Bits Bucket And Craigslist Finds For December 24, 2007
Plese 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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The “Wow” Factor…. At the bottom of the page, good read IMO.
http://www.dailyreckoning.com/
“…The houses were just like all the others built in the last 10 years - with large, fraudulent fronts, laid up in brick, some with tall Tara-like columns…and front windows so large you bend down to look for a stone. You think they might be substantial, handsome houses. And then you see the vinyl siding and small, plastic windows on the side. They only look good from the front. And then only if you don’t look too hard. Charmless…soulless…hasty…slick…they are stacked hard up one against one another like Chinese TVs in a discount mall.”
Boy, he nailed it right there.
We purchased such a house as this way back in 1998. Cookie-cutter, looked like 7 other homes in the subdivision of 200. It was terrible. All our neighbors were white (not that it’s a bad thing, just bizarre in a community with 20% black and 20% hispanic families), most had the same bumper stickers (either U of I or IU or Univesity of Indiana), all had a dog, and two kids. Most drove the same SUV. Felt like Edward Scissorhands. We sold and rented after 2 years (house price inflated quite a bit, thankfully!).
Now we’re living in a 106 year old home, with the oldest tree in town in our front yard. It’s a gorgeous home, built to stand, with a solid foundation, very well insulated (energy usage is HALF of the smaller cookie cutter home), and has a ton of style. Yes, maintenance may be a bit more, but you can feel the difference in build quality.
I can’t imagine going back to a newly built home. My only negative is that it’s still sided, and I’ve always lived in brick homes when I was a kid. The brick homes in our community are rare, but the ones that we’ve considered were still too over-inflated. Our budget was 1X-1.5X our annual income (we live below our means), and the brick homes were 2.5X income, and not designed how I prefer homes (tall ceilings downstairs, few closets which I hate, not too many rooms that would go unused and need to be filled with crap).
I can’t imagine us selling for any reason, but our town does have a very healthy home rental market, so it’s possible that if we ever do want to move, we could rent it out. Considering what I paid for it (just under 1.5X annual income, no mortgage), if we rented it for around $1200/month (3 bedrooms, huge yard), we’d be close to breaking even on the use of the money invested. My neighbor duplexed her house (she lives in half), and she gets $1100 from her tenants, who have less square footage than we’d offer if we rented.
The whole neighborhood has “soul and charm,” even though most people make 1/3rd what we make. It’s lower middle class, but the families are out in the yard every day in the good weather, shoveling each other’s drives and walks, and the block parties are awesome. It’s also cool to see kids playing together of all races and religions — black, white, hispanic, Christian, Muslim, Catholic and agnostic. That’s my hometown.
Sounds like a great neighborhood.
I grew up in that type of neighborhood in the late 60s and early 70s. I and my siblings had a blast.
Different strokes for different folks, I suppose. How are the schools in your “diverse” neighborhood? If you had kids of your own, you might find yourself gravitating toward the souless cookie-cutter tract ‘hood.
I know where you are coming from and used to see things exactly the same way. But honestly, sometimes you can get tired of diversity. After living in Los Angeles for 6 years a soulless tract home community is beginning to look pretty good, frankly.
Diversity actually makes it quite difficult to know your neighbors. On my block alone, we have Chinese, Vietnamese, Africans (three — two couples from Nigeria, and another from South Africa), Pakistanis, Mexicans, Nicaraguans, Russians, and one Midwesterner (yours truly.) There are no American-born whites here under 60 except me. Actually, it’s even more diverse than that. One of the Vietnamese women is actually black, and the South African husband is white, while the SA wife is black. They actually aren’t our neighbors any longer, they just moved to Studio City. The husband said it was because — and I am not making this up — there is “too much diversity” in our neighborhood!
All of these different people are packed into just three two-story apartment buildings. Also, every single one of our neighbors is FOB, no second-generation descendants of immigrants here.
We get along very well with all of our neighbors but none of the children ever play together. It’s sad. Different languages and cultures make this very difficult. Our town is predominantly Asian and Hispanic, and those kids seldom mix, even at a very young age. It’s not really a racism thing, they just don’t. Things are a little better in the next town. There are more white kids there and they tend to be more sociable. My own kids, who are part Hispanic and part white, seem to be able to socialize with children of all races, but for the most part kids stick to their own ethnic groups.
The children here do NOT attend one another’s birthday parties, etc. Formal, structured activities are a little better; we take the boys to a tumbling class that is attended mostly by Iranian, Chinese, Russian, and Mexican children and the kids there get along famously. Also, there seems to be more mixture by the time kids get to high school level, but even then the Asians seem to hang with the Asians while the Hispanics hang with the Hispanics.
There is no racial tension here, everyone is nice and gets along very well, although some times there will be a minor fracas; for example, last year the student newspaper at the high school ran an opinion piece by an Asian kid who noted that while the school is 1/3 Hispanic, the honors classes have almost no Hispanics. Since this is liberal California, factually true statements are regarded as “controversial” and not to be spoken outside the faculty lounge. And I have had Hispanic people confide to me that Asians are “arrogant.” People here are very nice, though, so aside from issues like this there is no racial tension; it’s not like Compton where there are race riots at the high schools and black and Hispanic street gangs are at war with one another.
Still, though, all this diversity makes it very difficult to build a sense of community. The different ethnic groups seldom socialize with one another or participate in community institutions. There are some surprising areas of commonality — for example, when I was canvassing for the GOP in 2004 I discovered that my Vietnamese neighbors, most of whom do not speak any English at all and some of whom (I swear) still wear those conical hats like you see in old movies, were all fanatical Bush supporters; they did not approve of Kerry’s opposition to the Vietnam war.
But aside from that diversity tends to atomize people instead of bringing them together. Therefore, I can see the merits of a cookie-cutter tract home where the neighbors are just like me. It can be stifling, there’s no doubt about that, but it has its good points too.
This sounds totally off topic, but have you ever watched the history of Jazz by Ken Burns? (For all those actual Jazz fans out there, I know watching that documentary does me an expert…)
At any rate , it’s fascinating to watch Jazz progress from it’s roots as improvised dance music to the somewhat esoteric and choatic music of the after WWII era.
I really like early Jazz. There’s enough diversity and spontaneity to be interesting. The bass was not improvised and the music is restricted to relatively popular and danceable melodies. By the time you reach the 50’s and 60’s, however, there is both an increasing emphasis on virtuosity and further “freeing” of jazz from rules. At that point, jazz loses all appeal to me personally. There’s no common thread to follow, nothing but random notes that to me defeats the point of music.
I guess I’m saying that it is diversity is great up to a certain point, adding interest and variety. Beyond that point, it tends to choas.
>
Yup, diversity is …. Balkanization. I had a Korean coworker who described to me the pecking order of who it was acceptable for Korean-Americans to marry. Needless to say. whites were at the bottom of the “acceptable” list while blacks and Hispanics were on the “unacceptable” list.
Joe, another GOPer here. Speaking of canvassing, I was out going door to door in a cookie-cutter neighborhood and it cracked me up the way the vinyl siding pushes way in when you ring the doorbell. Now THAT just seems cheapo to me.
Lots of people move to MT for the homogenaity. Even when you’re not racist, it’s still sort of like going home again. I go to SoCal frequently to visit family and the people are nice but once an ethnic group gets to critical mass they no longer need to be very friendly or assimilate.
I go to SoCal frequently to visit family and the people are nice but once an ethnic group gets to critical mass they no longer need to be very friendly or assimilate.
Bievenido a la Republica de Aztlan. Para servicio en ingles, oprima dos.
I lived in a racially diverse apartment complex. Well it had no blacks and very few Hispanics, but it had lots of Indians and Asians. The Indians were the rude ones. You smile at them and they would never smile back - only stare. Some of the Asians were nice. But most of them rude (I’m white, and that’s probably the reason). Their children were nice, but the adults were rude. This was in Los Angeles. I know how you liberal whites marvel about racial mixing, and I think it would be a good thing (had some non-white girlfriends before), but mixing mostly does not happen. IMO, the whites have been the most accomodating, open, and accepting, while the other ones want no outsiders coming in. At my workplace in LA, the Asians were nice, but they too, prefer to be among other Asians. This is one reason I refused to become a direct hire at that company. I would feel left out and worry about not being given responsibility or opportunities in the work place. I know another white male (who was offered a position there) who told me the same thing. I’m much better consulting for that company, and I’m still doing it on the east coast at their parent company.
It’s not that non-whites are purposely being rude, I think that it’s that they have not learned the importance of saying “excuse me” and waiting your turn in this country. I noticed that those little things count big in America.
I understand what you mean by feeling left out. I’ve always felt that way growing up Asian in an all white suburban area. The same goes with work…..felt that I always had to work harder just to be recognized. However, it doesn’t bother me anymore bc I’m so used to it and have accepted it as a part of life.
What I have learned growing up in this country is that I’m more fearful of living among the wealthy and well-off than those who are poor. For the rich, it is never enough….so they continue on taking from those with less. The poor try to make do with what the rich people only allow.
There are just so many white-collar criminals/politicians out there today getting away with it. What’s disgusting is that they think that they’re so clever.
One day the time will come where each of us will be accountable to Him.
Merry Christmas everyone! And God bless!
A.B. Dada,
Are you in Bloomington?
I also like brick a lot, but I don’t like facades. This poses a dilemma for new construction, since there simply is no such thing as a solid brick house any more. Even if you’re going to build a masonry-frame house with a brick exterior, it would invariably be cinder blocks behind the brick (so I’m told).
Is there some other masonry material which is solid structurally and also an attractive exterior?
I don’t think structural brick houses have been built for a very long time. Even if brick is the load bearing material internal wood structure would have to be used for insulation spacing and sheetrock hanging, although you could do lath and plaster, or 2 x 2 stringers with gypsum board over. For earthquake reasons, loading bearing brick is pretty nuch a no-no as the risk of collapse is huge. Structural brick would also require more than a single brick layer, adding to expense. I really think that if you look at almost any brick house still standing that is used for a home you will find interanl wood framing. As far as masonry-brick, the exterior brick is laid on the concrete foundation and attached to the framed structure with steel straps that are embedded in the brick masonry joints; I don’t believe it is necessary to use cinderblock, although that might be more common in the south. My brother builds houses in Alabama and uses brick facade; the house is built and the last thing is laying the brick.
