December 26, 2007

Bits Bucket And Craigslist Finds For December 26, 2007

Please post off-topic ideas, links and Craigslist finds here.

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Comment by NYCityBoy
2007-12-26 05:29:59

Today is December 26, 2007 - welcome to start of the Spring Selling Season!

Comment by txchick57
2007-12-26 08:02:15

1.40, dude. Think about it.

Comment by NYCityBoy
2007-12-26 08:53:46

Done and done.

Comment by txchick57
2007-12-26 09:02:12

I get pissed when I try to give money away and someone doesn’t take it.


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Comment by Leighsong
2007-12-26 15:18:08

Honorable Mentions:

TxChick and I’Hop waitress tips - you rock girl. My first tax paying gig was waitressing, put myself through school, thanks to the generosity of you and yours! Thank you.

HBBer’s who selectively and frugally spent money this season - thank you. There may be a war on savers, but we have the big guns!

HBBer’s who donated - time, money, books, clothing, food or blood (and any donation toys etc), - thank you for making this world a better place.

HBBer’s whom valued their family above all - thank you. McMansion or small rental - all the same…family and health are true wealth. Thank you.

Those whom drive cars into car heaven - thank you. (Mine last at least 13 years ~ showing my age!) Those whom buy newer - thank you for keeping your family safe.

(please do not feel excluded; I’m a bit feeble)~

Last, certainly not least, to Ben. Thank you for a forum of sanity and delightful debate!

May the Universe fill thy cup over!

Comment by charliebrown
2007-12-26 05:30:06

“The credit crunch … is creating problems in commercial real estate, driving down prices of office buildings, shopping malls and apartment complexes”

Commercial and Residential real estate are two asset classes with a combined valuation higher than the stock market. Over the past six months both have deteriorated significantly and both are highly levereged.

As more and more real estate and finance business shut down, we may expect to hear more about commercial.

Comment by combotechie
2007-12-26 06:29:05

Wow! They only needed fifty million of equity to secure 7.1 billion of debt.

Comment by Sniggle
2007-12-26 06:33:09

I run into a fair number of commercial property management entities and REITs in the greater DC area. They all state that vacancies are up, rents are coming down, and it is hard to replace lost tenants.

The DC area still has several million square feet of new office space coming on line in 2008, and many projects completed in 2007 wanting for a tenant. The approx. three year development process from plan to completion is going to leave many REITs holding nonperforming assets.

Comment by zeropointzero
2007-12-26 10:53:09

Including this inventory — residential, commercial & hotel — coming into the mix at nearby National Harbor.

Comment by autechre78
2007-12-26 08:41:31

The trend appears to be the same in Sacramento, I drive by many empty business complex’s on the way to work every day. Roseville, Rocklin, Folsom, Granite Bay, Loomis…. everywhere you look. For those of you not familiar with this area, parts of these cities are very new, most of these buildings have never had renters.

Sac Bee just ran an article about The Melting Pot in Rocklin experiencing significant drop in traffic and sales.

Comment by wmbz
Comment by Quirk
2007-12-26 05:46:40

Nyet. Ron Paul for President?

Comment by combotechie
2007-12-26 06:38:54

For 2008:
Oil to go to $175.
Grain prices to double.
China’s economy collapses by 40%.
US economy declines by 25%.
Ron Paul to be elected President.
Credit card crisis.

Happy New year!

Comment by slorenter
2007-12-26 08:23:44

Dollar falls 15%
Interest rates go to 1% then back up to 10
unemployment 10%
Gold $1400.00

Comment by sweeny texas
2007-12-26 09:31:10

combo, we just might survive the coming apocalypse if the next-to-last item on your list happens.

Otherwise, not so much.

Comment by combotechie
2007-12-26 10:46:30

We’ll need another “Contract With America” type of congress we got in 1994 to be elected with Ron Paul.
Remember, what the President proposes, congress disposes.

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Comment by sm_landlord
2007-12-26 10:17:25

Russians bearish? What a surprise! ;-)

Comment by txchick57
2007-12-26 05:38:26

Great Xmas for Amazon. I knew it. I enjoy watching short sellers get hammered on that one. Great company, deserves every dime of its stock price.

6:58 am ET announces the 2007 holiday season finished as its best ever (AMZN) 91.01 : Co announces the 2007 holiday season finished as its best ever, with its busiest day being December 10. On that day, Amazon customers ordered more than 5.4 mln items, which is 62.5 items per second. In addition, the co wrapped up its second year of Amazon Customers Vote, with more than 4.6 million votes cast during the promotion. Co also says top sellers in consumer electronics included the Garmin (GRMN) GPS, Canon (CAJ) PowerShot digital Elph cameras and Samsung LCD HDTVs.

Comment by packman
2007-12-26 06:46:20

Take that with a grain of salt though. Every retailer that’s even decent experiences generally 5-10% sales increase every year, so to say that the holiday season is the “best ever” isn’t saying much. It’s a natural product of increasing population, increasing commercialization of Christmas (e.g. earlier and earlier sales; seems like they started right after July 4th this year), and the general long-term trend of more disposable income. Plus Amazon still has the rapid increase of online sales going for it - e.g. my mother-in-law just this year order things online for the first time ever (turns out you can teach an old dog new tricks; though I’ll probably rue the day).

