Getting my crash course in U.S. finance, real estate games, and so on while dealing with my Dad's things, the thing that dawned on me was that the house prices didn't make sense. For example a house should cost more or less depending on the average income of someone in that area, so it would be a factor of income. Also prices would naturally correlate to rents. However what I saw was that these correlations had been forgotten about and the name of the game was to buy a ridiculously priced house knowing you could sell it 5 years later for a doubly ridiculous price. This curve was upwards at about 20 degrees but it seemed limited to the house game. The houses never get fully paid for but rather flipped and shuffled with all sorts of people whose job it is to make this easier for you. Well anyway, I just saw the clearest explanation so far of the crises and was reflecting on that summer and my first contact with how it all works in the US. If you care to take a look the link is below.Warren Buffet on Charlie Rose 10/2/2008