Thanks, SteveH. My house was built in 1902 and the walls are (I *think*) load bearing brick, while the floors are of course supported by wood joists. If you have a link or any more info on this, I’d be interested.
Our rural eastern Washington neighborhood is composed of comfortable retired folks, and educated but struggling young families with children. Our children play with the neighbor’s children at school, but rarely at home. Maybe it’s the weather — miserably cold or too hot, and always windy — no where close to California’s comfortable climate. Almost everyone we know around us was driven here by economic forces, most from California, but also some Portland - Seattle refugees too. Many can’t wait to leave, but mostly to be near family again.
Diversity’s great till your hubcaps are stolen and your daughter comes home pregnant at 13.
My daughter’s GS leader lives in a house like this. Big white columns in front and back. What are the columns made of? Marble, perhaps? No. Wood? No. Aluminum? No. Plastic? Same stuff my daughter’s sled is made from, I imagine. It feels the same anyway. Fake plastic shutters screwed into the vinyl siding. Only 1/2 of one side is “made” of brick.
(think they might be substantial, handsome houses. And then you see the vinyl siding and small, plastic windows on the side. They only look good from the front.)
I guess it beats 1970s and 1980s ‘modern” houses. Lots of money in the interior. From the street, it seems as if the occupants are mooning the neighborhood.
Fake columns, false fronts are to Botox and breast implants. Welcome to the fake America! Pretense is all that it’s about, and many people are so caught up in it that they do not realize it. Very tiresome. Where is the spirit of Diogenes? http://tinyurl.com/648h3
“And then you see the vinyl siding and small, plastic windows on the side.”
I don’t see any vinyl siding. All I see is stucco, and lots of folks who got stucco.
Yup, thats the California look. Our Escondido house did have some siding (the compressed board stuff) on the side that faced the street, bu the rest was good old stucco, with a few cracks here and there. A typical 1980’s SoCal house. Oh, and don’t forget the cracked slab. Of course, the majority of houses had cracked slabs, so no one really cared. Then again, those slabs made the houses feel cold during the SoCal winters,
We can see the cold, miserable crowds gathering in front of the White House already.
“Our children have no milk,” say the impoverished ones.
“Then, let them drink Diet Coke,” comes the answer from the West Wing.
Bwaaahaaahaaa…stop it….STOP IT….(snort)….you’re killing me…
There’s a Starbucks at 1730 Pennsylvania Avenue. Line was out the door last week when there was a fire in Cheney’s closet at the Old Executive Office Building.
Let then drink lattes?
They are better off without milk, that stuff is white poison. I still drink it, but just a little, and use it for cooking. but milk is flat out bad for you.
Only if your body doesn’t produce lactase.
Mine does; I’m golden. Btw, there seems to be a positive correlation worldwide between height and consumption of dairy products and beef. Just sayin’.
(Sorry if that came off as bratty–I don’t produce enough melanine to survive here in Florida, so I guess I have to make up for that shortcoming somehow!)
It’s not the lactose; it’s all the crap that is in the milk that you don’t know about. Anti-biotics, pesticides, wierd commercially made molocules that make you fat and give you cancer.
There is also a strong correlation between milk drinking and being a fatty-fat-fat-fat.
“height and consumption of dairy products and beef.”
I would say no, there isn’t. What there is is a correlation between lots of food and height. People like beef, and Americans drink lots of milk. That does not mean that milk and beef make you tall. Big’ol bucket of rice would do it too.
Big’ol bucket of rice would do it too.
Since we’re all throwing out anticodal evidence - no, a big bucket of rice won’t make you tall. It makes you short and potentially fat if you eat too much of it. We carnivorous ominvores with millions of years of evolution based eating meats and plants as they are found in the wild. Eating a big bag o rice, taken in the whole scale of our history, is a brand new food development.
The good part of milk is the highly digestible protein, which is why the Heifer project is in favor of a cow in every 3rd world home. I would drink it myself except I’m allergic to it.
Everyone who eats food dies of something eventually. None of us gets out of here alive!
*** “Food prices soar in America,” says one headline. The price of milk, we discover, has gone up nearly 25% since the beginning of the year.
We can see the cold, miserable crowds gathering in front of the White House already.
“Our children have no milk,” say the impoverished ones.
“Then, let them drink Diet Coke,” comes the answer from the West Wing.
BWAAHAAHAA …..I can’t take it…rofl…stop it….it’s too early in the morning…
Woops, double post…..
guess I found that REALLY funny….
Snort, chortle, water out of nose funny!
I bought eggs at Sams Club on Friday. Two 18 packs used to go for about $2.40. They were $5.60. Yeah, inflation is under control.
Inflation is contained.
“And there was no point in arguing with the people who were buying this garbage; they were geniuses and had the money to prove it! ”
Isn’t that precisely the attitude during the dot.bomb bubble? Brokers were forced to buy pets.com because they if they didn’t, they got fired. They had to make profit right this minute, never mind the lack of fundamentals. And they began to believe their own crap.
Great article on the “Wow” factor.
The internet bubble in the 90s was a liar’s economy. Lots of tech stocks that did not earn one penny and lots of bragging around the water coolers about how much their stocks were worth.
The years 2000 to 2006 again is the Liar’s economy. I would not call it an ownership society. I call it a Liar’s society - America. Valet parking attendents lying about their incomes to buy two or three houses, mortgage bankers making fraudulent loans, realtor whores cheerleading as FBs jump over the cliff. And this is not just realty that personifies lying. You can see lawbreaking on the streets in your city every day. People not using turn signals - a me first and the heck with you mentality. People driving 15 MPH above the speed limit, which is more often faster than the flow of traffic. People illegally crossing solid lines. But yes, this has been going on for decades, like cheating on exams in school, cheating on spouses. This real estate fraud only makes lying seem much more prevalent. For that, I wish for a major economic disaster to affect the liars only.
However, gold does not lie. The same amount of gold will buy the same material it takes to produce a $100 paper bill as it does a $1 paper bill.
2010 through 2017 could be very ugly. 2020 to 2030 will be the ‘Honest Society’? Just my prediction.
Unpaid Credit Cards Bedevil Americans- AP
Americans are falling behind on their credit card payments at an alarming rate, sending delinquencies and defaults surging by double-digit percentages in the last year and prompting warnings of worse to come.
http://biz.yahoo.com/ap/071223/credit_card_crunch.html
Skyrocketing property taxes leave homeowners struggling
http://news.yahoo.com/s/ap/20071224/ap_on_bi_ge/taxed_out
U.K. House Prices Fall the Most in Three Years
http://www.bloomberg.com/apps/news?pid=20601087&sid=afMkTTCHS89o&refer=home
Robert Weil close a marker of times
REAL ESTATE: Loss of local firm known for high-end listings points to drop-off in industry.
http://www.presstelegram.com/ci_7790380
Taste of hard times Once-thriving restaurants now face business slump fueled by housing market crisis
http://www.sacbee.com/103/story/586093.html
My friends, the trends are very troubling indeed.
Incomes have been declining for the past six years. Expenses have been rising. In some cases, expenses up over 100%
Trillions were generated as a direct consequence of easy money from the housing boom. Trillions more as an indirect consequence. Now the money is evaporating.
Not only that, banks and investors want to be paid back and there is seemingly little chance of success without massive defaults.
The consequence of rampant repudiation of debt has never been tested to this degree in US and maybe world economic history. How this plays out at this point is anyone’s guess. From this standpoint, it appears a bit ominous.
“‘Not only that, banks and investors want to be paid back and there is seemingly little chance of success without massive defaults’”.
THAT (there) is a telling statement!
Hindsight is 20/20…er…masters of the universe…er…greedy fracks.
OK. I’ll be nice. grrr…
Leigh
It amazes me that people can’t stop spending. I help people get out of debt (a free service I provide), and I mail them stickers to put on their credit cards that say “Don’t use me except in an emergency!” It actually makes them THINK before charging.
We run a huge CC bill each month (sometimes as much as a $30,000 new balance), but I focus on paying it off BEFORE the statement cuts. If you pay it off after the statement cuts, your credit report will reflect that balance as the current balance. I prefer to see zero-usage if possible. I still get the mileage credits (which come in very handy). We are moving to the Paypal debit card next year (I believe it offers cash back instantly on all purchases) and moving away from credit entirely.
I still prefer using cash, but the mileage is so tempting (I travel A LOT). For a year I used cash only, and we “saved” any cash or change at the $1 bill or lower level. I think we pocketed away a few hundred bucks a month in the ole piggy bank. My friends, even back in 1999-2000, couldn’t believe I carried cash around.
When I was in Vegas last month, I couldn’t believe how many people were using their credit cards at the ATM. The cash advance machine doesn’t process the charge as a cash advance (not sure how they do that), and the lines were always long. How hard is it to put together $1000 or $2000 in cash before a trip, and leave the CC at home? Our usual LV hotel (we go 6-8 times per year) has our CC on file, so we don’t even NEED to bring one. Charge food and entertainment to the room, and check-out on the TV. Simple, no way to blow the gambling budget either.
Also, our gas station always posts the winning lottery tickets from the previous week. Last year, there would be maybe 5 tickets with $25-$100 wins per week. Now there are 25-30 each week. I would guess that people are gambling 6X as much on the lottery (a loser’s game, but can be fun if you do it once in a while) because of the number of winners. I told the owner he should post the losers in the bathroom hallways.
The wife and I cut down on our smoking (about 30 smokes each per day), and we’re already seeing the financial benefit. She’s at about 6 per day, and I’m at about 10. Just in cutting back 45 smokes per day, we’re saving about $6 per day, or $2000 per year! That’s a cruise for both, or a long weekend in London.
By you and your wife cutting back on your smoking, you are also adding years to your life. Hopefully you will be around a long time for your family and friends.
Smoking is a tough one for me personally because I didn’t start smoking until my doctor offered it as a possible treatment for my ADD and my kidney stones. My stones were so bad 3-4 times a year that we tried everything (dietary changes, medication, other treatments). My 70-something doctor said that some people mentioned that nicotine may help, even though he is generally anti-smoking. I started smoking about 6 years ago, and hadn’t had a stone since then. My kidney stone support group also has “new” smokers who also haven’t had recurring stones.