I heard a general stat on the radio this morning that while this holiday season sales were up relative to last year (I think the estimate given was 3% or so), this was the weakest increase in the past 5 years. The most meaningful stats showing how strong the sales season was would be to compare the increase/decrease this year with the increase/decrease of each of the past 20-30 years or so.

Comment by ronin
2007-12-26 08:12:32

The 3% retail estimated sales increase includes gas & food. Take that away and the sales increase is under 2%.

This does not allow for inflation, which is at say 6%. Therefore, the increase does not even meet inflation.

Finally, a sales increase does not translate into a profit increase. While sales increases are nice, businesses exist to make profits. Let’s see how the decreased margins arising from slashed sales prices really come into play.

Comment by Joe Schmoe
2007-12-26 06:55:15

The other day a writer told me that Barnes & Noble is still the largest bookseller by far. I was shocked, having just assumed that Amazon was #1.

I order everything — EVERYTHING — from Amazon. In fact, I probably haven’t set foot in a bookstore for 3 years. Amazon has everything, their prices are usually (95% of the time) the lowest anywhere, and shipping takes only 2 days when you are a Prime member. We’ve probably received 100 shipments from Amazon and I can only remember one being late; it arrived in 3 days instead of 2.

I probably read a book per week (kids) and they are all purchased from Amazon. The used bookstore feature is fantastic — around half of the books you are interested in are $4.00 ($0.01 for the book plus $3.99 shipping), and I have never paid more than $10.00 total for a used book.

The best part about Amazon is that they have everything. If you are into obscure histories of the 19th century, ordering through a bookstore is painful to say the least, and you have to wait 2-6 weeks to see if your book arrives. At Amazon, it’s available instantly and delivery takes 2 days (in stock) or 1 week (used).

Amazon is so excellent that I cannot understand why anyone patronizes regular bookstores any more. Seriously, it makes no sense.

It’s funny, I suspect that people on the HBB have similar purchasing habits. We assume that everyone else does, too, but the numbers are to the contrary. Maybe stuff like this is part of why bubbles get started. We assume that anyone paying $500k for a tract home is an idiot, but the rest of the world just doesn’t see it. Well, maybe Barnes & Noble will survive, but I’m sure house prices won’t.

Comment by leosdad
2007-12-26 07:48:39

Why buy?
I read about 30 books per week (picture books to my son), and they all come from the local library (Carmichael branch in Sacramento County).
And when it comes to (rarely) buying a used book = a book, after I having checked it out from the library, and think buying it anyway, there is also Abe books ( They are often cheaper than Amazon, believe it or not.
True, Amazon is good, but there are better deals possible. The best: you local library. Get a card.

Comment by krazy bill
2007-12-26 08:50:03

Socialism! Pure socialism competing against private enterprise. Think of all the books and magazines that aren’t sold, that aren’t even published because the proletariat can utilize the public (socialistic) library!
How this Marxist innovation ever gained a foot-hold in the U.S. is a sad chapter of history.

(sarcasm off)

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Comment by combotechie
2007-12-26 09:07:42

You can thank that pinko Benjamin Franklin for our libraries.

Comment by exeter
2007-12-26 09:11:42

It’s a communist conspiracy!!!!

Comment by Xpovos
2007-12-26 09:57:52

You may be being sarcstic, but L. Neil Smith isn’t.

Comment by Chuck Ponzi
2007-12-26 11:00:16

buy now or be priced out forever. They’re not making any more books.

Comment by SGA
2007-12-26 13:34:12

I think it was that communist Andrew Carnegie that did most of the libraries out there. :)

Buy a book. Read it. Give it to a library.

Comment by tab
2007-12-26 10:06:23

I’m quite surprised that you have yet to run out of books to read. The branch must be well stocked.

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Comment by AnnScott
2007-12-26 10:16:58

Neat thing libraries can do called “inter library loan.”

Charge a minimal fee.

I ask for, and within 7 days had in my hands, “The Russian Roots of Nazism: White Émigrés and the Making of National Socialism” by Michael Kellogg published by Cambridge University Press .

Cost more $2 versus the Amazon or Abe prices of (then) $85 new and around $70 used.

Interesting. Primary money sources for Hitler in the 1920s were Grand Duke Cyril (the Czar presumptive) and Henry Ford of Detroit and Ford cars.

Comment by tresho
2007-12-26 17:50:59

I have cards at several of my local libraries, never a charge for “interlibrary loan”.

Comment by Lost in Utah
2007-12-26 11:04:22

Hey, this is even better - get your local paper to let you write an occasional book review and presto, you’re a book reviewer and can get any free book you want. The catch - you really should review a few to be honest.

I haven’t bought books for 10 years. I write occasional reviews for about 5 papers and a couple of regional mags. They like the free publicity, I like the free books.

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Comment by Lost in Utah
2007-12-26 11:07:16

OT - can anyone tell me if I buy a blackberry now and pay for it next year (when my CC statement comes) if I can expense it (business) for next year? Thanks.

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Comment by Chad
2007-12-26 11:15:57

Expense it when you pay for it. It’s not like you’re capexing it and showing as a depreciable asset. Besides, you can say you didn’t use it, therefore it did not provide any value, until 2008 ;)

Comment by Reddy Watt
2007-12-26 18:16:25 rocks the stacks, finds the best price for used. I’ve got five library cards and get books from all over my state. Too bad interlibrary loan doesn’t work for crap here.

