are realizing that their paycheck isn’t keeping up with the cost of living. Slowly the public is being taxed via inflation and a falling dollar. The only person running for president that I’ve heard mention anything about these economic issues is Ron Paul.

Los Angeles is a different beast. We have 88 cities in the county. We have 10,000,000+ people living in a relatively small area. There are 3,339,763 housing units. The median income for a household in the county is $42,189, and the median income for a family is $46,452. In addition, the homeownership rate is 47.9 percent. So in fact, Los Angeles County has a renting majority population. But if you want to own, we have some wonderful Real Homes of Genius eager for a new owner.

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Dr. Housing Bubble Celebrates Monumental 100th Post! Top 10 Housing Articles.

I’m in a celebratory mood. Today marks our 100^th post on Dr. Housing Bubble! While reviewing the archives of previous posts, it turns out that I’ve written over 300 pages worth of housing bubble information since October of 2006. Easily enough to fill a book. We’ve also covered 25 Real Homes of Genius exposing the extraordinary housing bubble in Southern California.

Two years ago it was difficult to find solid mainstream academic articles covering the housing bubble. Now, it is a challenge parsing so much information into a succinct article. It is comparable to drinking water out of a fire hydrant. Alternatively a better comparison would be, “like being part of the audit team at New Century Financial.” While I gather more information for another article, I wanted to leave you with the Top 10 articles on Dr. Housing Bubble over the past year. This should be a great primer for anyone new to the site or for those veterans that would like to play armchair quarterback and realize that we saw this coming long ago.

#10 - Manias, Panics, and Crashes: 2007 First Quarter All-Stars – Foreclosures, Subprime, and Politics. Five Characteristics of a Housing Bubble.

Examining five stages of an asset bubble. Speculation, Credit Expansion, Financial Distress at Peak, Crisis, and finally Crash and Panic.

#9 - Lying Dirty Scoundrels of Housing: 3 Additional Factors to the Housing Explosion: Money Supply, Consumer Inflation, and Celebrities?

Where do you think the money for this housing bubble came from? This article takes a look at the money supply and how consumer inflation is vastly understated. Oh, and we also look at Trump’s the Apprentice for good measure.

#8 - Housing Premonition: When You Knew it in Your Gut That Housing is Overpriced.

When your gut says no but your mortgage broker says yes! Understanding the nature of snap judgments and how this affects market psychology toward housing. Wall Street owned the subprime market and we saw how quickly things turned sour for this market niche once Wall Street lost the appetite for high risk loans.

#7 - Zillow is Off by a Small Amount. Try $250,000 off with Proof!

An oldie but goodie. A short article showing the difficulty Zillow has in determining accurate prices in overpriced markets with quickly changing inventory and lots of mortgage fraud. When this article posted in November, I was getting doubters saying that subprime would continue its strong momentum upward. Oh really?

#6 - $640 Billion in Sub-prime Loans Originated. $386 Billion in Alt-A Loans Originated. $1.026 Trillion in Loans at Risk? Priceless.

Leverage is king in this market. Amazing how a company worth $80 million at one point was able to have $8.4 billion in loans outstanding. This article looks at the quick fall of share prices that many subprime lenders encountered during the subprime debacle.

#5 - Why Did the Housing Phenomenon Spread? 3 Key Reasons for a Social Epidemic: Housing Connectors; Mavens; and Salespeople.

Housing spread like wildfire. Many people played into this game but 3 kinds of key people were paramount in accelerating the housing bubble. We have the housing connectors, mavens, and salespeople.

#4 - Yearly Income, $14,000. Purchase of House, $720,000. Have we All Lost our Minds???

I think the title says it all on this one. The much touted $14,000 a year farmer being able to purchase a $720,000 home. Read the article to find out if his income was able to support the monthly payment.

#3 - Real Homes of Genius: Special Edition, Lifestyles of the Poor and Notorious. 10 Southern California Homes that Prove a Gargantuan Housing Bubble.

The ultimate Real Homes of Genius article. Not only do we look at one overpriced home, but we examine 10 homes in 5 counties! This bubble is equal opportunity across all of Southern California. At least it doesn’t discriminate right?

#2 - America’s Codependence on Housing: 30% of Job Growth Contributed by Real Estate. 5 Point Plan on how the Bubble Will Burst.

When 30% of your job growth is contributed by real estate since 2000, we got some massive issues. We also hear how diverse and stratified our economy is but we haven’t put this to the test with a declining housing market. Read the article for the 5 point plan of how this bubble will burst. So far it looks like we’re heading down this path.