When I quit 3 years ago (with doctor’s support), my stones returned within 6 months. Is it placebo-effect? No idea, but I do get worried that they’ll return if I give it up for good. I’ll get myself down to 5 or so a day and see.
Also, my ADD is VERY bad, one of the worst that my referred doctor had seen. Smoking was better than the drugs I initially tried, and has made my life more consistent. It was an odd side-effect after I started smoking that I was able to focus much better, and stay on track with jobs and responsibilities.
And yes, when I quit I did try the patch and gum for the nicotine, but the stones (and ADD) both returned.
It’s a bizarre story to say that you smoke because you were prescribed cigarettes, but it is also the truth. My wife and I both had smoking (she picked it up because of me), so we’re discussing ways to be accountable about finding my minimum and sticking to it. She’ll hopefully be done after our 3 week international vacation starting today (all patches, all the time), and I’ll limit my few smokes to my office or my workshop.
It’s a bad habit — yes, but it’s also one that HAS made my life better in the years I’ve been doing it. Go figure.
As for MGNYC’s comment below: I like gaming. It doesn’t cost me much money because I only gamble money I earn through my various websites and blogs. I don’t gamble to win, although in 2006 I was ahead almost $6000 because of a lucky win, and in 2007 I lost about $1500. We go to Vegas more for the shows, food and entertainment, and don’t gamble more than 2% of our household income for the year. Our stop-loss is $2500 annually, and in 5 years we haven’t lost that much. With my added web income (very passive income, too), I can’t imagine what I’d do with the money in terms of the entertainment we get visiting LV. Where else can you stay 5 days, see 3 shows, eat at 6 fantastic restaurants, gamble for 1-2 hours a day, and go home with the entire vacation costing less than $1500 for 2 people?
I can’t tell you how fascinating I found your posting because I always thought that as a child I had ADD…. I was so scattered as a kid that I have a hard time remembering certain childhood events. I suddenly became focused and had direction around the time I started smoking at 17….and each time I quit (several times due to pregnancy and just quitting) everything seemed to go in a tailspin…. I started again 2 weeks ago and feel on top of my game again. Hmmmmm…
Both your stories about ADD interest me greatly. (I’m currently studying school psych.) I’m a little surprised that a physician would label your problems as ADD. I don’t know of any psychologist or psychiatrist who still uses that term. (Actually, I know one, but he’s not very good.) My instinct says that you should both find someone who specializes in ADHD, with my semi-educated guess being that ADHD-PI is a likely diagnosis for Danni (attention problems minus impulsive behavior), but the gaming part makes me think impulsive behavior might be part of the problem for A.B. Daba. Again, I’m still just a student, so I wouldn’t take anything I say as gospel. It just strikes me that a doctor who uses an outdated term like ADD might not know what they’re talking about. Even within psych circles, you’d want to find someone who specializes in externalizing disorders, rather than depending on a jack-of-all-trades. Danni, your comment about memory loss was very interesting, as there is much new research (Russell Barkley) that suggests that ADHD has working memory (basically what you can hold in your mind at a certain point) as a core deficit. This, in turn, causes a range of other problems. It makes sense that nicotine would offer some relief. ADHD gets tossed about as if it is a minor problem, but the more I read about it, the more I realize it’s something people should take seriously. Psychopharmacology is way way out of my expertise at the moment, but I do know that there have been some strides made in drugs (particularly time release ones) for the treatment of the attentional problems. Good luck to you both.
And I’m not impressed by a student who ha a real bad case of “studentitis” where they think they know more than they do and that knowing and using the latest fad name for an illness or condition is a mark of experience, knowledge and expertise.
And anyone who thinks the pharmecutical industry is an answer to much of anything has a lot to learn.
AnnScott, I’m studying to be a psychologist, not a psychiatrist, so I don’t have an abiding interest in pushing for pharmaceutical companies. That said, I’m not ignorant of the need some people have for some type of aid. I’m just not sure nicotine is a great drug for a physician to be prescribing. But clearly you have other (uninformed?) ideas.
As to it being a fad diagnosis, as I said, ADHD is one of the most studied of all psychosocial illnesses. What I call it is not important. What is important is that these people have access to psychologists and perhaps psychiatrists who are experts in ADHD. How anyone could be dim enough to find this a problem is beyond me.
My point was your obsession with the NAME that a medical provider uses. That condition has had as many names over the past 20 years as a coondog has fleas.
Typical student. An experienced medical provider doesn’t use the name du jour and they are judged incompetent. That is very very arragont.
In case you hadn’t noticed, insurers do NOT happily pay for specialists. The whole focus in the healthcare indusry is to have GPs diagnose the garden-variety mental health conditions such as depression or attention disorder.
Wait till you get in practice. Insurers will scream bloody murder at paying your bill.
ADHD is not a name du jour. It is a specific diagnosis and your implication that it’s changed much over the years is an indication you don’t know what you’re talking about. ADD is not a diagnosis at all. No one with any experience in this field would use it. No one. It’s something that an uniformed reporter (or in this case, doctor) would use. That set off all kinds of warning bells with me, as it should have with anyone dedicated to psychology. As to your advice about insurance companies, I won’t be treating ADHD, so it’s really not an issue.
Lionel,
I thought your post was insightful, thanks for writing it.
Anyone doctor who suggests smoking as a palliative for a medical condition is already suspect. If nicotice is indeed indicated, nicotine patches would do far less damage than butts. Additionally, cigarettes introduce an array of toxins into the bloodstream, not least formaldehyde among others.
Besides COPD and emphysema, lung, throat and/or mouth cancers are likely. Suggesting that the poster seek a second opinion is rock-solid advice.
Thanks, Spike. I appreciate your thoughts.
Twenty years from now ADHD will be derided in the same terms by knowledgeable grad students of psychology as ADD has just been derided by Lionel. The modeling of human behavior is in its infancy.
just think if you did not smoke or gamble?
re: smoking
i’ve come to the conclusion that tobacco is the least harmful substance in cigarettes since i’ve been rolling my own for the past 15 years (bali shag red — moderately mild). i think the additives/chemicals used in commercial cigarettes are the real killers. seriously.
Agree that the added chemicals are probably the worst culprits.
OT, but I also have severe ADD and definitely noticed a significant increase in symptoms when I quit years ago when pregnant. Thought the worsening symptoms were due to pregnancy & hormonal fluctuations. Never thought about the nicotine effect, but my mind never did return to pre-pregnancy/smoking level.
I also have a friend (in her late 70s) who was told to start smoking to help with her anxiety. It worked.
Everyone, please distinguish the process of smoking from ingestion of tobacco/nicotine by other means.
“Unpaid Credit Cards Bedevil Americans”
Should also read “Unpaid Credit Cards Bedevil Americans and Credit Card Companies”
BTW, good morning everyone
the credit cards love this. they THINK they are “earning” $39 every month for the late payment and another $39 every month for the over limit. plus the regular 29% interest.
“Incomes have been declining for the past six years.”
What’s the source? How come federal income tax receipts have been rising (even this year)?
Now if you meant incomes haven’t kept up with inflation, that’s probably true.
I know this conflicts with the “everything is fine with the middle class” ideology but the fact is that incomes of the top 25% of income earners have indeed gone up. The bottom 75% have declined year after year for nearly 30 years.
When adjusted for inflation, the median income did not keep up for 5 years. In 2006, the median income managed to gain a whole $480 a year ahead of inflation. The kicker though is that gain was actually made by the households who were retired or who lived on unearned income. Wage or income earning households saw a decrease.
The data is all there in the US Census annual report on poverty, income and health insurance. Remember the 2007 report is for 2006, 2006 for 2005 etc. Go to the US Census website.
Here is how the income gains (not adjusted for inflation) break out by income groups. This is from the annual Congressional Budget Office’s “Historical Effective Federal Tax Rates - it was released about a week or so ago.
Here’s what the numbers say about percentage gains in after-tax income from 2003 to 2005:
Bottom quintile which is up to the 20th percentile with incomes up to $23,000 - Gain = 2%
Next quintile from the 20th percentile to the 40th percentile with incomes up to $36,000 - Gain = 2.4%
Middle quintile from the 40th to the 6oth with incomes up to $57,000 - Gain = 3.9%
Fourth quintile from the 60th to the 80th with incomes up to $91,700 - Gain = 3.7%
Top quintile from the 80th to 100 percentile with incomes ABOVE $91,700 - Gain = 16%
Top 10% with incomes above $123,000-Gain = 20.9%
Top 5% with incomes above $157,200 -Gain = 27.7%
Top 1%: with incomes above $402,000 - Gain = 43.5%
Now within the top 20%, as the data shows, the gains were heavily loaded towards the top 10% so those in the 80th to 90th% had far less income gains than those in the 90th to 100th%.
Bottom line is that if you are not in the top 10%, you are falling behind. The offical inflation numbers in 2003 -2005 were about 2 -3% every year for a total inflation of around 7.5%.
The top 6.37% of households earn 33% of all income in the US.
The 2006 Economic Report of the President shows that the real earnings of college graduates actually fell more than 5 percent between 2000 and 2004.
And a little more data about income gains:
“A new research paper by Ian Dew-Becker and Robert Gordon of Northwestern University, “Where Did the Productivity Growth Go?,” gives the details. Between 1972 and 2001 the wage and salary income of Americans at the 90th percentile of the income distribution rose only 34 percent, or about 1 percent per year. So being in the top 10 percent of the income distribution, like being a college graduate, wasn’t a ticket to big income gains.
But income at the 99th percentile rose 87 percent; income at the 99.9th percentile rose 181 percent; and income at the 99.99th percentile rose 497 percent. No, that’s not a misprint.
Just to give you a sense of who we’re talking about: the nonpartisan Tax Policy Center estimates that this year the 99th percentile will correspond to an income of $402,306, and the 99.9th percentile to an income of $1,672,726. The center doesn’t give a number for the 99.99th percentile, but it’s probably well over $6 million a year. ”
The 2006 Treasury report showed 32% of the Bush tax cuts went to the top %1. 53% of the tax cuts went to the top 10%.