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Comment by txchick57
2007-12-26 08:03:57

I probably spend 10K a year there. I’ve been buying from them since 1996 or so and they have never screwed up an order. I think it’s the best run company in America.

Comment by Deflationary Jane
2007-12-26 09:39:50

I agree Tx. Even my Univ library doesn’t have everything so I also use them for finding out of print books along with new releases. I bought in late 98 and this is the one of the few stocks I still hold.

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Comment by FB wants a do over
2007-12-26 18:22:38

Amazon is great for a lot of things. Best prices on books = E-bay.

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Comment by o'side renter
2007-12-26 08:15:43

Joe, I agree that Amazon has it all. But I still go to Barnes and Noble at least once a month with my granddaughter. I make a point of buying from them regularly. I don’t want a world without book stores.

Comment by Chad
2007-12-26 11:17:52

I like the world with bookstores too, just not the big box type.

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Comment by Melvin Frumph Hoppe
2007-12-26 09:31:50

“Amazon is so excellent that I cannot understand why anyone patronizes regular bookstores any more. Seriously, it makes no sense.”

With all due respect, it makes sense to me. We have great bookstores here in the Bay Area, used and new. Why would i want to support a huge faceless company like amazon that has no effect upon my community? it doesn’t pay taxes here and lifts this place not an iota except perhaps the local Fed-ex or UPS delivery business. I buy local whenever I can even when i pay a little more. Frankly it gets me sick at heart to see local bookstores hurting and closing. thats my choice, and I’ll stick to it. here’s the best bookstore in the universe, a mile from my house. Great readings once a week and 3 floors of used and new books.

I can understand using Amazon if you live in an area without the resources and bookstores of a larger metropolitan city like mine. For me though I always buy locally.

Comment by Deflationary Jane
2007-12-26 10:20:06

Moe’s and Cody’s are wonderful, espeically for art books but we don’t have anything like them here. My other fetish is Dark Carnival but since the traffic has gotten so bad and gas so expensive, I shop online almost exclusively now.

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Comment by Chad
2007-12-26 11:27:37

Melvin, I understand you viewpoint too, if you are speaking of small, locally owned book stores. Consider these thoughts:
1. What do you do if you want to sell a book? I think Amazon is a great place for someone who just wants to get rid of some things here and there (I sold my college text books there, and circumvented the ridiculous campus bookstore). So, in a way, Amazon does support the little guys (though I would agree that their selling fees are too high).

2. Giant faceless retailers like B & N aren’t destroying local bookstores also?

3. I honestly believe that the local book stores are going out of business because of B & N, not Amazon. Amazon allows the small local stores to gain a worldwide audience (if they choose to sell through that portal). Though I will concede that it does create a more price competitive environment.

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Comment by Kime
2007-12-26 09:34:24

“Amazon is so excellent that I cannot understand why anyone patronizes regular bookstores any more. Seriously, it makes no sense.”

I buy books from Amazon, but I like to shop at B & N, too. Shopping there is a book lover’s dream with comfortable chairs scattered through the store for shoppers to sit and take a comfortable look at the books, and I am sure some people just sit and read for hours without buying. At least that is what ours is like. It even has a coffee shop, which I don’t care about but others do. It’s just a fun place to go and you often find a book you just have to buy right then even if you weren’t planning on buying so their strategy works. Whenever I go by I feel the urge to stop.

That said, I patronize the library more than anywhere. You can’t beat it, but you just want to own some books.

Comment by Chad
2007-12-26 11:10:16

“The other day a writer told me that Barnes & Noble is still the largest bookseller by far. I was shocked, having just assumed that Amazon was #1.”

I would take THAT with a grain of salt. SEC filings for 2006 show Amazon sales @ 10.7BN, and Barnes @ 5.2BN. Though comparing the companies are not really apples to apples. You can get coffee @ Barnes, but you can get toys and about everything else @ Amazon. Too bad the 10K filing does not break out segment sales for AMZN (books, music, collectibles, etc).

Comment by Diggs
2007-12-26 14:25:43

“We’ve probably received 100 shipments from Amazon and I can only remember one being late; it arrived in 3 days instead of 2.”

I am a Prime memeber and I ordered an in-stock book on the 20th and got an estimated delivery for the 24th. Here it is the 26th and I still don’t have it. It was sent via DHL 2nd day. I just got off the phone with DHL and was told I should have it by the end of the week. I said “well I would hope so since it was supposed to be here on the 24th!” and she says “well it appears to be traveling by ground instead of 2nd day” WTF???

Comment by peter m
2007-12-26 07:16:00

I contributed $26.00 toward Amazon holiday revenues on a great deal . Two paperbacks on China for one single low price. Saved $15.00 off retail and also got free shipping. Items arrived in 3 days, extremely fast for free shipping. Amazon has my Vote for top online retailer.

BTW the 2 paperbacks are: ‘The Rough Guide to China’,( highly recommended-1300 fact-jammed highly detailed pages ;complete coverage of all China, as good as lonely planet guide ), and the rough guide Phrasebook, ‘Mandarin Chinese’.

Comment by Xpovos
2007-12-26 08:08:09

AMZN was a short play for me in a ‘free trial account’ type of deal where I was competing against others in a similar fashion. It bit me hard back then, and clearly would again. But that doesn’t mean I understand it. Clearly I have a lot more to learn.

Slow day today, eh?

