$ Trillions lost....

[Bigmack]

I read that Murikans have probably lost over $850 Billion in home equity....
http://www.latimes.com/classified/realestate/printediti...

And I read the story about gas guzzler owners not being able to sell them.
"Gas hog owners can't sell them." http://www.democraticunderground.com/discuss/duboard.ph...

And I started wondering how much in loss of value this economy has suffered... in total.

We own a boat that gets about 6 miles per gallon of diesel. That's pretty good, really. I know lots of regular people whose boats get 1 mile per gallon. We bought them when diesel was about $1 per gallon, so we're not quite as dumb as we seem. Like the gas-guzzling cars, nobody can sell a boat these days either. And the motor homes? Fugedabowdit. A motorhome that cost $150,000 is now just about worthless.

Add up the total in losses in value of homes, businesses, cars, boats, etc., then add loss of disposable income related to higher fuel costs, and you end up with a hit that no economy can sustain without permanent damage.

And then there's the weather....

[slackmaster]

1. It wasn't real money

Not a problem.

[Bigmack]

4. Sure, it's real!

We counted on the value of our boat in our total assets/liabilities balance sheet. We paid $62K, and counted on getting at least $50K for it when we left boating.... probably more, since ours is an "affordable" powerboat.

Now, we almost certainly can't sell it. Our assets are down at least $50K.

That's real money.

[anigbrowl]

9. If I might politely disagree...

I think you made a few mistakes here. I am not an accountant, mind - just thinking of some different ways to look at it.

1. the boat is a non-performing asset, insofar as you don't have it leased out or have a contract with anyone to buy it at a certain price within the coming years (unless you have it insured, but it would be illegal to consider sinking it...).

2. On the other hand, it probably has some value considerably greater than $0. You figured it went down in value $12k as soon as you 'drove it off the lot', which is sensible. Clearly this was an underestimate, although this is not your fault. But are similar models selling at, say, $30k rather than $50k? If so, your loss may be only $20k.

3. On the brighter side, the price of oil will slide quite a bit over the fall - it does this every year, and there are a number of reasons to think that the current bull market in oil has peaked and will fall back. Thus, it might be a lot more saleable in 6 months. Over the long term, it's more difficult to say.

4. Also on the bright side, you still have the use of the boat (though tempered by the rising cost of operating it). Maybe this would be a good time to look into leasing arrangements and find other ways to develop it as a capital asset rather than the most obvious one of simply cashing it out.

[Bigmack]

11. Still don't understand...

I'm not an accountant, but if a person writes out an assets/liabilities sheet, it seems that any tangible - and some intangible - objects count in that estimate.

First of all... I bought a used boat ten years ago. Got a decent price, and the type of boat I got doesn't depreciate much, if at all. For example, we sold a smaller boat to buy this one. We got $50 for it. It was for sale last month for $85K... same boat. Dunno whether they'll sell it, but it's indicative of the relative gain/loss in value of this type of boat. Not mentioning any brand names, but the most popular boat in our area loses value like a new car, only worse.

Anyhow, if I had a $250K house (appraised value), a $50K boat (blue book value), and two $20K cars (blue book value) ... all paid for, and the value of the house dropped to $200K, the boat dropped to $10K, and the cars remained the same, wouldn't my net worth be $90K less?

This is different than stock... up until recently, nobody speculated in family houses, and nobody ever speculated in boats!

I'm just using this example to point out how much people have lost in personal assets over the last 8 years. The Repubs are always bleating about the government taking money away from us, but this is a bigger hit than my taxes have been over the same period.

[slackmaster]

16. Your point is sound but I question whether you ever really had that much in your house

I'll give mine as an example:

I paid $140K for my house in December 1994.

A year or so ago, comps and automated valuation models put the market value around $600K, maybe more.

Now it's back to about $475K.

I don't see that as a loss of $125K in equity, because A) I never intended to sell the place, B) did not borrow against the paper gain, and C) even at $475K I am still flush with equity in terms of borrowing power and way ahead in net compared to when I moved in.

[slackmaster]

10. My 15-foot 1968 Seaspray catamaran uses no diesel

It's probably still worth the $300 I paid for it in 1994.

We counted on the value of our boat in our total assets/liabilities balance sheet. We paid $62K, and counted on getting at least $50K for it when we left boating.... probably more, since ours is an "affordable" powerboat.

Now, we almost certainly can't sell it. Our assets are down at least $50K.

Sounds like poor planning.

:hi:

[Bigmack]

13. A 15 foot Seaspray catamaran?... in the Straits of Juan De Fuca?...

Shiiiiiit... our 32' trawler gets shorter and shorter as we get farther and farther out in the Straits. We've started out with flat water and 2 hours later waves are 6 feet. Same with the Straits of Georgia, near Vancouver BC. Or Johnstone Strait. Lots of others here.

We wanted a 37' Fisher motorsailer, but didn't have the $180K on hand for one of them.

Sailboats are the answer, but when we bought the boat, diesel was under a buck.

[slackmaster]

14. I wouldn't take it there, but it's a heck of a lot of fun in San Diego Bay

Especially the southern part where the afternoon sea breeze is unimpeded and the water too shallow for much traffic.

I've also put it in the ocean at La Jolla Shores a few times and sailed up the coast and back. You get wet, and it goes faster than a Hobie 16 if there is some wind.

:D

[MercutioATC]

2. The next two years are going to be great for people with money.

Lots of toys available at fire sale prices...

[Ian David]

3. This explains why I see so many used motorhomes for sale.

I was thinking of building a concrete bunker, parking a motorhome in it, and using it as an emergency shelter.

[whistle]

5. 120,000,000 homes worth an average price of $185,000 two years ago

...having declined 30% so far in the housing crisis comes to a tidy $66.6 trillion vanished under BushCo's 2nd term watch

[skids]

6. Hrm. Motorhomes can probably hold a whole lot of batteries...

Hmmmmmm.....

[Bigmack]

7. Damn! Never thought of that!

Pull that goddam Volvo 135 hp diesel out of the engine compartment, find a big-ass electric motor, and fill that compartment up with batts. Weight is not the problem in boats that it is in road vehicles. I NEED about about a half-ton of weight down low in the boat.

Motorhomes... I dunno. Why not just park them for a place for the kids to move into when they lose their houses?

[skids]

8. Don't forget the MHD drive :-)

I jest, because IIRC they turn out not to be all that efficient, but you may want to google it for fun.

[librechik]

12. damn--you beat me to the "park and live in them" suggestion.

Waiting for some of those white elephants to depreciate into my budget. Still can't find them in the want ads for what i would consider affordable.

Sorry you guys. The American Dream just ran out of gas.

[Uncle Joe]

15. It's not really lost, it's in Iraq. n/t