Tax revenues are rising because the incomes are rising - at least for the upper 10%. Now for those in the upper 5%, a fairly good portion of their income is unearned income (think Wall St bonuses which are treated as investment income.) That means it is taxed at 15% because of the tax cuts. If the tax cuts had not been made, that unearned income would have been taxed at a higher rate and generated at least another $400,000,000,000 to date. (Now that would have been most useful for the deficit and the interest bill from the Chinese.)
All this data is there in the US Census reports, the Treasury reports and the Congressional Budget Office reports – you just have to know where to look and how to pull out the numbers from the sources.
Is that enough of a source for ya, Bill?
Thanks, Ann!
I’m a dyed-in-the-wool policy wonk who actually gets excited when the annual poverty & income report comes out in August and my Xmas present is the annual CBO report on effective tax rates.
My poor husband walks out in the AM to be greeted by such causal conversation as ‘Oh dear, the CPI is up and being driven by inflation orginating from goods which have a fairly inflexible demand and when that is combined with the deflationary effects of the credit markets…..” And the poor dear hasn’t even had a cup of coffee yet. (Is that grounds for divorce?)
LOL. Ahem…you don’t happen to have a daughter or sister cut from the same cloth, do you?
Sorry sugar. Only 1 sister - an investment banker - who has been married to the same guy for 30 years. (When we were kids, she use to charge me a 100% interest a day if I borrowed a dollar from her.) Don’t think my 2 nephews will fit the bill.
AnnScott’s outline of YOY income changes is much appreciated. Sometimes I wish there were a blog devoted to such issues. I have minimal trust in the govt’s inflation figures, however. A small change in the inflation figures would skew real personal income greatly.
Now add to those income gains
Dividend tax cuts which help the top 1% much more than others, and factor in the affects of AMT on those in the 60th -98th percentile and you’ll see just how severelly the middle class and upper middle class is getting hit. When they say they want an ownership society they mean they want the top 0.1% to own society.
And the market is up.
wmbz,
This describes the cause of the Housing and Credit Bubbles quite well, thanks for the link.
“Many of the derivative contracts they sold to others, and sold to themselves, were never ‘marked to market.’ Instead, they were ‘marked to model,’ mathematical models with deep, obvious flaws. Worse, many were ‘marked to make-believe’ in a way similar to subprime mortgages themselves. The borrower lied about his income, his assets, his age, his employment, his marital status and how many points were on his driver’s license. The appraiser lied about the value of the collateral. The lender lied about the terms and conditions of the loan. And then Merrill, or Citigroup (NYSE:C), or Goldman (NYSE:GS) lied about the quality of loans generally…and Moody’s backed them up!”
Then again in the Wow Factor
“The homeowner lied about how much he earned or how much he had; the appraiser lied about the value of the collateral; or the mortgage company lied about the terms of the loan. Sometimes all of them lied to each other. And then, along came the Wall Street packagers who told more whoppers. Bundling up thousands of fraudulent mortgage contracts they somehow managed to get the stuff rated “investable” grade, a lie so spectacularly in-your-face it practically knocked your nose off.”
The questions remains is how will our political illuminatti (both sides) react to the pain that’s headed our way? It seems evident that whatever they do will be too little, too late, and will stretch out the much needed correction for years.
My question is where to park my money while all of this happens?
Merry Christmas to all,
Lip
I am not sure it is mathematically possible to stretch out this correction much longer. We went “all in” with housing to stretch out the dotcom excesses.
There is not more you can leverage at this point to keep the bluff going. Private equity is pretty much over and a lot of public money will be lost in the process.
It is plain and simple. In past boom/bust cycles, there was never the debt overhang the world currently faces. In the past, we got rich, we became poor again and vowed to know better next time. This time we borrowed trillions upon trillions and have little capacity to pay it back.
I believe this is what is called a solvency crisis. This one happens to be the mother of all solvency crises and few really are aware of the magnitude yet.
In addition, because of the debt overhang, we have created a multitude of moral hazards by trying to bail parties out. Somebody screwed the pooch but is not telling. Now we will have to see what the litter looks like.
charliebrown,
I agree and have a question. When you say “Private equity is pretty much over”,
What do you mean? The private equity in our hands is miniscule compared to the mountain of debt?? Or that it will all be eaten away by the correction??
Thanks for any help, I have a 401k and I need to find a safe place to park it.
Thanks,
I asked the same question a while back. I don’t think anyone really knows.
At this point, I am not sure anyone knows how this plays out. Nor can anyone really know what is “safe.”
If you bail out borrowers, which ones and what attitude do you create for future borrowers. What interest rate will have to be charged for higher risk of defaults?
At this point, adding in corporate debt, home equity loans, first and second res mortgages, commercial RE debt, consumer revolver debt, and municipal debt, we are likely looking at over $25 Trillion dollars facing potential impairment. That number is about 1.5X the total value of the stock market with a higher liquidation priority than equity.
IF I AM RIGHT, WE WILL REALLY START TO SEE THE MSM PICK UP ON THIS STORY VERY SOON. IT IS PEOPLE LIKE BEN JONES WHO GAVE SOME OF US A HEADS UP AND A FORUM TO TRY TO FIGURE THINGS OUT.
At this point, it’s like trying to bail water out of the Titanic with a spoon. No matter how many spoons you have, its too slow to stop the ship from sinking.
we are likely looking at over $25 Trillion dollars facing potential impairment
If you print enough dollars to cause hyper-inflation, and then replace an old worthless dollar with a new improved version at a ratio of 10000:1, then 25 trillion impairment in old dollars will become a meager 2.5 billion in new dollars. ::gulp::
international stocks, oil stocks, anything commodity or natural resource related.
I’m 48. 401k? IRA? I’m fully investing into stock mutual funds, as I have done since 1989. It’s money I do not expect to tap into for at least another fifteen or twenty years. Outside tax deferred plans, I’m very safety conscious, that’s why I mainly buy government securities and precious metals bullion for cash outside my retirement plans.
Hi Lip. Last year I decided to change my 403B allocation to underweight stocks and overweight cash and bonds. I made the switch in Feb-March 2007 and have slept well since. Of course I’m ten years or less from retirement. If you’re young, you might feel differently. I missed the Dow peak of 14000 this summer, for example.
I am thinking of the “Cokes and Smokes” safe heaven. I haven’t bought any yet, but parking my money with the Altrias, Cokes, and P&Gs of the world may be a good idea it seems.
People still got to have their smokes, drink their cokes, and brush their teeth.
I think they call those “Growth Stocks” they generally have higher PE ratio’s so you pay more for them. I also switched from “Value” to “Growth” for the same reasons.
Value was doing great last few years but I bet its run is over.
Breakfast anybody?
http://bp2.blogger.com/_wFWqWIH-WFU/R20zxJefX2I/AAAAAAAADM8/eW0m6X105b4/s1600-h/55802_CaptCrunch.jpg
In an article proposing more aggressive bailout measures:
Bair says she understands that many Americans believe it’s unfair for the government to help borrowers who knowingly took on loans that later proved unaffordable. But she says the problem has become so big that it affects more than just those borrowers.
“Even if you don’t have sympathy for the borrowers, have sympathy for the neighborhoods and the communities,” she says. “There are not a lot of good options here. We just have a very bad situation, and people needed to make some decisions.”
http://www.latimes.com/business/la-fi-sunprofile23dec23,0,5993755.story?coll=la-home-business
—————————-
My take on the above quote:
It is not foreclosures that cause neighborhoods to decline. It’s the fact that banks take too long to complete the foreclosure process and SELL the properties to people who intend to live in them. They sit with their wishing prices, complaining that there are no buyers. Hogwash! Plenty of buyers are sitting right here, but NOT at these bubble prices.
If there is to be any intervention, force the banks to sell the homes within 90 days (or less?) of finalizing the foreclosure. If they fail to sell the homes, the “new govt entity” will take over and hold regular “no reserve” auctions to get the houses sold. Whatever they make, the govt takes a share of the proceeds to cover costs (and — gasp! — maybe even make some profit) and gives the remainder to the banks/bagholders.
The FBs deserve no sympathy, but the communities might. This way, the problem would be solved and everyone could quickly discover the TRUE value of their assets (CDOs, MBSs, homes, etc.).
Thoughts?
If there is to be any intervention, force the banks to sell the homes within 90 days (or less?) of finalizing the foreclosure. If they fail to sell the homes, the “new govt entity” will take over and hold regular “no reserve” auctions to get the houses sold.
On the surface, that’s a great idea but by the time some pol gets a hold of such a plan it would somehow get perverted into something that we pay for.
Death and taxes…..you know the deal.
Legally impossible. Lender can hold the property for 100 years as long as they pay taxes and the property doesn’t turn into a hazard (like mosquito infested pools & the likes).
At that point it might be possible to legally force the current owner/lender into “action”.
“Legally impossible. Lender can hold the property for 100 years as long as they pay taxes and the property doesn’t turn into a hazard (like mosquito infested pools & the likes). At that point it might be possible to legally force the current owner/lender into ‘action’.”
Not true. Bank regulators don’t like banks to own REO’s. In the early 90’s they were forced to sell them. Sooner or later that will be the case this time, too. Otherwise, hello Japanese-style real estate depression.
Maybe this is a good place to use that hated all-encomapssing Eminent Domain. Why not? Cities bulldozed established neighborhoods so developers could build insane condos. Now, get these lousy condos catagoized as Blight and tear them down, just like any inner-city slum. Turnabout is fair play.
Has anyone ever actually seen a “bank regulator”? Do they have just a single horn on their forehead like in the stories?
I believe they have two horns situated on top of the head right above the eyebrows. Once in awhile, when the wind is blowing just right, the hair is lifted (for those that have hair) just enough to see the horns. Of course most people that get a glimpse of what a bank regulator really looks like will put it down to their eyes must be playing tricks. However, we the HBBers really know the truth.
I guess that’s the point, Mike. If houses are sitting empty, deteriorating, attracting crime, varmints, etc. it is a hazard. That seem to be Sheila Bair’s contention & her reason for why we need taxpayers to bail out Wall Street, banks and assorted bagholders. She’s playing the whole “foreclosures make everyone lose” card (also used repeatedly by Paulson).
