Bits Bucket And Craigslist Finds For June 19, 2007
Please post off-topic ideas, links and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
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UCLA
http://www.latimes.com/business/la-fi-econ19jun19,1,7572257.story?coll=la-headlines-business&ctrack=1&cset=true
Housing slump’s drag on state flagged
Slow economic growth into late ‘08, says report
By Dean Calbreath
STAFF WRITER
June 19, 2007
The continuing downturn in the real estate market will result in sluggish economic growth in California through late 2008 and home sales may not stabilize until mid-2009, according to a report released today by one of the state’s leading economic think tanks.
Layoffs in construction and finance will drag job growth to below 1 percent for the next five quarters, said a report by the UCLA Anderson Forecast.
http://www.signonsandiego.com/uniontrib/20070619/news_1b19anderson.html
‘Christopher Thornberg, a former Anderson Forecast economist who heads Beacon Economics in Los Angeles, said the prediction was too rosy.
“To think we’re going to get through this period with just a slight increase in unemployment is ludicrous,” he said. “We have a situation in our economy which is absolutely unprecedented: rapidly rising rates of foreclosures when the economy is not already in a recession. This will take a toll on the U.S. economy. I don’t see how it cannot.”’
Words ought to be a little wild, for they are the assaults of thoughts on the unthinking.
- John Maynard Keynes -
Part of the UCLA report from the OC Register:
http://tinyurl.com/lzgbg
Take a close look at the eyepopping negative “Acceleration” rates (rightmost column on p. 6 of this report). If these were parachute velocities, I would be concerned; fortunately, they are merely falling knives.
CAUTION: .PDF FILE
http://media.corporate-ir.net/media_files/irol/63/63356/PMI_ERET061907.pdf
A little over a fortnight to a New Revoltionary Independance Day…
In the long term, I don’t think that the economy can withstand the malinvestments that have been caused by the hyperlow interest rates of the past few years. The idea behind the low interest rates of the last few years is that increasing liquidity would lead to greater investment into productivity improvements. Instead, interest rates have been kept so low that LBOs, equity prices and real estate have soaked up all that money. Basicly, anything that could be used as collateral for further credit expansion has seen its price double. Most of this money has simply been inflating the prices of stuff that isn’t in the CPI.(Equities and RE) Little of it has been spent on plant and equipment.
It is a good thing that interest rates are returning to sanity. The high levels of debt encouraged by hyperlow rates have baked in our upcomming recession. The sooner we stop trying to find Goldilocks and throw the RE and stock market out to feed the wolf, the better the productive economy as a whole whole will be IMHO.
the “experts” can call it whatever they want, and spin it nine ways to sunday. it changes nothing. interest rates went down to nothing, every warm body suddenly qualified for whatever quack mortgage “product” that the industry could devise…….all to serve one purpose: to jump start a failing economy. and hey, it worked, but now it’s time to pay the piper, because none of the so-called growth was based on any increase in REAL income. the brokers all sound suspiciously like used car salesmen. “don’t worry about the price, just let me put you in this baby for 700/month.”
i’ll know we’re at the bottom when current prices are cut in half. until then, i’ll keep renting and keep stashing the cash, waiting for the correction/adjustment/balancing/the dog ate my homework.
Sanity? We won’t have true sanity until efforts like Paul’s are successful and we get the monkeys off our back.
“On Friday, Rep. Paul introduced H.R. 2755 To abolish the Board of Governors of the Federal Reserve System and the Federal reserve banks, to repeal the Federal Reserve Act, and for other purposes. The text of this bill is not yet available on-line but Rep. Paul introduced a similiar bill back in July of 2003 which never even made it into committee.”
Ron Paul is the man. I may even register to vote because of this guy.
You don’t even have to do that, just jot down the number of the bill, call your Representative and voice your support for it.
The Fed was a major factor, perhaps THE major factor behind the housing bubble travesty.
I recommend that you look into all of his beliefs before jumping on the bandwagon.
Hell, if he can abolish the FED and re-institute the constitution I wouldn’t care what else he did. It couldn’t possibly be any worse than what the asshat politicians have done to this country the past 50 years or so.
A statist will balk at his beliefs. The fear that your neighbor is having fun (without harming anyone) - that’s statist. Ron Paul’s philosophy is non-aggression. What can be wrong about that?
No individual or group has a right to the initiation of force or the threat of force against another individual or group.
And you think people should disagree with that?
I recommend that you look into all of his beliefs before jumping on the bandwagon.
That’s definitely a good thing to do.
On some levels I feel the LP goes too far. For example, I fear turning over the national park system to private interests. But on the other hand, this is likely so far down on the agenda that in the 4-8 years a president gets, it probably wouldn’t happen. And in those 4-8 years of prosperity and sanity, we just might get to the point where a private entity could be trusted to protect our most treasured natural areas.
Which means that I am willing to vote for the guy.
All this hype about Ron Paul. I haven’t looked closely enough at him to make any judgements but even a fiscally responsible @sshole is still an @sshole. Just saying….
First, I’m doing what I can to help Ron Paul get the nomination. If I could, I’d do the same for Mike Gravel, but I can’t do both.
Second, if I hear one more person say they are afraid of Ron Paul turning over national parks, or highway trash pickup, or whatever gov’t service to private companies I’m going to smack them.
What do you think one man as president is capable of accomplishing? It won’t be much, certainly nothing to be afraid of. It took a president, a majority in both houses, and six years to screw us this badly.
The only thing I believe Ron Paul will have a chance at accomplishing will be to shine a bright light on all the roaches that have overrun Washington. Later in his term, if we vote in a congress that supports his ideals, there may be real change.
Of course, private companies already run many gov’t services, including national parks. One I frequent in Colorado has been outsourced by the forest service for years. You’ve always had to pay to camp, but now you have to pay to have a picnic, fish, or even park the car. I can’t say it’s better or worse, but now I only pay for it if I use it. I have to say it’s a much fairer system, but I don’t believe that the forest service has cut their budget or increased services because of the private contract.
Here’s a collection of Ron Paul’s essays and speeches before Congress:
http://www.lewrockwell.com/paul/paul-arch.html
he lp but doesn’t know it
http://www.lp.org
yo
Yes, he does know it. He was their Presidential candidate a few elections ago.
With a 2 party system Mr. Paul says it costs to much money to run as a 3rd party candidate unless your a Ross Perot.
It would be more likely that congress would pass a bill making stating that “Jesus Christ sucks, all Mexicans are granted citizenship and every American should burn the flag twice a day” than to pass a bill that abolishes the Federal Reserve Board. Nice idea, but not politically feasible.
I was wondering when one of these statements would show up.
Ideas are the basis of anything that happens here on this globe. Ideas are the only thing that can trump armies and weapons, or actually make armies and weapons. At one time, the Federal Reserve itself was nothing but an idea. (Actually, any institution that exists now was, at one time, nothing more than an idea). Now, the job is to relegate it to the status of a very bad idea that was a nice game for Da Boyz and Girlz while it lasted. How do we do that? Start by talking about it, to friends, to co-workers, to family, to representatives, to the person next to you on the checkout line.
I’m with Palmetto on this. On the weekend I posted a link from the Wash Post that stated other politicians and the media are stunned that the blogosphere embraces Paul. Also, his fundraising comes directly from blogworld support.
Ya gotta keep hope alive.
politicians and the media are stunned that the blogosphere embraces Paul. Also, his fundraising comes directly from blogworld support.
Ya gotta keep hope alive.
This is not new. Rep. Jerry McNerny (D-CA) was a relative unknown had a huge amount of support from blogosphere in Nov 2006 elections. He trounced a long term incumbent who was equally stunned, albeit when it was too late for him. Even George and Laura Bush couldn’t save him.
The computer is following the time-line of the automobile, albeit almost 100 years ahead…
Think of newspapers, magazines, radio, movies and tv as:
Buggy, saddle, reins, horses and horse whip.
You should register to vote no matter what. And then you should exercise that right.
Ron Paul remains the only guy in Congress who is on the side of America and Americans.
TESTIFY, Brothah Spike!
