Reply #69: but...

[sendero]

... this is a prime example of what the investment community calls "dumb money".

"Dumb money" are the folks who buy at the market top. When profits have been made, the easy money already earned, "dumb money" gets in when it looks like a sure thing.

Once the "dumb money" gets in, the party is over by definition.

This guy was simply gambling with other people's money. He leveraged zero to a couple thousand dollars into controlling a 700K asset. Had prices gone up, he could have walked away with a nice profit with almost no investment on his part. but, being dumb money he waited too long and got burned.

Frankly, the REASON we have a housing bubble at all is that America is FULL of these folks who are willing to gamble with other people's money, and the financial institutions are all too willing to help them do so.

Let me restate that: financial institutions USED TO BE ALL TOO WILLING to help. That's over for a decade or two.