Comment by txchick57
2007-12-26 08:21:15

Not for me. My largest holding is up 27%

Comment by Xpovos
2007-12-26 08:48:49

I am envious. Must I learn to control the envy before I reach for new heights… or should I allow it to spurn me to them?

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Comment by txchick57
2007-12-26 08:53:34

Make that 37%. No, don’t envy, trust me, I had to endure a steep value drawdown before it happened. One of the hazards of messing with illiquid stocks.

Comment by sweeny texas
2007-12-26 09:38:54

Ah, an honest day’s pay for an honest day’s work, eh txchick?

Comment by txchick57
2007-12-26 10:10:44

Try 8 years of work on this one, Bunky. It liberated me from gainful employment in the 1990s.

Comment by Chad
2007-12-26 09:18:01

Me either. Largest holding up 6%. Largest gain 10.64%. Nothing of mine is down today, either. But it is still early. BTW, I have no short positions today.

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Comment by vile
2007-12-26 09:08:20

I did 80% of my xmas shopping on Amazon.

Comment by NoVa Sideliner
2007-12-26 10:05:45

I did likewise. What a great place. No gasoline burned (by me — UPS is a different matter), no parking problems.

The only thing I’d worry about for Amazon’s bottom line is whether the Amazon Prime shipping deals are eating into the profit margins. I ordered a lot of stuff with Amazon Prime, as well as some stuff with overnight for $4 extra, and it almost all came in separate packets. That’s a lot of shipping cost for a stack of $10-$20 gifts. But I think Amazon saved me a LOT of time and aggro this season, so I do hope they made money off of me.

That said, I do shop at B&N and Borders because I can see more of what I’m buying. Not every book has sample pages on Amazon, and sometimes I can get a much better feel for it by having the whole book in my paws before buying it. This goes for tech books especially, which I tend to buy locally where I can do more one-on-one comparison.

Comment by sm_landlord
2007-12-26 10:44:41

Agree with you tech books. They’re expensive, generally not discounted much if any, and many of them are shovelware, so you really need to look at the book before you buy it. The reviews on Amazon help, but in many cases with tech books I still need to see it. Especially when the price is upwards of $50.

But I buy all of my other books at Amazon, another satisfied customer.

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Comment by Anonymous Coward
2007-12-26 10:33:03

AMZN is back in a bubble. Which is not to say it won’t keep going up, at least for a while. But I don’t care how good they are, nothing can justify that P/E. You just can’t make that much margin buying and selling books (or DVD’s or such).

Comment by matt
2007-12-26 10:37:57

amzn was a buy at 40 and a sell at 100.

Comment by txchick57
2007-12-26 10:45:45

I’m going to sell mine on earnings day.

But I’ve been fooling with it since it was $9

Comment by wmbz
Comment by packman
2007-12-26 08:17:47

Wonderful. I saw that in the WaPo this morning.

Why just seniors? Why not let *everyone* work social programs for the government, to pay off / pay down their taxes?

And hey, if they’re doing that - why not just cut out the middle man - don’t even bother paying taxes - just work for the government, and then they can just provide direct payments to the grocery store, gas station, etc. You just have to make sure you use government-approved services, and show your government ID. Oh and you might have to wait in line a little.

See where I’m going? This is a really slippery slope; IMO a really bad idea. If the government were really looking out for their best interest they simply wouldn’t make their taxes so damn high.

Comment by sohonyc
2007-12-26 09:10:26

Meet the newest form of slavery.

Comment by Xpovos
2007-12-26 10:06:01

There is so much wrong with this that I barely know where to start.
So, let’s start with the legal side of it. By January 2009, the federal minimum wage is going to be $7.25… will they still be paying seniors $7/hr? How do they plan to increase the payments, otherwise?
2) One of the major reasons people in this age bracket who are not sufficiently well off to not be worried about taxes are retired is medial. So… they’re too frail to get themselves to a ‘normal’ job, so we’ll give them a gov’t one? How exactly is this gov’t job any easier? How are they transported?
3) “The work done by the seniors includes landscaping, gathering climate data, clipping newspapers and staffing the courthouse information booth.” Seriously? Clipping newspapers?
4) “”If we got seniors working for the schools, there might be a more intergenerational feeling there,” he said. “It might be easier to pass the school budgets.”" Ah, I see. It’s all just a scheme to get people to pass off on higher taxes…

Comment by SanFranciscoBayAreaGal
2007-12-26 11:54:44

“”If we got seniors working for the schools, there might be a more intergenerational feeling there,” he said. “It might be easier to pass the school budgets.”” Ah, I see. It’s all just a scheme to get people to pass off on higher taxes…

All of the reasons make no sense especially number 4. Wouldn’t this just put those same senior citizens into more of a tax debt? I feel like we are getting closer and closer to Logan’s Run

Comment by speedingpullet
2007-12-26 11:56:49

Ah, come on, you’re 76 years old, have a big tax bill to pay.

You’re too old/infirm to elbow your way through the younger job market, have skills that need to be used to be retained, and a shortfall on a fixed income. What do you do?

Personally, I’d much rather work a few hours a week doing what I can, rather than sitting at home, ossifying, worrying myself into ill-health about where I’m going to make the money from.

Sure the taxes are too high to start with, and who knows how those ‘jobs’ will stand up once a significant part of the working population loses their jobs and needs a way to make ends meet.