How exactly would people propose doing this? There’s simply no non-catastrophic way to get away from a fiat currency. If the government decided to harden the currency by re-opening the gold window and eliminating the federal reserve we would have to set the gold/dollar exchange rate so that it was proportional to the money supply. Otherwise you’ve simply provided a government subsidy for people to empty out fort Knox. If the government decided to hand out one ounce for every 35$ people brought in, Fort Knox would be empty in DAYS. Banks would drive tractor trailer trucks of all their currency right up to the window and demand their gold until it was all gone.
So the exchange rate would have to be set at a level proportional to the amount of money currently in circulation. The question quickly becomes, what version of money supply do you use? If we decided to use M3, the broadest level of money in circulation, we’d be able to walk up to the gold window and turn in $477,782 for one troy oz of gold. This is not the sort of exchange rate that will provide the inflations limiting backstop that people who hate fractional reserve banking want.
So let us instead use the M0 money supply. This gives us an exchange rate of $544/oz. Now we’re talking. M0 is a measure of actual currency and coin in circulation. If we did we would have to eliminate the FDIC. To limit the exchangeable money to that which is part of M0 the government could not guarantee deposits greater than actual cash on hand for banks. The result would be an instant run on banks until all of their cash was gone. The first few people in line might get all their money and everyone else gets the shaft. Savings accounts, money markets, checking accounts all gone, because the government does not have sufficient gold to back them.
Now these figures would be a little differnet if we went bi-metallic and included the governments silver reserves in our calculations but they wouldn’t change by the several order’s of magnitude required for wealth to be preserved. Curing inflation by eliminating the Fed is like curing a torn ACL with amputation. There’s simply no way to do it without an economic shock that would make the great depression look like the Dow’s little Februry dip.
My post seems to have been eaten so I’m trying again. If this ends up a double, excuse the duplicaiton.
How exactly would people propose doing this? There’s simply no non-catastrophic way to get away from a fiat currency. If the government decided to harden the currency by re-opening the gold window and eliminating the federal reserve we would have to set the gold/dollar exchange rate so that it was proportional to the money supply. Otherwise you’ve simply provided a government subsidy for people to empty out fort Knox. If the government decided to hand out one ounce for every 35$ people brought in, Fort Knox would be empty in DAYS. Banks would drive tractor trailer trucks of all their currency right up to the window and demand their gold until it was all gone.
So the exchange rate would have to be set at a level proportional to the amount of money currently in circulation. The question quickly becomes, what version of money supply do you use? If we decided to use M3, the broadest level of money in circulation, we’d be able to walk up to the gold window and turn in $477,782 for one troy oz of gold. This is not the sort of exchange rate that will provide the inflations limiting backstop that people who hate fractional reserve banking want.
So let us instead use the M0 money supply. This gives us an exchange rate of $544/oz. Now we’re talking. M0 is a measure of actual currency and coin in circulation. If we did we would have to eliminate the FDIC. To limit the exchangeable money to that which is part of M0 the government could not guarantee deposits greater than actual cash on hand for banks. The result would be an instant run on banks until all of their cash was gone. The first few people in line might get all their money and everyone else gets the shaft. Savings accounts, money markets, checking accounts all gone, because the government does not have sufficient gold to back them.
Now these figures would be a little differnet if we went bi-metallic and included the governments silver reserves in our calculations but they wouldn’t change by the several order’s of magnitude required for wealth to be preserved. Curing inflation by eliminating the Fed is like curing a torn ACL with amputation. There’s simply no way to do it without an economic shock that would make the great depression look like the Dow’s little Februry dip.
Agree that the short-term ramifications are high - but if the system is broken do you continue it just because? Or do you fix it? Long-term it’s by far the right thing to do.
I would say that the instantaneous destruction of ~98.9% of the money of the country (the M0 case) is a pretty severe cure for inflation (actual INFLATION of the money supply here, not CPI prices) running in the ~20% range.
An interesting angle for those of you that want to put aside cash…
Each Nickel in circulation has 9.04 Cents in metallic content, because their content is 75% Copper, 25% Nickel.
Put away $200.00 bags, each of which has $360.00 worth of value, @ current commodity prices.
No downside, except for where to put them?
If Copper tanks, they are still worth 5 Cents…
During the Mexican devaluation, I remember when the Mexican coins were worth more as “ore” than as currency and trucks were crossing the border to purchase the coins in bulk, bring the coins to the US and re-exporting the ingots.
It is illegal to melt coins, regardless of the value of the metal.
I knew a guy that the king of the illegal smelters, of his day, in sunny el lay…
His game was pre 1965 90% Silver Coins, and he melted many millions of Dollars worth of them in the late 60’s to mid 70’s~
Businessmen can always find their way around rules, if there is a decent profit to be made and, nobody gets hurt.
I’d say its like advocating for amputation for a gaingreen arm. The arm is already gone, its just a matter of time, but you choose the rest of the organism over the loss of the limb. Sure its seems extreme to the guy who still has limited use of his limpy arm for a couple more weeks. These kinds of monetary arrangments are like the barbs on a spear, they naturally go deeper with time, and the path of least resistance is further empalement.
I don’t believe that the silver reserves exist any longer. I remember reading that all those reserves were sold off in the 70’sish timeframe.
Yes, the Treasury has to buy silver to mint Eagles these days.
That would explain why a quick google search didn’t turn up any figures for the US Govs silver reserves. Multiple sources cited 4570 metric tons as the amout of gold reserves. The figure I got for M0 was ~80 billion and guestimates for M3 varied from 7.02 trillion to 11.5 trillion. Not enough gold to cover the currency in circulation is why FDR stopped exchanging it in the first place. When the Au bugs talk about Nixon taking us off the gold standard, they don’t truly realize how limited opportunites to exchange dollars and gold was. Only foreign governments were allowed to do any of that and they were strongly discouraged from doing so. Since our major trading partners also had fiat currencies, nobody was in a mood to rock the boat.
At least today, unlike when I was a child, anyone who distrusts US Federal Reserve Notes, can simply buy gold and use that as a store of wealth. Or Swiss Francs or whatever toilet paper they use in Zimbabwe. This is much better IMHO than control on private ownership on gold that were prevalant before Nixon “closed the gold window.”
Hear hear!
“The high levels of debt encouraged by hyperlow rates have baked in our upcomming recession.”
What’s sad in all this is that if folks had stuck to buying within their means, NOT stretching to get “the most” house, taken out a record-low 30 year fixed loan, they’d be set.
I think so much of this was greed. Why get a modest starter home when you can “qualify” for something bigger with granite countertops?
I am not such a pessimist to believe this was greed. IMHO it was a desperation move caused by falling wages and a lowering of the standard of living that resulted in normally staid individuals gambling away their futures. Some won , most lost.
“…gambling away their futures. Some won , most lost.”
Most who lost didn’t know they were gambling. What they ‘knew’ was, “Real estate always goes up.”
I would be tempted to say that RE agents should have a “Past performance is no guarantee of future gain,” disclaimer like stocks, but with a large percentage of people not even realizing that their option arm is ammortizing negatively, I don’t think that it would do any good, except to indemnify RE agents.
“Past performance is no guarantee of future gain,”
Problem is, according to the NAR, real estate always went up before just about now…
I agree Hoz..
I believe that the standards of living in America are now in a long protracted decline, and all of this financing of a lifestyle is nothing more than an entire generation acting out in denial.
I am not saying that we are headed in the direction of a third world nation; we are headed in the direction of a middle class in the low end of a Western European context. Somewhere between Italy and Spain; or perhaps something less than that, like maybe between Spain and Portugal.
Future generations will eventually accept that they will not do as well as their parents or grand parents generation. Expectations will be more in line with reality as American society slowly adopts to the new economic realities. And life will go on in America, but not with the same increasing hyper levels of conspicuous consumption as we have been witnessing for the past 1/3 century.
As for what we are now witnessing, this “debt=wealth” mantra will flush out the ones that perhaps NEED to fall the hardest, to clear a new path for the new thinking that the next generation will HAVE to adopt. SOME of these huge houses and Most condo towers with all of this shoddy construction will be left standing around for a long time to remind us how insane we used to be, as these structures gradually inch closer and closer to their intrinsic value of zero.
