The thing I don't get about the current housing bubble is how can the home prices be so high, when the economy is sputtering and so many people are out work. It just doesn't make sense to me. The whole thing reminds me of the tech stock bubble, before it all crashed.

I used to wonder why the tech stocks were priced so highly when hardly any of the companies were making a prophet. I mean, economically the tech stock bubble just didn't make any sense to me, so I never bought into the mania of investing in tech stocks for the long term. The tech stock boom was great if you could buy a stock for cheap, then turn around and sell it right away when the price went up. I think some investors did this, and made quite a lot of money. Most people, including money fund managers however, started buying the over valued tech stocks and held on to it for too long. When the market started to crash in April 2000, their portfolios tumbled and way too many people saw their 401(k)s turn into a 101(k)s.

The housing bubble reminds me so much of the tech stock bubble, especially here in the SF Bay Area, although the reports say it's happening all over the country. It just doesn't make sense that the price of housing is going up as more and more people are losing their jobs, and the economy is so shaky that there will undoubtedly be many more layoffs in the next two years. Who is buying these houses? Something is definitely off either in the numbers of jobless people, like maybe there really aren't that many, or in the housing information, like maybe home prices aren't really going up. I don't know.

It's scary to me though, because it so much reminds me of the year before the tech crash in 2000. There was so much media hype about the tech stocks, and how everyone had to buy, buy, buy. There were some doomsayers reporting about the tech stock bubble, but these folks were regarded as loonies. I bet the loonies still have a 401(k), and not a 101(k).

Then April 2000 came, and the markets lost about $1 trillion in value. I mean, sure it was all on paper that's still a ton of money to lose on paper. I mean, after that didn't you think that you couldn't trust the media anymore because they hyped the stock market so much? I don't know what to believe anymore, except when I hear the media hyping anything I just have to wonder why.