But in the meantime, I say hats off to the local councils for at least trying to give seniors a way to make some money, and keep active and busy. The article goes on to say that many of the seniors keep on volunteering after they’ve paid off their taxes, because they like working

BTW - Chronos - Newspaper clipping is a decent job for people with mobility limitations - many newspapers still keep a paper archive, and need someone to collate and archive articles.

I had a friend with MS who did this job (for the Guardian in the UK) for years, enjoyed the financial independance it gave him (plus he got to read all sorts of interesting pieces), and valued being able to contribute in some small way.
Eventually he had to quit, as the fine motor skills in his hands deteriorated enough to stop him being able to manipulate scissors, paper etc… He deteriorated quickly and passed soon afterwards, in no small part because he no longer had any meaning and purpose in his life.
Jobs aren’t always about making the Big Bucks.

Comment by SanFranciscoBayAreaGal
2007-12-26 15:01:49

Ahh speeding so far off on the age and tax bill. Take another guess and you may be right.

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Comment by ChicagoANT
2007-12-26 16:44:31

I’m 37 years old and have been keeping my eye on the housing market for an upgrade. I’ve always thought that the home that I end up buying, I had better be able to afford the property tax when I retire on fixed income. You can always finance the “fixed” mortgage and know your liability, but with property tax it’s always growing.

So basically, I’m waiting for home values to fall and the tax reassessments to begin before I jump in.


Comment by Laura
2007-12-26 20:08:19

or, if she so desperately wants to stay in her home, how about a tenant whose rent would cover the tax? Common enough on Long Island.

Comment by cynicalgirl
2007-12-26 05:46:40

Hovnanian is a “victim”:

“We feel that Hovnanian has fallen victim to its earlier aggressive growth strategy which has left the credit over-leveraged, inflexible and ill-equipped to navigate through the tough current market conditions,” CreditSights, a debt analysis firm, said in a report last week.

Comment by Chad
2007-12-26 11:40:20

The definition of “victim” and the necessity of “assailant” do not allow for them to be one in the same. Hmm, can I be a rape victim of my own aggressive advances? “Your honor, I didn’t want it, but my hand was uncontrollable!”


Comment by yensoy
2007-12-26 05:46:40

This is one of those very rare days that I get a headstart on everyone. So I have the following comment - please feel free to critique.

It is most tax-advantageous to load up your 401(k)/IRAs with cash and bond holdings, while keeping equities in post-tax savings. For example, from a taxation standpoint $100k in 401(k) invested in bonds + $100k in post-tax savings in equities is better than $100k in 401(k) invested in equities + $100k in post-tax savings in bonds.

The above statement assumes the following:
1. You have a good choice of investment options in your 401(k) and IRA accounts.
2. You minimize turnover.
3. The dividend tax break continues, and long term capital gains are taxed favorably.

Basically, interest is taxed unfavorably and 401(k) accumulations are taxed unfavorably (both as regular income). So it’s best to let the interest accrue in the tax deferred bucket. If you were to put equities into your 401(k), what should have been a favorable tax treatment due to dividends & capital gains will end up being taxed (much later, maybe in a different slab) as regular income.

I ran a simulation to verify the above, but if any gurus here have other opinions, I would love to hear.

Comment by txchick57
2007-12-26 06:09:10

1. You have a good choice of investment options in your 401(k) and IRA accounts.

You almost never do. Mutual funds all suck. I think people should self direct.

Comment by yensoy
2007-12-26 06:28:30

That only furthers my point txchick :-)

Comment by packman
2007-12-26 06:50:41

Agree on the sucky choices for 401(k) - mine certainly do. However you can’t beat company match - e.g. mine matches 100% up to 4% of salary; so there’s 100% gain on investment right off the bat - I’m willing to give up a bit of flexibility for that.

Most IRA’s allow fairly full self-direction, e.g. I can buy individual stocks with Fidelity IRA. If you have one that doesn’t allow that, perhaps it’s worth switching to someone else.

Comment by in Colorado
2007-12-26 09:47:32

The bumped our match up to 6% when they killed the pension plan. I expect to hear the “in order to remain competitive” speech in the not too distant future when they lower the match.

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Comment by Xpovos
2007-12-26 08:10:52

Seriously? I’ve got good money in a number of funds that I spent a lot of time researching. I wouldn’t feel comfortable at this point in my own market education process managing a portfolio that large.

Comment by shakes
2007-12-26 14:10:22

I wasn’t comfortable at first self directing my individual stocks but I got tired of the”professionals” not doing a good job and not having the flexibility to take money out of the market when times get bad. It was the flexibility and I after reading about Warren Buffets style of investing. Buy a few companies you know a lot about and you will do better then the performance of mutual funds. (well that is what I took from reading the book). I can say I have done better then the market and I know a lot more about the companies that I invest in. It takes time and energy but if this interests you then I say go for it but “Know” what you are buying so that when things do not go your way you will understand why and know whether to double down or let your stop hit and take your losses. I still use 2 brokers since I like to bounce my ideas off of different people. I don’t trust either of them except to let me know what the feeling in their firm is. (1 is UBS the other Merril Lynch). I am growing tired of their ‘cheerleading’ and am thinking of going to an on line broker where I can trade at anytime. I get charged a $100 fee and am chrged 10 cents a share so their costs are not all that high but when buying 1-3000 shares a trade they are definitely way more expensive then the on-line route. Anyone out there have a on line brokerage they really like?