This is my answer to her “problem” of foreclosures causing neighborhoods to decline. It’s not foreclosures, it’s empty, unattended homes that are the problem. By forcing lenders to expedite the sale of these homes (to people who will occupy and take care of the homes), Bair, Paulson, etc. can no longer use that as an excuse.
I have a solution too - banks should allow anyone with a credit score over 700 to rent the foreclosure for one year for the cost of insurance, maintenance and property taxes. Properties are taken are of, taxes paid, neighborhoods don’t decline, and me and my monsters get a decent place to live.
Too bad I blew my karma so this will never happen.
Agree!
CA,
Thoughts?
Bull dozers. Clean descruction method of said waste!
Leigh
The banks would all be officially insolvant instead of only effectivly insolvant.
Such a mechanism already exists; it’s FDIC receivership. If the bank holds too much REO and has too many non-performing loans it will become insolvent. At which point the FDIC will step in, wipe out the owners, and sell off the assets. If after reimbursement for expenses and the payoff of insured depositors there is any money left it will go to the bank’s general creditors.
Unfortunately it is not banks that own most of these deteriorating eyesores. They have been securitized and disappeared into the ether.
While I may have sympathy for neighborhoods and communities not my own, I am already paying taxes to my local community, 85% of which goes to pensions, benefits, and salaries the majority of taxpayers can only imagine.
But I chose to live here, in a community, putting up with the unhipness, bad weather, and all the other drawbacks of living in flyover country.
Now I’m expected to also pay taxes to other communitites to preserve those local government workers, they who are so smug about the uncool place I live?
(It is not foreclosures that cause neighborhoods to decline. It’s the fact that banks take too long to complete the foreclosure process and SELL the properties to people who intend to live in them.)
I agree 100 percent, and here is where action is needed. First, ruthless code enforcement by local government. Maintain the properties if the “owners” won’t, and rack up so many liens that the “owner” agrees to just walk away.
Second, make them write it off. They are holding the property rather than renting it so they can avoid writing off the negative carry, and holding it rather than selling so they can avoid writing off the capital loss. SELL AT MARKET.
The only other intervention I can see is one to make sure conventional loans remain available at conventional metrics, if such loans are in fact under threat.
I posted that love letter from the LATimes to Bair yesterday, and found it nauseating. Check out this lead statement….
“it was at an investor conference in October that Sheila C. Bair made her stand.”
October?? So what was Bair doing during the run-up? Had she any thoughts in August? How about a year ago? The FDIC is understaffed, and is not sufficiently funded to handle a major bank collapse. But did Sheila pay attention to the RE development and construction loans being made by smaller banks, and how leveraged their lending books had become? Apparently not. Only after the Northern Rock run on the bank in the UK, and the meltdown in August, did she have an inkling. And then she waited until October to say anything.
What an impressive performance. Not.
I might have lifted the link from your post, spike…just too lazy to go back and find out who posted it. Credit to you.
Yes, funny how she was getting so much credit for being “ahead of the problem.” WTF????
No problem, CArenter, just glad someone else noticed that the fawning by the reporters at the latimes is ridiculous, considering the oversight this dimwit neglected was what she was empowered to do.
This sent me up the wall.
http://dallas.craigslist.org/rfs/517964254.html
This is my neighborhood. This place is 70 years old, half the size of the numerous McMansions in the area, and priced higher than them. The owner is obviously a moonbeam who doesn’t read the papers. The tax appraisal is 460K and this clown is trying to get 50% higher than that. Did I mention this place is only 2000 square feet? This is Dallas for chrissake, not Los Angeles!
WHERE DO THESE PEOPLE COME FROM?
Givem a break - this is a “one of kind house with soul” - “organic and private” - who wouldn’t jump at the chance to pay a mere $699K for all that?
Can’t you see the aethetics and the ambiance? Those have to be worth something, don’t they?
BTW, TXC thanks for all your posts this year. I always try to read the articles, but when you, Hoz, and some of the other knowledgeable folks start talking about puts, going short, et all, I just can’t comprehend it all no matter how much I read. Anyway thanks for your contributions to this blog.
I need to look at that again…my eyes aren’t in focus…did that say $699K…huh….for what???
But the cowboys are playing well and will have a new stadium.jessica simpson is in the house with flaunting her huge chest.I guess you have to pay up for all that in dallas.
The Cowboys haven’t played in Dallas since 1971.
Is that some kinda above ground walk way in those pictures? Where the heck does it go??
re: jessica simpson
i thought she was pretty cute in “employee of the month,” which was a funny take on a failed dot.com entrepeneur forced into walmart serfdom. hmmmm.
They come from Los Angeles.
They come from “The Land of Augmentation.”
Or Beemerville
Or “Heloc Heights”
Take your pick, I’m sure there’s more.
I like that “Heloc Heights.” Very funny!
That’s not a one-of-a-kind house. It’s a mass-produced version of uniqueness, like it was specially made for HGTV to show when everybody else got tired of granite countertops.
And for 700K you can buy a lot and build pretty much anything you want, anywhere.
on june 04,2007 i bid 25 cents on the dollar for a countrywide reo.
since then their stk is down from $40 to today’s less than $9.00. in the meantime, they have dropped the price of this appraised home from where i bid by 2.3%. CFC’s stock is declining faster than they will lower their inventory prices. hopefully, i will get a shot at the same property from the next bankruptcy holder, if it doesn’t burn down first. And i notified the Fire Chief of that possibility.
Your comment illustrates the benefits of short-selling as opposed to real estate investments.
Does anyone in their 30’s + think that possibly they won’t buy in the event this thing takes too long? If it takes a 15 year Japan-style grind to hit fundamentals, I’m not sure I’d buy in 2023. Renting sucked until I found a rental that mirrored what I would buy; now life is pretty damn good.
Another note: my wife is now on board, which means renting for 10/20/life is entirely possible.
We’ve been renting for 19 years. It’s no big deal.
but tx you are not building equity
merry x-mas
Sure I am. In my brokerage accounts
Maybe so, but I feel buying is still a better option, IF the buy-rent ratio is low enough, and you include taxes/repairs etc in the calculation. Yeah, I’m making interest on the difference between the rent v. mortgage payent, but if buying comes down to the cost of renting, I’ll buy. As long as I break even, I’d at least get some of the payments back in the form of cash when I sell.
However, nothing will induce me to buy a condo with an exhorbitant condo fee. That’s really throwing money away.
No flattery intended but I’m becoming more and more convinced that the shrewdest and wealthiest among us rent or lease. The further along in this thing we get, the old worn out standbys and expressions related to residential housing gives me the impression that housing is a major loss for the end user. Think about it….. Who the frig pays retail for anything and comes out ahead in the end? I don’t mean to start a debate on whether housing is an performing investment but unless you’re GCing the structure or doing the site work, it’s a damn loser.
It suddenly came to me last week that a major driver of this is people’s desire to keep their 2 big dogs and 4 cats, and landlords do NOT like that scenario. Someone on a moving board asked for help moving here to MT, had all sorts of pets and I thought I’d never rent to someone who insisted on all that baggage. Problems, always problems. People need to grow up.
Oh you would rent to me. My crew are:
(1) retired Service Dog who is now 17
(2) now-working Service Dog who is 4, 29 ” at the shoulder and 115 lbs (and the ADA says you will take him no matter what)
(3) retired AKC Champion show dog (uncle of the Service Dog and I ended up with him 18 months ago when his co-owner was killed in a car crash.)
I have standing offers around here from people who have a house or two which they rent that if I get bored with this house or want something bigger, to let them know. Everyone knows my guys and find it very amusing and amazing that a 98 lb woman can make a hand gesture and over 300 lbs of dogs execute a command without a word being said.
Easy criteria on pets. Just ask the owner if they have ever competed the dog in AKC competition in real dog shows - either conformation, obedience or agility.
The exception that proves the rule? We’re in a college town, and it seems like a freshman no sooner rents place than they go and acquire 2 big dogs. And no, not AKC type dogs.
“Who the frig pays retail for anything and comes out ahead in the end? ”
I started laughing as around my village where the polite people call me ‘frugal’ but I cheerfully own up to being ‘cheap’, everyone can practically recite my favorite line which is
“Only a fool pays retail”
I did have to pay retail for something last Friday and nearly had a stroke at the price. My leather watch band was falling apart. Normally I would just go on Ebay and pick one up for $3-5 including shipping. Decided I couldn’t wait 2 weeks with the Xmas mail so off I went to the jeweler. (Only choice around here for leather watch bands.) I was expecting maybe $10 max for the watch band. It was $22! Ohmigod!!!
Not having set foot in a mall for over 9 years, I was less than clueless about retail prices. If God had meant me to go shopping, she wouldn’t have invented Brooks Brothers and UPS.
Where in Leelanau county can you buy all your food wholesale?
Yep. We’re willing and able lifetime renters, if need be.
Not our preference, as we’d like to build our own home exactly how we want to, but there is no good reason to buy if the PTB continue with their plans to keep housing priced at totally unaffordable levels.
Merry Christmas to Ben & all the wonderfully insightful & intelligent HBB’ers!
My husband keeps saying that even if the prices come down, he can’t help but wonder if the property taxes here won’t kill us in the long run anyways…..
Danni…. Carrying costs are the key point in the northeast. I think you said you hailed from LI. Unless the system stops shifting the tax burden to the working class and reverses to where the burden ought to be, the northeast is beyond hope. I’ve never seen property taxes go down in the N.E. and considering the fact they’re just plain oppressive right now, I have no doubt that we’re in for tough times here.
After 23 years of marriage and previously owning 2 homes, wife and I are happy renters for the last 2 years. It would have to be an exceptional location, great landlord, etc, but I do not feel the “need” to own another home. Or pay the taxes. Or the insurance. Or the upkeep and repairs. Or…
Muggy,
I’m 36. My wife and I sold our CA home 16 months ago. We’re now building our dream house on 65 acres in the Midwest. I expect the new house and property to be our family retreat until I die. It’s too strange and large to ever sell. But if I work in CA again, I’ll just rent. We can afford to buy, but I see no point to paying more than a property is worth and losing the ability to sell it at will. Renting will work just fine.
Have fun paying taxes on the non-performing dirt.