You can make the argument that the seeds of “debt=wealth” where sown in our culture with the first broadcast of “Lifestyles of the Rich and Famous,” and that TV is too pervasive on our society to allow for a new culture of thinking; but I think that several generations of level or even declining middle class incomes along with more sensible lending standards will eventually win out. Gas guzzlers, mansions, obesity, childhood diabetes, frequent world travel/vacations, all of these “living large” things will become the realm for ONLY the truly wealthy households of the CEOs, large shareholders, hollywood types, professional athletes, semi-crime and crime cartels, and national politicians.
And TV/cable/video/movies/whatever will be relegated to its old function as a fantasy release for hardworking men and women who will know that entertainment is simply a big lying farce and nothing more.
Got 10% down?
One can only hope…
Relatives and friends in places like Ireland, Spain, and Greece have seen dramatic increases in the standard of living over the last 15 years. I am not optimistic as to where the U.S. middle class will end up in comparison after the next 15 years.
Middle class will be the debt slaves for years to come as the slavemasters will enjoy their incomes. Slavemasters counted on greed and the good life of material things the serfs so wanted and knew they would pay. Perhaps future generations will learn until the next bubble/trap is set by the slavemasters.
I’m not even sure that there will be an actual DECREASE in living standards. But presently, people are unwilling to even accept a stagnant standard of living. People want nicer cars, bigger houses, and more years of retirement than their grandparents.
Well put, Hoz.
Luxury optimists-
Owners of million-dollar homes expect values to keep growing: study
http://tinyurl.com/2fo7z8
And BTW, did you know that June is National Homeownership Month?
http://tinyurl.com/3642o3
During National Homeownership Month and throughout the year, I urge citizens to consider homeownership opportunities in their communities,
Ok, let me consider it…DONE! Nothing affordable…move along.
…and I applaud American homeowners for helping fuel the economy.
Well, W, you can stop that clapping because the money well for most of these people has run dry. However, now you can applaud renters like myself who do still have money to spend and who can “help fuel the economy” rather than drag it down a la mass foreclosures.
What a bunch of b.s. speak.
Yes I did.
“HUD KICKS OFF NATIONAL HOMEOWNERSHIP MONTH
Reform of the FHA will better “Promote and Protect Homeownership”
…
HUD’s FHA has helped more than 34 million people become homeowners since its inception in 1934. HUD hopes to modernize the 73-year-old FHA through legislation that would make it more flexible by providing mortgage insurance to help underserved and minority homebuyers avoid high-cost loans. The Department estimates that a flexible cash contribution for an FHA-backed loan, a risk-based insurance premium structure, and higher loan limits that better reflect housing costs would provide tens of thousands of eligible borrowers with a safe alternative to exotic subprime loans.”
http://www.hud.gov/news/release.cfm?content=pr07-076.cfm
“to help underserved and minority homebuyers”.
We are the government and were here to help you.
Maybe we should christen some month of the year as national renters month?
October sounds purdy good to me. With proper timing and promotion we can try to create a linkage to Octoberfest. Octoberfest can be a joyous time for renters to trade stories of FBs and alligator feeding landlords while we guzzle from beer steins.
Got 10% down?
The other 11 months of the year are ‘Renters’ month’, just like every day is ‘Children’s Day’.
Oh for chrissakes. This is a study done by — surprise! a Coldwell Banker luxury outfit — based on a survey of 301 people! CNN, shame on you for rewriting this idiotic press release, and anyone else for passing it off as accurate.
I don’t think JP meant to pass is off as accurate. I think he was pointing out the stupidity of it. Obviously, people don’t want to know that they’re losing money. They would have to admit to making a mistake.
No implied diss on JP -
A “Bedroom Kitchen”? The house is so big that they can’t walk all the way to the kitchen for a midnight snack? WTF?
No, the purpose of this is to allow you to pretend you’re in a nice hotel somewhere far far away from all your housing bubble depression.
So you can rent it out in an attempt to keep up with your mortgage payments…
Here are some related headlines:
“People on the third marraiges believe ‘this time, I’ve found the right one forever’.”
“Cubs fans see World Series win just ahead”
“Ethanol to solve gas shortage and foreign dependency issues.”
“…peace in our time.”
“When the Red Army Band plays America the Beautiful in Kennedy Center”… oops
Many million dollar homeowners are leveraged to the hilt. Values will only go up if there are buyers. Many of them that would have moved up are in debt way over their assets. Eventually these homeowners will come down to earth, when they try to sell and no one can afford their houses.
Yeah, I was wondering how many of these people were actually rich and could afford millin dollar homes as opposed to those who are merely pretty well off. To some extant those who are willing to really stretch beyond their means to borrow 1 million are self selected for nearly delusional levles of optimism.
New video on Houston RE:
https://www.blogger.com/comment.g?blogID=10861497&postID=186613570470044770
Nothing unusual, except for the 3 houses for sale. Strange coincidence.
Sorry, wrong URL.
http://louminatti.blogspot.com/2007/06/katy-texas-real-estate-update.html
Umm, well the three houses for sale all in a row on the same street and no other houses in that neighborhood are for sale, very fishy. Good chance either they all are owned by the same Realtor (TM) or investor with different lenders, or owned by different investors with the same lender.
Got 10% down?
I use firefox, your link does not go to a video. Is it your link or my browser?
Was that with his first or second link? I use Firefox and I got the video (nice report Lou, thank you).
The first link.
GLOBAL WARMING HEATS UP!
http://www.norcalblogs.com/watts/weather_stations/
Global warming fanatics, you’re going to absolutely LOVE this story First .. here’s a column from Bill Steigerwald of the Pittsburgh Tribune-Review. Steigerwald writes about Anthony Watts of Chico, California. Watts is a former TV meteorologist. Watts did what Al Gore (or our lovely Belinda, for that matter) never did … he started searching out and looking at some of the 1,221 weather stations that the federal government uses to gather data on temperatures. That data, of course, is then used to tell us of the threat of global warming! Government standards say that these temperature measuring stations should be 100 feet from buildings, not on a hot concrete service, and so forth. Well, it would seem that these regulations aren’t exactly being adhered to.
Believe it or not, Steigerwald and his followers have found temperature measuring stations sitting right next to barrels where trash is burned. Some are sitting directly in front of air conditioning vents. Others are located near the tarmac on parking lots and at airports. Still others are found surrounded by high buildings. Believe it or not, he even found one official temperature measuring station sitting directly behind an airport ramp where it can be routinely subject to jet blast! Just what do you think the locations of these official government temperature measuring stations might mean to all of these temperature measurements that are being used by OwlGore and others to convince us of global warming!
“OwlGore”
That’s polemic, not science. Next.
I’m no fan of Gore, but oh, please, with or without CO2 global warming AND cooling is a fact, Jack. If it weren’t, we’d be sharing the planet with dinosaurs and there wouldn’t be mountains, valleys, glaciers, etc.
CO2 and other factors are just accelerants for the current natural cycle.
“CO2 and other factors are just accelerants for the current natural cycle.”
And the current debate is about whether we ought to be throwing gasoline on the fire.
kckid:
my understanding (little) of the global warming argument would indicate that the global warming fanatics are not using the data you mention very much.
Instead, the biggest data comes from:
1. measuring the thickness of the ice in Antarctica (which is decreasing at an alarming rate)
2. measuring the thickness/size/volume of the various worldwide glaciers (also decreasing at an alarming rate)
3. using INTERNATIONAL (not U.S. only) data.
4. measuring ocean temperatures
Also, from what I’ve seen, few disagree with the idea that the Earth is warming.
What is disagreed upon is whether:
1. the recent warming trend is a first-time occurence, or simply a natural cyclic occurnence. (such as what occured millions of years ago evidently)
and
2. whether or not the recent warming trend is caused by humans. (specifically all related to green house gasses)
Good presentation, HIC.
Gore’s positioning with global warming reminds me a little of the explorers and priests who would use foreknowledge of natural phenomena such as eclipses to wow primitive tribal people.
Earth is gonna do what it has gotta do.