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Comment by jbunniii
2007-12-26 10:00:03

My last employer offered a 401(k) that consisted of a standard brokerage account with Schwab, with no constraints on what you could invest in, other than the usual insider limitations on company stock. I wish all companies offered this.

Comment by txchick57
2007-12-26 10:20:56

Schwab kicks back 3-4% of invested assets to the employer in deals like that.

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Comment by LookinInCali
2007-12-26 10:22:25

I just red Bogle’s book and he suggests significant holdings in index funds. Low cost and you never have to worry about whether your fund “beat the market’>

Comment by LookinInCali
2007-12-26 10:26:05

Stupid free keyboards, red->read and ‘> -> .”

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Comment by bill in Maryland
2007-12-26 10:35:26

Shhhhh! You’re insulting the “tycoon” day traders here! But I’m with you on this.

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Comment by dude
2007-12-26 11:12:40

No insult to me, my “boring” money is in a very conservative IRA mutual fund.

I day trade with monies other than those needed for retirement. Those who risk retirement funds on volatility plays are asking for a trout wallop.

Comment by Lip
2007-12-26 06:01:12

Berkshire to Pay $4.5 Billion for Pritzkers’ Marmon

“Marmon employs 21,500 people, mostly in North America, the U.K., Europe and China, according to the company’s Web site.”

“The takeover is the largest announced by Buffett since 2005″

Some people with money are buying stock, but what does it mean for us?

Comment by NeilT
2007-12-26 06:46:46

“Some people with money are buying stock, but what does it mean for us? ”

Children should not play with fire. That is what it means.

Comment by Lip
2007-12-26 07:12:05


Funny, my sentiments exactly.

My financial advisor at Northern Trust says that they’re not even predicting a recession for 2008! I mean come on! What’s going on here? I spend maybe an hour a day looking at stuff on the web and they spend their lives looking at it.

What are they looking at? and why can’t they see this tsunami heading toward us?

Comment by measton
2007-12-26 08:49:28

My local used car salesman tells me he has a rust bucket that will be a collectable some day.

My local realtor tells me it’s a great time to buy a house.

My mechanic tells me I need to change my oil every 2500 miles despite the fact that the owners manual says 10k.

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Comment by combotechie
2007-12-26 09:12:08

My barber is always telling me I need a haircut.

Comment by Chad
2007-12-26 09:20:49

Measton, do you have a BMW or an Acura??

Comment by in Colorado
2007-12-26 09:50:51

I have a Buick and the on board computer tells me that I can get 11-12K miles per oil change based on my driving habits (I usually change it around 7K).

Comment by sohonyc
2007-12-26 09:17:30

Well, I wonder if that means they’re predicting a massive devaluation of the dollar? Because the only way we’re not getting a recession is if we get a massive flood of liquidity.

Remember, housing could in theory go back up (in price)– but only if the dollars that we’re measuring in, get cheaper.

And that may be the solution that the powers-that-be are planning behind the curtains.

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Comment by cashedin05
2007-12-26 10:55:30

People have to “qualify” for loans, the flood of liquidity will not change that in the near term . The downward spiral has way too much momentum. Too late even for wage inflation to help. Forclosures are the new comps here in Phoenix and there is nothing FB’s or the Government can do about it. Still fun to wactch them try.

Comment by Anonymous Coward
2007-12-26 10:44:41

That’s odd. Isn’t Paul Kasriel the chief economist at Northern Trust? Maybe this stuff doesn’t filter down to certain departments when it’s not in that department’s best (fiscal) interest.

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Comment by sd renter
2007-12-26 13:46:14

My bookie tells me that a certain game is a 10 star lock!

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Comment by mgnyc
2007-12-26 06:19:22

cnbc mourning the slow holiday shopping season
the american citizen (oops i mean consumer is tapped)

hope all had a happy holiday im still stuffed

Comment by ghostwriter
2007-12-26 06:27:26

Here’s how out of touch some sellers are:
3 condos all in the same place in Celebration FL

1612 sf $199,000 3br 3ba ground floor $123 sq ft
1606 sf $199,000 3br 3ba ground floor $123 sq ft
792 sf $199,000 1br 1ba stairs to unit $251sq ft

The 3rd one has a one car garage and the other two do not have one.
Apparently a one car garage is worth an extra $128 sq ft, and everyone would rather climb steps than walk in from the ground floor.

Comment by Ozarkian from Saratoga, CA
2007-12-26 06:33:55

Update from Palo Alto, CA (in Silicon Valley)

A friend just sold a 3/2 house for $1.2M. The house was nicely remodeled, in a good location, but basically a 1950s small rectangular ranch. On the market for less than a month.

Comment by packman
2007-12-26 07:21:28

Amazing. Silicon Valley to this point seems relatively immune to the bubble pop. Prices seem to have stopped their meteoric rise, though aren’t going down. Yet.

Probably this is since apparently there wasn’t much spec building in the valley, in part due to development restrictions (anyone who lives there correct me if I’m wrong). I’m guessing that SV may be dragged down eventually by the general economy - i.e. less consumer and business spending = less demand for SV electronics = worse SV economy = lower SV real estate prices, with lag time for each association. See 2001 for example - just when the rest of the country was getting geared up, SV RE prices were actually down briefly during that year due to the tech bust (which started in 2000), before continuing back up.

Comment by Troy
2007-12-26 10:36:16

SFHs will continue to be IMMENSELY strong in the PA -> Cupertino corridor. They’re not making any more of them, and the corridor is a magnet for the world’s most high-paying tech jobs. Creme-de-la-creme effect.

