Two of my friends plan to buy a house this summer. One is a first time buyer, the other a move up buyer! The move up buyer just put his house on Redfin, we'll see how the pricing holds up.
Nemo, I'm shocked. Why aren't those banks selling those REOs and buying nicer homes? Oh wait ... they will have plenty of nicer homes soon with foreclosures moving up the value chain.
the proposed tax cut will also come without buyer income/status restrictions. unless expressly prohibited (i don't see how it could), i expect lots of private transfers.
15k huh well that should take care of the down payment on home up too 400k assuming 3% down. but the others are still in trouble I'll wait until the 50k home credit.
"Tiffany Owens
Age: 42
Former job: Freelance writer
Current job: Property caretaker for absentee homeowners
Hometown: Portland, Oregon
With the economic downturn, it's been a terrible time to be a freelance writer. Since then, my husband, Dave, and I embarked on a completely new, second career as nomadic property caretakers."
The new fashionable trend wave approaching our shores is the move down buyers. Yes all those baby boomers that did not have enough kids to support them in retirement years are about to find out that there is not anybody to buy their houses. Yoo hoo
Today my favorite economist who shall remain nameless offered that for unemployment to stabilise and to call the end of the recession, the initial jobless claims will have to come down to -400,000. Today's print was over -600,000. A few years back this guy was railing because employment was only GROWING at about +300,000 jobs a month (a positive 300,000) and said that was not even enough to support workers entering the job force. But now losing 400,000 a month will be just so great. That 700,000 spread is hard to reconcile, but he does have a Nobel prize.
"Those that put any sort of money in there home over the last few years are still losers. "
one of the more pathetic elements of the housing bubble (which was also quite common in earlier bubbles, like the late 80s one here in CA) is the belief of flippers that the molding, lighting, etc, they would add to a place would actually be adding value. a bit like sticking your head out the car window and blowing towards the back really hard to increase the speed.
They will be even more shocked when they have to cash out of their retirement savings, stocks. Who is going to buy all the financial instruments pension funds have invested in?
They are the people who were smart enough or lucky enough to stay renters and keep saving money. The prices of homes will come down so much in many places that what would have been a 20% down payment on a low end house is a 40% downpayment on a high end house.
Los Angeles example: piece of crap house in an ok neighborhood in 2006, $600,000. Nice house in good neighborhood in 2010, $300,000.
this will still lower home values and lead to worse performance on the MBS's and more walkaways.
I was thinking more along the lines that my sister would sell her house to my brother and vice versa, especially if the gov uses the standard principal home definition. no mortgages on either home, and they'll pocket $15K each.
Broward you should look into becoming an estate manager - this is for real - take care of a big house for a rich person who is hardly ever there, hire people to do all the work, collect around 80k a year plus medical and vacation! Vacation! From living in a mansion! I suppose you go live under a bridge for a few weeks for a change...
No worries, the CMBS are on tap for taxpayer backstop. What could go wrong? As all pile into the dollar and treasuries for safety, the net catching them is built on awesome assets. Oh, wait.....
Hollywood Hack, I look at vintage houses. Every time I see a house with a graniteel kitchen I deduct value. Big time. The old kitchen can be restored or renovated in a manner consonant with the house. The graniteel crap is pure junk that will have to be scrapped and THEN it will be necessary to find period-compatible cabinetry.
a bit like sticking your head out the car window and blowing towards the back really hard to increase the speed.
Really? How silly can people be? You don't go faster, but it increases your gas mileage!
sister would sell her house to my brother... See how govt programs interfere with natural markets - and dont accomplish their stated purpose... govt programs and taxes make criminals of ordinary people... How bad does it have to get before the electorate wakes up and starts voting for liberty and small govt?
basel this will still lower home values and lead to worse performance on the MBS's and more walkaways.
Those that put any sort of money in there home over the last few years are still losers.
"
Just showed up on my street. Zillow shows homes like the one I'm renting with zestimate of 610k. One on our block just showed a sale @ 500k. Neighbor who is a mortgage broker said it was father selling to his son-in-law.
gd2 anecdote --
i live in a fairly poor to working class neighborhood very close to unlv. a few days ago my upstairs neighbor knocked on my door and said that his shoes had just been stolen from his front porch. i shrugged and said, "prolly just some kid raising hell." after we exchanged a few more words he asked me what size shoes i wore. i thought that he was insinuating that it was i who stole his shoes. i was wrong. he then asked if he could buy a pair of shoes from me. "don't charge too much man, i don't have that much money," he said. i gave him an old pair of sandals and told him that he could keep them until he had enough money for a new pair of shoes. well, he dropped by yesterday to return my sandals. the straps had busted so he repaired them with electrical tape. electrical tape. i told him that he could keep the shoes if he wanted them. he wanted them. he is still wearing them.
not even sure this is really recession related because i'm not sure this guy could hold down any sort of job in any economy, but it was eye opening. still kinda shaking my head...
and i don't think we'll be seeing 500K houses in Holmby Hills, off Mulholland, Palisades, etc NEXT year...
sellers in those kinds of hoods are still asking 550/Sqft and up. they're not going to collapse to under 200/sqft within the next 18 months. its a long long long journey down, and the boomers who own those places are going to tenaciously grip their version of reality every single day with every ounce of energy they have...
SM, please enlighten the masses here - an average - and I mean average - home near Douglas park (say between California and Idaho) will still list, in this climate, somewhere around 1.2 mil, right? It may not sell there, but it won't go for under a million, even these days.
do you really think we'll see them around 500K anytime before 2016 at the soonest?
Well I dont like to do it but as a matter of self-preservation my only response is to 'not waste the crisis' and make as much as I can from this madness....
mmckinl - c'mon, Bloomberg's probably having you on. Surely not. They wha? OMFG. Who are these Leading Indicators? Are they like leading commentators or something?
If they're leading, I'm only following out of morbid curiosity.
There was an agency in Palo Alto that specialized in placing estate managers, if you look it up... I'm serious, there are such jobs... you do have to undergo a background investigation though...
Lucifer (profile) wrote on Thu, 6/18/2009 - 8:56 pm
Unrealestate,
They will be even more shocked when they have to cash out of their retirement savings, stocks. Who is going to buy all the financial instruments pension funds have invested in?
Exactly. No one seems to comprehend the depths of that clusterf--k waiting to happen. Just one look at the demographics should convince anyone with eyes wide open.
Incidentally, if you have large items you want to donate, such as furniture and appliances, St Vincent de Paul and Salvation Army may pick them up ... You might have to check around locally though... When I could still move that stuff and I had a pickup, I used to just load it up and go to the cheapest housing in town and I always found people who were glad to take it in....
Swine flu patients in ICU tough to manage, 'just really, really sick': doctors
By Helen Branswell Medical Reporter – 2 hours ago
In a typical flu season, the Winnipeg hospitals where Dr. Anand Kumar works might see one, maybe two life-threatening cases of viral pneumonia caused by influenza.
So seeing 10, 15 and more flu patients in those same hospitals' intensive care beds in June is still a shock, suggests Kumar, a critical care specialist who works at three different hospitals in the city.
"You just don't see this many of them," Anand says of the patients, struggling to survive swine flu infections.
"You don't see rows and rows of patients on ventilators because they have respiratory failure, a viral pneumonia kind of thing. It's unusual."
At last count, Manitoba hospitals had 30 respiratory distress patients in the ICU, some confirmed swine flu cases, others for whom tests are still pending.
In most people, swine flu behaves like regular flu - it makes you feel miserable, you head to your bed and in time you recover. But in an as-yet unknown proportion of cases, the virus seems to quickly trigger severe illness.
A report compiled by the World Health Organization said between two and five per cent of confirmed cases require hospitalization. But no one yet knows how big a portion of the iceberg is above water (the confirmed cases) and how much remains submerged (cases that never come to the attention of medical authorities).
[snip]
"The patients are difficult to manage. They're unusually difficult to ventilate effectively," he says, referring to the practice of putting patients who cannot breath adequately for themselves on a machine called a ventilator that takes over the job temporarily.
"Exactly. No one seems to comprehend the depths of that clusterf--k waiting to happen. Just one look at the demographics should convince anyone with eyes wide open."
Kind of like if Japan were a net importer to the tune of 4-5% GDP?
Sorry for the long comment, but would like some feedback:
Inflation vs. Deflation and the Limits of Rational Discourse
I think the inflation vs deflation debate is an attractive thought experiment with far reaching implications. I will say up front I am pretty strongly in the "deflation now, inflation later" camp and that is no cop out. I never mince what I say or mean. I could care less about pleasing any audience by changing my opinions based on group think. I think the great debates and interactions featured here in the comments section here at Economic Disconnect have been some of the best, most civil, most accepting debates anywhere on the net. I appreciate all for their great ability to keep it intellectual.
That said, there has been a change in tenor from both sides of the debate as of late. Inflationists are calling deflation thinkers "dumb". Deflationists are attacking inflation types with terms like "blind", and "unable to see what is in front of them". This has to stop. I will delete any such comments from this blog, but I doubt I will ever have to police the comments as the crowd here is top notch. We even have outliers in the "Stagflation" camp, though that one has moved to the "Negflation" outlook as of late, but he is a bit crazy anyways! (just kidding Mark)
To see why this debate is hard to reconcile, we should start with the clear fact that NOBODY EVEN AGREES WHAT THE DEFINITIONS ARE for inflation and deflation. Some point to money supply, others to prices paid, and others to random data points.
I would like to put out an idea I have been working on that may help many of us get onto the same page. I have not fully developed this idea, but I thought it would be good to get it out there and get some feedback. Perhaps deflation and inflation proponents are closer in view than they know. Consider:
Classic Inflation Definition: Tons of "cash" (whatever iteration) chasing too few goods pushes prices up. How that cash was made (money supply, easy credit, etc) is not central to the argument. Many cannot keep up and hardship occurs due to lack of ability to buy needed goods/services.
Classic Deflation Definition: Money supply (whatever iteration) normal or low but not being put into purchases of goods, causing prices to fall. This reinforces the pattern and a spiral down ensues that causes hardship through various channels (loss of job, loss of equity in home or investment etc) which feeds itself.
Yes simplistic, but remember I am the easily "snookered" type. (Still burns)
Now consider:
In inflation (be it regular or hyper) you have ever increasing asset values, but the pace of increases of all the things you need are going the same rate or faster. You either go nowhere or fall behind.
In deflation (I think there is only regular) asset values are falling which destroys the equity in them, decreasing money supply as debt is defaulted on. Everything falls in price INCLUDING YOUR WAGES, hence you are chasing necessities that are falling in price, but your assets are worth less and your paycheck getting smaller. You either go nowhere or fall behind.
I think the core issue to think about is how much relative income you have that will have to chase relative prices and here I think the two views are more alike than thought.
Zillow shows homes like the one I'm renting with zestimate of 610k. One on our block just showed a sale @ 500k. Neighbor who is a mortgage broker said it was father selling to his son-in-law
If the house is not used as collateral, what dis-advantage is it to have the house priced lower?
"Hi neighbor - I'm in Crocker Highlands. Between us we got East Bay real estate covered. "
picosec,
I've seen some VERY nice older homes in Crocker Highlands. I'm a bit wary of anything below Highway 13 though. But I do really like some of the homes in Crocker Highland and other areas around that neck of the woods. How are the crime stats in that area?
Monctlair has been having petty crime and car vandalism but nothing major from what I have been hearing.
I also think there is an L shape in our future. I don't think we are at the bottom of the L yet. Pick a Pay loans will deepen the L through 2012 or so for housing. Unemployment looks like it will get deeper ( in real terms if you count hours worked and lower wages) for a couple of years at least.
So what will our "new normal" look like? Will electical tape on our shoes be a fashion statement by then?
How do you prepare for a decent life in the new normal?
sheeet nemo....your stuff on bonds is excellent....I am so very green at this stuff...Norka the first calc. was a bit primitive but I'll spend some more time on the second link....
I'm no expert but I think we are entering not a flat but negative yield curve where actual yield is determined by ability to pay and the maturity but also by the off-setting, repricing of like instuments...this happened in the late 1800s...quite unusual and may be typical of deflation episode....
Well, there aren't that many houses left there, many have been torn down to build condos.
Given that a few condos nearby are still selling for over $1 million, there is no way that an SFH would go for under $1.2 million today.
But you have to keep in mind that a lot of transactions around here were financed with the flavor of Option ARMs that are due to start exploding this summer and into next year. So by 2012, I do expect to see some serious price corrections.
500K? Unlikely. $750K? Maybe.
Unless we get into some serious inflation before then - then the game changes.
The article also mentions a proposal for a new $15,000 tax credit.
Once the monetary system collapses long-term loans will become unavailable and the structures we once called "houses", being as out of reach of the average American as a yacht or commuter jet is now, will be converted into convents, asylums, and brothels.
Would you give a career felon a 30 year loan for your entire net worth?
No?
The only reason we still have home loans is because the government can get away with forcing people to do just that.
sheeet nemo....your stuff on bonds is excellent....
Thanks, Barley. I am actually learning as I go, and I am trying to write what I would have wanted to read.
Not sure how well it is working, but I learn a lot by trying to explain stuff to other people. So I am getting a lot out of it even if nobody else does...
My goal is to understand the bond market better in order to watch, not to participate. Caveat lector.
right. people are way too bearish about truly desirable real estate in the short term, and not nearly bearish enough in the long, long, long term.
locales like Irvine, Santa Monica, Silverlake, Studio City, Laguna Beach, etc, are gloating insofar as they've only dropped 15% or so from a year ago, as opposed to the 30% in more middle class neighboorhoods and even 60-70% in real working class ones.
they shouldn't pop that champagne - wheras the neighboorhoods that have already dumped will probably hit a real bottom by 2012, those nicer hoods will keep dropping 15% annually, for upwards of the next dozen years.
I realized that years ago. Of course, no one wanted to believe me.
Part of my dislike for canucks comes from their attitudes towards non-white immigrants. If those non-white immigrants do not have well paying jobs or other opportunities, who is going to pay taxes in the future, who is going to buy stocks, houses etc.
