Creativity

Part of research I have learned is being able to create a plausible storyline to the application of your research. I was quite pleased with my storyline justifying my model specification I came up with today; I satisfies both my intuition and the math. So far I am on pace, and even exceeded a little bit with this added tidbit, with the outline I set yesterday. I suspect finding an reasonable time series to apply my work on may take more work than the one day I have assigned it, but I will try regardless. But I am done for today and will hit the gym in a few.

I spoke with the suntrust mortgage guy again today and I should be approved for up to an $100000 loan tomorrow. This is probably much more than I need but it's always good to have some wiggle room. I have narrowed down my search to less than 8 homes (townhouses) all of which are less than 100k even though they were built a few years ago. Some of these properties were going for 400k just a few years ago as well; it is utterly amazing how this mortgage phenomenon went on for so long.

It doesn't take a genius to realize that house values will increase significantly when you have a large number of buyer bidding on a house. One problem that arose was that many of the bidders were given loans they should have never gotten. But the banks didn't care because they sold these loans to other investors as AAA because as long as houses kept going up, even if a bidder defaulted, the value of the house would recoup any possible losses. It almost seems like a big pyramid scheme because the moment the market ran out of bidders, than the housing prices would drop substantially and banks and investors would longer be able to recoup losses.

Of course this is all in hindsight but this will be a case-study in finance classes for decades if not centuries to come.