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— It's the Greater Fool Theory. People know the merchandise is overpriced. They figure they can lay it off on another sucker before the music stops.

The speculation explains why so many mortgages are of the speculative kind. If they are gambling, "People feel they have no vested interest, no equity. If anything happens, they can walk away," says Goodkin. "Downtown condos are a very dangerous situation. It's a powerful market. It attracts speculators from all over the globe," many of whom are taking advantage of a weak dollar. "With interest rates low, why not go out and buy? With each passing month, it attracts more and more speculators. They are borrowing from the future. The weakness comes from too much speculation. It's a law of physics: what goes up must come down."

And San Diegans do not have the incomes or the employment base to absorb the trauma.

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