But canucks live in this dream world where they can maintain their attitdes as well as their lifestyle. Dreams are not reality.
wages and daily transactions are a measure of social austerity in the circumstance of your currency...
think about why Brazil and China are denominating transactions in Yuan. April of 2009, China and Brazil became the number one trading partners.....a century event is still unfolding.....dont get left behind....
framing the deflation and inflation debate in dollars as a function of wages is a poor effort with respect to emerging BRIC's austerity.
nemo - I like to watch, understand and, if possible to make some coin (or loose, too).
me thinks we are in new teritory here...just like early 07.....the yield curve is being managed by Central Banks....this create waves of unknow consequences.
"think about why Brazil and China are denominating transactions in Yuan. April of 2009, China and Brazil became the number one trading partners.....a century event is still unfolding.....dont get left behind...."
Agreed. The BRIC meeting was a big deal, although I have yet to see evidence that it has been consummated.
Trophy properties will probably maintain most of their value. There will be people getting newly rich from the Obama admin's largesse, and they will be buying... When the congress is going to spend 3.6 trillion in one year, some people are going to get some of that money... maybe even enough to pay cash for a beachfront trophy home...
This may be a small data-point but tech wages definitely have not been sticky in the Bay Area. I am hearing that Senior Software Engineers in general are making 20% less to start this year then a year ago.
mmckinl,
I hear you and do not disagree. Please read the long post I left above. While it is not the theory of relativity, of course everything is relative!
I have been laid off (in a right to work state) twice because I made the most money. I could be replaced (after increasing the firms bottom line) by someone with less experiance. All they had to do was service the accounts rather than bring in new business.
I have been self employed for over 20 years and am very glad I dove off the cliff and learned how to fly.
FAZ is your friend.....I have LOTS of FAZ. Probably the largest amount of any stock I've ever owned. Be patient.....they can't prop the equity side forever. The debt side will make sure of that.
The L-shaped recession reminds me a bit of the "permanently high plateau". If you just consider the current trajectory of the economy I can understand how economists get to the the L-shaped recession conclusion.
But when you consider the consequences of having a stagnant economy for a long period of time while mountains of new debt are piled on top of it, you start to wonder how long until "stagnant" becomes something a bit more exciting.
"those nicer hoods will keep dropping 15% annually, for upwards of the next dozen years. "
I don't understand your rationale for that - the last couple of cycles have seen the nicer hoods recover in more like six or eight years. I'm expecting a faster fall in prices because I think that there was too much toxic financing, at least here in SM. World Savings and First Federal were pumping out Option ARMs like crazy. So I expect a faster fall and recovery sooner. But I would like to hear your thinking about a slower rate of decrease over a longer period in the nicer areas only.
Okay, I'll admit that I've never studied up on the economics of genocide.
When Harry Dent first prposed his demographic prediction model, I was skeptical and back-worked against the post-Civil War period. Dent's model is strictly 20th Century, it doesn't account for the loss of 15% of the population.
Im convinced we (Amerikuns) are going to see 1989 real dollar pricing on Homes and Land.....that'll be the bottom. Not any sorta "nominal-inflation adjusted bullshit dollars".....been finding that little 2 acre, 3 bedroom 1 bath farmhouse is worth 49k quatloos in my neck of the green vallley.
The BRIC meeting was smoke and mirrors. I would like to see documentation of a significant trade denominated in RMB with, for instance, Brazil. I will not be holding my breath until IMF bonds meet even the semblance of an electronic accounting entry from any of them.
With the virtual freeze in mid/high-end sales and financing I expect prices could come down much more quickly once the dam breaks. At some point some people simply have to sell, but for now, those that can are simply holding out.
Of course, in the truly high-end people will pay what they'll pay, and that can vary widely. But those people and properties are fairly rare.
The one thing for sure is a lot more properties traded for a lot more dollars than there are people that can truly afford them, which is why I expect the tonier areas to come down dramatically. It's only a matter of time.
I can't iimagine they'd be that dumb as the bluff would HAVE to be called.
OTOH, they were dumb enough to take our paper. "
They went from the 1800s to the 2000s in 20 years. If you think they didn't get something out of that paper you're sorely mistaken. In spite of the troubles that still abound in China unless you grew up their in the 80s or earlier you cannot grasp how monumental the changes have been.
"But I would like to hear your thinking about a slower rate of decrease over a longer period in the nicer areas only. "
it is a function of demographics - there's a solid core of wealthy older owners with prop 13 bases going back to the 80s or earlier who have absolutely no intention of retiring elsewhere (would you with a 1977 tax basis on a place near the beach?). the exact opposite applies in the outlying regions, of course.
also, there really will be no recovery ala 1994-1996 - that was dependent on healthy job growth and boomer income cresting. hardly anyone was born in the early 70s, so those folks in their early 40s finally ready to move up to their dream home just aren't there (nor, of course, is the job market there to reinforce that professional class).
I started adding in mid-may.....I've done options exclusively for the last 3-4 years. The premiums got ridiculous last year so I went back to a non-beta trade. Put options are still *ucking outrageous as they seem to already have factored in the coming drop (yet again) so I'll stick to something I can understand while not paying for some douchebag's dinner in chicago every third friday.
FAZ is your friend.....I have LOTS of FAZ. Probably the largest amount of any stock I've ever owned. Be patient.....they can't prop the equity side forever. The debt side will make sure of that.
Ciao
MS
I have a problem with it these days for anything but short-term trades because of the way it gets eroded by volatility. I'm not willing to hold FAZ until the bottom begins to fall out. I'd rather short XLF or UYG.
FWIW I have picked up some puts on financials in the past week.
If you think they didn't get something out of that paper you're sorely mistaken
I could buy that but it's been obvious for many years, long before even the Dot Com Crash, that we weren't going to honor the paper. Did they really not understand that until 2009?
The ficalc link appears primitive, but it is sophisticated so that you the user does not have to remember the esoterica of bond market conventions.
For example, US Treasury bond calculations assume semi-annual compounding and actual/actual years when calculating coupon payments. US corporate bonds usually assume semi-annual compounding and 360/360 years when calculating coupon payments. Foreign bonds have their own conventions, usually determined by the norms of the market where they are primarily traded.
The devils in the details. Getting the details wrong can cost you serious money. I know a major airline, formerly headquartered in Dryfly's neck of the woods, that overpaid us $2.3 million dollars on a mortgage backed bond because they got the bond math wrong. It really pained me to point out their error and return the money.
IMO anything that is not front month is way overpriced......sure FAZ gets knocked around but I see more upside to that then most puts nowadays. What I hate about the options market is the fluff they price into both sides.....in most cases (and this is just my opinion) you are paying for the right to hold them.
With front month op ex you pretty much have the same volatility so IMO there's not a lot of difference....except you get to make the decision instead of the time value eating it for you.
personally, i like the story with TZA a bit more than FAZ - i worry that the fed will prop up the banks indefinitely, wheras the small caps are really left on their own
Lot of truth to what your saying. The question is how many of those long-time owners will see their nest eggs withering away -- between losses on stocks, bonds, houses, etc. -- in the face of spiraling taxes, food & (especially) health-related costs... and decide to cash in. A good portion of those living in nicer areas don't really have much more than their equity; they've just been there forever.
Building a lot of factories, training a lot of people and selling stuff for free, so that it could blow up and leave a lot of empty factories and unemployed people?
It makes as much sense as doubling your workforce as your revenue stream gets more and more negative.
Like.... like the Dot Com companies I worked for!
"A good portion of those living in nicer areas don't really have much more than their equity;"
well, prop 13 is what makes it interesting. when you're on a fixed income, that property tax bill (or condo/HOA fee) becomes very, very important. other folks in the rest of the country may not be aware of just what a free ride those old bases can be, with taxes on mil+ homes often being 60 or so bucks a month. and if the place is paid off, you may not give much of a shit about whether the neighbor is selling for 400K or 1.4 mil.
"...there's a solid core of wealthy older owners with prop 13 bases going back to the 80s or earlier..."
Very true, and those places will not be going on the market until the owners pass on - or maybe never if they were ever transferred to LLCs or trusts for heirs. The properties that will sell are the ones that previously sold since roughly 1997, since they have high property taxes and expensive loans.
There certainly won't be a recovery back to the bubble prices any time soon (in real terms). But I see an amazing number of 30ish dual-income families still pulling in household incomes at or above $200K. So my thinking is that once jumbo loans are available again, the demand will exist for SFHs in nicer neighborhoods at a price point somewhere between 700K and 800K. The 30-somethings will not be able to make big down payments, but they should be able to come up with 10% or 15% of say 750K in a few years.
sbarrkum wrote- "mp, re Carlyle. emailed a friend who worked for Carlyle Capital. Heres what he said. The below is BS. Carlyle's strategy is never to accumulate companies and create monopoly power. Carlyle's portfolio companies can be found on their public website."
Yeah, well, how does your "FRIEND" at CARLYLE CAPITAL explain this April 16, 2009 demand by the Florida Attorney General for a federal trial by jury, accusing them of CONSPIRACY and PRICE FIXING in OIL FILTERS?
They can't prop all of them....just a few. But I see what you're saying when I look at the chart...
Small cap stocks are not really participating the way the bank sector has been goosed so it may not have the same (potential) upside. Having said that I don't think I've ever seen as many crap stocks get pushed up ('07 is close) like this before. The search for yield (of any kind, shape or form) is certainly fascinating to watch.....
And they got US and other foreign companies to finance and build their factories. They now have plant, equipment, and some paper. We on the other hand have mostly paper.
Also, what percentage of the US dollar paper that they currently "own" has already been committed to buy foreign assets with the sale denominated in US dollars?
If you think they didn't get something out of that paper you're sorely mistaken. In spite of the troubles that still abound in China unless you grew up their in the 80s or earlier you cannot grasp how monumental the changes have been.
China used the creditworthiness and voracious appetite of our consumer to build up an industry they couldn't have otherwise developed. Now the U.S. consumer has been sucked dry and turned into a barren empty shell while their former creditworthiness has been transferred to China.
What they got was our most valuable asset, even if our paper is worthless.
But it still remains to be seen whether the Chinese consumer can be coupled to Chinese industry in a way that makes it profitable. And that worthless paper from the US may make Chinese businessmen and savers start to wonder why they're working at all if they don't get compensated for it with something of lasting value.
It's easy to assume that China has undoutably "gotten something" from this "worthless paper" and come out way ahead whether or not the U.S. pays back the debt they owe to China.
But I think that assumes that China can maintain control of this gigantic new machine they've built.
If they can't and the ensuing economic instability turns into social and political instability, they may find that for all their troubles they end up with nothing more than a smoking hole in the ground.
As long as the Yuan is pegged to the dollar all the BRIC stuff is puffery.
How are the BRIC a brac going to set inter currency rat that is independent of the dollar.
In fact the g-7 could pull out of WTO and set up something for ourselves leaving these guys hanging.
It would be messy but doable. The little napoleons trust we will not swat them.
Same with developing A-weapons
Imagine I am an Indian immigrant, and I worked for AT&T for 20 years, I bought my house in 1984 when my son was thirteen, and I am retired with a paid off house in Palos Verdes.....ITs worth a 750k quatloos right, RIGHT?
"The 30-somethings will not be able to make big down payments, but they should be able to come up with 10% or 15% of say 750K in a few years."
well, that's part of what I see - and I think this group has a VERY weak hand. they're small in number - 1972 was the demographic nadir - and a part of a professional class with more optimism than resources.
I sincerely hope that folks understand that we aren't in the middle of the ballgame in terms of the crushing burden of entitlement, we're in the the top of the first inning. Joe Boomer is only 54 years old. The tens of trillions baked into the donut bill passed 5 years are so are just now being seen. That pressure will steadily suffocate just about every professional trade, and many, if not most of those 30 somethings still bringing in six digits will not survive the next couple of late-2008 style waves. hang ten!
The number of "truly wealthy people" with low Prop 13 tax bases would be a statistic of interest, but I'm not certain how relevant it is to maintaining prices, as their numbers can't have changed much (if any) from before the bubble until after. That still puts "normal" at pre-bubble prices adjusted for typical appreciation.
Barley: Geez I thought I was all alone in holding and adding to FAZ. Thanks for that.
You are not alone. I bought in the 8's and have been averaging down a little, carefully. When I read the real stories behind the faux bank numbers and the obvious pump into equity offerings, I figured it would be a matter of time before truth played gravity and brought the financials down to earth. I was too early to the party, but I can't imagine that Q2 numbers for the banks will be any good.
@ac - re: your comments on transfer of wealth to China. That money, if spread equitably would be over 3-4 times the population, and doesn't account for how much is wasted on useless projects that don't benefit the people in any real way.
HH - first boomers are 64, not 54. The days of reckoning are closer than many think.
" The only people I've ever known at Carlyle were douchebags.
Wait, was that anecdotal or just plain offensive?
I have to agree....dealt with a few of them on a deal about 10 year's ago. They gave a new meaning to the term douche. Above and beyond anything I could have ever comprehended...the phrase entitlement is also a very good description.
The only thing they knew was name dropping...the company I worked for passed after the initial meeting....it was a DD meeting....
What do you people think about North Korea and that boat that might have nuclear missiles and/or components the military is tracking? Is Obama about to start playing war?
Carlyle Group is unable to comment on pending litigation, but can state for the record that any price fixing conspiracies we may have inadvertently entered into were not the result of any strategic decision of the corporation. Our mission is to be the premier global private equity firm, leveraging the insight of Carlyle's team of investment professionals to generate extraordinary returns across a range of investment choices, while maintaining our good name and the good name of our investors. Any concentration we may have in a particular industrial sector is merely the result of our attempts to focus on sectors in which we have demonstrated expertise.
While we would never make any attempt to leverage monopoly power, we would like to point out that we are open to opportunities wherever they may be found and are well positioned to take advantage of the extraordinary opportunities on the road ahead.
/spoof (the last thing I want is to get on the wrong side of Carlyle's legal department--I'm extremely claustrophobic and rendition to some offshore black ops site wouldn't be particularly pleasant)
The capital to build their factories is not the treasury paper they hold.
i'm surprised you'd make a mistake like this.
Our factories on Chinese soil are hostages. If we DK the Treasuries that they hold, they can seize the factories, which would BK most of the American companies that built them. If they are forced to pay compensation, they can offered the Treasuries as payment.
I've not been around at night lately...what's your take on the 2s/10's going ballistic today?
Anything to really worry about or just a piece of the long drawn out puzzle?