#1 - The Housing Tipping Point. 3 Factors That Will Burst the Bubble: The Negative Wealth Effect, Negative Press, and Suffocating Debt Payments.

The article title says it all. Last year the housing market was on its last leg but the press was still cheer leading and David Lereah was still the NAR’s chief economist. So much has changed since 2006. What tipped the housing market into the doldrums? Well for one the press isn’t so housing friendly anymore.

And there you have it. The Top 10 articles based on your readership. As the housing bubble continues to deflate, more and more organic searches are hitting this website. It seems that Joe and Susie public are concerned about their mortgages resetting. When they try to contact their mortgage broker many times they are finding he/she/it is no longer employed with the same lending operation. Welcome to summer of 2007. I have so many articles and nuggets of information that I want to share with you. In the meantime, read up on these articles and you’ll have a solid understanding of the housing and credit bubble we are currently living in.

I also want to thank you for being a great community. What started out as a little tightly knit community is now a growing network of thousands of daily visitors. Here’s to another solid year of housing analysis!

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True American Idol: Subprime Mortgage Lenders Send off a Blast Heard Around the World.

After searching and debating endlessly, we can now state that the catalyst of the housing downturn is subprime mortgage outfits. Many housing watchers have been sitting on the sidelines wondering what event or circumstances would prick the major global housing bubble. It is like watching a car chase on the 405, you know they will eventually catch the person, it’ll probably end bad, but you really don’t know the exact moment or thing that will stop the event. In effect, I am issuing a clarion call that subprime lenders are the first of millions of dominoes to collapse on this housing ponzi scheme. Yes, the call may not sound like an American Idol voice but let me tell you that more people will be affected by this housing collapse than those voting for glorified Karaoke all-stars.

First, let us take a look at a graph that I have used various times:

Let us look at the subprime market:



$1 Trillion in Loan Resets in 2007

With $1 trillion in loans resetting this year we are in a major game of cat and mouse. Close to $100 billion a month is resetting in adjustable rate mortgages and interest only suicide loans. Couple this with a housing market that is falling and you have a spectacle close to the shenanigans of the Anna Nicole case. For the past five years, we have been participating in the global housing orgy either actively or in spectator role. If a seller got in trouble he had two options, either sell the place at a higher price or refi into a longer term mortgage possibly with a cash-out refinance. Essentially the market gave these amateur buyers enough cord to hang themselves; not only that but it was under the guises of “investing.” Sound familiar? All these perma-bulls think that comparing housing to the technology boom is blasphemous. However, the market psychology behind both bubbles is the same; running to purchase an overpriced stock or commodity on risky terms. Think housing is a safe bet? Many newbie buyers are going to realize a hard lesson in leverage and real estate cycles soon…to the tune of $1 trillion.

What About Greenspan?

You don’t hear much about the maestro anymore do we? The great Amadeus of the housing credit party. Well let us recall that it is Greenspan after the 9/11 attacks that decided that we needed to prop up the economy from our very brief recession with easy credit.






All of a sudden with rates dropping, almost by serendipity, did home prices across the nation start going up. Coincidence? I think not. Of course housing raging alcholoic bulls would like you to believe that housing went up on its own merits and accord but unfortunately this is not the case. Wages have not gone up and inflation is still a threat, just ask our new resident HP LaserJet money printer, Ben Bernanke otherwise known as Helicopter Ben. This bubble is so ridiculous that even the aforementioned party heads have nicknames that connote their willingness to throw money at you as if you were in a JayZ video with a bunch of scantly clad women shaking their rears in your face. Okay, maybe that isn’t such a bad thing but back on track, the maestro setup an environment of easy credit access. Or as I like to call this easy credit access, the housing cocaine of the last 6 years. Good old Greenspan essentially gave every homeowner the ability to install a Diebold ATM on the side of their home and access money at their convenience. When 70 percent of our economy is based on consumption I think this was a smart move, don’t you?

40% of Subprime Loans are Liar Loans

Liar loans, no doc loans, fake-it-till-you-make-it-loans, mama didn’t raise a fool loans, or as we have seen in the mainstream media, no documentation loans have become a de facto part of the housing mania. 40% of all subprime loans are considered to fall into this category, a total of $400 to $500 billion in loans. Yet the question arises what happens when the market goes down and rates go up?

