The Housing Bubble And The Employment Effect

Readers want to discuss the housing bubble and the jobs impact. "I wanted to suggest a topic: I want to get into the details of the last SoCal collapse that has (to date) been blamed on the Aerospace industry collapse." "Is there a job loss scenario for SoCal that mirrors 1990? There have be oblique references to losses in the mortgage, banking and construction industries that seem to be the most likely candidates, but I also have an example that occured to me through personal experience." "I have a relative in Atlanta that has been working in the mortgage industry for the last five years. He owns a condo, but has been also been buying and flipping properties. He knows appraisers who will appraise for 'whatever he wants,' he can arrange for them to get the loan, and walk them through the application so that they don't 'hit any snags.' I am a lawyer and advised him this is really a bad idea, filled with conflicts of interest and possible fraud, but he advised me that this is standard operating procedure." "This seems to me a very overlooked area of froth (as a shout out to the departing Mr. Greenspan) which might account for some uncertainty in possible housing devaluation." Another reader asks, "How about a job loss update? We all know about Ford and GM. How about other recent announcements? Jobs are the glue that holds it all together." And another, "I, too, am interested in job loss scenarios for SoCal. A few years ago Big Pharmaceutical got hit pretty hard, though I'm not sure what the real cause was. It might have had something to do with the dot com bust and the Nasdaq decline generally. I know of one chemist who was laid off at that time and only recently got a 'real' job again, at Genentech in San Francisco." "I'd be curious to know why the downturn in Big Pharm, and could it happen again. After all, they are not profitless tech startups. A big slump in pharm would have a huge effect on the northern bay area and San Diego, if so." "I'm not sure what the big employment drivers are in the LA area, to be honest. There are a number of smallish tech startups. There is also the movie industry. The major studios are already asking big stars to take pay cuts and they are planning on putting out less product for the next few years." "In my area, much is made of the fact that The O.C. is filmed in Manhattan Beach. Big deal; one friggin TV show. Yet an unbelievable amount of froth has been generated around it. I am only half-joking when I say that the local economy here consists of selling real estate to each other and teaching each other yoga."