HH, MS or AC- what about using the decay to your advantage and shorting TYH. The 2&3x etf longs and shorts are just getting beat down in the end..why not use it to your advantage ex-fas 32-2, skf-300-40 srs-295-16 faz 201-4 qld-86-16 etc....
abprosper (homepage, profile) wrote (in reply to...) on Thu, 6/18/2009 - 10:30 pm
There are plenty of kids in the US. The population nearly doubled in my lifetime. The thing is wages went down 30% (ish) ye reap what ye sow
The economic system will gradually find its next-highest point of stability. It will feel like going back in time, Not exactly graceful degradation but close. We aren't very good at perceiving or planning around time-delayed events or those which span long periods of time.
@ac - re: your comments on transfer of wealth to China. That money, if spread equitably would be over 3-4 times the population, and doesn't account for how much is wasted on useless projects that don't benefit the people in any real way.
Money is not wealth, just an arbitrary scoring system that attempts to make different kinds of wealth interchangable.
You can no more spread wealth around China using money than you spread intelligence around the US by mailing everybody a college diploma.
The wealth doesn't come from money or industry. The wealth comes from how these things are used.
Money and economic growth, in the wrong hands, can lead to the direst poverty of all.
They won't seize them. They'll just "offer" to "buy" them at, say the "fair" market price with their Treasuries and be done with it. But, not while there's still some blood left in the victim, as dryfly repeats regularly (in a less maudlin way).
HH, MS or AC- what about using the decay to your advantage and shorting TYH. The 2&3x etf longs and shorts are just getting beat down in the end..why not use it to your advantage ex-fas 32-2, skf-300-40 srs-295-16 faz 201-4 qld-86-16 etc....
That's exactly what I do.
I short the leveraged funds and let the volatility make me money instead of costing me money. Sometimes they're hard to find though.
Hey Basel,
"the proposed tax cut will also come without buyer income/status restrictions. unless expressly prohibited (i don't see how it could), i expect lots of private transfers."
My nephew bought a 20s era craftsman bungalow for 32k last year, cheaper than renting. if I buy it from him, can I get the 15k? We could then split the money between us.
Would that actually be legal? What do you think?
EconDiscon-
Getting late and too pooped to give thoughtful reply but want to thank for your post, agreed a good excercise
Interesting that there's no definitions of either deflation or inflation in our new Glossary (which is awesome). Though after this post that may change, and change,and change . . .
EEngineer (profile) wrote (in reply to...) on Thu, 6/18/2009 - 8:36 pm
They won't seize them. They'll just "offer" to "buy" them at, say the "fair" market price with their Treasuries and be done with it. But, not while there's still some blood left in the victim
Ouch!
You've been channeling your inner norka paranoia.
It won't happen for a while. There are still lots of business processes that they must copy and IP they must "liberate" before they kick us to the curb.
Time to sign off. Good example earlier Tokyo time of why headline writers shouldn't file early in trading - Nikkei site at 10:03 local wrote some piffle about stocks up "on rosy US data", to - oooh - 9820, and the market promptly dropped 100 points. Bloomie's still running a similar story.
“FHA will be challenged to handle its expanded workload or new programs that require the agency to take on riskier loans than it historically has had in its portfolio,” Kenneth Donohue, the inspector general for the Housing and Urban Development Department, told lawmakers today. “The surge in FHA loans is likely to overtax the oversight resources of FHA, making careful and comprehensive lender monitoring difficult.”
....
Donohue said the rise of mortgage fraud among FHA lenders has depleted FHA’s mortgage insurance fund, which has fallen to $12.9 billion, or 2 percent of all insured assets as of Sept. 30, from $21 billion, or 6.4 percent of assets a year earlier. Under some economic projections, that ratio could fall below the statutory requirement of 2 percent, requiring taxpayer assistance or an increase in premiums, he said.
Some places are selling in my town of Sebastopol Ca.Both Raw Land and SFR's in the $700-$800k range and up.The places that are selling are priced competitively (about 25% below last year).A place down the road a bit just went on the market at $825k and had an "open house" sign on it every day this week.An older couple is selling to downsize,and this place is well laid out,well built and well maintained.2575 Blucher Valley Rd,95472 for those who are curious.I don't think the will get their price,but people bought pets.com all the way down...rent would be $2500 tops.
My nephew bought a 20s era craftsman bungalow for 32k last year, cheaper than renting. if I buy it from him, can I get the 15k? We could then split the money between us.
Would that actually be legal? What do you think?
The whole point of a kleptocracy is to make theft "legal".
Don't worry - the congress has your back on this one.
@ED - if it was $12.9B in Sept., it must be quite a bit lower now. Probably running close to parallel with the FDIC's shrinking supply. (Not including their 'just in case of emergency' $500B)
no real reason other than cost right now. Want to limit outlay. But I also think that the shorts in FAZ will work for me if/when it starts to rise.....being short means dealing with weak hands and I had enough of that in '06 with the homebuilder's. I took WCI down to mid-teens (from the 40's) and then covered it when Icahn started his games....I should have just waited...I think it's at .03 now or something...live and learn.
Being FHA is a matter of political will it will be very difficult for them to radically tighten up fees and underwriting. I guarantee you any plan to do so will be met with the full force and fury of the NAR, NAHB and MBA.
"There are plenty of kids in the US. The population nearly doubled in my lifetime. The thing is wages went down 30% (ish) ye reap what ye sow"
Per capita GDP went up. So "wages" in some "sectors" experienced tremendous "growth".
It's just they call them bonuses, capital gains, or interest. Just a technicality. Capital gains represent real progress, so they should be taxed lower than earnings from lowbrow "labor".
I live on Trestle Glen in a home built in 1936. Been here 38 years. I like it here and I like Oakland, warts and all. I am concerned about the local economy but it's probably hella better than most areas in CA.
I don't think about crime because (a) it's a waste of energy and (b) it's not an issue here.
We were burgled once...took my PET computer in 1979.
picosec,I can top you.I remember rowing a boat on lakeshore ave during the '62 floods.Say hello to the folks at Walden Pond for me the next tome you drop in...I lived in that area for decades and I wonder if I would recognize you...small world.
Did you have a mortgage on your house back during the double-digit interest rates? With all of the talk recently, there seems to be a lot of people who don't remember or understand what that time was like for a lot of people.
This neighborhood has held its value rather well, but always had very low turnover so the bubble was not so extreme. Also not flipper-friendly as the buy-in was a lot bigger thana home a couple of miles (or less) away.
That said, the house next to me was bought 2 years ago for $1.3M, outrageous at the time. Turns out, per Zillow it's now worth $0.9M so some did get burned. This is the prototypical "move-up" neighborhood and has always depended on that so the next year will probably tell the tale on that point.
June 19 (Bloomberg) -- The biggest threat to the global airline industry isn’t the swine flu outbreak, according to AirAsia Bhd.’s Tony Fernandes.
“We’ve been through SARS, bird flu, tsunami, you name it,” Fernandes, the founder and chief executive officer of Southeast Asia’s biggest discount carrier, said at the Paris Air Show this week. “The only swine now are bankers.”
@picosec - There will certainly be areas that will be insulated to a certain degree, though your example of a $400K drop in value in two years would probably have me kicking myself for not selling then.
Weren't they out of bullets last summer? The worst that can happen is I get stopped out... or someway it miraculously makes a huge gap down overnight; right ? TBT is going to gap down 10% in one night?
June 19 (Bloomberg) -- Porsche SE may find its alliance with Qatar will hasten a takeover by Volkswagen AG.
Plans to sell a stake to the Persian Gulf state would bolster Porsche’s finances enough to raise the sports-car maker’s attraction for Volkswagen, and give Qatar a path into Europe’s largest carmaker. Porsche may sell as much as 25 percent for 2.5 billion euros ($3.5 billion) to Qatar, two people familiar with the plan said June 15.
I bought in '71 and got a 29-year loan at 8.5% with 20% down. How quaint, you all say. (Long before rates went out of site. When inflation did hit, my income went up and the 8.5% looked awful good.)
The kicker is that the bank required that my net worth was at least as much as my loan! I made it with about $1k to spare. Try that in today's market.
PS - We can criticize all those who used their house as an ATM, but mine financed two kids through college. Timing is everything.
@picosec - timing is only part of it. A little common sense helps. Using home equity for something productive, like kid's education, hasn't been the problem - it's been using it to finance over-consuming lifestyles that has gotten the largest number of homeowners in trouble.
To all who asked question while my better half had my attention...
1) You're welcome
2) I still have my slide rule, US Army issue 1947 (but not to me)
3) Yes, the PET was quite heavy (transformer power supply). At the time there were fewer than 10,000 in the world so I have no idea how/where you could sell/fence such a thing. But I went out and upgraded from a 8kB machine to a 32kB one.
despite the fact that i'm at less than half of my life expectancy, i'd like to think i'm something of a vet in terms of shorting treasuries, been doing it since '03...
rrpix... agg puts (forgive my youth)... and, of course, tbt...
my advice is to pay the premium and buy tlt puts if you're determined to go out like adam dunn.. why monkey with 2x kids' stuff
I was lucky and sold my in early 2007 to take a new job. If I had sat another 6 months I would have "lost" another 10%. Again I was lucky... but I sold (traded) houses for a substantial (relative to my financial situation) every two years begining in 1996.
Now I live in CA and still can't afford to buy. CA coast has been fairly resilient so far.
That PET had a built-in BASIC interpreter and you could jam a lot of code into 32kB. Slow? Yes. But it's the last machine that I could actually write code on.
actually, lucifer, you should know better than anyone that our troubles really began with an egghead academic with eugenics/klansman affinities monkeying with congress' exclusive right to print dough... has anything besides thomas edison every come out of new jersey of use or import?
If you type “WAIT6502,1″ into a Commodore PET with BASIC V2 (1979), it will show the string “MICROSOFT!” at the top left corner of the screen. Legend has it Bill Gates himself inserted this easter egg “after he had had an argument with Commodore founder Jack Tramiel”, “just in case Commodore ever tried to claim that the code wasn’t from Microsoft”.
//actually, lucifer, you should know better than anyone that our troubles really began with an egghead academic with eugenics/klansman affinities monkeying with congress' exclusive right to print dough//
my sportsbook expertise is not that deep. i also have a moral objection to the nfl in terms of the way the average player is treated. i did kill, crush and destroy a friendly (no no-spread college betting pool last year however - played the sec and pac 10 like a fiddle.
@Lucifer - I wouldn't be surprised if future generations don't understand the math in those spreadsheets or presentations. All part of the banker's and gov't plans.
My grade-school daughter had an assignment--assign values 1 thru 26 to the letters of the alphabet in order, i.e. a=1, b=2, z=26.
Then find a word such that the values of the letters add to 100.
Being the good dad, I let her work on it a while, then tried it myself, all to no avail (it IS a lot of work to add up all those numbers). Then I wrote a BASIC code so that you enter a word and the PET displays the sum.
Still tried a LOT of words, and found two, probably the shortest and possibly the longest.
naw, FDR wasn't a nice person, but he ranks pretty well compared to mao, stalin and hitler, which, more or less, were his graduating class. on the whole, his legacy isn't so bad seeing as how all of his family money came from enslaving people to opium addiction.
"FDR is the reason US did not come apart in the 1930s.."
a cliche, but true. and which blue-blood was convicted of trading with the enemy for his activities in the 30s while working with Union Bank... class? anyone?
Green energy: just bubble-blowing?: Do investors have any bubbles left in them?
In the days of free and easy money, under the leadership of Federal Reserve chief Alan Greenspan (once dubbed the 'Maestro', though strangely enough, not any more), investment became a big game of 'spot the next bubble'.
With hindsight, investing was easy. You just had to ignore things like fundamentals and rationality, and buy whatever everyone else was buying. Trouble was, you also had to avoid being the 'greatest fool', and bail out before the bubble popped. Lots of people didn't, hence the current pain being caused by the property slump.
My nephew bought a 20s era craftsman bungalow for 32k last year, cheaper than renting. if I buy it from him, can I get the 15k? We could then split the money between us.
If the 15k is like the 8k, it is a cap on a 10% credit (3k on 30k).
What no one seems to remember about this "tax credit" is that it is simply a loan.
It has to be paid back over 10 years. Interest free of course...but I don't want to lose 1500 a year in refunds...or worse yet, end up paying 2500 every tax season for the next decade...
I think the government bubble is only a symptom of a larger systemic issue. The control mechanisms of our system are based on pre-1930 concepts, but technology and socio-cultural changes have made those old control mechanisms obsolete.
Example-
Should people have a job to enjoy a middle class lifestyle?
Should companies try to increase productivity through zero-sum games?
Should we not accept that "experts" are our version of false prophets?
Thyssen had a conscience! Note that Thyssen walked out on the third reich in 1938.. Bush continued till he was caught and reprimanded.
//The breaking point for Thyssen was the violent pogrom against the Jews in November, 1938 known as Kristallnacht, which caused him to resign from the Council of State. By 1939 he was also bitterly criticising the regime's economic policies, which were subordinating everything to rearmament in preparation for war.//
//Bush was one of seven directors of the Union Banking Corporation, an investment bank controlled by the Thyssen family, which was seized in October 1942 under the Trading with the Enemy Act as being owned by "enemy aliens." The assets were held by the government for the duration of the war, then returned afterward.//
That is not the issue.. The vast majority of people believe that the world is a zero sum game.. however that is not the case.
Think of it this way.. How many people perform jobs that generate wealth - products or services (create and design them). In the pre-industrial era almost everyone could have a useful job. After industrialization, it became harder and harder to achieve that goal. Nowadays, we cannot even pretend that is possible. But we still require consumers to consume and keep those with useful jobs employed. How can we do that in our current system?
Another one- Almost all of our great scientific discoveries were unplanned and accidental, so why pretend that we know enough to direct money into specific research areas or persons to the exclusion of others?
well, it is after 2 EST... in terms of my conscience and dragging things deeper into OT land...
did he? or did he just recognize that despite the Bavarian power base and Austrian heritage, his Leader was emphatically NOT catholic (or christian) in any meaningful way, but a disgusting hybrid child of the worst elements of Wagner and Nietzsche?
And the more disturbing conclusion - was this really the only syncretism, barbaric as it was, that could fuse the still-lingering wounds of centuries of catholic/protestant strife in Europe?
