Rating: 
Summary: Post Bubble Blues
Review: As the stock market again tests our collective ability to suspend disbelief (and the real estate market never stopped) Rubino writes like a sane man in an insane financial world. Of course, during the mania, too often such voices are written off as gadflies, naysayers, chicken littles. I'm tempted myself, and view pretty much any prognostication with a healthy dose of skepticism. (No doubt it's very difficult to predict anything, especially the future).Still, Rubino's arguments are clear, concise, and borderline horrifying -- particularly mounting personal and government debt, as well as the institutional arrangements that expedite such reckless behavior. It all will stop, one day, it's just a question of when and the extent of the fallout. Rubino backs it all up with concise and entertaining writing, very interesting history lessons (and plenty of arcane financial discussion that may take several passes to absorb). The guy obviously knows his topic, and is a crack researcher and writer. I was introduced to Rubino's writing several years back, at TheStreet.com, and found him insightful, relevent, and, more than a bit of a gadfly whose track record speaks for itself. My advice: go to the web site, check out his columns, and track how well his picks have done over the past 4 years. (I've personally cued up some Rubino portfolios in my yahoo-finance account, from tankers to gold to fuel cells to "WWIII", and I'd be a rich man today if I had the capital and guts to listen to him). So: go now. If his track record is any guide, this book will be one of the best investments you'll ever make. Besides being incredibly insightful, it's a interesting read. Buy it. Five stars plus... then look out for the next installment, on gold.
Rating:
Summary: Right Again
Review: Back in 1999, when investment bankers were ordering $400 bottles of wine at lunch and Dow 36,000 was a credible forecast, not a joke, John Rubino was offering bear market strategies to readers of his column in TheStreet.com. Here's what he wrote on Oct. 21 of that year: "Put simply, stocks are as expensive as they've ever been and the economy is running out of slack. Labor is so tight that companies are having to pay up to keep good people. Health care and energy costs are rising again, and interest rates are up across the yield curve. The inevitable result: higher costs of borrowing and doing business, lower corporate profits and sinking stock prices." Rubino was clear-headed enough at the height of the stock market bubble to see the tunnel at the end of the light. Now he is sounding the alarm about the housing bubble. It's well worth listening to. You don't need to be an economist or a financial expert to grasp the warning signals he points to: credit policies that have become shockingly easy, to the point where a down payment on a home has become optional; high levels of consumer debt, and soaring home prices. Meanwhile, job creation and income growth are stuck in neutral and profligate government spending has undermined the value of the dollar and left the U.S. up to its neck in debt to the rest of the world. Rock-bottom interest rates have been pumping air into the bubble, of course, but so has the relatively new process of securitization, a feat of financial engineering that allows government-sponsored agencies like Fannie Mae and Freddie Mac to create a virtual bottomless pit of new credit that is beyond the reach of anyone to regulate. Rubino does an admirable job of walking the reader, step by step, through this financial maze, explaining how it has held together so far, and how it could fall apart. He posits a number of scenarios for how things could play out, from the merely worrisome to the terrifying. There are so many moving parts to the global financial engine, it's best not to get too hung up on exactly how or when the bubble will pop. Inevitably it will, and you'll understand why after you've finished the first half of the book. The second half of the book is your roadmap. It outlines a variety of strategies for sheltering your investment portfolio as well as your real estate assets from the post-bubble fallout. These include investing in commodities, particularly gold; selling stocks short, buying stocks in recession-resistant sectors, and buying bear-market mutual funds. Even if you don't think there is a housing bubble, the second half of the book offers a good investing overview that will serve you well no matter where you think we are in the business cycle. Rubino also offers a variety of defensive moves for home owners ranging from the drastic - selling, trading down to a smaller house, or moving to a less-overpriced housing market - to the less drastic but more complicated strategy of shorting housing stocks to hedge the value of your home. Full disclosure: I used to edit Rubino's columns for TheStreet.com. So I have long known what new readers will soon discover: He's a talented financial writer with a deep understanding of the markets and a knack for explaining complex things in a simple and lively way. His advice was worth listening to in '99 and it is even more so today.
