Tuesday, May 31, 2011
"The Hangover" (Extended Edition)
The first “Hangover” came out in 2009. The phenomenon was so huge, we never got over it. Now we are engrossed with “The Hangover II,” which takes over right where the first film left off (the long-awaited movie finally hit theaters last weekend). Over the last 4 days the film grossed almost $140 million, and was number 1 at the box office for the weekend (and that doesn’t even include the $10 popcorn).
The movie isn’t the only hangover in our lives (I am not just referring to your weekend). Financially, we’ve been suffering a hangover since (before) the first movie came out. When will our hangover be over with? It’s hard to say. We could always take our cue from the film and relocate to
East Asia ( is having a pretty awful hangover by all accounts – plus, added bonus, we wouldn’t have to pay nearly as many import taxes). But relocating might be difficult, given the nature of our hangover. As if it were timed with “The Hangover II,” today marks the “confirmation” of a “double-dip” in the value of our homes. According to a widely-used indicator of housing prices (called the “Case-Shiller Index”) released today, our homes are continuing to depreciate in value (not great if you own a home, especially if you bought it within the past few years). From March 2010 to March 2011, the 10-city measure showed house values declined 2.9%; the 20-city measure showed values declined by 3.6%. It’s hard to get excited about moving to Las Vegas Asia for those of us who will lose money on the deal (and possibly get attacked by Russian mobsters). At least initially, in 2007, these declines were part of a market adjustment that was needed because our homes were likely over-valued (thanks to that whole “easy credit” thing) which led to huge increases in the values of our homes that were not sustainable. What is unfortunate about this latest development is that home prices were on the rebound in 2010, but now are back in the red (“double-dip”) with no clear end in sight.
This means we are still feeling the effects of getting drunk on home purchases, Round 2. How good or bad we are feeling about the economy can be measured: an estimate of “consumer confidence” released today suggests that in May we were still feeling good, but not as good as in the first 4 months of the year (kind of how we are happy “America’s Got Talent” will be back on, but we know it’s not the same as “American Idol”). We took notice of higher food and gas prices (sharp observation skills), and are worried our incomes won’t keep up in the coming months. To be on the safe side, we should consider sticking to water – it’s relatively low cost and doesn’t leave you hung over the next morning.
These signs show “The Hangover” could continue on: after all, there are three other main characters who could have their own adventures (we could be talking engagement parties, more bachelor parties, multiple weddings, and baby showers). Hopefully the next edition of The Hangover will stem from a different (new) set of events to show that while mistakes happen, at least we can learn from the ones we’ve already made. And if we are in for the long-haul, perhaps we should save the $20 movie ticket, bunker down on our couches at home (invest in that back massaging chair – we might be here a while), and wait for it to come to a Red Box near you.
(S&P Case-Shiller Index, The Conference Board, IMDB/Box Office Mojo)