Fritz had some time to cool his heels as he pondered all this and more. Much like another master of evil - Joe Kennedy - had more than enough time to ponder his legacy behind his paralytic mask in his final decade.
"What no one seems to remember about this "tax credit" is that it is simply a loan.
Actually the present scheme is a gift."
Ahh, but a gift to whom?
Assume multiple potential buyers are eligible for the credit. Each now has $15k more purchasing power than they had without the credit. Now they can bid $15k more than before.
Ipso facto - The SELLER gets the bonus (and one more comp at a higher price is created to help guide the next home that goes on sale in the neighborhood).
Both communists and capitalists believe that the world is a zero sum game. I am suggesting that it does not have to be that way. Indeed, it is more profitable (and realistic) to work in a non zero-sum world.
I think he knew the difference between simple discrimination and mass murder. That is more than you can say about some US presidents (Andrew Jackson)
//did he? or did he just recognize that despite the Bavarian power base and Austrian heritage, his Leader was emphatically NOT catholic (or christian) in any meaningful way, but a disgusting hybrid child of the worst elements of Wagner and Nietzsche?//
"Both communists and capitalists believe that the world is a zero sum game."
not quite true - the classic "capitalist"/neo-liberal response to more socialist critique of the post-reagan social landscape is "But the poor now have microwaves, bigscreens, cable and at least one car!" Not a hard argument to counter, but, still, not a zero-sum one either.
@lucifer - investors didn't know in advance of previous innovations. There will be others in the future - it's just a bit audacious of us to assume those innovations will happen here.
June 19 (Bloomberg) -- Give me your arm, make a fist, relax. This isn’t going to hurt.
It always does but that just makes doctor and patient even. What really, really hurts, physicians say, are medical malpractice suits -- those humongous awards ladled out by gullible juries are more painful than a thousand hypodermic needles.
"That is more than you can say about some US presidents (Andrew Jackson)"
and here we come back full circle - who was the last president to truly challenge the banking elite and insist upon the return of monetary policy to the hands of the people? who was, perhaps, the last real (and damn effective) champion of the american working class to occupy the white house?
@picosec - agreed, and a bit more $$ to the realtors and another $15K in loans for the banksters to work on that wouldn't have been there at the lower price.
As with all of the other plans, though, there are those prickly little unintended consequences...
sadly, the debt binge therein set up a deflationary prison for a whole generation that really wasn't relieved until the spending of the spanish-american war...
no... the answer to that one is that scowling visage coming at you from those ATM tickets - the hero of the battle of new orleans... And i genuinely hope that our new Dear Leader can take a tip from AJ... a mean man for mean times, that knew very well what it meant to kick ass for the everyday american.
Well that's news.
I cannot think of anybody who saw this coming.
Certified Distressed Property Expert - hehehe.....
With people getting laid off they'll have time to look for their next bigger house !
NEWSFLASH: Bloomberg says the recession is ending.
Now, back to our regularly scheduled broadcast.
Hey! Check out the link JP posted. It is freaking awesome. More please?
becoming realtors.
Two of my friends plan to buy a house this summer. One is a first time buyer, the other a move up buyer! The move up buyer just put his house on Redfin, we'll see how the pricing holds up.
What about "move-down" buyers?
Newsflash- putting makeup on a corpse does not revive it!
I am a Certified distressed property expert, too. I own one.
Nemo, I'm shocked. Why aren't those banks selling those REOs and buying nicer homes? Oh wait ... they will have plenty of nicer homes soon with foreclosures moving up the value chain.
best to all.
CR, you wag!
Hoocoodanode?
the proposed tax cut will also come without buyer income/status restrictions. unless expressly prohibited (i don't see how it could), i expect lots of private transfers.
"I dreamed I shifted the paradigm with my Hurst shifter, from the Carlyle Group"
NEWSFLASH: Bloomberg says the recession is ending.
errr ...because the depression began ?
Obviously they were "snookered" into thinking the move up ladder always works! Sorry, still burns CR!
How many of our current jobs have any utility?
15k huh well that should take care of the down payment on home up too 400k assuming 3% down. but the others are still in trouble I'll wait until the 50k home credit.
What kind of jobs can revive the housing ponzi scheme?
Pg. 4 & 6 are almost as amusing to me.
"Tiffany Owens
Age: 42
Former job: Freelance writer
Current job: Property caretaker for absentee homeowners
Hometown: Portland, Oregon
With the economic downturn, it's been a terrible time to be a freelance writer. Since then, my husband, Dave, and I embarked on a completely new, second career as nomadic property caretakers."
Move up buyers is so yesterday.
The new fashionable trend wave approaching our shores is the move down buyers. Yes all those baby boomers that did not have enough kids to support them in retirement years are about to find out that there is not anybody to buy their houses. Yoo hoo
Lucifer
How many of our current jobs have any utility?
~~~~
Quiet ... you'll scare the hoi polloi ...
No need for "move-up" buyers when you have "cash flow" investors. (Two terms which perhaps belong in the Glossary.)
To the moon, Alice!
Meanwhile, Dave and Tiffany are eating their meals at the local soup kitchen... Oh the humanity...
"i expect lots of private transfers."
basel this will still lower home values and lead to worse performance on the MBS's and more walkaways.
Those that put any sort of money in there home over the last few years are still losers.
Today my favorite economist who shall remain nameless offered that for unemployment to stabilise and to call the end of the recession, the initial jobless claims will have to come down to -400,000. Today's print was over -600,000. A few years back this guy was railing because employment was only GROWING at about +300,000 jobs a month (a positive 300,000) and said that was not even enough to support workers entering the job force. But now losing 400,000 a month will be just so great. That 700,000 spread is hard to reconcile, but he does have a Nobel prize.
barley: link to bond calculator got pigged.
FICALC - The Web's Fixed Income Calculator (Bond Calculator)
Let me know if this the type of info you are looking for.
I can point you to other links if necessary.
NW
"Those that put any sort of money in there home over the last few years are still losers. "
one of the more pathetic elements of the housing bubble (which was also quite common in earlier bubbles, like the late 80s one here in CA) is the belief of flippers that the molding, lighting, etc, they would add to a place would actually be adding value. a bit like sticking your head out the car window and blowing towards the back really hard to increase the speed.
Unrealestate,
They will be even more shocked when they have to cash out of their retirement savings, stocks. Who is going to buy all the financial instruments pension funds have invested in?
"cash flow" is the new "this time its different". Does GOOG trade as cash flow? Maybe flow out!
My term for 2010 is "leapfrog buyers".
They are the people who were smart enough or lucky enough to stay renters and keep saving money. The prices of homes will come down so much in many places that what would have been a 20% down payment on a low end house is a 40% downpayment on a high end house.
Los Angeles example: piece of crap house in an ok neighborhood in 2006, $600,000. Nice house in good neighborhood in 2010, $300,000.
second career as nomadic property caretakers
Damn, you can get paid for this?
I've been doing it for free.
this will still lower home values and lead to worse performance on the MBS's and more walkaways.
I was thinking more along the lines that my sister would sell her house to my brother and vice versa, especially if the gov uses the standard principal home definition. no mortgages on either home, and they'll pocket $15K each.
"Nice house in good neighborhood in 2010, $300,000. "
more like 2020 - with a japan-style endless drip to get there
Broward you should look into becoming an estate manager - this is for real - take care of a big house for a rich person who is hardly ever there, hire people to do all the work, collect around 80k a year plus medical and vacation! Vacation! From living in a mansion! I suppose you go live under a bridge for a few weeks for a change...
USA 2008, September:
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USA 2017 will be 4 countries: North East SA, West SA, South SA, Middle SA.
Beautiful is not it.
No worries, the CMBS are on tap for taxpayer backstop. What could go wrong? As all pile into the dollar and treasuries for safety, the net catching them is built on awesome assets. Oh, wait.....
Hollywood Hack, I look at vintage houses. Every time I see a house with a graniteel kitchen I deduct value. Big time. The old kitchen can be restored or renovated in a manner consonant with the house. The graniteel crap is pure junk that will have to be scrapped and THEN it will be necessary to find period-compatible cabinetry.
One Third of the Prices within the CPI Fell Last Month
Economist's View: One Third of the Prices within the CPI Fell Last Month
Take a look at Anne's CPI chart in the comments ...
Sep ( 4.9)
Oct ( 3.7)
Nov ( 1.7)
Dec ( 0.7)
2009
Jan ( 0.
Obama
Feb ( 0.2)
Mar (- 0.4)
Apr (- 0.7)
May (- 1.3)
From 4.9 to -1.3 in 8 months ...
There's more ...
barley:
Info source on bonds.
FINRA - Investor Information - Accrued Interest Calculator
or
Nemo's site
https://self-evident.org/
or
Bond Calculator
for a bond overview.
a bit like sticking your head out the car window and blowing towards the back really hard to increase the speed.
Really? How silly can people be? You don't go faster, but it increases your gas mileage!
"more like 2020 - with a japan-style endless drip to get there "
Looking at Case-Shiller... no, I don't think so.
sister would sell her house to my brother... See how govt programs interfere with natural markets - and dont accomplish their stated purpose... govt programs and taxes make criminals of ordinary people... How bad does it have to get before the electorate wakes up and starts voting for liberty and small govt?
"Los Angeles example: ..... Nice house in good neighborhood in 2010, $300,000."
I think that's a bit optimistic. This looks like it's going to drag on slowly. Maybe 2012?
"
"i expect lots of private transfers."
basel this will still lower home values and lead to worse performance on the MBS's and more walkaways.
Those that put any sort of money in there home over the last few years are still losers.
"
Just showed up on my street. Zillow shows homes like the one I'm renting with zestimate of 610k. One on our block just showed a sale @ 500k. Neighbor who is a mortgage broker said it was father selling to his son-in-law.
gd2 anecdote --
i live in a fairly poor to working class neighborhood very close to unlv. a few days ago my upstairs neighbor knocked on my door and said that his shoes had just been stolen from his front porch. i shrugged and said, "prolly just some kid raising hell." after we exchanged a few more words he asked me what size shoes i wore. i thought that he was insinuating that it was i who stole his shoes. i was wrong. he then asked if he could buy a pair of shoes from me. "don't charge too much man, i don't have that much money," he said. i gave him an old pair of sandals and told him that he could keep them until he had enough money for a new pair of shoes. well, he dropped by yesterday to return my sandals. the straps had busted so he repaired them with electrical tape. electrical tape. i told him that he could keep the shoes if he wanted them. he wanted them. he is still wearing them.
not even sure this is really recession related because i'm not sure this guy could hold down any sort of job in any economy, but it was eye opening. still kinda shaking my head...
"no, I don't think so. "
and i don't think we'll be seeing 500K houses in Holmby Hills, off Mulholland, Palisades, etc NEXT year...
sellers in those kinds of hoods are still asking 550/Sqft and up. they're not going to collapse to under 200/sqft within the next 18 months. its a long long long journey down, and the boomers who own those places are going to tenaciously grip their version of reality every single day with every ounce of energy they have...
How bad does it have to get before the electorate wakes up and starts voting for liberty and small govt?
~~~~
How many people will have an address to register to vote ?
Does : "Under the Bridge" qualify as an address ?
Good used clothes cheap at Goodwill or Deseret... I just took another big load over there this week...
"How bad does it have to get before the electorate wakes up and starts voting for liberty and small govt? "
Much worse than anything we have seen, apparently. Including GD1.
Norka Thx!
Vacation! From living in a mansion!
I suppose I get a Ferrari, too, and do private eye work in my spare time.
"Maybe 2012? "
SM, please enlighten the masses here - an average - and I mean average - home near Douglas park (say between California and Idaho) will still list, in this climate, somewhere around 1.2 mil, right? It may not sell there, but it won't go for under a million, even these days.
do you really think we'll see them around 500K anytime before 2016 at the soonest?
Well I dont like to do it but as a matter of self-preservation my only response is to 'not waste the crisis' and make as much as I can from this madness....
mmckinl - c'mon, Bloomberg's probably having you on. Surely not. They wha? OMFG. Who are these Leading Indicators? Are they like leading commentators or something?
If they're leading, I'm only following out of morbid curiosity.
C
Small government?
Maybe if the UE got to 30%
HollywoodHack
That is contributing to the 60 month turnover time in areas like that ...
The turnover time is still going up fast in those areas ...
"boomers who own those places are going to tenaciously grip their version of reality every single day with every ounce of energy they have..."
Yeah, but when the neighbor next door sells for 295/sq.ft out of fear of worse...
mmckinl (profile) wrote on Fri, 6/19/2009 - 1:37 am
"L " shaped recovery ?
That L is not recovery, it is permanent recession.
Recovery will be L with serif.
There was an agency in Palo Alto that specialized in placing estate managers, if you look it up... I'm serious, there are such jobs... you do have to undergo a background investigation though...
Lucifer (profile) wrote on Thu, 6/18/2009 - 8:56 pm
Unrealestate,
They will be even more shocked when they have to cash out of their retirement savings, stocks. Who is going to buy all the financial instruments pension funds have invested in?
Exactly. No one seems to comprehend the depths of that clusterf--k waiting to happen. Just one look at the demographics should convince anyone with eyes wide open.
Thanks but I have no interest in living in S.F.
Counterpointer
The LEI is dead cat bouncing after the multi story crash ...
Incidentally, if you have large items you want to donate, such as furniture and appliances, St Vincent de Paul and Salvation Army may pick them up ... You might have to check around locally though... When I could still move that stuff and I had a pickup, I used to just load it up and go to the cheapest housing in town and I always found people who were glad to take it in....
Swine flu patients in ICU tough to manage, 'just really, really sick': doctors
By Helen Branswell Medical Reporter – 2 hours ago
In a typical flu season, the Winnipeg hospitals where Dr. Anand Kumar works might see one, maybe two life-threatening cases of viral pneumonia caused by influenza.
So seeing 10, 15 and more flu patients in those same hospitals' intensive care beds in June is still a shock, suggests Kumar, a critical care specialist who works at three different hospitals in the city.
"You just don't see this many of them," Anand says of the patients, struggling to survive swine flu infections.
"You don't see rows and rows of patients on ventilators because they have respiratory failure, a viral pneumonia kind of thing. It's unusual."