Here’s an example of the data that I’ve seen that is much more worrisome to scientists:
It is a representation of Greenland in 1992 and also 2002.
http://buffalobeast.com/87/greenland.gif
and here is one from NASA.
http://svs.gsfc.nasa.gov/vis/a000000/a001200/a001255/index.html
The same data is showing up in (I think) every glacier across the world. (they are all thinning and melting)
Any thoughts on why Greenland is called Greenland? Oh yeah…it was all green way back when….then the earth started cooling and all this ice started forming….and everybody was worried…and now the earth is warming and the ice is melting and everybody is worried once again. Back in the 70’s all of these super genuises were worried about another ice age.
Greenland is the canary in the coal mine…
Settled around the same time as Iceland, by the Vikings, and an established settlement for over 400 years…
The last contact with said settlers, was around 1400, nobody survived.
Greenland is really the first example of RE spin.
some guy gets banished from iceland and finds this new place where you can barely make a living. however he needs more people to make a community and goes back and says he found this place called greenland. with such a nice name people think it must be nice there and moved.
that doesn’t mean it wasn’t warmer there than it is now, but it was by all means not a nice hospitable place
That was most excellent sarcasm.
I thought I remembered from school days that Greenland was named to get people to move there–in other words, a marketing ploy. From Wikipedia:
The name “Greenland” comes from Scandinavian settlers. In the Icelandic sagas, it is said that Erik the Red was exiled from Iceland for murder. He, along with his extended family and thralls, set out in ships to find the land that was rumoured to be to the northwest. After settling there, he named the land Grønland (”Greenland”), possibly in order to attract more people to settle there.[1] Greenland was also called Gruntland (”Ground-land”) and Engronelant (or Engroneland) on early maps. Whether “Green” is an erroneous transcription of Grunt (”Ground”), which refers to shallow bays, or vice versa, is not known. It should also be noted, however, that the southern portion of Greenland (not covered by glacier) is indeed very green in the summer, and was likely even greener in Erik’s time because of the Medieval Warm Period.
Wow! I must have Viking genes. I’m a tax thrall!
Today’s Dilbert is funny on the surface, but a lot of envirowackos really believe the only thing that can save the earth is a 90% reduction in the human population.
http://www.unitedmedia.com/comics/dilbert/
Okay… if that’s what they want they can lead the way.
After settling there, he named the land Grønland (”Greenland”), possibly in order to attract more people to settle there.
Well the use of the word possibly in a wikipedia article makes it a fact for me.
“Buy a house now and you will possibly make millions of dollars on the appreciation!”
I don’t want global meltdown, but history shows that these weather patterns are nothing new. Please visit Rome 2500 years ago where they were dependant on the Middle east for their grain. You can go back another 2000 years and find Edan (the real one, not the biblical one) more to the east, it was a vast productive agricultural area that is now dessert.
Cracked me up that there was a large group in Greenland that supports global warming =) They think it’s great!
Rome dependant on Egypt for grain, Edan was in the middle east.
read Ayn Rands book
1968?
the coming anti industrial revoltion
nihlists that vote
I’m a huge Ayn Rand fan. Do you mean her book, “The New Left: The Anti-Industrial Revolution?”
I’ve been a huge fan of Rand’s philosophy, but not Rand herself (she had an idiotic fixation on smoking, was opposed to almost any music created after the year 1917, etc). Peikoff’s “Objectivist Philosophy of Ayn Rand” is a brilliant book.
Okay. Now all the Rand haters will start their insults below: Here’s a typical one I expect: “I liked Ayn Rand when I was young, but then when I grew up…” I shrug those off. I’m an active-minded Objectivist, but not an open-minded one.
Rand was an impractical idealist who didn’t allow for human nature in her land of ubermenschen. Oddly, hippies on communes suffered from a similar lack of reality. Utopias of all kinds are unworkable precisely because they are not human, a notoriously imperfect, varied and emotional species. I think the reason most people leave Ayn behind as they get older is because they come to understand that, and also that dealing with the real world doesn’t allow for living in a logical straitjacket.
I think she makes valid points about the extremes of socialism/communism, and how taken to the extreme it is a disaster. She was right, and it is shown it what happened to the Soviet Block and how China was not able to build an economy until they embraced concepts of capitalism.
However, she saw economics as PURE black and white. COMPLETE communism or COMPLETE free market capitalism. She ignores the fact that it is possible to regualte a capitalistic based economy.
It doesn’t have to be one extreme or the other.
For the sake of justice, the chapter titled “Reality” in OPAR is one I highly recommend.
And dark1p’s comment is too much: An objectivist does not know how to deal with the real world? So someone whose metaphysics is based on the primacy of conciousness must know how to deal with the real world? I just laugh.
Back to the topic, which is (and I paraphrase from the top of this page) “Please post off-topic ideas…”
Atlas Shrugged didn’t criticize pure communism. It was about regulated capitalism and the economic death spiral you take as you go from one regulation to the next, to fix the unintended consequences of the prior regulations. Hmm, kind of reminds me of the fed’l gov’t subsidizing homebuying through FNMA, artificially lowering interest rates, bailing out FBs with tax money, and now hyper-regulating residential loans.
On what other blog could you have this many people who know some Ayn Rand? So who IS John Galt??
John Galt is most likely not a well-known figure - none in politics or on the silver screen. Surprisingly (and this is my guesstimate) the real heros are the schoolteachers who actually produce the next Einsteins, the biochemists who find the cure for a dibilitating disease, the foot soldier who covers the grenade to save his platoon. That type of thing. These are unsung. And it’s sad.
Each of us ought to ask ourselves how often we thought of Paris Hilton last week and how often we thought of Patrick Tilman?
Yeah, Al Gore and 99% of all Climate Scientist on Earth are such fools.
Opinions are like ***holes. Everybody has one.
Nice comeback.
Global warming is a great issue to take Americans’ minds off of Iraq and the ongoing housing bust. I am surprised W has not embraced it wholeheartedly.
Global warming is real and greenhouse gases is the biggest factor. I wrote a little explanation of why greenhouse gases are greenhouse gases, take a look at Green house gas Science.
I applaud his efforts as a TV meteorologist to expose mistakes in TV meteorology.
Unfortunately for your argument, geophysicists do not depend on data gathered by TV stations. They use high-quality data from the US Navy, global satellites, and institutional weather stations (such as the Mt. Washington weather station).
Incidently, geophysicists typically have physics PhD’s, whereas the qualifications for being a TV meteorologist are a full set of teeth (or passable dentures), hairspray (or a rug), the ability to read a teleprompter, and a gambling disposition. Contrary to popular belief, TV meteorologists no longer do the most basic forecasting, but rather rely on US NOAA National Weather Service data, and NWS-data-based private services such as Accuweather.
No cigar.
Oh, you mean the experts that said 2006 was going to be the worst hurricane season ever. I get it.
Monterey housing prices fall $70,000 in a month:
http://tinyurl.com/366rxx
Those are pretty small sample sizes, but WOW! That’s a 9.15% drop in one freakin’ month. It’s even worse when you consider that the inventory increased by 8.58% in that same month as well. Those are the biggest one-month deltas I’ve seen to date.
Are you or anyone else local to Monterey? What’s going on there?
while it pales…sherman oaks (91423) median ppsf is down 4% since march. i think it’s officially “on”
I’ve had relatives who lived there. It’s a great area. 9.15% drop is in the right direction. Let’s go for 40% more.
Please. Salinas isn’t Monterey. Salinas is a slum pit and Monterey is an ocean paradise. Wake me when you can buy something decent in Monterey for a mil. Salinas can rot before I’d move there at any price.
All i know its still the same….. 30 resumes in the past 2 week for jobs that have some relevance to my resume, (Video audio Radio Tv music paralegal)and the only ones that answered are the NO PAY intern “jobs”
And these are the Good times????? My take is we have dumbed down America so badly, that If you are smart you are passed by very quickly.
I started a Zydeco Rock and Blues night, so maybe i can get a nice crowd willing to pay a few buck to dance to a dj. Some Videos or Rosie Ledet.
http://www.youtube.com/aNYCdj
Traditional R/TV jobs are a dead-end. Look into where the market is going. It’s all going online. I think that is where you should look.
dj:
perhaps think of a different field? or a different city?
One problem I’ve found with NYC is that you often have too much competition for jobs, so wages are often lower (or in your case, no wages) than they are in smaller metro areas.
can you open up your job search?
