Update on the Bubble

This morning on my short drive to work I heard a commercial that reminded me of the glory days of 2005.  First, it was a commercial for a home equity loan, a pitch that largely disappeared for a decade or so.  Second, though, the pitch said that you could take the money and put in in the stock market or -- I am not kidding on this, I think I got it word for word -- "buy the dip in the Bitcoin market".    There you have it:  Borrow against the theoretical unrealized price gain in your home and use it to market-time Bitcoin prices.  Take your paper gain in one bubble and apply it to a bigger bubble.  Nothing could go wrong there.


  1. marco73:

    Multiple companies in the Tampa/Orlando markets are pushing second mortgages to pay for "high interest credit cards", "home improvement", or "a luxury vacation."
    I haven't heard any advertisements about investing in the stock market or Bitcoin with borrowed funds, but it sure feels like 2005 out there.
    There is somewhat of a housing shortage in the Tampa/Orlando market. With little new construction from 2008 to about 2012, anything already built is premium priced.
    I still recall back in the early 2000's people at work taking a couple days off so that they could camp out in a new home development parking lot, waiting for a particular street or phase to open up, so they could grab the home of their dreams. So, so many of those became the home of their nightmares.

  2. craftman:

    Related: the trade show I was just at bragged about how they sold out all of their booth space. First time that has happened since...wait for it...2007. I’m not confident enough to think I can time the market, but just another indicator that everybody is just a little too flush with free cash.

  3. August Hurtel:

    It is particularly bad, because the finance guys are scamming Bitcoin. These futures are ended in dollars, not bitcoin. So they are just going to push down the 'official' price. This is an interesting problem, and I don't know what the solution is, because it basically amounts to massive amounts of fiat money masquerading as bitcoin. There have been suspicious games played with other futures (esp. oil and gold) because people seldom insist on taking the underlying asset, but the way this is set up suggests the scam will be worse.

    Bad money chasing out the good, in a way.

  4. Dan Wendlick:

    Bet the house on the goodwill of a bunch of (likely) Russian computer programmers. There's a good, safe retirement plan.

  5. Elam Bend:

    I remember a radio commercial for a home equity loan in the run-up to the bubble (I started hearing it in 04 or 05) that had the tag-line "It's on the house". It advocated using to loan for all kinds of things, including a vacation.

  6. cc:

    I noticed that the TV ads for flipping homes (renovations) only took a break for a few years but ads for making a fortune in real estate are still scarce. One indicator near me was the for sale signs everywhere as young families moved up to bigger homes. Not a single sign in my neighborhood right now (Chicago suburb).

  7. C078342:

    But I am reminded of the old aphorism, "Its morally wrong to let a sucker keep his money." Some say it is attributable to PT Barnum, but I don't know. I do adhere to its premise though.