At last count, Manitoba hospitals had 30 respiratory distress patients in the ICU, some confirmed swine flu cases, others for whom tests are still pending.
In most people, swine flu behaves like regular flu - it makes you feel miserable, you head to your bed and in time you recover. But in an as-yet unknown proportion of cases, the virus seems to quickly trigger severe illness.
A report compiled by the World Health Organization said between two and five per cent of confirmed cases require hospitalization. But no one yet knows how big a portion of the iceberg is above water (the confirmed cases) and how much remains submerged (cases that never come to the attention of medical authorities).
[snip]
"The patients are difficult to manage. They're unusually difficult to ventilate effectively," he says, referring to the practice of putting patients who cannot breath adequately for themselves on a machine called a ventilator that takes over the job temporarily.
"They're just really, really sick. It's impressive how sick they are."
The article requested is no longer available.
"Exactly. No one seems to comprehend the depths of that clusterf--k waiting to happen. Just one look at the demographics should convince anyone with eyes wide open."
Kind of like if Japan were a net importer to the tune of 4-5% GDP?
If it's an L, I think of it as mere restoration of the norm.
Does : "Under the Bridge" qualify as an address ?
You may be a little strident at times, but you aren't a troll.
Broward estates are everywhere, not just in SF... but whatever... Thanks to a lot of dead people you have the liberty to do whatever you like...
when I read the energyecon headline:
I saw Swine Flu patients in ICU managed in tonnage....
Good to see someone's put Manic Depression in the Glossary.
Now if there was some way I could arb an IP claim on that...
C
Sorry for the long comment, but would like some feedback:
Inflation vs. Deflation and the Limits of Rational Discourse
I think the inflation vs deflation debate is an attractive thought experiment with far reaching implications. I will say up front I am pretty strongly in the "deflation now, inflation later" camp and that is no cop out. I never mince what I say or mean. I could care less about pleasing any audience by changing my opinions based on group think. I think the great debates and interactions featured here in the comments section here at Economic Disconnect have been some of the best, most civil, most accepting debates anywhere on the net. I appreciate all for their great ability to keep it intellectual.
That said, there has been a change in tenor from both sides of the debate as of late. Inflationists are calling deflation thinkers "dumb". Deflationists are attacking inflation types with terms like "blind", and "unable to see what is in front of them". This has to stop. I will delete any such comments from this blog, but I doubt I will ever have to police the comments as the crowd here is top notch. We even have outliers in the "Stagflation" camp, though that one has moved to the "Negflation" outlook as of late, but he is a bit crazy anyways! (just kidding Mark)
To see why this debate is hard to reconcile, we should start with the clear fact that NOBODY EVEN AGREES WHAT THE DEFINITIONS ARE for inflation and deflation. Some point to money supply, others to prices paid, and others to random data points.
I would like to put out an idea I have been working on that may help many of us get onto the same page. I have not fully developed this idea, but I thought it would be good to get it out there and get some feedback. Perhaps deflation and inflation proponents are closer in view than they know. Consider:
Classic Inflation Definition: Tons of "cash" (whatever iteration) chasing too few goods pushes prices up. How that cash was made (money supply, easy credit, etc) is not central to the argument. Many cannot keep up and hardship occurs due to lack of ability to buy needed goods/services.
Classic Deflation Definition: Money supply (whatever iteration) normal or low but not being put into purchases of goods, causing prices to fall. This reinforces the pattern and a spiral down ensues that causes hardship through various channels (loss of job, loss of equity in home or investment etc) which feeds itself.
Yes simplistic, but remember I am the easily "snookered" type. (Still burns)
Now consider:
In inflation (be it regular or hyper) you have ever increasing asset values, but the pace of increases of all the things you need are going the same rate or faster. You either go nowhere or fall behind.
In deflation (I think there is only regular) asset values are falling which destroys the equity in them, decreasing money supply as debt is defaulted on. Everything falls in price INCLUDING YOUR WAGES, hence you are chasing necessities that are falling in price, but your assets are worth less and your paycheck getting smaller. You either go nowhere or fall behind.
I think the core issue to think about is how much relative income you have that will have to chase relative prices and here I think the two views are more alike than thought.
Zillow shows homes like the one I'm renting with zestimate of 610k. One on our block just showed a sale @ 500k. Neighbor who is a mortgage broker said it was father selling to his son-in-law
If the house is not used as collateral, what dis-advantage is it to have the house priced lower?
"Hi neighbor - I'm in Crocker Highlands. Between us we got East Bay real estate covered. "
picosec,
I've seen some VERY nice older homes in Crocker Highlands. I'm a bit wary of anything below Highway 13 though. But I do really like some of the homes in Crocker Highland and other areas around that neck of the woods. How are the crime stats in that area?
Monctlair has been having petty crime and car vandalism but nothing major from what I have been hearing.
I also think there is an L shape in our future. I don't think we are at the bottom of the L yet. Pick a Pay loans will deepen the L through 2012 or so for housing. Unemployment looks like it will get deeper ( in real terms if you count hours worked and lower wages) for a couple of years at least.
So what will our "new normal" look like? Will electical tape on our shoes be a fashion statement by then?
How do you prepare for a decent life in the new normal?
Not One Cent
"L " shaped recovery ?
That L is not recovery, it is permanent recession.
Recovery will be L with serif.
~~~~
Flattening out will be a recovery ... just with O growth ...
The more I see, the more I doubt it ....
Deflation is coming on strong ... State, county, city and school layoffs ...
Very sobering : One Third of the Prices within the CPI Fell Last Month
Economist's View: One Third of the Prices within the CPI Fell Last Month
Anne posted some figures as well.
"If the house is not used as collateral, what dis-advantage is it to have the house priced lower? "
Basel, no disadvantage as far as I am aware other than to your neighbours that are still convinced their house is still worth 600k-700k (:
sheeet nemo....your stuff on bonds is excellent....I am so very green at this stuff...Norka the first calc. was a bit primitive but I'll spend some more time on the second link....
I'm no expert but I think we are entering not a flat but negative yield curve where actual yield is determined by ability to pay and the maturity but also by the off-setting, repricing of like instuments...this happened in the late 1800s...quite unusual and may be typical of deflation episode....
HollywoodHack,
Well, there aren't that many houses left there, many have been torn down to build condos.
Given that a few condos nearby are still selling for over $1 million, there is no way that an SFH would go for under $1.2 million today.
But you have to keep in mind that a lot of transactions around here were financed with the flavor of Option ARMs that are due to start exploding this summer and into next year. So by 2012, I do expect to see some serious price corrections.
500K? Unlikely. $750K? Maybe.
Unless we get into some serious inflation before then - then the game changes.
What kind of jobs can revive the housing ponzi scheme?
The kind we've spent the last 10 years offshoring !
The article also mentions a proposal for a new $15,000 tax credit.
Once the monetary system collapses long-term loans will become unavailable and the structures we once called "houses", being as out of reach of the average American as a yacht or commuter jet is now, will be converted into convents, asylums, and brothels.
Would you give a career felon a 30 year loan for your entire net worth?
No?
The only reason we still have home loans is because the government can get away with forcing people to do just that.
They may not be able to for long...
"Everything falls in price INCLUDING YOUR WAGES, "
~~~~
wages are sticky ...
look at the wages for new jobs ...
sheeet nemo....your stuff on bonds is excellent....
Thanks, Barley. I am actually learning as I go, and I am trying to write what I would have wanted to read.
Not sure how well it is working, but I learn a lot by trying to explain stuff to other people. So I am getting a lot out of it even if nobody else does...
My goal is to understand the bond market better in order to watch, not to participate. Caveat lector.
Anyone else noticing the NAZ as a leading indicator lately? Bullish over the "recovery" and an now a bit bearish?
"500K? Unlikely. $750K? Maybe."
right. people are way too bearish about truly desirable real estate in the short term, and not nearly bearish enough in the long, long, long term.
locales like Irvine, Santa Monica, Silverlake, Studio City, Laguna Beach, etc, are gloating insofar as they've only dropped 15% or so from a year ago, as opposed to the 30% in more middle class neighboorhoods and even 60-70% in real working class ones.
they shouldn't pop that champagne - wheras the neighboorhoods that have already dumped will probably hit a real bottom by 2012, those nicer hoods will keep dropping 15% annually, for upwards of the next dozen years.
Inverted yield curve is a significant indicator of recession.
The Impact Of An Inverted Yield Curve
A permanently inverted curve would be Very Bad Medicine.
The last couple of inversions that I saw only lasted a few months.
flaminia (profile) wrote on Fri, 6/19/2009 - 2:14 am
If it's an L, I think of it as mere restoration of the norm.
I agree.
I was using the perspective of those who think the bubble should be the normal.
"Thanks, Barley. I am actually learning as I go, and I am trying to write what I would have wanted to read."
How about doing an entry on the bond market in the glossary? I was going to give it a swag, but you are much more funny.
RIF,
I realized that years ago. Of course, no one wanted to believe me.
Part of my dislike for canucks comes from their attitudes towards non-white immigrants. If those non-white immigrants do not have well paying jobs or other opportunities, who is going to pay taxes in the future, who is going to buy stocks, houses etc.
But canucks live in this dream world where they can maintain their attitdes as well as their lifestyle. Dreams are not reality.
wages and daily transactions are a measure of social austerity in the circumstance of your currency...
think about why Brazil and China are denominating transactions in Yuan. April of 2009, China and Brazil became the number one trading partners.....a century event is still unfolding.....dont get left behind....
framing the deflation and inflation debate in dollars as a function of wages is a poor effort with respect to emerging BRIC's austerity.
Is FAZ a Leading Indicator too? Looks like a screaming buy. Might call the fund mgr and ask if he's getting much trade.
C
/edit - fk fk fk add /snark quick, or someone will...
Oops.
mmckinl:
"Everything falls in price INCLUDING YOUR WAGES, "
~~~~
wages are sticky ...
"
Yup. Just like home prices..Ooops!
Compare hours worked with wages and you will see what I mean.
nemo - I like to watch, understand and, if possible to make some coin (or loose, too).
me thinks we are in new teritory here...just like early 07.....the yield curve is being managed by Central Banks....this create waves of unknow consequences.
"your love is like bad medicine, bad medicine is what I need"..Bon Jovi
the only "yield curve" inversion I am privvy to, is the 4's and 5's on the back of Brown's Pound.
"think about why Brazil and China are denominating transactions in Yuan. April of 2009, China and Brazil became the number one trading partners.....a century event is still unfolding.....dont get left behind...."
Agreed. The BRIC meeting was a big deal, although I have yet to see evidence that it has been consummated.
Trophy properties will probably maintain most of their value. There will be people getting newly rich from the Obama admin's largesse, and they will be buying... When the congress is going to spend 3.6 trillion in one year, some people are going to get some of that money... maybe even enough to pay cash for a beachfront trophy home...
broward (homepage, profile) wrote on Thu, 6/18/2009 - 7:23 pm userInverted yield curve is a significant indicator of recession.
I WOULD agree - not now...yields / or interest rates ae being managed like they have never been before. Different times.
Re: wages.
This may be a small data-point but tech wages definitely have not been sticky in the Bay Area. I am hearing that Senior Software Engineers in general are making 20% less to start this year then a year ago.
EconomicDisconnect
I agree ... I just meant over the short term ...
Also, the rise in some wage rates is because lower paid workers usually have less seniority
and are laid off first ...
Blackhalo --
How about doing an entry on the bond market in the glossary? I was going to give it a swag, but you are much more funny.
I think I mostly confuse sarcasm for wit, but thanks for the compliment.
Too hard to define in just a couple of sentences, and I am not feeling too inspired tonight. Another time.
Even Obama doesn't have the power to change demographics.
Senior Software Engineers in general are making 20% less
That's the range I'm estimate, a drop of 20-30%.
maybe even enough to pay cash for a beachfront trophy home...
~~~~
Like the Hamptons ?
oooops ...
interest rates ae being managed like they have never been before.
Intervention could be a problem, yes, but rates HAVE been managed like this before, during the Great Depression.
"Even Obama doesn't have the power to change demographics."
Stalin and Mao sure did!
"http://www.latimes.com/business/la-fi-geithner19-2009jun19,0,5119841.story?track=rss"
Why is the treasury, pimping for more Fed powers? Crack kills.
mmckinl,
I hear you and do not disagree. Please read the long post I left above. While it is not the theory of relativity, of course everything is relative!
"lower paid workers get laid off first"
I have been laid off (in a right to work state) twice because I made the most money. I could be replaced (after increasing the firms bottom line) by someone with less experiance. All they had to do was service the accounts rather than bring in new business.
I have been self employed for over 20 years and am very glad I dove off the cliff and learned how to fly.
FAZ is your friend.....I have LOTS of FAZ. Probably the largest amount of any stock I've ever owned. Be patient.....they can't prop the equity side forever. The debt side will make sure of that.
Ciao
MS
I also think there is an L shape in our future.
The L-shaped recession reminds me a bit of the "permanently high plateau". If you just consider the current trajectory of the economy I can understand how economists get to the the L-shaped recession conclusion.
But when you consider the consequences of having a stagnant economy for a long period of time while mountains of new debt are piled on top of it, you start to wonder how long until "stagnant" becomes something a bit more exciting.
"Why is the treasury, pimping for more Fed powers? Crack kills."
~~~~
You need to ask? Timmay is a bankster agent ...
The privately owned and operated Federal Reserve wants more power ...
"those nicer hoods will keep dropping 15% annually, for upwards of the next dozen years. "
I don't understand your rationale for that - the last couple of cycles have seen the nicer hoods recover in more like six or eight years. I'm expecting a faster fall in prices because I think that there was too much toxic financing, at least here in SM. World Savings and First Federal were pumping out Option ARMs like crazy. So I expect a faster fall and recovery sooner. But I would like to hear your thinking about a slower rate of decrease over a longer period in the nicer areas only.
ED, discussions of inflation and deflation which treat the currency as if it was a variable in a vacuum are... er... "dumb".
fiat currency is a political entity, and if a nation's paper is blackballed, supply, wages, etc, are all irrelevant.
Stalin and Mao sure did!
Okay, I'll admit that I've never studied up on the economics of genocide.