If paralegal is one of your specialties, I know there are TONS of paralegal jobs here in MN as example, and they pay a very decent liveable wage.
I have a paralegal friend who works for a judge 4 days a week, and she is able to afford her own modest home on a 30 yr fixed rate mortgage and still has a fair amount of spending money. A lot of my legal friends say that the legal market here is very robust (but they are mainly lawyers)
anyway, if after a while you can never find a job, then to me it means that either you have to broaden your job parameters or your location parameters.
obviously, you are correct that if we had a blistering economy, someone would snap you up… but we don’t.
Thanks, but i have one problem probably none of you have. My GF (No not that) is a NYC girl and never drove in her life… that would require a major life style change. Plus we would have to buy another car. expenses etc etc.. I would prefer going south maybe to SCarolina but not to florida
If you have a camera, you can always market to realtors who want to post online video tours of their listings…
Sometimes, change is good. Despite what New York’ers think, there is life outside NYC
Good luck.
no if my wife could get that memo!
i want out but she is so resistant to change.
at least i got her to agree renting is our best option
btw this morning waiting for x-bux into manhattan
overheard a conversation. this guy who is selling his house since april 06 (was asking 509k) for a 2 bedroom 1 bath with a dingy basement attached townhouse which is only 16ft wide and is in decent shape, nothing special. i know because i looked at it over 14 months ago (he does not remember me)
anyhow a fellow passenger asked him if he sold yet and he said no lookers at all, well i cannot understand that i mean he did lower the price to 499k!!!
meanwhile i rent 1 block away a 3bedroom 2 bath more modern with 2 baths and 2 balconies and more than 600 sq feet of living space for $1700 a month
maybe i should buy his albatross with 100k down and piti of roughly $3000 a month. i do not think so
i checked on property shark and they just bought in 2005 with a 100% financing at $475 and are apparently stuck and cannot afford the place. oh well so much for that investment idea.
lower the price and take the hit and move on or sit and spend most of your take home on this overpriced tiny house! i mean 16ft wide you cannot even have a dining room table for crying out loud.
more than 600sq feet more living spacve is what i meant
i have over 1500 sq feet of living space
Yeah, but the restaurants tend to be a lot worse.
I’m an ex New-Yorker myself. I got my driver’s license when I was 27 years old. A few years later, I found driving to be a somewhat painful chore. I kept my car, but I started bicycling.
I recommend moving to a city with good public transit (there are a few out there, besides NYC), or moving to a city that’s set up for cyclists. You can get a really nice commuter bicycle for about $500, or a basic one for a few hundred.
Oh, and entry level “arts” jobs in NYC always paid crap wages. Even during the internet boom in the mid-90’s I found it hard to find anything that wasn’t an unpaid internship. So I took my creative writing degree and moved into tech. Since that time…let’s just say I’ve been extremely lucky. My advice — figure out whatever people hate to do, and run with that.
I agree. I’m from Boston. When I left I found a town with a good walking center (old railroad town) so I was able to find housing near work (mixed use zoning or small zones–woot!) and I bike to work.
You can actually bike rather long distances to work. Look for housing near commuter rail lines or housing close to place of employ.
Heck, even in rural/exurban hell a friend of mine who is an engineer found a new house being sold by a flopper which gave her a 5 minute commute to work. Score.
Now, if you’re nostalgic for staring at those black spots on sidewalks from old gum, I’m afraid you may be out of luck.
We’ve been trying to higer a software QA engineer for about 3 months. We’ve reviewed dozens of resumes, interveiwed half a dozen people. The one person we wanted was hired out from under us in the 3 days it took to get approval up the chain of command.
I got laid off back in February. Took 8 working days to get an offer at a better company, for more money.
The outsourcing doomsday crowd fails to realize that if it’s really difficult to find a qualified person in the US, it’s not going to be any easier in India or China.
I used to work for a company that used “low-cost” software people where it made sense (yes it does make sense in many cases) and hired the most talented software people that they could find in the US. It worked out really well, for many years, until a new CEO came about… More and more work was sent to the “low-cost centers” and more and more of it came back as failed projects. Instead of restoring the balance, projects were canceled and US software developers laid off (including me). Profits soared and the stock price followed. Except that in the last year or so, it’s been a bit rocky. Fancy new products failed to materialize, leaving analysts baffled.
The outsourcing doomsday crowd fails to realize that if it’s really difficult to find a qualified person in the US, it’s not going to be any easier in India or China.
That sort of logic has never stopped those who dwell in fancy corner offices. They only see the savings.
They jump from job to job and are only looking at short-term payoff. *Their interests are not your interests. Not even close.*
The old robber barons destroyed other businesses and other people’s livelihoods. The new robber barons strip their own employers bare.
You live in NYC. Why the heck aren’t you temping??
I have a friend who didn’t graduate college and she started temping in the county courthouse… in Gainesville! I know it pays shit wages/hour, but I’ve found that temping can lead to job offers (and if not, there’s always the next job and potential boss to win over). You should definately be able to find paralegal temp jobs.
I agree with temping.
During my college years (back in the late 80s), I took a temp job with a company (temporary, part-time receptionist). Six years later, at that same company, I was managing over 200 employees, my pay had gone up by many multiples, and I had free reign over my hours, dress code, etc. If you’re good at what you do (whatever that may be), you’ll do very well with temping, IMHO.
Seriously consider it.
BTW, guess who made the front page of the Sydney Morning Herald?
http://www.smh.com.au/news/web/blogger-learns-how-to-monetise-hate/2007/06/19/1182019071972.html
Oh ain’t he sweet,
well see him walking down that street.
Yes I ask you very confidentially:
ain’t he sweet?
Trying again.
I’m just sayin… I see where this train is headed.
He could end up like this though:
http://www.law.umkc.edu/faculty/projects/ftrials/Simpson/Kato.htm
The FIX is in
Housing starts in the U.S. fell in May, signaling the slump in home construction will continue to depress growth.
Builders broke ground on new houses at an annual rate of 1.474 million, down 2.1 percent from 1.502 million the prior month, the Commerce Department said today in Washington. Building permits rose 3 percent to 1.501 million from 1.457 million.
Can’t wait to see what spin the MSM will put on this
http://www.bloomberg.com/apps/news?pid=20601087&sid=awyDzLEZVg4w&refer=home
Sigh. How about we just have a national moratorium on building and concentrate on improving what we’ve already got?
When I lived in South Florida during the late 90s, I used to commute between Ft. Lauderdale and downtown Miami via the rail system, which was mostly elevated. It was interesting to see, from above, huge swaths of abandoned or barely populated neighborhoods. Some of those neighborhoods had once been quite nice, with nice streets and older, well built houses that were once landscaped with bougainvillea and flame trees. Were it not for the crime in those areas, I wouldn’t hesitate to live someplace like that.
“Sigh. How about we just have a national moratorium on building and concentrate on improving what we’ve already got?”
And all the builders instantly go bankrupt as they’d lose the cash-flow that is allowing them to make payments on the debt they have from buying land and building infrastructure.
Build or die.
Only our man casey would escape to a country, whose real estate bubble is about a year or 2 ahead of us, in downturn and fading fast…
More importantly:
An over/under must be immediately established, as to the final number of houses/condos casey ends up with down under.
I’m setting the line @ 7
Place your bets…
Housing market not pretty in Florida and nation, reports show (no shit!) from Ft. Lauderdal Sun-Sentinel
Two studies released Monday underscore the dismal housing picture in Florida and across the nation.
A quarterly survey from the University of Florida shows that the state’s housing market has deteriorated since January. UF officials said sales of existing homes have faded in recent months, although they’re more optimistic about the prospects for new homes sales.
But then came a report from the National Association of Home Builders, which said builder confidence slipped two more points in June and now stands at its lowest level since February 1991.
“I am of the opinion that the market is going to take a long time to recover,” said David Levin, a real estate consultant in Delray Beach. “As much as we all would like for it to be faster, it’s just the way it is.”
while construction of apartments rose by 3.1 percent.
