Sunday, June 15, 2008

When Turtle talked about "Cheap money," we should have known there was a bubble

As part of my *ahem* research for living in Southern California, I started watching the first season of Entourage. In the second episode, Vince decides to buy a $10 million house after he has turned down a $4 million movie contract. Drama tells him it is OK, because it is, after all, California, where a house worth $10 million this year will be worth $20 million next year. And Turtle tells Vince "he can get money cheap."

The show's first year was 2004. Should have tipped us all off....

4 comments:

dcase said...

I watched the entire first season of Entourage last week and had the same thoughts and mentioned it to my wife when I heard Turtle mention "cheap money" a reason to buy...

Uncle B Winks @ Mt. Pelerin said...

Here's a far out consideration: As moviemakers go more and more to animation and internet, production will shrink even more in L.A., and one of the big magnets that attracted people to the area in the first place, will be gone. Entertainment, defense, housing -- gone. We'll be left with economic casualties and the academics that study them.

I think the very high end will continue to hold its chin up for a while, however. We have characters here still running around building 20,000 sq. ft. houses. We even have an expatriate Texan building a 32,000 square footer on the old Saudi Prince's lot on Sunset Blvd. It started at a humble 12,000 sq. ft., but something that size simple does not befit a modern baron. I guess you have to do *something* with all that money. Doesn't do you much good burning a hole in your offshore account.

Some reports say that 50% or more of high end purchases are by foreign buyers. That explains half of the phenomenon.

Check out rents downtown? You'll be close to the music center and the original Pueblo.

Jordan Crouch said...

Ironically, I watched this very episode this morning. I've seen it several times now and I smile every time I hear Turtle says he knows a guy that can get money cheap.

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