Rating:
Summary: The NYC view
Review: Don't know what it's like in other places, but here in New York City, all I can say is DAMN. A friend who paid $700,000 a few years back for an nice but unspectacular condo says it's now worth $1.5 million. Apartments the size of walk-in closets rent for $1,500 a month. Who knows where the money's coming from, but there's no doubt about how all this will end.
Meanwhile, the author of this book has been busy. I Googled "Rubino housing crash" and found some interviews that readers considering buying this or a similar book might find useful. There's an hour-plus webcast on Jim Puplava's Financial Sense Online, in which Rubino makes some aggressive (to put it mildly) comments about the big banks, derivatives, and gold. Also interesting is a profile/interview in something called Bacon's Rebellion, a site dedicated to Virginia politics and economics. Both, I think, make a compelling case that housing-and maybe the whole economy-is headed for trouble, and that Rubino gets it. (...)
Rating:
Summary: Nothing wrong with a little hedge against your home
Review: Even if you don't agree with the conclusions, you have to agree that this book does a great job describing where we are right now. The sections on derivatives, Freddy and Fanny, and the unregulated spinning of mortgages on Wall Street really start to 'hit home' when taken in the context of the recent corporate scandals. In my minds eye I can see the CEO's of the major mortgage players in front of Elliot Spitzer trying not to look like crooks. The idea that as a culture we have been conditioned to 'do the deal at any cost' will come back to get us in many ways, and maybe a housing crash will be the least of our worries. Regardless, if you are a capitalist, and you want to keep your homes, but hedge against a crash there are great strategies, including currency plays, precious metals, options and bear funds, that can be pulled together using the information provided in this book. I am a capitalist, and I own four properties. I read it in one day. I couldn't put it down. My gut was telling me to go on. To those, reviewers or not, that foresee house prices rising ad infinitum, I say that any book that makes you think is a good book. This is a Great Book.
Rating:
Summary: Exactly the right strategies for this market
Review: Exactly the right strategies for this market
I've gone through this book three times in the past six months and have found more to like each time. The first half's critique of today's debt-driven economy is both fun to read and, in my opinion, devastating. The chapter on Fannie Mae and Freddie Mac is especially eye-opening, explaining how those monstrosities are inflating what is obviously a nationwide housing bubble. The chapters on derivatives and precious metals are in the same vein, easy-to-follow and enlightening.
By now most you out there have experienced the housing bubble first-hand. My son, a responsible guy but still just in his twenties without a high paying job, went in for a home loan, and the bank offered him $175,000! There was a time, not so long ago, when someone with his age and income would have had trouble borrowing half that much, but now it seems that anyone can borrow practically anything. And I myself just got an offer from a bank for a loan of 125% of my home's value. This is absolutely crazy.
Rubino's strategies for making money from the coming mess were a little premature when published a year ago, but they're right-on today. You can summarize his
approach as "betting against the bubble." That means shorting the stocks of companies that depend on us borrowing ever-larger amounts of money (a no-brainer conceptually but tough to do without guidance, which this book provides). And it means getting into precious metals and out of real estate (including your
overvalued house unless you intend to stay put for a decade or more).
We are a consumer driven economy. The extended credit, whether it is home equity loans, credit card debt, or debt through car dealerships at 0% financing can only last so long. There are trillions of dollars in consumer debt. We have trillions of dollars of debt in out federal government. It doesn't take a rocket scientist to figure it out. Too much debt can be a serious problem for us as individuals as well as our country. Only time will tell if Rubino is correct in his book. Maybe this is a good wake up call to all of us!
Rating:
Summary: Outstanding!
Review: I never thought I'd say this about a finance book, but I couldn't put this one down. It is fascinating, logical, concise, well-written, and occasionally quite funny. Despite the catchy title, it is about more than just the regional housing bubbles we are experiencing right now: it is a primer on the entire lending industry and how badly it's gotten out of hand. Just to be clear about it, this is not a "doom and gloom" or "the sky is falling"-type book. There are no histrionics to be found here, only well-researched facts and common sense presented in a very reasoned manner. Whether you own real estate or are thinking of eventually buying, and whether or not you are convinced that some housing markets are overpriced, this book will give you the background and advice you need to protect your assets and possibly even to profit enormously. I have to comment on one of the other reviews here, by "A reader from San Diego, Ca," which implies that Rubino ignores the laws of supply and demand. This is an unfair accusation because it cites bad data: as a matter of fact, San Diego's home supply has increased at exactly the same rate as its population growth. They have both increased by 7% in the past 5 years. In the same time period, San Diego home prices have increased by 110%. The person who posted that review is clearly more interested in rhetoric than in facts but I wanted to set the record straight.