I’m reminded of those staked trailers in “downtonw” Asheville NC
w/o Bens blog the world would be left w BLS and commerce dept
Bear Stearns fund going down; dive, dive…
http://tinyurl.com/ypreng
lots of good quotes in this article: - Senior Wall Street bond executives familiar with the Bear fund’s collapse are afraid that if it liquidates the balance of its holdings, “we are going to see billions of dollars worth of losses across hedge funds and dealers,” according to one executive.
Right, but here is the key thing — like the actual decline in housing prices from the mania peak, those losses actually exist. The question is whether they will be admitted to.
Home sellers don’t have to admit (and really shouldn’t care) that their home value has gone down until they have to sell. At some point, however, bank examiners or accountants will force financial organizations to mark these CDOs to their market value.
And what is their market value? No one knows. And apparently, no one wants to find out.
“The question is whether they will be admitted to.”
The other question is whether they will go from unrealized to realized losses.
In the bear stearns hedge fund, was born
Lived a Korporate entity, who failed to see
And it told us of it’s life
In the land of Subprime Submarines
So we sale’d up all the junk
Til we found a sea of green
And we hid under the waves
In our Subprime Submarine
We all live in a Subprime Submarine
Subprime Submarine, Subprime Submarine
We all live in a Subprime Submarine
Subprime Submarine, Subprime Submarine
And our friends are all aboard
Many more of them live next door
And the band begins to pray…
Hummmm…
BLACKSTONE IS BEAR FUND’S LAST HOPE
By RODDY BOYD
June 19, 2007 — A foundering Bear Stearns hedge fund staved off collapse for another day, getting a 24-hour reprieve from angry creditors in order to allow Blackstone Group to implement a rescue plan.
They delay the hedge fund asset sell off, and Blackstone moves up its IPO by a week…
Me thinks there is a corilation…. delay the sell off becasue they don’t want anyone to know just how worthless these hedge funds “assets” truely are until after they’ve been dumped on the sheeple.
My guess is the two are already sleeping together. They just don’t want anybody to find out about the wedding until after the IPO. Then the guests at the reception are going to get a nice gift to take home and eat….if they can swallow it.
Conjecture: Rather than waiting until after a global-economy-threatening blowup hits the financial news (as with LTCM in 1998) and cobbling together a high-profile bailout to pick up the pieces, the PPT is nowadays using preemptive stealth bailouts involving GSPEs. These are reported very cryptically in the financial press, but always raise the question, “Why would any private firm want to purchase that falling knife in mid-air, long before it reaches the ground?”
That would be very foresightful of the Fed, considering they can only spot bubbles through the rear-view mirror.
(GSPE = government-sponsored private equity firm)
Exactly GS. What a friggin mess the Fed has made of the world.
A dispatch from the 10th circle of condo-ownership — out having drinks with a friend, who is lamenting not only her $650 condo fee (old building, pretty, well-manicured lawn, huge complex, lots of staff, pool, fountain, exercise room, the works) - but also the impending $10,000+ assessment for complex-wide “window replacement” — and this is one a one bedroom + den (upper Northwest, Cathedral Heights area, Washington DC — truly one of the nicest, parts of town).
It’s a really pleasant, pretty, and relatively quiet area to live in — but those costs are just brutal. Ugh.
The costs of owning your own home aren’t a picnic either. Except, of course, that I am the “staff” and we don’t have a pool, fountain, or lawn. But getting the eliptical machine in the basement fixed is a pain.
Zero,
those ’special assessments’ are hitting a couple of my friends as well–10-15k for lobby redos, repointing bricks, etc. One doctor friend, who bought in 2005, has watched her maintenance climb to 1100 a month from 700+. This is killer stuff, coupled with an ARM, which is what she has. And it’s all for a one-bedroom.
The thing is, I’m sure a lot of the repairs, maintenence and upkeep are needed in this building — and in your friends. But, when it’s your own place (like my 1820’s townhouse, which requires a lot of ongoing work), it just seems easier to swallow.
My friend’s building is great for all the rich widows who live there — a lot of assistance and little to worry about besides writing those checks every month (it actually has kind of a fancy New York City co-op feel to it) - but those costs crush a plain old wage slave (even a very successful one like my friend), especially in the context of not seeing any appreciation in the two years they have owned it. (Yep - also bought at the top of the market).
I think my friend assumed they would be able to make an easy $100k or $150k off this place in a few years, and then upgrade to a townhouse or something, based on their experience selling their first condo, making about $100k over three years, and using that equity to upgrade to this place).
Well one of the advantatges of owner-occupation is the ability to fine tune the amount of maintenance that you want done to the funds that you have available. If it takes repainting every year and a perfect lawn to keep you happy you can do that. If you don’t want to sweat the little stuff, you don’t have to pay for it. And if you care about what your neighbors park in their driveway, you can buy in a place with a homewoners association.
$10,000+ assessment for complex-wide “window replacement”
how many more assessments will we be seeing? i’m gettin’ giddy!
my creepy rental in a condo complex has had a crew fixing the elevator since may 18th.
They may never fix that elevator correctly. You have to find both honest and competent elevator people, supervised by competent people at the condo-closet building. 3 out of 3 is hard. Good luck.
The fact is that many of these poorly constructed/converted condo-closet buildings have a lifespan that has been way overestimated by some people. The engines of the 747 jumbo jet where not assembled or overhauled correctly, so now they are trying to fix ‘em while in midair. If possible, it would be prohibitively expensive. It is cheaper to just buy a whole new aeroplane.
Got 10% down?
With your own home you can sometimes delay repairs to a better time, but with condo assessements you have to pay when they say. I used to think I might later want a condo so I didn’t have much to take care of, but you can really get screwed in fees and assessemnts, over which you have little control.
Another quick anecdotal. Realtor friend has a couple of retired clients who rolled the dice on their WHOLE retirement fund with some RE investment scheme. They lost everything except the house they are living in, which they have up for sale with the realtor friend. Apparently they spent about 80K pimping out the place because they intended to die there (prior to losing their ass in the RE game). There are 6 other homes on the market in the neighborhood but because of the upgrades their’s is priced slightly higher. The house is going into foreclosure in August if they don’t sell because they’ve not made payments for a couple of months.
Realtor friend says they got a cash offer for the house that is only $1500 below asking but the sellers won’t respond to the offer! Apparently they are absolutely frozen with indecision and are “praying” about it! I can hardly believe the idiocy here. How did this couple make it this far in life without getting hit by a car or sticking a fork in an outlet?
Sounds like they did stick a fork in an outlet. At least that would explain the idiocy.
Wow, $1500 away, and they can’t decide? Hopeless!
There are a lot of sellers out here who would slobber all over your shoes if you offered anything that close to their asking price. Especially if the alternative for them is foreclosure.
Of course, on the flip side, the realtors won’t give up $1500 of their commision to seal the deal??
He’s a realtor first and a friend last.
If the sellers decline the offer then I wouldn’t be surprised to see an effort to adjust fees or other compromises. However, these dolts won’t even respond to the offer.
Sounds like God has already answered their prayers - an offer. I would like to see the look on their face when they ask God why he didn’t help and he asks why they didn’t take the offer given.
One month with taxes and insurance will blow the $1500. Two months and they’re in the hole. Four months later the only offer is $10,000 below.
The Realtor (TM) may not want to come across as a predator on these people’s retirement savings, so he could be resorting the the tried and tested “if the lie is big enough people will believe it” routine to wash his/her hands off any complicity. So the midwestern multi-millionaire showed up in a Chevy Malibu in his plaid cotton shirt and jeans with a trunk full of hundred dollar bills to save the day, but the seller refused his help. Right.
Got 10% down?
A two-legged market downturn is imminent. Be prepared for the worst.
Stock market? Art market? Tulip market?
Stock market.
I agree. Some bond market analysts are predicting the 10-year to go up to 5.5% wthin several weeks. This would trigger another market sell-off that could complete the capitulation of the homebuilders and a trendsetting downslide for REITs and utilities.
Among all this, could be a big disappointment in the Apple iPhone, the Blackstone IPO, the private equity tax changes, the new subprime problems, etc. etc. etc!
Thanks in part to the housing market, a huge two-legged market downturn is imminent.
What is a two-legged downturn? What is meant by Huge? Thanks
Obviously, no one can predict the stock market. That being said, a two-legged downturn in the stock market means there is a strong possibility the market will go down by a very large amount, then attempt to recover, followed by another large downturn. How large? No one can say for sure, but 10 percent or more would not be surprising.