When Harry Dent first prposed his demographic prediction model, I was skeptical and back-worked against the post-Civil War period. Dent's model is strictly 20th Century, it doesn't account for the loss of 15% of the population.
"yes, but rates HAVE been managed like this before, during the Great Depression"
Nope - not like this. Not like this.
would like to hear your thinking about a slower rate of decrease over a longer period in the nicer areas only.
Japan.
Im convinced we (Amerikuns) are going to see 1989 real dollar pricing on Homes and Land.....that'll be the bottom. Not any sorta "nominal-inflation adjusted bullshit dollars".....been finding that little 2 acre, 3 bedroom 1 bath farmhouse is worth 49k quatloos in my neck of the green vallley.
Brazil represents 1-2 % of world GDP. India's GDP is the same as Mexico's.
The BRIC meeting was smoke and mirrors. I would like to see documentation of a significant trade denominated in RMB with, for instance, Brazil. I will not be holding my breath until IMF bonds meet even the semblance of an electronic accounting entry from any of them.
C
MS - Geez I thought I was all alone in holding and adding to FAZ. Thanks for that.
"Trophy properties will probably maintain most of their value. "
Some trophy properties have taken big hits recently. Like 30%.
sm_landlord,
With the virtual freeze in mid/high-end sales and financing I expect prices could come down much more quickly once the dam breaks. At some point some people simply have to sell, but for now, those that can are simply holding out.
Of course, in the truly high-end people will pay what they'll pay, and that can vary widely. But those people and properties are fairly rare.
The one thing for sure is a lot more properties traded for a lot more dollars than there are people that can truly afford them, which is why I expect the tonier areas to come down dramatically. It's only a matter of time.
"if a nation's paper is blackballed"
~~~~
cept they own a shitload of ours ...
course it could blow up ...
their not ready for that yet ...
give it decade or so ...
The BRIC meeting was smoke and mirrors
You think they're bluffing?
I can't iimagine they'd be that dumb as the bluff would HAVE to be called.
OTOH, they were dumb enough to take our paper.
Where nuclear holococaust was the deterrent to bad action, now it is currency manipulation. Nothing happened last tkme so ......
"OTOH, they were dumb enough to take our paper"
BA asks staff to work for free for a time
aka
BRIC asks America to pass along tax rev. for a time
Any difference?
Any difference
There was never any question that the bubble would blow out.
Besides, you're making my argument.
If they never expected the paper to hold value, why would they be bluffing?
"You think they're bluffing?
I can't iimagine they'd be that dumb as the bluff would HAVE to be called.
OTOH, they were dumb enough to take our paper. "
They went from the 1800s to the 2000s in 20 years. If you think they didn't get something out of that paper you're sorely mistaken. In spite of the troubles that still abound in China unless you grew up their in the 80s or earlier you cannot grasp how monumental the changes have been.
"But I would like to hear your thinking about a slower rate of decrease over a longer period in the nicer areas only. "
it is a function of demographics - there's a solid core of wealthy older owners with prop 13 bases going back to the 80s or earlier who have absolutely no intention of retiring elsewhere (would you with a 1977 tax basis on a place near the beach?). the exact opposite applies in the outlying regions, of course.
also, there really will be no recovery ala 1994-1996 - that was dependent on healthy job growth and boomer income cresting. hardly anyone was born in the early 70s, so those folks in their early 40s finally ready to move up to their dream home just aren't there (nor, of course, is the job market there to reinforce that professional class).
I started adding in mid-may.....I've done options exclusively for the last 3-4 years. The premiums got ridiculous last year so I went back to a non-beta trade. Put options are still *ucking outrageous as they seem to already have factored in the coming drop (yet again) so I'll stick to something I can understand while not paying for some douchebag's dinner in chicago every third friday.
Ciao
MS
think Latvian style social austerity as a measure of wages.....
cheapest box in the world is a bitch for the Russians....too little hard talk round these parts?
FAZ is your friend.....I have LOTS of FAZ. Probably the largest amount of any stock I've ever owned. Be patient.....they can't prop the equity side forever. The debt side will make sure of that.
Ciao
MS
I have a problem with it these days for anything but short-term trades because of the way it gets eroded by volatility. I'm not willing to hold FAZ until the bottom begins to fall out. I'd rather short XLF or UYG.
FWIW I have picked up some puts on financials in the past week.
MS - every third Friday ... including quad witching?
Bwaha, hehehe.
C
If you think they didn't get something out of that paper you're sorely mistaken
I could buy that but it's been obvious for many years, long before even the Dot Com Crash, that we weren't going to honor the paper. Did they really not understand that until 2009?
OT CNN has a story on air about suburban pot (weed, smoke) fatories. Just new farms in the current economyn LOL.
Seems like the middle class is finding a new income stream.
The ficalc link appears primitive, but it is sophisticated so that you the user does not have to remember the esoterica of bond market conventions.
For example, US Treasury bond calculations assume semi-annual compounding and actual/actual years when calculating coupon payments. US corporate bonds usually assume semi-annual compounding and 360/360 years when calculating coupon payments. Foreign bonds have their own conventions, usually determined by the norms of the market where they are primarily traded.
The devils in the details. Getting the details wrong can cost you serious money. I know a major airline, formerly headquartered in Dryfly's neck of the woods, that overpaid us $2.3 million dollars on a mortgage backed bond because they got the bond math wrong. It really pained me to point out their error and return the money.
ac-
IMO anything that is not front month is way overpriced......sure FAZ gets knocked around but I see more upside to that then most puts nowadays. What I hate about the options market is the fluff they price into both sides.....in most cases (and this is just my opinion) you are paying for the right to hold them.
With front month op ex you pretty much have the same volatility so IMO there's not a lot of difference....except you get to make the decision instead of the time value eating it for you.
Ciao
MS
broward,
Other countries will play the game as long as they think they have a chance.
personally, i like the story with TZA a bit more than FAZ - i worry that the fed will prop up the banks indefinitely, wheras the small caps are really left on their own
C-
Yea ok.....it's a statement that isn't 100% correct...it's been along day so if there's a joke there somewhere I must have missed it.
Ciao
MS
Imma Bagowner:
She's a pig, tarded up hussy, overburdended with money, she cant carry the weight and needs to unload.......
Help Obi-one-Bagowner....yer my only hope....
HH,
Lot of truth to what your saying. The question is how many of those long-time owners will see their nest eggs withering away -- between losses on stocks, bonds, houses, etc. -- in the face of spiraling taxes, food & (especially) health-related costs... and decide to cash in. A good portion of those living in nicer areas don't really have much more than their equity; they've just been there forever.
as long as they think they have a chance
Chance of what?
Building a lot of factories, training a lot of people and selling stuff for free, so that it could blow up and leave a lot of empty factories and unemployed people?
It makes as much sense as doubling your workforce as your revenue stream gets more and more negative.
Like.... like the Dot Com companies I worked for!
"A good portion of those living in nicer areas don't really have much more than their equity;"
well, prop 13 is what makes it interesting. when you're on a fixed income, that property tax bill (or condo/HOA fee) becomes very, very important. other folks in the rest of the country may not be aware of just what a free ride those old bases can be, with taxes on mil+ homes often being 60 or so bucks a month. and if the place is paid off, you may not give much of a shit about whether the neighbor is selling for 400K or 1.4 mil.
Volker will tell you all those move-up buyers are in Louisiana. Making luxury cars at 40k/year, no mention of benefits.
It's good because now we will have more car-making capacity, replacing the plants we just closed. If you don't agree with him, you must be dumb.
"...there's a solid core of wealthy older owners with prop 13 bases going back to the 80s or earlier..."
Very true, and those places will not be going on the market until the owners pass on - or maybe never if they were ever transferred to LLCs or trusts for heirs. The properties that will sell are the ones that previously sold since roughly 1997, since they have high property taxes and expensive loans.
There certainly won't be a recovery back to the bubble prices any time soon (in real terms). But I see an amazing number of 30ish dual-income families still pulling in household incomes at or above $200K. So my thinking is that once jumbo loans are available again, the demand will exist for SFHs in nicer neighborhoods at a price point somewhere between 700K and 800K. The 30-somethings will not be able to make big down payments, but they should be able to come up with 10% or 15% of say 750K in a few years.
From previous thread:
sbarrkum wrote- "mp, re Carlyle. emailed a friend who worked for Carlyle Capital. Heres what he said. The below is BS. Carlyle's strategy is never to accumulate companies and create monopoly power. Carlyle's portfolio companies can be found on their public website."
Yeah, well, how does your "FRIEND" at CARLYLE CAPITAL explain this April 16, 2009 demand by the Florida Attorney General for a federal trial by jury, accusing them of CONSPIRACY and PRICE FIXING in OIL FILTERS?
Conjure Bag says, "BWAHAHAHAHA!"
"The INVISIBLE HAND is at work."
Carlyle Group says, "Talk to the hand."
http://myfloridalegal.com/webfiles.nsf/WF/JFAO-7R6QFE/$file/FiltersLawsuit.pdf
HH-
They can't prop all of them....just a few. But I see what you're saying when I look at the chart...
Small cap stocks are not really participating the way the bank sector has been goosed so it may not have the same (potential) upside. Having said that I don't think I've ever seen as many crap stocks get pushed up ('07 is close) like this before. The search for yield (of any kind, shape or form) is certainly fascinating to watch.....
Ciao
MS
OTOH, they were dumb enough to take our paper.
And they got US and other foreign companies to finance and build their factories. They now have plant, equipment, and some paper. We on the other hand have mostly paper.
Also, what percentage of the US dollar paper that they currently "own" has already been committed to buy foreign assets with the sale denominated in US dollars?
broward,
It is about hope. Other countries are buying US t-bills etc because they still hope that it will come back and status quo will be restored.
The only people I've ever known at Carlyle were douchebags.
Wait, was that anecdotal or just plain offensive?
mp, it's good to see you.
other folks in the rest of the country may not be aware of just what a free ride those old bases can be
Yep, that is how it was sold to us, protection for those on fixed income who can't be blamed for the insane prices people around them were paying.
We on the other hand have mostly paper.
And a lot of plastic toys and other crap, thank you very much.
If you think they didn't get something out of that paper you're sorely mistaken. In spite of the troubles that still abound in China unless you grew up their in the 80s or earlier you cannot grasp how monumental the changes have been.
China used the creditworthiness and voracious appetite of our consumer to build up an industry they couldn't have otherwise developed. Now the U.S. consumer has been sucked dry and turned into a barren empty shell while their former creditworthiness has been transferred to China.
What they got was our most valuable asset, even if our paper is worthless.
But it still remains to be seen whether the Chinese consumer can be coupled to Chinese industry in a way that makes it profitable. And that worthless paper from the US may make Chinese businessmen and savers start to wonder why they're working at all if they don't get compensated for it with something of lasting value.
It's easy to assume that China has undoutably "gotten something" from this "worthless paper" and come out way ahead whether or not the U.S. pays back the debt they owe to China.
But I think that assumes that China can maintain control of this gigantic new machine they've built.
If they can't and the ensuing economic instability turns into social and political instability, they may find that for all their troubles they end up with nothing more than a smoking hole in the ground.
As long as the Yuan is pegged to the dollar all the BRIC stuff is puffery.
How are the BRIC a brac going to set inter currency rat that is independent of the dollar.
In fact the g-7 could pull out of WTO and set up something for ourselves leaving these guys hanging.
It would be messy but doable. The little napoleons trust we will not swat them.
Same with developing A-weapons
just for a moment:
Imagine I am an Indian immigrant, and I worked for AT&T for 20 years, I bought my house in 1984 when my son was thirteen, and I am retired with a paid off house in Palos Verdes.....ITs worth a 750k quatloos right, RIGHT?
"The 30-somethings will not be able to make big down payments, but they should be able to come up with 10% or 15% of say 750K in a few years."
well, that's part of what I see - and I think this group has a VERY weak hand. they're small in number - 1972 was the demographic nadir - and a part of a professional class with more optimism than resources.
I sincerely hope that folks understand that we aren't in the middle of the ballgame in terms of the crushing burden of entitlement, we're in the the top of the first inning. Joe Boomer is only 54 years old. The tens of trillions baked into the donut bill passed 5 years are so are just now being seen. That pressure will steadily suffocate just about every professional trade, and many, if not most of those 30 somethings still bringing in six digits will not survive the next couple of late-2008 style waves. hang ten!
cornering the oil filter market? wow hadn't heard that one before.
"let's get it on it...the Duke's know something"
Ciao
MS
And they got US and other foreign companies to finance and build their factories. They now have plant, equipment, and some paper
Apples and oranges.
The capital to build their factories is not the treasury paper they hold.
i'm surprised you'd make a mistake like this.
HH & sm_l,
The number of "truly wealthy people" with low Prop 13 tax bases would be a statistic of interest, but I'm not certain how relevant it is to maintaining prices, as their numbers can't have changed much (if any) from before the bubble until after. That still puts "normal" at pre-bubble prices adjusted for typical appreciation.
and many, if not most of those 30 somethings still bringing in six digits will not survive the next couple of late-2008 style waves.
Don't worry, Hack.
Your salary might be cut in half but we'll guarantee you twice as many hours "volunteering" in ObamaWorld.
Barley: Geez I thought I was all alone in holding and adding to FAZ. Thanks for that.
You are not alone. I bought in the 8's and have been averaging down a little, carefully. When I read the real stories behind the faux bank numbers and the obvious pump into equity offerings, I figured it would be a matter of time before truth played gravity and brought the financials down to earth. I was too early to the party, but I can't imagine that Q2 numbers for the banks will be any good.
RockyR- Thanks, good to hear from you too.
MS- "cornering the oil filter market? wow hadn't heard that one before."
Power tends to concentrate. Why not oil filters?
Conjure says, "Talk to the invisible hand."
"BWAHAHAHAHA!"
@ac - re: your comments on transfer of wealth to China. That money, if spread equitably would be over 3-4 times the population, and doesn't account for how much is wasted on useless projects that don't benefit the people in any real way.
HH - first boomers are 64, not 54. The days of reckoning are closer than many think.
" The only people I've ever known at Carlyle were douchebags.
Wait, was that anecdotal or just plain offensive?
I have to agree....dealt with a few of them on a deal about 10 year's ago. They gave a new meaning to the term douche. Above and beyond anything I could have ever comprehended...the phrase entitlement is also a very good description.