The problems with buying a home (in Miami) are numerous.
a) declining prices, don’t want to pull the trigger too early
b) renting is cheaper
c) renting keeps you more flexible in case you have to relocate due to job demands. In my case twice in the last 10 years.
d) renting is less headache. Roof leaks, water heater breaks, termites eating throught the walls, pipe bursts, etc. it’s all the landlord’s headaches, not mine.
e) Property tax time bomb. Here in FL we don’t have an income tax. All revenue is generated via sales tax and property tax. Our politicians need extra $$, first one they turn to is Joe homeowner. That poor sucker has to pay or “they” foreclose on his house. In Florida you have to be a fool to buy a house. In states with an income tax and low property taxes things might look a bit different.
Will you good folks lock my husband in a closet and promise to give him sunshine once a week?
Wack him with a carp?
I’ll pay for the upkeep!
Please?
Leigh
I’ll let you in on the secret that worked with my husband: buy a fixer-upper and make sure you are too busy to help. It only takes a few years before renting for life seems like a dream come true.
HA! If only ~
He’s a perfectionist, and LOVES that sheet!
Spare closet?
Leigh
I have extra kennel space here. You will have to box him up and ship him out. Has he had his shots? Is he house broken? Get back to me on that.
I have extra kennel space here.
He’s big and he bites! LOL!
You will have to box him up and ship him out.
Can I fly him instead? HA!
Has he had his shots? Is he house broken?
Check, check. (Perfectionist).
Get back to me on that.
Shucks, I’ll just keep the handsome devil and hide the checkbook!
Merry Christmas!
Leigh
Bwahaha. My wife actually enjoys remodeling here in the states. I think it is theraputic for her after working on our devil house overseas every few years.
We are getting ready to do more remodeling /repairs on our vacation home overseas and the preparation is driving her wacko. She has problems sleeping due to all the problems of attempting to manage shifty people from 14 time zones away. I’d be happy to help but I don’t speak the local language much, and being a “rich American” I don’t have any hope in bargaining with contractors. My only job is hugs, calming words, and sitting down to signal the meals should begin.
This trip won’t be as stressful for her as the last one (a total remodel), but I hadn’t considered whether she will come back more inclined to rent here afterwards… perhaps a beneficial trip after all!
We are getting ready to do more remodeling /repairs on our vacation home overseas and the preparation is driving her wacko. She has problems sleeping due to all the problems of attempting to manage shifty people from 14 time zones away.
Wow! Sounds like a great vacation home! Run of the mill time shares merely take your money. It’s hard to imagine the added luxury of being fully responsible for unmotivated contractors 1/2 a world way.
I know that some will disagree, but it does come down to location, location, location. I moved back to Pittsburgh and found a house that was slightly more than 3X income of the area. If I took this property and plopped it back where I moved from it would be 10-15X income easy.
I know, I know most people don’t wanna live in Pittsburgh hence the lack of bubble prices in most areas around here. At the very least I can now afford to have a family on one income, which was nigh on impossible in California.
Santacruzsux,
Santacruz sux if you didn’t buy a house over 10 years ago. My aunt used to own a house in ScottsValley. It was very large and nice. They paid $127k about 15 years ago. It shouldn’t be worth more than 200k now–but I’m sure it would list for over a Million.
Though I eat breakfast at Zack’s every few weeks and I enjoy the ride up the coast to 92, I’m over the whole CA thing. The enjoyment I get vs the cost is no longer justified.
And having visited Pittsburgh for work a few weeks ago, I completely understand your move. All the best.
Yes, I have been enjoying it here again. I had a chance to buy in Santa Cruz after the ‘89 earthquake, but as I was just starting out $139,000 was pretty steep for a small two bedroom of King Street. The place is now at least $700,000.
The ‘Burgh is a pretty cool place, but I do miss all the great breakfast places in Santa Cruz. Heavenly Cafe, the Sunrise, Zachary’s, Linda’s etc. Breakfast was definitely the meal in Santa Cruz.
I like Pittsburgh, santacruz. It has a lot to offer. You’ll just have to sacrifice the good weather and the ocean views. You could do a lot worse.
We’re 33 and we owned a house for 7 years (10 if you count our condo). We’re okay with the possibility of renting for life. Like CA renter, we would probably want to build custom in order to get the house we wanted. If prices don’t come down to make sense to build, renting is okay in our book.
Owning a “fixer-upper” has pretty well convinced us of the luxury of having a landlord fix things when they break. It’s also pretty sweet to think that if life changes, all we need to do is wait out the lease or simply break it and move on. After signing mortgage papers for a decade, I had forgotten how simple leases were. Very nice.
If things unwind slowly enough, then people may be stuck becoming renters long term.
Once you are committed to an area, however, there are benefits to owning — one is more a part of the neighborhood. It’s a whole different attitude.
Of course, it’s “different here” in Brooklyn. Here people really do know their neighbors, less true in some other places. Here renters can get priced out forever, elsewhere you can consider yourself a long term resident even if you rent. Here there is a large enough job base that one can be sure of spending one’s entire career just getting off different places on the subway. Elsewhere one might have to move for a job.
I guess a difference is that I have lived within three blocks of the house I now own since 1986, and expect to be here indefinately. I don’t think that’s the American way. Strange that such a mobile country also has a high homeownership rate. It doesn’t go together.
“there are benefits to owning — one is more a part of the neighborhood. It’s a whole different attitude.”
I disagree with this. I’ve always been a renter in Manhattan and very much part of the neighborhood. Course I have dogs, and dog folks are always running into each other at dog runs or chatting while the dogs sniff each other, not to mention all the volunteer work and fund-raising for Riverside Park. Neighbor is one of the garden people–the volunteers who do the same fund-raising and grunt-work in Central Park. How would you pick out the owners from the renters in either crowd? Manhattan is home to an army of lifetime renters. Your owner’s bias is showing.
yeah, spike, but manhattan really is different wrt to a rent-stabilized apt, where the renter is virtually protected for life.
otoh, a co-op board can actually evice an owner (force them to sell) as simple as canceling a business contract. most people don’t realize this, but it is now settled law. a renter is SAFER than a co-op owner in nyc.
I have many questions this morning:
1. Is there anyone prepping? I occasionally check those sites and never given that attitude much credence; however, it’s not too hard for me to imagine a 6 months supply of basics as a good idea. This isn’t really a financial issue, more an “Am I really that guy?” issue. Has the bubble pushed anyone into prepping?
2. Subset of 1, does anyone see AG as the next gangsta bubble? Factory farming and corporate welfare for this type of activity seem to be reaching fever pitch.
Prepping for what? (Seriously…)
Usually just food and water. I have enough for a few weeks (Florida hurricane style), but some people keep 6mos + supply
So to answer your question: prepping for disruptions and price-spikes in the food supply. It’s usually predicated on some sort of natural disaster or terror attack, but now I’m seeing how there could be issues as a result of the economy. I currently pay $5 a bar for my fav cheese at Publix. If it goes up one more freakin’ cent I’ll stop buying.
Anyway, I’m neither predicting nor sounding the alarm, just putting out a feeler to see what other people think. I will say that it isn’t hard for me to imagine food being the next necessity that gets gamed to hell like housing.
It’s already laid in here, as a result of the media hyperventilaion over the coming bird flu pandemic last year. A lot of our Y2K stuff had finally spoiled so we had to restock.
If you have a supply of food and water, for Gosh Sakes, DON’T TELL ANYONE! Otherwise, if there’s an emergency, our government will take it away from you with force, and give it to people without food and water who may be more politically important to them
And if you think I sound crazy, consider the “Deadbeat Specuvestor tax relief act of 2007′ that Bush signed in to law last week. That simply confiscated money from taxpayers to cover people who chose not to pay their mortgage debt. There’s little difference.
“does anyone see AG as the next gangsta bubble? Factory farming and corporate welfare for this type of activity seem to be reaching fever pitch.”
AG has been in gangsta mode for a long time. AG needs a huge clean-up. The misery that has been visited on the US by the AG business is not to be underestimated, going back to the Civil War, and it continues to this day. The sleaze of the AG business has been cloaked in the noble goal of “feed the people”. But when you think about it, the AG business has brought bloodshed and racial/ethnic problems to the US over the decades on a mass basis, first by importing slavery and now by importing illegal labor, all in the name of “profit” for the massahs. Not only that, but now, instead of the AG business being responsible for providing the housing and care of their personnel, they have forced the American taxpayer to provide subsidized housing, education, health care, and welfare for the labor. Betcha the plantation masters wish they could have figured that one out.
Also AG business couldn’t exist without the backing of our spineless Congress.
Nice post palmetto. I had never thought how the illegals were just the 20th/21st century version of slave labor.
Bill, please tell us you’re joking.
Excellent post, palmetto.
“Has the bubble pushed anyone into prepping?”
Good ol’ fred has gone off the deep end.
You have to ask yourself what is wrong with a financial system that allows real estate to double in less than 5 years. An understanding of the implications of the compound interest formula and the unlimited creation of credit and debt will lead you to the realization that a financial crash of epic proportions is highly possible. The assets that are easily financed and leveraged, e.g. real estate and stocks, will deflate. Credit will cease to be available and debt will be destroyed, and this is happening now. It is a fact.
You then ask yourself, where do you hide your stash, and how do you protect yourself? Ask as well, do you trust the government not to take your savings via inflation or more taxation. We know that over $50 Trillion in unfunded liabilities is coming due and Fedgov is essentially bankrupt. It is a fact.
You also know that a 3 day supply of food is in the distribution pipeline, the electrical grid is old and falling apart, and the banking and related insurance systems are undercapitalized. These are facts.
So, yes, I have a substantial percentage of my net worth in physical cash, gold and silver, while the rest (except for trading/gambling cash) is in short term Treasury Direct. I also have a year supply of Mountain House #10 cans, various assortments of firearms, 2 generators and am currently planning garden construction.
Finally, I’ve cashed out IRA’s and am paying taxes and penalties to protect from further limitations placed on those types of accounts and will invest in more PM’s on dips.
Lord help us.
SUPPORT YOUR LOCAL MILITIA!
Oftentimes, what sounds crazy is what comes to pass. Don’t discount the forward-thinkers, even if it seems a bit extreme at the moment. Some people are better able to connect the dots and look further out into the future than others. It does not mean that they are crazy, uninformed or “tin-foil hat.”
Yes, they might be wrong, but consider that they might also be right.