“10 percent or more” = necessary to re-equilibrate stock market valuations w/ bearish bond market valuations
“Obviously, no one can predict the stock market.”
That is fortunately not true. There are more than enough examples of individuals that consistently out perform the market and have done so for decades. On a minute by minute change that may possibly be true. I suggest you read
“Market Wizards: Interviews with Top Traders” Schwager
A couple of names for you:
Tom Baldwin: US T Bond trader - when asked if Lehmann Bros was more profitable responded “I wouldn’t say that”
Paul Rotter - aka “the Eurex Flipper” : 200,000 contracts/day possibly the largest and most profitable trader in the world.
For a little light humor/aside on how to reduce stress in Chicago:
http://tinyurl.com/2xq2zq
Cigar Afficianado
“I think, probably, a lot of them are subconscious. I don’t happen to have that. I mean, I have a pretty good understanding of risk and I have a lot of war wounds. When you lose $5 million in 10 minutes, I deserve everything I make anytime I make it. I mean, that’s a lot of pain.” Tom Baldwin
Not to be a name dropper, but I’ve interviewed Schwager many times. In my opinion, when you get into the prediction game, you are gambling, not trading. That being said, based on short term information, it does appear the stock market is due for a rather severe correction. Most will be surprised when it does occur, just like they were when real estate started crashing.
I do know the book (not Schwager), there are to many people that have been successful in predicting the market to be random chance. When the odds are in your favor it is not gambling. In Las Vegas, would you rather be the house or the gambler?
How do you explain the decades long success of Warren Buffet, George Soros, Boone Pickens, etc. random chance? They’re history is based on predicting.
“their history” > Dork that I be! LOL
Perhaps we’re disagreeing on definitions. The success of long term investors such as Buffett are based on his top notch analysis of companies, looking for value in companies and analyzing management and other fundamental data. He bases his investment decisions on facts, not predictions. And traders such as Schwager base their trading decisions on technical indicators. Traders often follow trends based on technical data. But if you make a trading or investment decision based on a prediction, you will have a 50-50 chance of being right, i.e. it’s a gamble. When you get to the level of there is an 80 percent chance you are right, it’s not a gamble or prediction but an informed decision based on technical or fundamental data. And by the way, even with an 80 percent chance of being right, you could be wrong, which is why you have to prepare for errors.
“Foretelling of a future event. Predictions are probabilistic estimates of future occurrences based upon many different estimation methods, including past patterns of occurrence and statistical projections of current data.” Answers. com predictions
All successful traders predict. Buffett, Soros, Pickens as well as all active traders all use statistical projections of current data to constantly evaluate current and future positions.
As a trader, I like to think that I am trading based on probabilities rather than predicting. I have a feeling that most professional traders feel the same. And I predict that if you ask Buffett, he would not say that he is investing based on predictions. Perhaps it’s all semantics.
Mike S. I spent 15 years on the exchange floors. I know only one trader that succeeded by getting lucky and I heard of another trader that got lucky in the Mexican Peso collapse. Otherwise, every successful trader I know was successful by hard work and a consistent method of prediction.
some of Buffets predicitions
“We’re going to have a something in the way of a major nuclear event in this country,” said the billionaire. “It will happen. Whether it will happen in ten years or ten minutes or 50 years…it’s virtually a certainty.” The world’s second richest man added that New York City and Washington, D.C., both hit during the Sept.11 terrorist attacks, would be the most likely targets.
forbes
and
In November 1999, Warren Buffett dropped a bombshell on investors when he wrote (with Carol Loomis) in Fortune magazine that the most likely average annual returns for investors in the market for the following 17 years would be 4%….
…During the past seven years, the market has returned just slightly less than 1% in terms of capital gains if you’re measuring with the S&P 500 — a bit better if you measure by the Dow Jones Industrial Average. Dividends have been on the order of about 1.6%, on average, and inflation has been 2.7% annually. So, real returns are almost exactly 0%. For real market returns of 5% annually (ignoring, for the moment, the costs of investing) to materialize by 2016, we would need to see roughly 8.5% real returns over the next 10 years….
motley fool
Hoz, I don’t think we are disagreeing except on what the definition of prediction is. You call it prediction, I call it probabilities. And we can probably leave it at that.
LOL - agree! ’nuff said
http://www.reuters.com/article/domesticNews/idUSN0530157720070619?feedType=RSS&rpc=22
A town embraces BerkShares, in lieu of greenback dalas.
Do I have to be the one to explain what “Berk” means?
from encarta:
U.K. fool: somebody regarded as stupid or foolish ( slang insult )
Here’s a topic (other than Ron Paul and Ayn Rand):
http://biz.yahoo.com/fool/070619/118226124003.html?.v=1&.pf=personal-finance
Don’t expect your “investment” in a home to make you rich. It can help many people become wealthy, but it’s not a surefire ticket to Easy Street. As Knight Kiplinger recently noted in Kiplinger magazine, whereas the average annual gain of the S&P 500 over the past 30 years has been 12%, the average annual gain for home values has been 6.2%.
Possibly true but stocks won’t keep the rain off your head….I can understand renting vs. owning argument…Makes perfect sense…I just would not want to be in my 60’s,70’s or god forbid 80’s and still be a renter….
I agree in principle with you SC but in reality you are still a renter even if you own the home outright. The only problem is that the state/county/city gets to continually raise the rent whenever they want without your direct consent and they will take your house if you don’t pay. These taxes (rent) are no longer inconsequential in some areas (Florida comes to mind).
Well the residents of FL have choosen through their elected representatives to have no state income tax. When you combine that with “save our homes” you get a very hight millage rate.
Taxes in Ohio have to be voted on not imposed, whether it’s schools, roads, fire, police, libraries, parks, etc. Even city income taxes. Pennsylvania imposes school taxes. I’d rather live in a state where we vote before a tax can be put on.
Extend that period out another 20-30 years and see what happens. The past 30 years have been a relative anomoly (1500% gain total) for the stock market - the 20-year period before that it was nearly flat (80% gain total).
The principle is still true kind of, but the numbers are exaggerated. Over the *really* long term, stocks tend to go up about 6-7%, housing about 4-5%. After including mortgage interest deduction though they’re about break-even.
What the heck does the mortgage interest deduction have to do with it? What about people that buy with cash? The amount someone is willing to pay a lender to borrow money has nothing to do with it. I am still amazed at how many people think a mortgage interest deduction is such a great deal that they continue to pay a bank interest (when they can easily just pay it off) so they can get a fraction of it back at tax time. Many of these people are highly paid educated people and they can’t seem to grasp this concept.
the average annual gain of the S&P 500 over the past 30 years has been 12%
How does this mean the NEXT 30 years will be close to 12% ?
Old Fed mantra: “Lean into the wind to fight inflation.”
New Fed mantra: “Inflate stock market with a hurricane blast of liquidity on any sign of price weakness.”
you got me on that one GS… I’m smirking at my desk and getting stares!
ROFL
PMIs risk index is out:
http://phx.corporate-ir.net/phoenix.zhtml?c=63356&p=irol-Publications
San Diego has dropped to number 10….
Are you still seeing buyers where you’re looking? Do you notice anything particular about them?
I live in a 1960s-era tract of SFRs that should be worth around $150k, but are still hovering around $600k. Amazingly, houses in the neighborhood are still selling. A 3/2/pool house down the street (asking $750k; don’t know the sales price) just sold and I saw yesterday that the new “owners” had moved in. There were three cars in the driveway: a humble Honda, a lowered Navigator and a blinged-out Escalade.
I give them six months, tops.
Am watching the papers here in Montrose, Colorado and have seen at least 5 houses reduced by 100k in one fell swoop (all bet. 400 and 600k) in the last two weeks. It’s coming to western Colorado!!! I’ve been watching a cool strawbale on 10 acres – sat at $375k for almost 2 years, a second home, the owners wouldn’t budge a dime, now at 335k, FSBO. Wahoo – it’s gonna take more than that, but IT’S STARTING TO HIT HERE!! PARTY TIME!!!