A big drop in subprime from NEW. So what exactly occurred here? As you can see above with New Century Financial many lenders are now taking a closer look at the mortgages they are receiving and kicking them back to mortgage companies for not vetting them properly. Not only that, but many mortgage companies make money on the margin and now they are getting doubly screwed. As of a week ago (this is changing daily since a set of things are now in motion) 21 subprime lenders have bit the dust or are filing for bankruptcy. Last week Novastar took a major hit in the similar vein of NEW.

Can’t Refi When You’re Underwater

This raises the major issue that you can’t refinance a home when you are underwater. I’m not referring to a Jacque Cousteau documentary but the fact that you owe more than the house is worth. See, in the last few years even a chimp buying a home would be able to flip it to his donkey neighbor and make a buck. Same thing with technology stocks; remember the infamous experiment of the chimp throwing darts at a bunch of tech stocks and making money? However, now that subprime implosion is on its way we realize that the piper must be paid. And the first to pay up to Tony Soprano is these subprime mortgage companies. Sorry folks, this is only the beginning and many of those following the housing mania realize that the worst is yet to come and many of us saw this a long way coming.

Easier to Buy than Rent!

Unbelievably it is easier to buy a home in California than to rent. If you rent, you have to have a security deposit and at a very minimum a credit check – I’ve also heard through the grapevine a pulse would be a plus but not required. Why do this when you can buy and do a cash-out refinance with no one digging into your background plus you actually get money instead of forking your hard earned moolah. Now that the tide is setting out, we can see who is swimming naked. Many of these folks were betting on turning around and selling their homes if they ever got in trouble. Too bad this isn’t the case and the market this summer will be flooded with these people realizing that their home is worth less than they owe. And this is the recipe of disaster because no longer is real estate the hottest deal in town. The subprime market is now showing us that housing can go down and go down fast; do you think banks will hold on to REOs forever? They’re not in the business of renting properties out so they will be the best indicator of market sentiment and prices because they will sell at the best price the market can get. Unlike many delusional sellers thinking they’ll get Alice in Wonderland prices. Welcome to the first phase of the housing implosion courtesy of the subprime market.

OC Down $42,000 in one-month. Where is the Mainstream Media?

Let us run a quick stat check:

December 2006 OC Median Price: $642,000
January 2007 OC Median Price: $600,000

That is a 6.5% drop in one-month. All those cheerleaders talking about double-digit declines that are impossible are sorely in the wrong ballpark. Keep in mind that 2007 has only started and we do not even have first quarter stats being reported. The sub-prime market implosion that is going on behind the scenes is making people in the know feel that 2007 is the year of change. With New Century Financial based in Irvine going south to Mexico we realize that eventually someone will have to pay the bill; only time will tell whether it will be the tax payer or home owners and speculators taking it on the chin. If you think the government will step in and intervene, you are sorely mistaken.

We all know how efficient large bureaucracies that cater to those with large capital can be especially when they have their motives at heart. The response will be as usual, an after the fact a day too late type of reaction. The government as we have learned throughout history is largely a defensive mechanism when it comes to intervening on things economical.

So what are people doing? We’ve all seen the U-haul rates of places in California going to other states. Let us do a fact check:

From Irvine CA to Austin TX; 26’ truck = $3,650
From Austin TX to Irvine CA; 26’ truck = $486


Guess where most of the middle class is going? There is a book called Life 2.0 by Rich Karlgaard where he discusses the phenomenon of middle-class families selling out of equity rich states and going to other parts of the country. By looking at the rates above you can tell where the demand is coming from. Even the L.A. Times published an article in their real estate section a few weeks back highlighting this change.

Again, why did prices drop so precipitously last month in Orange County? For one, let us look at the sales data. Year over year sales fell from 2,868 in 01/2006 to 2,400 in 01/2007, a drop of 16.3%. This is typical in the beginning of a bear housing market; sales fall drastically while prices follow in line. Why does this happen? Well go out to any local area or take a look at the real estate classified section. Currently sellers and speculators are living in real estate yesteryear hoping for the peak prices which will never materialize. So sales drop as these folks hold out and those that desperately need to sell do so but at market rates. And did you get the memo? We are in a buyer’s market. So prices are dictated by what is being offered while those educated enough to know about real estate market cycles realize that they now have all the time in the world.

What goes up eventually comes down especially in the OC where interest only exotic death defying loans are the mainstream way to finance a house. Speaking to a person in the know, Irvinerenter we are beginning to see that those that have the most insight into the market, builders are quickly liquidating and selling developments at losses to hedge their own bets on a collapsing market. Ask yourself why someone would leave money on the table if we are in a