If things get to a worst case scenario (looks even more probable than run-of-the-mill bears were expecting), we might see small, well-armed farm co-ops. Extreme, but not impossible.
The #1 most important thing we all need to remember for this election is to make sure no anti-gun politicians get in. The first thing a malevolent government does is disarm the people. Think smart.
From Phoenix:
“A major Valley real estate broker shut its doors just days before Christmas, leaving 350 agents without a home, and about 20 salaried employees without a job.”
http://www.azcentral.com/business/articles/1223remax1223.html
“Bruce Fraser, an agent with RE/MAX 2000 in Gilbert, said Sunday the company held its Christmas party about two weeks ago, and there were no signs the broker was in trouble. “I did not see this coming,” he said.”
All those FOR SALE signs around town didn’t portend choppy waters?
The air goes out of the balloon.
Re/Max leaving PHX metro!
http://www.azcentral.com/realestate/articles/1223remax1223.html
“RE/MAX 2000, based in Gilbert, is closing its 13 offices around the Valley.”
Guess the Spring bounce has been called off.
Dude wait til the superbowl is over and things will be booming again.I’m going to buy ten homes in casa grande.
They should have laws against people like you arizonadude. You’re trying to monopolize the market, and we all know that is bad because they’re not making any more land in Arizona, and with housing prices always going up, you’re making unfair profits over the landscaping guy who can only buy 3 or 4 homes.
Instead of buying 10 homes, it sounds like they should raise property taxes on you as they’re likely too low if you can afford more than the morally-responsible 3-4 homes that the lower class is entitled to own.
I really hope you don’t have more than 4 SUVs in your driveway. It disgusts me when people think they’re entitled to 5 or 6. I think the law should cap it at 3 SUVs per $50,000 of annual income.
LOL - thanks for the morning laugh!
“Dude wait til the superbowl is over and things will be booming again.I’m going to buy ten homes in casa grande.”
That is so kool, dude! I can hardly wait for the toga party!!
Anyone see Cerberus say Chrysler is effectivly bankrupt? I can’t find a link but the flapping heads on CNBC were talking about it.
Did they think they would find it in good health after Dymler PAID them to take it off their hands?
Chrysler says they’re only operationally bankrupt, but theoretically they’re not. Once you value all their assets at the 2005 peak, they’re fine — they just need the Fed to offer better interest rates to homeowners so that the homeowners can take advantage of their equity and buy some more cars.
Maybe Pelosi will offer the “Good Parent Investment Tax Credit” to let parents of kids aged 2-12 purchase cars today to entice the kids to do better in (public) school. If the kid sees the shiny new car in the driveway for a few years, they may consider attending classes more regularly.
I talked about Chrysler’s death years ago, and I think it has to do only with the ending of the Le Baron line of cars. By ending the ultimate cruiser, they effectively ended years of pretend profits and shady financial goals.
Car manufacturers are like governments: every 10 years they should be overthrown, dismantled, and sold off, so that a new one can come into the market without the overhead of the previous one.
Um, weren’t all corporate charters supposed to expire after a set time? Like 30 years or so?
What happened to that concept?
DCX’s final knife in the chest was when they pretty much destroyed the Jeep line. One tactical mistake after another relating to the suspension design of TJ’s, Cherokees and Grand Cherokees.
grrr…
Cheyne Finance SIV Receivers Agree Terms for Sale to Goldman
http://www.bloomberg.com/apps/news?pid=20601102&sid=aLvNg0BM02xQ&refer=uk
Nothing good can come from this, fracking GS.
Leighsong,
Are you a fracking Battlestar Galactica fan?
er…yeah
So say we all!
My girlfriend and I are also B.G. fans.
I wanted to ask a question about parking money. If someone has 400K cash, what would be the best way to invest it in this market.
I’ve lost trust in housing and stock market. Also, all 401K etc. is also based on returns from the stock market. How would one of you invest it. Is CDs the only option? And some in Coverdell for kids.
Is foreign investment safe enough? With the US recession in sight, I think all the world economies will be affected. I feel that the stock markets in China and India are way overprices and their housing markets too.
I have my money in staggered C.D.’s at different banks so its 100% insured. I’m getting crappy returns in the 5.5% range but since Ive saved alot, it actually adds up to some REAL income every year. It seems i may become a perminent renter too. Prices here on Long Island are STILL too high. Merry Xmas everybody.
Shall I feel safe that CDs are FDIC insured upto 100K and I distribute the money in 4-5 banks.
If you buy CDs, don’t put more than the FDIC limit in any one bank (100K for individual, 200K for joint, but check with your accountant before depending on any advice you get on the Internet!)
I pulled my $$ out of broad-market index funds in favor of hand-picked stocks with low P/Es, plenty of cash, and that pay dividends.
And I only have 20% of my money in US equities any more.
I pulled my $$ out of broad-market index funds in favor of hand-picked stocks with low P/Es, plenty of cash, and that pay dividends.
Which ones?
Listening to Peter Schiff lately?
I know…loving spirit of the season.
GS, Paulson…grrr…
http://afp.google.com/article/ALeqM5hTp7LLb0zX6sUthGHsrIX4nGfanA
Thought I’d mess up my karma with evil thoughts today. Anyone care to add a verse since this is about the extent of my creative writing? Merry Christmas to all and to all a good night.
Twas the night before Christmas and all through the house
Not a creature was stirring, not even a mouse
The bags were all packed and the “toys” boxed with care
In the knowledge the sheriff soon would be there.
The FB’s were nestled all snug in their beds,
While visions of equity danced in their heads
And mamma with her Prada, and I in my Gucci
Had just settled down for some exuberant smoochy,
When out on the driveway there arose such a clatter,
I sprang from the bed to see what was the matter.
Away to the window I flew like a flash,
Tore open the shutters and threw up the sash.
The moon on the breast of the new H2
Gave the lustre of mid-day to a different kind of screw
When, what to my wondering eyes should appear
But a tow-man’s sleigh….
You guys are awesome!
lmao…. beautiful.
…and someone mentioning an auctioneer
With his greasy hair all combed back and slick
I knew it had to be Guido the Stick.
“Oh $%#! He’s found us!” I was heard to exclaim
He whistled and shouted while he took aim
“Now where did you think you were going to hide?”
Loud enough that we could hear him inside.
To the back of the patio and across a pool like a moat
they’d found the jet skis, the 5th wheel and boat
(which were all secured with a certain bank note)
In what seemed like only the blink of an eye
all the toys my house earned had gone bye-bye…
Nice!
Much better writers than I.
Thanks guys!
Scary memories in rearview mirror…NOT! What’s to come?
http://www.theglobeandmail.com/servlet/story/LAC.20071224.RBUSCH24/TPStory/Business
Leigh,
G&M sugercoats it. They are WS/TSE shills. They lost their cred.
Happy Holidays everyone…i think the reality check for this market comes in feb.march..until then..hang in there.
Get ready for the year-end Bernanke Claus rally. Buy stocks now or get priced out of the market forever!
http://www.usatoday.com/money/markets/2007-12-23-santa-rally_N.htm
The folks at The Daily Reckoning seem a bit skeptical about the wisdom of getting long into stocks at the present moment in financial history. I suggest everyone should ignore these gloomsters and go with the USA Today recommendation instead.
“Housing hit its high water mark last year. It’s been going down ever since.
Stocks, too, reached a level that was equivalent to a 40-year flood this year. The larger story on stocks is that they hit a flood-tide high three times in the last century - in ‘29, again in ‘66, and finally in ‘99/’00. What we’ve seen this year was merely a follow-on gush of liquidity. In terms of gold, the euro, or real dollars (adjusted to consumer price inflation), stocks were actually down from their January ‘00 level.
Of course, we’ve also seen high water records set in markets all over the world. Many emerging markets hit all-time highs. Many stock markets are still near all-time highs. So are many peripheral markets. Shares in Sothebys, the celebrated auction house, ran up 600% from 2003 to 2007. A tide of liquidity floats heavy boats…as well as a lot of light, trivial trash. Nothing is more unsubstantial than contemporary art. Now it too seems to be coming down; the art market itself reached a peak this year.”
AHEAD OF THE TAPE
By JUSTIN LAHART
Egg Cracks Differ In Housing, Finance Shells
December 24, 2007; Page C1
It’s now conventional wisdom that a housing bubble has burst. In fact, there were two bubbles, a housing bubble and a financing bubble. Each fueled the other, but they didn’t follow the same course.
http://online.wsj.com/article/SB119845906460548071.html?mod=googlenews_wsj
This link is not a political statement.
On The Night Before Christmas, All Through the House…Oops We Just Lost the House…
http://www.huffingtonpost.com/danny-schechter/on-the-night-before-chris_b_78071.html
IRWIN KELLNER
The name game
Commentary: Be it a recession or a slowdown, 2008 looks tough all over
By Dr. Irwin Kellner, MarketWatch
Last update: 7:55 a.m. EST Dec. 24, 2007
PORT WASHINGTON, N.Y. (MarketWatch) — If it looks like a duck, walks like a duck and quacks like a duck, then it’s a duck — no matter what else you might want to call it.
http://www.marketwatch.com/news/story/commentary-things-looking-difficult-all/story.aspx?guid=%7B8F0DBDBC%2D5E94%2D4BFA%2D8FA3%2DD0564714816B%7D
“Don’t wait for the National Bureau of Economic Research, the official arbiter of the business cycle, to make the call. It takes at least six months, and sometimes longer, before enough data become available and survive the inevitable revisions before the NBER will declare a turn of the business cycle.”
Lock in St. Louis loft prices while you can! (there’s a Suzanne involved)
http://stlouis.craigslist.org/rfs/518433495.html
BTW, long time lurker here and one of the few that doesn’t think St. Louis is different. Thanks for the entertainment.
“This is beneficial because you can lock in a loft at today’s prices…
and earn equity while you’re leasing it.”
Why would anyone want to “lock in” today’s prices? LOL!
I like how they put the … after prices. Almost like giving you a chance to pause and consider how totally BS the statement is.