The only thing they knew was name dropping...the company I worked for passed after the initial meeting....it was a DD meeting....
Ciao
MS
What do you people think about North Korea and that boat that might have nuclear missiles and/or components the military is tracking? Is Obama about to start playing war?
"Is Obama about to start playing war? "
Nope. Not a chance.
HH - first boomers are 64, not 54
It's a curve.
Peak population is 51 years old.
The number of 64-y-o is relatively small.
Carlyle Group is unable to comment on pending litigation, but can state for the record that any price fixing conspiracies we may have inadvertently entered into were not the result of any strategic decision of the corporation. Our mission is to be the premier global private equity firm, leveraging the insight of Carlyle's team of investment professionals to generate extraordinary returns across a range of investment choices, while maintaining our good name and the good name of our investors. Any concentration we may have in a particular industrial sector is merely the result of our attempts to focus on sectors in which we have demonstrated expertise.
While we would never make any attempt to leverage monopoly power, we would like to point out that we are open to opportunities wherever they may be found and are well positioned to take advantage of the extraordinary opportunities on the road ahead.
/spoof (the last thing I want is to get on the wrong side of Carlyle's legal department--I'm extremely claustrophobic and rendition to some offshore black ops site wouldn't be particularly pleasant)
The capital to build their factories is not the treasury paper they hold.
i'm surprised you'd make a mistake like this.
Our factories on Chinese soil are hostages. If we DK the Treasuries that they hold, they can seize the factories, which would BK most of the American companies that built them. If they are forced to pay compensation, they can offered the Treasuries as payment.
mp-
I've not been around at night lately...what's your take on the 2s/10's going ballistic today?
Anything to really worry about or just a piece of the long drawn out puzzle?
Ciao
SM
Hahaha.
THEY own the factories.
I don't care what American corporations believe or what the legal fine print says.
There are plenty of kids in the US. The population nearly doubled in my lifetime. The thing is wages went down 30% (ish) ye reap what ye sow
HH, MS or AC- what about using the decay to your advantage and shorting TYH. The 2&3x etf longs and shorts are just getting beat down in the end..why not use it to your advantage ex-fas 32-2, skf-300-40 srs-295-16 faz 201-4 qld-86-16 etc....
mp, Yes saw that article and also heres what I found.
Couldnt find the UCI --> Honeywell connection though
This was probably from this rticle
U.S. Probing Allegations of Oil-Filter Price Fixing (Update3) - Bloomberg.com
Honeywell International Inc. disclosed that the U.S. Justice Department is investigating allegations the company and other makers of automotive filters colluded to fix prices.
Carlyle
The Carlyle Group : United Components, Inc.
|
V
United Components
United Components, Inc. - Our Products: Fuel and Cooling Systems, Filtration Products, Engine Management Systems
|
V
And United components pretty owns all the rest
champlabs.daytoncreative.net
MS, at present, I remain bearish on both debt and equities of any flavor.
Until, that is, we see more data.
I'm going to give it a few more months.
stanford indicted
Financier Allen Stanford indicted on fraud charges - MarketWatch
abprosper (homepage, profile) wrote (in reply to...) on Thu, 6/18/2009 - 10:30 pm
There are plenty of kids in the US. The population nearly doubled in my lifetime. The thing is wages went down 30% (ish) ye reap what ye sow
The economic system will gradually find its next-highest point of stability. It will feel like going back in time, Not exactly graceful degradation but close. We aren't very good at perceiving or planning around time-delayed events or those which span long periods of time.
@ac - re: your comments on transfer of wealth to China. That money, if spread equitably would be over 3-4 times the population, and doesn't account for how much is wasted on useless projects that don't benefit the people in any real way.
Money is not wealth, just an arbitrary scoring system that attempts to make different kinds of wealth interchangable.
You can no more spread wealth around China using money than you spread intelligence around the US by mailing everybody a college diploma.
The wealth doesn't come from money or industry. The wealth comes from how these things are used.
Money and economic growth, in the wrong hands, can lead to the direst poverty of all.
They won't seize them. They'll just "offer" to "buy" them at, say the "fair" market price with their Treasuries and be done with it. But, not while there's still some blood left in the victim, as dryfly repeats regularly (in a less maudlin way).
hey, I thought that worked!
Lassie
HH, MS or AC- what about using the decay to your advantage and shorting TYH. The 2&3x etf longs and shorts are just getting beat down in the end..why not use it to your advantage ex-fas 32-2, skf-300-40 srs-295-16 faz 201-4 qld-86-16 etc....
That's exactly what I do.
I short the leveraged funds and let the volatility make me money instead of costing me money. Sometimes they're hard to find though.
Late night thread music.
YouTube - Good Ship Lollypop
Conjure says, "Don't laugh."
"Have a good evening."
Hey Basel,
"the proposed tax cut will also come without buyer income/status restrictions. unless expressly prohibited (i don't see how it could), i expect lots of private transfers."
My nephew bought a 20s era craftsman bungalow for 32k last year, cheaper than renting. if I buy it from him, can I get the 15k? We could then split the money between us.
Would that actually be legal? What do you think?
EconDiscon-
Getting late and too pooped to give thoughtful reply but want to thank for your post, agreed a good excercise
Interesting that there's no definitions of either deflation or inflation in our new Glossary (which is awesome). Though after this post that may change, and change,and change . . .
EEngineer (profile) wrote (in reply to...) on Thu, 6/18/2009 - 8:36 pm
They won't seize them. They'll just "offer" to "buy" them at, say the "fair" market price with their Treasuries and be done with it. But, not while there's still some blood left in the victim
Ouch!
You've been channeling your inner norka paranoia.
It won't happen for a while. There are still lots of business processes that they must copy and IP they must "liberate" before they kick us to the curb.
NW
NW
Time to sign off. Good example earlier Tokyo time of why headline writers shouldn't file early in trading - Nikkei site at 10:03 local wrote some piffle about stocks up "on rosy US data", to - oooh - 9820, and the market promptly dropped 100 points. Bloomie's still running a similar story.
No doubt there'll be much rosiness tomorrow.
nytol
(doomer lullaby: YouTube - In Heaven - Eraserhead )
C
How about this from Bloomberg:
Demand for FHA Loans Is Overtaxing Agency, HUD Official Says
“FHA will be challenged to handle its expanded workload or new programs that require the agency to take on riskier loans than it historically has had in its portfolio,” Kenneth Donohue, the inspector general for the Housing and Urban Development Department, told lawmakers today. “The surge in FHA loans is likely to overtax the oversight resources of FHA, making careful and comprehensive lender monitoring difficult.”
....
Donohue said the rise of mortgage fraud among FHA lenders has depleted FHA’s mortgage insurance fund, which has fallen to $12.9 billion, or 2 percent of all insured assets as of Sept. 30, from $21 billion, or 6.4 percent of assets a year earlier. Under some economic projections, that ratio could fall below the statutory requirement of 2 percent, requiring taxpayer assistance or an increase in premiums, he said.
Effective Demand: "Demand for FHA Loans Is Overtaxing Agency"
Some places are selling in my town of Sebastopol Ca.Both Raw Land and SFR's in the $700-$800k range and up.The places that are selling are priced competitively (about 25% below last year).A place down the road a bit just went on the market at $825k and had an "open house" sign on it every day this week.An older couple is selling to downsize,and this place is well laid out,well built and well maintained.2575 Blucher Valley Rd,95472 for those who are curious.I don't think the will get their price,but people bought pets.com all the way down...rent would be $2500 tops.
Nikkei still up, just 100 points or so 'less up'.
My nephew bought a 20s era craftsman bungalow for 32k last year, cheaper than renting. if I buy it from him, can I get the 15k? We could then split the money between us.
Would that actually be legal? What do you think?
The whole point of a kleptocracy is to make theft "legal".
Don't worry - the congress has your back on this one.
"I'm going to give it a few more months."
It's difficult to know what to do next.
@ED - if it was $12.9B in Sept., it must be quite a bit lower now. Probably running close to parallel with the FDIC's shrinking supply. (Not including their 'just in case of emergency' $500B)
credit-
no real reason other than cost right now. Want to limit outlay. But I also think that the shorts in FAZ will work for me if/when it starts to rise.....being short means dealing with weak hands and I had enough of that in '06 with the homebuilder's. I took WCI down to mid-teens (from the 40's) and then covered it when Icahn started his games....I should have just waited...I think it's at .03 now or something...live and learn.
Ciao
MS
TARP,
Being FHA is a matter of political will it will be very difficult for them to radically tighten up fees and underwriting. I guarantee you any plan to do so will be met with the full force and fury of the NAR, NAHB and MBA.
"There are plenty of kids in the US. The population nearly doubled in my lifetime. The thing is wages went down 30% (ish) ye reap what ye sow"
Per capita GDP went up. So "wages" in some "sectors" experienced tremendous "growth".
It's just they call them bonuses, capital gains, or interest. Just a technicality. Capital gains represent real progress, so they should be taxed lower than earnings from lowbrow "labor".
Bloomberg.com
Headline #1 and #3...
So which is it Bloomy...Yen up or down?...
Ciao
MS
I don't expect any changes with FHA, ED. They'll just get more money too when they run dry.
The bubble-blowers won't give up until they have no other choice. Figuring out when that will happen is the big question.
@MS - depends on which currency you measure it against.
poic-
I live on Trestle Glen in a home built in 1936. Been here 38 years. I like it here and I like Oakland, warts and all. I am concerned about the local economy but it's probably hella better than most areas in CA.
I don't think about crime because (a) it's a waste of energy and (b) it's not an issue here.
We were burgled once...took my PET computer in 1979.
picosec,I can top you.I remember rowing a boat on lakeshore ave during the '62 floods.Say hello to the folks at Walden Pond for me the next tome you drop in...I lived in that area for decades and I wonder if I would recognize you...small world.
@picosec - they stole your PET, but not your big-screen 24" television?
@TomS
They fixed the storm drains. Now the city distributes sandbags to the shops and that is (usually) sufficient.
BTW: Oscars is long gone.
TARP - It was 17" then.
(Maybe I should be clear about what "it" is.)
LOL - maybe. I was trying to remember what a 'big screen' was in '79. Might have been 25-27" for a few grand.
had a boom box with 8-track AND cassette.
Did you have a mortgage on your house back during the double-digit interest rates? With all of the talk recently, there seems to be a lot of people who don't remember or understand what that time was like for a lot of people.
But seriously folks, and back on topic...
This neighborhood has held its value rather well, but always had very low turnover so the bubble was not so extreme. Also not flipper-friendly as the buy-in was a lot bigger thana home a couple of miles (or less) away.
That said, the house next to me was bought 2 years ago for $1.3M, outrageous at the time. Turns out, per Zillow it's now worth $0.9M so some did get burned. This is the prototypical "move-up" neighborhood and has always depended on that so the next year will probably tell the tale on that point.
‘Swine’ Bankers Shun Jet Loans, Leave $36 Billion Gap (Update1)
‘Swine’ Bankers Shun Jet Loans, Leave $36 Billion Gap (Update2) - Bloomberg.com
By Andrea Rothman and Susanna Ray
June 19 (Bloomberg) -- The biggest threat to the global airline industry isn’t the swine flu outbreak, according to AirAsia Bhd.’s Tony Fernandes.
“We’ve been through SARS, bird flu, tsunami, you name it,” Fernandes, the founder and chief executive officer of Southeast Asia’s biggest discount carrier, said at the Paris Air Show this week. “The only swine now are bankers.”
Picosec,
Thanks for the info.
We were burgled once...took my PET computer in 1979.
A net benefit.
Maybe they'll steal your slide rule next time.
I'm gonna put everything I have in TBT... and if I lose any of it... so what...
@picosec - There will certainly be areas that will be insulated to a certain degree, though your example of a $400K drop in value in two years would probably have me kicking myself for not selling then.
Was it not a rather heavy machine?
We were burgled once...took my PET computer in 1979.
It's your money, YSLP - or was.
Weren't they out of bullets last summer? The worst that can happen is I get stopped out... or someway it miraculously makes a huge gap down overnight; right ? TBT is going to gap down 10% in one night?
@YLSP - that was bazooka bullets. They've got attack helicopters now, and fighter jets and bombers in reserve for the fall.
Porsche May Fail to Avoid Volkswagen’s Grip, Even With Qatar
Porsche May Fail to Avoid VW’s Grip, Even With Qatar (Update3) - Bloomberg.com
By Andreas Cremer
June 19 (Bloomberg) -- Porsche SE may find its alliance with Qatar will hasten a takeover by Volkswagen AG.
Plans to sell a stake to the Persian Gulf state would bolster Porsche’s finances enough to raise the sports-car maker’s attraction for Volkswagen, and give Qatar a path into Europe’s largest carmaker. Porsche may sell as much as 25 percent for 2.5 billion euros ($3.5 billion) to Qatar, two people familiar with the plan said June 15.
Will they get gas discounts?
I bought in '71 and got a 29-year loan at 8.5% with 20% down. How quaint, you all say. (Long before rates went out of site. When inflation did hit, my income went up and the 8.5% looked awful good.)
The kicker is that the bank required that my net worth was at least as much as my loan! I made it with about $1k to spare. Try that in today's market.
PS - We can criticize all those who used their house as an ATM, but mine financed two kids through college. Timing is everything.
@picosec - timing is only part of it. A little common sense helps. Using home equity for something productive, like kid's education, hasn't been the problem - it's been using it to finance over-consuming lifestyles that has gotten the largest number of homeowners in trouble.
though I wouldn't want to forget to include all of those mortgages that were handed out like candy to completely unqualified borrowers...
To all who asked question while my better half had my attention...
1) You're welcome
2) I still have my slide rule, US Army issue 1947 (but not to me)
3) Yes, the PET was quite heavy (transformer power supply). At the time there were fewer than 10,000 in the world so I have no idea how/where you could sell/fence such a thing. But I went out and upgraded from a 8kB machine to a 32kB one.
"I'm gonna put everything I have in TBT..."
despite the fact that i'm at less than half of my life expectancy, i'd like to think i'm something of a vet in terms of shorting treasuries, been doing it since '03...
rrpix... agg puts (forgive my youth)... and, of course, tbt...
my advice is to pay the premium and buy tlt puts if you're determined to go out like adam dunn.. why monkey with 2x kids' stuff
I think you shocked everyone into silence as they ponder what you could actually accomplish with only 32kB of awesome computing power, picosec...
compared to punch cards, PETs were da bomb.
