Jason Kelly

I spent some time yesterday walking around Caruso Affiliated's new Americana at Brand center in Glendale, Calif. and then meeting some investor friends, of both the real estate and stock market variety.

I even toured the Excelsior luxury condominiums at The Americana, as I'm looking to buy more California property in the current downturn. The sales agent was excellent and the tour compelling. The marquee unit with a corner view of the center's main square, downtown Los Angeles, and surrounding mountains, is listed at $2.4 million. "Because of the current environment, however," the agent told me, "we'd be willing to make a deal." Here I am inspecting the joint:

I asked my investor friends later, "Is this what the next Great Depression looks like in America? I mean, every day the headlines are worse than the day before, all of you tell me you've never seen deeper gloom in the market, and yet life is completely normal on the street."

And it is. ATMs are fine, traffic is flowing, restaurants are cooking, even real estate offices are humming. I met with a friend's agent yesterday and the only thing he kept saying is "the last time we saw this..." and making comparisons to the right time to buy. His wife even drew a line on a piece of paper rising 2/3, settling back 1/3, rising another 2/3, then settling back 1/3. "As you know, Jason," she told me, "this is what the real estate market does on an approximately seven-year cycle."

Economist Nouriel Roubini, who predicted the current crisis better than almost anybody, wrote on Monday that if an international bank run on the interbank liabilities of the U.S. were to accelerate, "a total meltdown of the U.S. financial system could occur."

Yet, in front of that, the only impact Excelsior is feeling is the need to mention their willingness to "make a deal" with me on a $2.4 million condo. The only impact the real estate office is feeling is the need to mention that this happens every seven years or so. As for the typical person on the street, they're barely aware that anything's happening, beyond a vague "all this trouble on Wall Street" comment before praising their neighbor's new SUV.

It makes you wonder, doesn't it? How bad do things have to get before it really matters? At what point will people on the street feel an impact? When, if ever, will any of this genuinely affect your life?

Posted by Jason Kelly at 11:42 PM Japan time
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