In the rest of the valley the pattern is to do infill development . . . pull out an office park tilt-up or two and put in god-awful 3-story townhomes with 98% concrete coverage.

Comment by cashedin05
2007-12-26 11:00:16

You would have to be insane or have one seriously high paying tech job to pay 1.2mil for a cookie cutter house anywhere in the U.S.

Comment by alta
2007-12-27 01:02:10

In general housing in the SV is not affordable, even when making 120k+ a year. A couple with double income and no kids can merely afford a starter home. And only 30% of the workforce is in the tech sector. Also there is a lot of building in the SV, converting parking lots into combined shopping and condo complexes. There is the same affordability issue, Silicon Valley is not immune.

Comment by wmbz
Comment by Anonymous Coward
2007-12-26 10:58:22

That was hilarious!

Comment by Jas Jain
2007-12-26 07:00:06

December 26, 2007

Howard Davidowitz: “Consumer Led Recession That Will Last For Two Years.”

Mr. Davidowitz appeared on Bloomberg. He may be the most experienced retail/consumer analyst.

He summarized his extreme negative outlook on consumer related businesses with, “It is murder.” In terms of negative impact on the economy, “This sub-prime is only the appetizer… credit cards… auto loans… it is very ugly out there. ”

Would the consumer led recession that lasts two years lead to increase or decrease in the inflation rate?


Comment by badger boy
2007-12-26 07:46:04

Mr Pretcher,

Consumer recession during a presidential election year? Only if Bernanke’s press overheats.

Comment by Jas Jain
2007-12-26 08:19:33

Why do you persist in this idiotic “Mr Pretcher” name-calling? How would you like if I refer to you as someone you dislike? And you don’t even know how to spell the name.

There is no reason to be uncivil just because you don’t agree with my conclusions.


Comment by alambka
2007-12-26 09:30:32

He is Badgering you and acting like a boy. I would take it with a grain of salt. His parents doomed him when they named him Badger Boy.

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Comment by Kime
2007-12-26 10:51:32

“Would the consumer led recession that lasts two years lead to increase or decrease in the inflation rate?”

I’m not sure if this might be rhetorical but I am expecting a decrease in the inflation rate with deflation in some items besides home prices. I expect that collapsing debt itself from default, along with less new debt due to increased caution among lenders and investors would be the actual source of decreased inflation and or deflation. I wouldn’t say it was caused mainly by the consumer led recession.

Comment by packman
2007-12-26 07:23:50

Dollar down sharply all of the sudden - anyone know why?

Comment by Jas Jain
2007-12-26 07:45:48

You mean that -0.5% is down sharply? Just volatility and recovering last week’s loss, I think.


Comment by slorenter
2007-12-26 08:27:43

dead cat bounce is over,
If you want to save this nation and its currency
Vote ron paul, the only candidate addressing our currency crisis.

Comment by sd renter
2007-12-26 13:51:28

I AM voting for Ron Paul. I didn’t vote in the previous election because I didn’t want to vote for the guy I hated the least.

He’ll have a chance if he can win New Hampshire. He may not even fininsh in the top 3 in crusty ol conservative Iowa but in NH, he has a legit shot.

Comment by RoundSparrow
2007-12-26 10:44:41

Ha, down sharply?!

When the JPY finally moves the 8%+ it needs to in the next 3 weeks…. then it will have moved sharply. EUR+NOK+CHF+GBP seem to have leveled off in the past 2 weeks… I think they are waiting on JPY to take the lead this round.

Comment by WT Economist
2007-12-26 07:25:05

Case_Shiller saying 6.7% down year-over-year, with much of the decline in September.

INcluding food and energy, the CPI is up over 4% year-over-year. That’s an 11% decline in housing prices relative to other things in 12 months. It’s a start.

Comment by Jas Jain
2007-12-26 07:59:47

No, it is down 6.1% YoY and down 6.6% from the peak in Jul’06.

YoY, Phoenix down 10.6%, Miami down 12.4%, SD down 11.1% and LA down only 8.8%.

Charlotte and Seattle doing the best with YoY gain of 4.3% and 3.3%, respectively.


Comment by Jas Jain
2007-12-26 08:09:52

OK, there are two composites: Composite, CSXR, down 6.7%, & Composite-20, SPCS20R (reported on headlines and widely followed), down 6.1%.


Comment by GetStucco
2007-12-26 08:35:17

The good news: The bad 2007 housing situation is almost over, and the red hot spring 2008 selling season is just around the corner.

And what if you are a prospective buyer who is priced out of the market? Would you view the news that prices are returning to affordable levels as “grim” in that case?

Real Estate
Mortgage Meltdown 2007 Archive
Home prices post record drop
S&P/Case-Shiller index of 10 major cities fell 6.7% in October. Housing markets remain ‘grim.’
December 26 2007: 9:26 AM EST

Home prices post record drop
Mortgage mess has government scrambling
Pain Street USA: ‘08 housing outlook
November foreclosures take a dip

NEW YORK ( — Home prices fell 6.7 percent in October, compared with a year ago, according to the S&P/Case-Shiller 10-city home-price index, a record drop as housing markets continued to deteriorate.

It was the largest drop in more than 16 years and marked the 10th consecutive month of price depreciation and 23 months of decelerating returns.