Punch cards were great.
You could use them as note paper.
If you were the system operator and someone pissed you off, you could always drop the box of cards by accident.
Now paper tapes didn't give that pleasure.
NW
I think you shocked everyone into silence as they ponder what you could actually accomplish with only 32kB of awesome computing power
Visicalc Ruled!!
I can't imagine that any programmer made the card-drop mistake more than once. It's one of those lessons that don't need to be taught twice.
Our troubles started with Banksters using visicalc and then excel.. and MBAS using powerpoint.
I was lucky and sold my in early 2007 to take a new job. If I had sat another 6 months I would have "lost" another 10%. Again I was lucky... but I sold (traded) houses for a substantial (relative to my financial situation) every two years begining in 1996.
Now I live in CA and still can't afford to buy. CA coast has been fairly resilient so far.
NIF
You would know, Luci - you have deals with many of them.
That PET had a built-in BASIC interpreter and you could jam a lot of code into 32kB. Slow? Yes. But it's the last machine that I could actually write code on.
Treasury-Altered Reality Plan,
Future generations might see Excel and Powerpoint as tools of the Devil..
Bill Gates might have coded part of the interpretor.
//That PET had a built-in BASIC interpreter and you could jam a lot of code into 32kB. //
Luci-
You might be right. The word then was that Commodore DID have Microsoft program the firmware.
actually, lucifer, you should know better than anyone that our troubles really began with an egghead academic with eugenics/klansman affinities monkeying with congress' exclusive right to print dough... has anything besides thomas edison every come out of new jersey of use or import?
@HH - a good NFL draft class?
Bill Gates’ Personal Easter Eggs in 8 Bit BASIC
Bill Gates’ Personal Easter Eggs in 8 Bit BASIC « pagetable.com
If you type “WAIT6502,1″ into a Commodore PET with BASIC V2 (1979), it will show the string “MICROSOFT!” at the top left corner of the screen. Legend has it Bill Gates himself inserted this easter egg “after he had had an argument with Commodore founder Jack Tramiel”, “just in case Commodore ever tried to claim that the code wasn’t from Microsoft”.
woodrow wilson?
//actually, lucifer, you should know better than anyone that our troubles really began with an egghead academic with eugenics/klansman affinities monkeying with congress' exclusive right to print dough//
my sportsbook expertise is not that deep. i also have a moral objection to the nfl in terms of the way the average player is treated. i did kill, crush and destroy a friendly (no
no-spread college betting pool last year however - played the sec and pac 10 like a fiddle.
@Lucifer - I wouldn't be surprised if future generations don't understand the math in those spreadsheets or presentations. All part of the banker's and gov't plans.
but of course. the original traitor of the western world.
the original traitor of the western world.
I thought that was FDR?
The board's quiet so I'll tell a PET story.
My grade-school daughter had an assignment--assign values 1 thru 26 to the letters of the alphabet in order, i.e. a=1, b=2, z=26.
Then find a word such that the values of the letters add to 100.
Being the good dad, I let her work on it a while, then tried it myself, all to no avail (it IS a lot of work to add up all those numbers). Then I wrote a BASIC code so that you enter a word and the PET displays the sum.
Still tried a LOT of words, and found two, probably the shortest and possibly the longest.
The words???
PUSSY
TELEPHONE
Guess which one she used?
"I thought that was FDR? "
naw, FDR wasn't a nice person, but he ranks pretty well compared to mao, stalin and hitler, which, more or less, were his graduating class. on the whole, his legacy isn't so bad seeing as how all of his family money came from enslaving people to opium addiction.
Those formulas do not contain math.. They contain lies, exaggeration, wishful thinking, prayers and BS.
//I wouldn't be surprised if future generations don't understand the math in those spreadsheets or presentations. //
FDR is the reason US did not come apart in the 1930s..
//I thought that was FDR?//
Im guessing we wont see this study pimped in the next NAR newsletter:
http://real.wharton.upenn.edu/~wongg/research/The%20American%20Dream.pdf
Was she the only one who got an answer?
"FDR is the reason US did not come apart in the 1930s.."
a cliche, but true. and which blue-blood was convicted of trading with the enemy for his activities in the 30s while working with Union Bank... class? anyone?
@picosec - your question has me wondering if 'good dad' told her to use telephone, or whether Lucifer was at your shoulder...
nice thesis - too bad he had to use data from flyover-land
@squidward - I don't know.
@TARP - Ask Lucifer, his memory is better than mine.
HH - Bush?
ding! poppy sr himself...
Bush 41st father? Hitler's money launderer..
//Which blue-blood was convicted of trading with the enemy for his activities in the 30s while working with Union Bank//
Apologizing for slavery even as they re-enslave all of America.
The irony.
I am always hanging around...
//Ask Lucifer, his memory is better than mine.//
It's been fun, but here's something to bring us back to the economy.
Too Big to Fail? Is Obama Proposing an Implicit Government Guarantee of Goldman Sachs' Liabilities?
"FDR is the reason US did not come apart in the 1930s.."
If FDR were president in 1929, I can see voters throwing FDR to the curb and electing Hoover in 1932.
HH - he wasn't actually convicted, though, was he? The gov't shut down Union Bank, but I didn't think Bush was actually convicted.
Proposing?.... I thought it was already in practice.
// Is Obama Proposing an Implicit Government Guarantee of Goldman Sachs' Liabilities?//
Lucifer-
Some folks haven't caught on yet.
The next big investment bubble - green energy
The next big investment bubble - green energy
- MoneyWeek
By MoneyWeek Editor John Stepek Jun 18, 2009
Green energy: just bubble-blowing?: Do investors have any bubbles left in them?
In the days of free and easy money, under the leadership of Federal Reserve chief Alan Greenspan (once dubbed the 'Maestro', though strangely enough, not any more), investment became a big game of 'spot the next bubble'.
With hindsight, investing was easy. You just had to ignore things like fundamentals and rationality, and buy whatever everyone else was buying. Trouble was, you also had to avoid being the 'greatest fool', and bail out before the bubble popped. Lots of people didn't, hence the current pain being caused by the property slump.
Yes! Let's have the gov't do to the top 19 banks, and GM and Chrysler, what they did to Fannie/Freddie. Should be just as successful, right?
Is that not the reason they have committed 13.9 trillion (one year's GDP)
//Yes! Let's have the gov't do to the top 19 banks, and GM and Chrysler, what they did to Fannie/Freddie. Should be just as successful, right?//
@Lucifer - $13.9T? Give them time - they'll double or triple that to keep pace with the rate of asset destruction ($14T from peak and counting)
My nephew bought a 20s era craftsman bungalow for 32k last year, cheaper than renting. if I buy it from him, can I get the 15k? We could then split the money between us.
If the 15k is like the 8k, it is a cap on a 10% credit (3k on 30k).
Union Banking Corporation - Wikipedia, the free encyclopedia
note that the revisionists don't deny a connection between thyssen and prescott.
IG Farben - Wikipedia, the free encyclopedia
it was a fine thread, but the time for the godwin had come.
13.9 Trillion is just the first "estimate"... money has lost it's value..
6.023 *10^23 = avogadro number
the 'green bubble' is only the tiniest of tangents to the real bubble, already tagged and bagged here on CR - the government bubble
and thyssen was the nicer person..
//note that the revisionists don't deny a connection between thyssen and prescott.//
What no one seems to remember about this "tax credit" is that it is simply a loan.
It has to be paid back over 10 years. Interest free of course...but I don't want to lose 1500 a year in refunds...or worse yet, end up paying 2500 every tax season for the next decade...
No thanks
Those credits don't benefit the buyer, imo. Incentives like that get priced in to the advantage of teh seller, bank, etc. before they hit the street.
How many people have been suckered into buying a $20K vehicle being sold for $25K with a $2K rebate?
"and thyssen was the nicer person.."
kolbe, fritz and pius xii...
the good, the bad and the ugly
HollywoodHack,
I think the government bubble is only a symptom of a larger systemic issue. The control mechanisms of our system are based on pre-1930 concepts, but technology and socio-cultural changes have made those old control mechanisms obsolete.
Example-
Should people have a job to enjoy a middle class lifestyle?
Should companies try to increase productivity through zero-sum games?
Should we not accept that "experts" are our version of false prophets?
Thyssen had a conscience! Note that Thyssen walked out on the third reich in 1938.. Bush continued till he was caught and reprimanded.
//The breaking point for Thyssen was the violent pogrom against the Jews in November, 1938 known as Kristallnacht, which caused him to resign from the Council of State. By 1939 he was also bitterly criticising the regime's economic policies, which were subordinating everything to rearmament in preparation for war.//
//Bush was one of seven directors of the Union Banking Corporation, an investment bank controlled by the Thyssen family, which was seized in October 1942 under the Trading with the Enemy Act as being owned by "enemy aliens." The assets were held by the government for the duration of the war, then returned afterward.//
Is it time for root cause analsyis, Lucifer?
How about we blame the person who invented the word 'mine'?
What no one seems to remember about this "tax credit" is that it is simply a loan.
Actually the present scheme is a gift.
The first tax credit was a loan but the second one was not.
I wonder how the early buyers feel about paying back 8k while later buyers pay a lower price plus get 8k or 15k for free.
That is not the issue.. The vast majority of people believe that the world is a zero sum game.. however that is not the case.
Think of it this way.. How many people perform jobs that generate wealth - products or services (create and design them). In the pre-industrial era almost everyone could have a useful job. After industrialization, it became harder and harder to achieve that goal. Nowadays, we cannot even pretend that is possible. But we still require consumers to consume and keep those with useful jobs employed. How can we do that in our current system?
Another one- Almost all of our great scientific discoveries were unplanned and accidental, so why pretend that we know enough to direct money into specific research areas or persons to the exclusion of others?
19-23-9-13-13-5-18
people believe that the world is a zero sum game.. however that is not the case.
Lucifer == communist
"Thyssen had a conscience!"
well, it is after 2 EST... in terms of my conscience and dragging things deeper into OT land...
did he? or did he just recognize that despite the Bavarian power base and Austrian heritage, his Leader was emphatically NOT catholic (or christian) in any meaningful way, but a disgusting hybrid child of the worst elements of Wagner and Nietzsche?
And the more disturbing conclusion - was this really the only syncretism, barbaric as it was, that could fuse the still-lingering wounds of centuries of catholic/protestant strife in Europe?
Fritz had some time to cool his heels as he pondered all this and more. Much like another master of evil - Joe Kennedy - had more than enough time to ponder his legacy behind his paralytic mask in his final decade.
@Comrade Troyski
"What no one seems to remember about this "tax credit" is that it is simply a loan.
Actually the present scheme is a gift."
Ahh, but a gift to whom?
Assume multiple potential buyers are eligible for the credit. Each now has $15k more purchasing power than they had without the credit. Now they can bid $15k more than before.
Ipso facto - The SELLER gets the bonus (and one more comp at a higher price is created to help guide the next home that goes on sale in the neighborhood).
Both communists and capitalists believe that the world is a zero sum game. I am suggesting that it does not have to be that way. Indeed, it is more profitable (and realistic) to work in a non zero-sum world.
//Lucifer == communist//
I think he knew the difference between simple discrimination and mass murder. That is more than you can say about some US presidents (Andrew Jackson)
//did he? or did he just recognize that despite the Bavarian power base and Austrian heritage, his Leader was emphatically NOT catholic (or christian) in any meaningful way, but a disgusting hybrid child of the worst elements of Wagner and Nietzsche?//
"Both communists and capitalists believe that the world is a zero sum game."
not quite true - the classic "capitalist"/neo-liberal response to more socialist critique of the post-reagan social landscape is "But the poor now have microwaves, bigscreens, cable and at least one car!" Not a hard argument to counter, but, still, not a zero-sum one either.
@stfs - swimmer?
@lucifer - investors didn't know in advance of previous innovations. There will be others in the future - it's just a bit audacious of us to assume those innovations will happen here.
Hubris..
Gods in White Coats Hold Key to Health Care: Margaret Carlson
Gods in White Coats Hold Key to Health Care: Margaret Carlson - Bloomberg.com
Commentary by Margaret Carlson
June 19 (Bloomberg) -- Give me your arm, make a fist, relax. This isn’t going to hurt.
It always does but that just makes doctor and patient even. What really, really hurts, physicians say, are medical malpractice suits -- those humongous awards ladled out by gullible juries are more painful than a thousand hypodermic needles.
"That is more than you can say about some US presidents (Andrew Jackson)"
and here we come back full circle - who was the last president to truly challenge the banking elite and insist upon the return of monetary policy to the hands of the people? who was, perhaps, the last real (and damn effective) champion of the american working class to occupy the white house?
Actually the present scheme is a gift.
"It's a gift,....And a curse"
-- Adrian Monk
I agree.. given the feminised bureaucracy, greedy banksters, credulous public, fraudulent scientists.. that is very likely the case.
//There will be others in the future - it's just a bit audacious of us to assume those innovations will happen here.//
In that respect they are somewhat better than communists.. but such systems require money that is created by means other than debt.
//"But the poor now have microwaves, bigscreens, cable and at least one car!"//
Lincoln and the Greenback?
// who was the last president to truly challenge the banking elite and insist upon the return of monetary policy to the hands of the people?//
But investors, banksters and MBAs still tell creative people how to work.. they have not learned anything.
//investors didn't know in advance of previous innovations.//
@picosec - agreed, and a bit more $$ to the realtors and another $15K in loans for the banksters to work on that wouldn't have been there at the lower price.
As with all of the other plans, though, there are those prickly little unintended consequences...
work in a non zero-sum world
Lucifer == Kafka
"Lincoln and the Greenback?"
sadly, the debt binge therein set up a deflationary prison for a whole generation that really wasn't relieved until the spending of the spanish-american war...
no... the answer to that one is that scowling visage coming at you from those ATM tickets - the hero of the battle of new orleans... And i genuinely hope that our new Dear Leader can take a tip from AJ... a mean man for mean times, that knew very well what it meant to kick ass for the everyday american.
HH - I'll guess Jackson...
the post-reagan social landscape
HollywoodHack == James Carville