An article and video painting the Mercury Insurance Group as the sort of Grinch of title insurance companies that stole Christmas can be found at:
http://www.news10.net/display_story.aspx?storyid=36567
If anyone doubts the seriousness of this real estate bubble crash, it is important to recognize signs like the recent closing of Alliance Title. In the last downturn (89-95), here in California we witnessed the closing of small escrow branches, but with the exception of one relatively small underwritten title company in Southern California, the title business survived. Here we are, barely two years into the market decline and we find a company owned by Mercury is closed. More telling perhaps is the fact that a visit this morning to http://www.mercurycompanies.com, results in only the following information:
“Sorry for the inconvenience, but our website is currently unavailable while it is undergoing maintenance and enhancements.”
Agree Professor - very telling indeed!
Thanks for the heads up on the mercury website.
Just to put the situation into perspective relative to the size of Mercury, I managed to pull the quote below off of Financial Title’s website ( http://www.financialtitle.com/Region.cfm?page=AboutUs ).
As you can see, we are not talking about a relative insignificant player in the title insurance business. The challenge of course is to see where Mercury fits into the picture. Internet research leads me to believe that FATCO may end up being the bag holder if Mercury goes down. I have not been able to verify the validity of this connection that’s discussed at http://radicaltitletalk.blogspot.com/
——————-
“From its founding in 1946 through to today, the Mercury Companies has grown to a family of 18 title and escrow companies with about 500 offices that employee approximately 3,500 title and escrow professionals. Financial Title Company was founded in 1995 when the Mercury Companies expanded into the California market with the purchase of several successful title companies in the San Francisco Bay Area and Fresno. Since then we have experienced tremendous success, expanding into additional markets and adding new and talented Associates through California and Nevada.
Our company is headquartered in Folsom, California. Escrow services are offered in more than 127 locations in California. We have 4 offices in Las Vegas and 1 in Incline Village, Nevada. Title services are provided by state of the art multi-county title operations strategically located to best serve our customers.”
As someone who worked support on a lawsuit against Mercury, it doesn’t surprise me that Alliance shut down or that Mercury is in trouble. In order to increase their presence in California, Alliance and Financial were offering outrageous salaries and bonuses to employees of other title companies to get them to leave their current companies. It amounted to corporate raiding. This corporate strategy has come back to haunt them. It’s possible that one of the reasons Alliance choose to shut down was to get out of the burdensome employment contracts they entered into in 2005 - 2006.
Karma…
Bulls are running .
DJ to 13.8k before the day ends.
The world has gone crazy.
Entry points, Mmmmmmmm. sez Homer.
There is nothing crazy here — just a natural consquence of multiple waves of freshly printed liquidity washing over the stock market.
The Night Before FOMC
http://www.stockmania.com/index.php?showimage=119
Top notch! You’ve outdone yourself, bear.
Merry X-mas, and may Bernanke Claus drop a bundle of cash down your chimney!
Thanks John!
Professor, I am afraid Bernanke Claus will be bypassing my house this year and head straight for Wall Street.
Heh, heh…over on the Yahoo! Finance page they have a story on how fund managers are turning to commercial RE for “stability”. Gee whiz, they seem bound and determined to lose other people’s money. It is getting to the point where if you don’t directly control your money - you’re boned. While a radical veiwpoint, I still think 401ks and even pensions are a scam - they’ll be thoroughly looted in the coming carnage. Sorry, its only my opinion but I don’t trust them - in 20 years or so I’ll no whether I was right or not for feeling this way.
Merry Christmas to all!
edgewater, I don’t know if it was the same article, but I’d recently read that one of CA’s big pensions had decided, because it had been hit by the CDO crisis, that it would try to make it up by investing in CRE. I think they’ve been to Vegas to many times. You can’t just double down with people’s pensions.
Amazing, isn’t it? Many of them make salaries I would die for but they actually think CRE will stand while everything else falls? When one reads of things like this how can they not come to the conclusion that they could do better on their own?
So I guess Santa’s equity elfs ran out of double-Ds?
diminishing dollar effect:
The sharp decline of the U.S. dollar since 2000 is affecting a broad swath of the world’s population, with its drop on global markets being blamed at least in part for misfortunes as diverse as labor strikes in the Middle East, lost jobs in Europe and the end of an era of globe-trotting rich Americans.
It marks a shift for Americans in the global economy. In times of strength, a mightier dollar allowed Americans to feed their insatiable appetite for foreign goods at cheap prices while providing Yankees abroad with virtually unrivaled economic clout. But now, as the United States struggles to fend off a recession, observers say the less lofty dollar is having both a tangible and intangible diminishing effect.
http://tinyurl.com/2lykhw
Thanks for the link.
superfund collapse embarrasses Treasury:
The collapse of the plan to create a $75bn “superfund” is embarrassing for the US Treasury, which backed the scheme, but is not likely to have big implications for financial markets, analysts and former officials said.
The idea - to create a fund to support liquidity in the market for housing-related securities - was killed off late on Friday when the banks behind the scheme abandoned it after other financial institutions showed little interest.
http://tinyurl.com/3ctbeo
person of the year: Jean Claude Trichet:
A central banker can never really doze in the sun. But in the usually sleepy month of August, Jean-Claude Trichet, European Central Bank president, might have expected to relax longer in Saint-Malo, the rocky seaport on France’s Brittany coast, where he skippers motor and sailing boats.
Instead, the former French bureaucrat was, metaphorically, at the bow when the waves of this year’s global credit squeeze came crashing down on the world’s economies.
http://tinyurl.com/325zhg
UK housing prices fall most in three years:
Dec. 24 (Bloomberg) — U.K. house prices fell the most in three years in December, and the threat of more declines may cause the property market to seize up in 2008, Hometrack Ltd. said.
The average cost of a home in England and Wales slipped for a third month, dropping 0.3 percent to 175,200 pounds ($348,350), the London-based research group said today. The number of property transactions will fall 17 percent and prices will rise just 1 percent next year, Hometrack forecast.
http://tinyurl.com/2uxvq4
Asian inflation means US inflation; they make what we buy;
Dec. 24 (Bloomberg) — Singapore’s inflation accelerated in November to the highest in 25 years as consumers paid more for food and transportation.
The consumer price index jumped 4.2 percent from a year earlier, after gaining 3.6 percent in October, the Department of Statistics said today. The figure, the highest since May 1982, exceeded the median estimate of 15 economists surveyed by Bloomberg News for a 3.8 percent gain. Prices rose 0.6 percent from October.
The Monetary Authority of Singapore expects consumer prices to rise next year at more than double the 2007 pace, suggesting it will allow the currency to strengthen further to curb consumer price gains.
http://tinyurl.com/22cmov
Asian inflation means US inflation; they make what we buy;
PRC interest rates raised for the 6th consecutive meeting, but still below 4.5%. Until they get to 9%, I think it’s very safe to convert part of your weekly paycheck into precious metals. When the Tiger’s consumer goods stop the price hikes, and the labor stops its raise requests, that is the time to move from precious metals into high yield bonds. The U.S. is lagging foreign central banks. The canary in the coal mine for gold bugs is represented by foreign central banks, not the U.S. federal reserve.
What I’ve found interesting is that for at least a year google trends has showed that Singapore had the highest incidence of people searching for recession…Don’t know if it means anything.
Asian tigers;
Dec. 24 (Bloomberg) — You would expect a year marking the 10th anniversary of the Asian crisis to be hectic, and 2007 didn’t disappoint. Coup attempts, subprime fallout, terrorist attacks, scandals, volatile stocks, elections, you name it.
Yet the biggest news wasn’t a singular event; it was a not- so-subtle shift in Asia’s role in global markets.
Growth in Asia boomed as more developed regions plodded along. As the dollar lost its footing, currencies like the Thai baht surged 18 percent and the Indian rupee jumped 15 percent. And as the U.S.’s clout waned, China blanketed the globe, grabbing resources, making new friends and ignoring Treasury Secretary Henry Paulson’s demands to revalue the yuan.
http://tinyurl.com/27bqvg
There’s been a lot more news lately about the nearly $1Trillion dollar of credit card debt Americans have, and how accounts that are 90 days past due have doubled since last year.
I suppose Congress will pass some law to make *me* bail them out!
Wow, mountain property in Colorado is still selling:
http://hosted.ap.org/dynamic/stories/C/CO_MOUNTAIN_REAL_ESTATE_COOL-?SITE=COFOR2&SECTION=HOME&TEMPLATE=DEFAULT
Harper Rejects Debt Bailout, Putting Pressure on Canada Banks
http://www.bloomberg.com/apps/news?pid=20601109&sid=a9lpYUicPdgc&refer=home
“If the government became the day-to-day underwriter of market risk in commercial securities markets, that’s a bottomless pit,” Harper said in an interview in Ottawa. A government rescue wouldn’t be “healthy for the long-term growth of the Canadian economy.”
Harper’s refusal to shore up the market for asset-backed commercial paper — 30- to 90-day securities backed by car loans, credit card debts and mortgages — leaves holders at the mercy of the country’s biggest banks. Some banks have already expressed reluctance to provide support and are resisting pressure from the central bank.
MERRY CHRISTMAS!
After the first of the year and the end of the holidays, listings are going to take a gigantic leap. Instead of a 2 or 3 year supply there’s going to be a 4 or 5 year supply on the market.
Today there was an article about how fast the number of credit card defaults is climbing. Wait until this holiday season is over and I’d bet that number is going to double about Mar or Apr.
Merry Christmas to everyone. Be glad we’re on this site and in the know. That’s the greatest present we could receive.
MSM, keep’s pumping out the “Foreign buyers scooping up real estate”, is anyone buying this? I mean I do believe that there are some foreign knife catchers out there, but even with the currency advantage created by the weak dollar, I can’t see how a second home in the US would really benifit foreigners other then the extreamly wealthy who may be in the US constantly…Am I the only one that see this a organized propaganda to try to prop up the domestic real estate market….
The idea that a weak dollar does not affect US citizens because they buy with dollars products priced in dollars is false IMO. Yes I believe foregin buyers will continue to buy up choice properties in certain areas. Foriegn buyers buy RE in the US sometimes because were they live is on the edge of a revolution and their families lives are in constant danger. Sri Lanke, Boliva, and a few years ago Iran. Knew plenty of rich families back in Cali from thoses areas thats just off the top of my head. Iraq will be next.
will it make a difference , no only in certain popular areas not in flyover land.