Across the ocean…My nephew lives in the rural area near Waimanalo, Hawaii, and has a studio apt. he rents out on his property. Talked to him and he says he’s had about 100 calls on it in 2 days. It’s affordable ($1000) – but out in the boonies - what’s going on in Hawaii? Is it the price? To me, that’s a lot for a studio out there. And 100 calls???
And a bit OT, but for those who were interested in the bird thread a few days ago, I’m hand-feeding a baby finch that fell out of a nest and no way to get back in. There’s a bird rehab place here and if I can get him through the first week or two (this is day 4) until he’s ready to start flying, they’ll take him and get him off the ground. So far, so good, he eats every 15 minutes (the secret to caring for baby birds, I’m told) from dawn to sunset – (if you ever do this, 1:1 mixture of ground-up dry dog food and Gerber’s dry baby cereal (rice w/ banana) mixed with water and fed with an eye dropper, 4 or 5 drops). His mouth goes the entire width of his tiny head.
He’s a little punk – just in the last day he’s grown a topknot that looks like a Roman helmet. He must weigh 3 oz – has wing feathers and a tiny tail feather. I have a fantasy of teaching him to whistle “Hey Didalee Dee, An Actor’s Life For Me” (Jiminy Cricket). I put him in his box out under the nest during the day so he gets to hear the other birds talk all day and learn Finchese. If there weren’t a housing bubble, these birds might’ve been able to afford a better place.
good luck w/the bird rehab…he sounds like a character…
funny bird story…my co-worker’s wife works part-time at this pet store and she will baby-sit pets once in a while for whatever reason. Anyway, she was watching this bird (cockatoo I think?) that was owned by a local trucker in Bakersfield…guess you know where this story is going…anyway, the bird would shout all these expletives when people came over…lol
Best of luck with Mr. Finch. Very kind of you.
I hope the little guy makes it. Sounds like you are doing a good job.
Home Depot Sells Supply Unit for $10B
http://tinyurl.com/3cbvgy
As it happens, the New York Times has an article about what we discussed earlier — realized losses on mortgages.
http://www.nytimes.com/2007/06/19/business/19mortgage.html?_r=1&ref=business&oref=slogin
Among the local effects — depressed profits for NY financial companies, which will impact state and local tax collections where (NYC has a local corporate income tax in addition to the state corporate income tax).
That is in addition to an end to the money rush due to all the housing units and buildings getting flipped (mortgage recording tax, real estate transfer tax).
“We don’t really know the ripple effects,” said one industry official who spoke on the condition of anonymity because of the sensitivity and gravity of the situation. “It is causing a revaluation of the securities, some of which may lead to additional liquidations. That’s possible, but it’s not set in stone.”
Looks like Rich Dad has a problem…
http://www.azcentral.com/business/articles/0617biz-kiyosaki0617.html
This is kind of funny…from the Mortgage Insider blog in OCR.
GMAC ‘tests’ scare tactic
Times are tough in the mortgage biz. The old ‘teaser’ rate mortgage pitches — you know, like pay just 1% interest — just aren’t bringing in the customers anymore. Or maybe Wall Street is just too choosy about buying those loans.
Anyway, mega lender GMAC, owner of Ditech.com in Costa Mesa, has tried a new tactic. Yet trying it out on a reporter, Jon Birger, who writes for Fortune magazine, may have been a mistake. He writes:
Just consider the direct-mail solicitation I recently received from GMAC Mortgage. The letter was addressed to me as a “Washington Mutual Customer”- I have a 30-year, fixed-rate mortgage with WaMu - and it began ominously: “You’ve probably read about it in the newspaper or seen it on the nightly television news. Many mortgage lenders all across the country are heading for financial trouble because they have made too many questionable loans. Some lenders may even go out of business. And what will become of the people who trusted those lenders if that happens?”
Then came the kicker: “Allow us to help you refinance your mortgage with the rate and term that best suits your needs.”
GMAC’s pitch is absurd on so many levels I barely know where to begin. First off, the letter implies if you have a conforming mortgage, as I do, that you could somehow lose your mortgage should your lender go bankrupt. That’s simply untrue. Sure, there could be some servicing glitches should your loan be acquired by another bank, but that’s more an annoyance than a genuine financial safety issue.
By the way, Birger points out that GMAC has more subprime exposure than Washington Mutual and its credit rating is lower. Here’s how Birger ends his piece:
So what does GMAC have to say for itself? I called the company to ask about the letter, and GMAC spokesman Stephen Dupont sounded genuinely apologetic. The letter was part of “test mailing,” Dupont said. “It’s not something that we’re going to be repeating.”
In LA, WAMU is running this text as a radio commercial.
Scared the heck out of me and I rent.
“The titles reflect the book Rich Dad Poor Dad, written by Kiyosaki and Lechter, which tells of Kiyosaki’s frustration that his real father wasn’t as wealthy as an unidentified mentor he calls “Rich Dad.”
Is money the only thing that matters in this country? Saw a sign on a church on Father’s Day that said, “My dad left me a spiritual inheritance.”
whoops - supposed to go under the rich dad post above…
Another one from OCR.
Mortgage Insider: Lenders tighten standards most since early ’90s, consultant says
http://tinyurl.com/26dahk
The title of the article is wrong. It implies that the standards themselves are the tightest since the early 90’s, but that’s not what the survey studied. The survey studied the percentage of loan officers that believe that standards are currently being tightened - a big difference. The standards themselves are still quite a bit looser than they were in the early 90’s.
Attn Renters:
There was a post a few days ago re concern for ID theft and theft of security deposit by LLs facing foreclosure, trust accounts, etc.
I will address all those concerns in a later post, but to address the ID theft concern, please hand-write (preferably in ALL CAPS) the following at the top of the Rental/Lease Application form:
“THE PERSONAL AND FINANCIAL INFORMATION PROVIDED ON THIS FORM ARE TO BE USED SOLEY FOR THE PURPOSE INTENDED AND FOR NO OTHER PURPOSE.” Please initial next to your clause.
~Misstrial
The interesting side effects of the drought in Alabama…
http://www.al.com/sports/huntsvilletimes/index.ssf?/base/sports/118182152234420.xml&coll=1
Anybody listen to Dave Ramsey today? It’s been nothing but RE gone sour all day today, and he’s singing the Housing Bubble Blog theme song to his parade of FB’s.
When did he find this blog?
I heard it on my way home from work. He does still tell some of the FB callers that they are in a “good market” though. It’s hard to take sometimes.
There was that one woman saying they just dropped the price of there empty house by 20k to 164k or there-abouts and got an offer at 158k..they countered and the buyers walked. Bwaahahaaaa.
saw an add in the paper yesterday 3000 sq ft home for 297k, less than 100$ per sq ft. brand new home by matthews. there are some condos selling for 300k 2b2b. what a discrepancy.
http://www.larouchepub.com/other/2007/3418bids_dem_candidate.html
Blackstone and other financial locust hedge funds are “buying” 2008 Democratic Presidential candidates, especially Hillary and Obamba.
China is buying Blackstone; Blackstone is buying candidates — I am glad that story did not come from a reputable source.
Test
Received this email today from a realtor, which I thought was entertaining.
Hi
State Legislators passed a two-prong plan which will immediately cut property taxes on Florida real estate and also create a super exemption for homesteads effective in 2008.
What does this mean to the real estate market in Florida? It means that more buyers will be getting off the proverbial fence and be BUYING NOW…likely causing an end to the historic buyers market we are currently in.
We have already seen increased sales in our ZipRealty office by over 50% in the last few months in anticipation of this property tax cut. The amount of buyers requesting to see homes has doubled in the last 2 weeks.
These are clear signs that the market is really heating up. The media hasn’t reported it yet but as agents we see the first signs of a turn-around. The lenders are the second to see it as they process loan applications. The press generally knows when the “sold” figures come in which won’t be for many months.
If you have been “waiting and seeing” this is your wake up call…NOW is the time to buy…before this historic buyers market shifts back to the seller side. Interest rates are still low, but creeping up, inventories are high but beginning to drop, and sellers are willing to negotiate, but this will change when the market gets flooded with more buyers.
If you are ready to take advantage of this last great opportunity to buy real estate at rock bottom prices in South Florida…please give me a call or send me an email.