I can get no remedy against this consumption of the purse: borrowing only lingers and lingers it out, but the disease is incurable.
William Shakespeare, King Henry the Fourth, Part II
In the year of our Lord 2005, on the Pacific coast of North America, a two‐bedroom trailer was offered for $1.4 million. This was hardly a first or even a most. Other mobile homes had sold for $1.3 million and $1.8 million.1
The $1.4 million trailer was in a gated community, on a triple‐wide lot. Triple or even quadruple, why would people pay so much for a trailer? Location, location, location, you might say. And it was true—the views were spectacular. But the buyer of a trailer—even one costing a million dollars—does not buy location. The trailer owner only rents the location for a fee. “Space rent” for a $1.4 million mobile home would be $2,700 a month—not a fortune, but still a drain on your money. And mortgages are hard to get on trailers, because they might be pulled off the land, and then what would they be worth?
Meanwhile, in Miami, speculators would buy a group of five or ten condos—before a single shovelful of dirt had been displaced. The contracts would be flipped—sold to other speculators, none of whom had any intention of living in the object of their speculation, which in truth looked rather unloved. Many condos lay empty, awaiting the poor buyer who would actually live in them.
Two years later, we are still not sure that the great bull market ...