Rating:
Summary: Outstanding!
Review: I never thought I'd say this about a finance book, but I couldn't put this one down. It is fascinating, logical, concise, well-written, and occasionally quite funny. Despite the catchy title, it is about more than just the regional housing bubbles we are experiencing right now: it is a primer on the entire lending industry and how badly it's gotten out of hand. Just to be clear about it, this is not a "doom and gloom" or "the sky is falling"-type book. There are no histrionics to be found here, only well-researched facts and common sense presented in a very reasoned manner. Whether you own real estate or are thinking of eventually buying, and whether or not you are convinced that some housing markets are overpriced, this book will give you the background and advice you need to protect your assets and possibly even to profit enormously. I have to comment on one of the other reviews here, by "A reader from San Diego, Ca," which implies that Rubino ignores the laws of supply and demand. This is an unfair accusation because it cites bad data: as a matter of fact, San Diego's home supply has increased at exactly the same rate as its population growth. They have both increased by 7% in the past 5 years. In the same time period, San Diego home prices have increased by 110%. The person who posted that review is clearly more interested in rhetoric than in facts but I wanted to set the record straight.
Rating: 
Summary: Important Book
Review: I read Rubino's book and it scared me. I pray he wrong, but I had a hard time disputing his argument. Before becoming a writer I'd been a real estate developer in Utah during the 80s boom. When the market turned, it fell into a freefall. Everyone who is thinking about speculating in real estate should be forced to read his book. That is unless they enjoy the pain of loss.
Rating:
Summary: Probably Right
Review: I think that he is probably correct that real estate processes will drop. Both his book and a magazine list San Diego as over valued. My apartment complex is going condo. I've decided not to buy. $295,000 for 866 square feet seems excessive. Now we have the fires out here, so I don't know what that will do to real estate values. His hedging schemes require money to hedge with. If you invest $100,000, you might make 50,000, but I don't think that you could get rich off his hedging schemes. I have some money in an international bond mutual fund, so I've had one of his hedges for some time. Maybe I'll invest in gold. He has one chapter on waves. I've heard that they're extremely hard to interpret which makes it hard to make predictions based on waves. I skipped most of that chapter.
Rating:
Summary: Worth a read
Review: If the names Stephen Roach, Marc Faber, Bill Bonner, Bob Prechter, or Jim Puplava are familiar to the reader, then John Rubino's well written, easily digestible, and quite convincing summary of the bear case (not just in real estate, but also in the US equity market) should be old news. However, if these names are unfamiliar, the reader would do well to plunk down the money to buy this book, consider his argument, and give some thought to preparing for possible bad times should they occur. Rubino spends the first part of the book laying out a case for why a bubble exists in the real estate markets, and then uses the second part of the book to explain possible strategies to protect assets and even profit. The hedging strategies are well organized, but I doubt most people would consider shorting housing/fannie/freddie stock or buying gold/silver bullion. It would also be unrealistic to expect people to abruptly move from their overpriced houses in California/Boston, leaving friends, families and schools behind. The asset protection strategies could have been more detailed (in the same vein as the books by Martin Weiss). Rubino could have made his real estate bubble case stronger by using more local market information, statistics, and graphs (a la John Talbott in his highly recommended book The Coming Crash in the Housing Market). Overall, this book would prove valuable for people unfamiliar with the risks in the economy and the possible outcomes if this risk ever manifests itself in the economy and the markets. This reviewer cannot help but add as an aside that given the current conditions (early 2004) in the United States of unhealthy financial asset and real estate valuations, burgeoning debt and its financing by foreign nations with their own unpredictable agendas, high budget and trade deficits, and wage pressure brought on by globalization, it might not be a bad idea for the reader to recognize that the potential downside risk may be much greater than any potential upside, and act accordingly when planning for their financial future.
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