“No matter how you look at these data, it is obvious that the current state of the single-family housing market remains grim,” said Robert J. Shiller, chief economist at MacroMarkets in a release.

Comment by in Colorado
2007-12-26 09:53:37

The MSM is finally starting to acknowledge that at least food prices are rising very quickly.

Comment by Chad
2007-12-26 07:30:05

Holy Cow. I’m not really sure if this is related to a subprime mortgage or not, but it looks like this is a “charity” chrod striking auction to help out a family in trouble.

Comment by wmbz
2007-12-26 07:41:06

Someone has lost their mind!

Comment by Rich
2007-12-26 08:00:07

This guy needs to taks his meds.

Comment by Chad
2007-12-26 08:24:12

Well, just did the calculation, and over the last 80 years, this represents a 9.1% annualized return if it sold for $700,000. :o

Comment by Xpovos
2007-12-26 08:27:45

jesture? I shouldn’t pick, because it’s actually a reasonable spelling, but I see it and can only think ‘jester’.

Comment by AnnScott
2007-12-26 10:32:40

Think he is using Ebay to adverties without selling by putting aninsane price on it. Those cars in mint condition or prfectly restored can go for up to $75,000. seems he just wants potential buyers to contact him though the Ebay email link

One way to keep the Nigerian scammers from bidding and asking for money.

Either that or the 5th 0 was a typo.

Comment by ugh
2007-12-26 10:35:26

That fool lives 10 minutes from me. I bet he’s a specuvestor. CRE sales have stalled, maybe he’s long on that.

Comment by rms
2007-12-26 07:50:18

Our prosperity as a nation depends upon the personal financial prosperity of each of us as individuals. –George S. Clason

Comment by measton
2007-12-26 09:00:15

I’m not sure this is true anymore, or atleast it’s not true if you substitute elites for nation. There was an article by Tom Friedman a year or two ago that suggested that countries with oil were much less likely to be democratic. The elites could make more money by stealing oil then by building an economy and democracy that functioned. The same probably holds true for other commodities. Russia moved toward democracy and an open society when oil was cheap but now is moving in the other direction.

Comment by txchick57
Comment by GetStucco
2007-12-26 08:47:49

A look at that chart is very informative — shows that prices are falling at a faster YOY rate than at the worst point in the early 1990s bust (1991-1992) with no sign that the rate of decline has bottomed out yet. It is sobering to think that prices continued falling for another 1/2 decade after the point of maximum price decline was reached in the last bust.

Comment by Jas Jain
2007-12-26 09:01:14

Actually, there was lot more overbuilding of SFH during 2003-06 as people were pushed into being “homeowners.” The low in sales of new SFH was close to 400K in the previous cycle and the high was 1,371K during July 2005.

Finally, the supply-demand is exerting itself as the insane lending that drove the prices is over.


Comment by Kent from Waco
2007-12-26 08:36:26

This is one of those very rare days that I get a headstart on everyone. So I have the following comment - please feel free to critique.

It is most tax-advantageous to load up your 401(k)/IRAs with cash and bond holdings, while keeping equities in post-tax savings. For example, from a taxation standpoint $100k in 401(k) invested in bonds + $100k in post-tax savings in equities is better than $100k in 401(k) invested in equities + $100k in post-tax savings in bonds.

Your analysis might make sense if all your savings was for the same purpose and for equal time horizons. For most people it is not.

For example, my wife and I have access to more tax deferred retirement opportunities than we can take advantage of. Through her work she has both a profit sharing plan (with about 20 fund choices) and a self-directed 403(b) which is in vanguard. I have access to the Federal TSP (which is is low-fee index funds) and my own vanguard 403(b) and we have our own Roths. All-combined we could be putting over 60 grand/year into tax-deferred retirement.

On top of that we have 3 kids for which we need to save for college and then general savings to do for future housing and land purchases that we are contemplating.

Sure there might be tax advantages to what you recommend. But our retirement savings is on a 25-30 year horizon and our non-retirement savings is on a 3-10 year horizon. In that respect it doesn’t make sense to dump our short-term savings into equities and our long-term retirement savings into bonds and cash.

Comment by yensoy
2007-12-26 11:02:19

Thanks Ken, you’re the first to actually respond to the question :-)

In your situation, I can still see the merits of putting your cash/bond holdings for 3-10 years in your 401(k) and stock holdings in post-tax savings. At the point in time that you need the cash, sell your stock (pay cap gains on it) and convert an equivalent amount of 401(k) cash/bonds into the same or similar equity holding (within your 401(k)).

Comment by plastic fantastic
2007-12-26 08:36:43

Data point from our Christmas party: I never bring up housing, since it’s usually a volitile subject, but two guests did so independently. They know I’m a renter, and said ‘You are so lucky you rent! The housing market is (awful in Los Angeles)!’ Both comments from westside homeowners. This would have been unimaginable a year ago. Psychology has made an about-face.

Comment by jbunniii
2007-12-26 10:14:34

Why do most homeowners even care that the market is “awful”? They can’t all be planning to sell in the near future, can they? To me, renting is certainly no “luckier” than having bought prior to the bubble.

Comment by jim A
2007-12-26 11:13:57

And how is that lucky? I fail to see any element of chance involved. You made a choice that has been advantageous to you. There’s no “luck” involved.

Comment by kahunabear
Comment by rent4now
Comment by txchick57
2007-12-26 09:14:57

A complete crock of crap.

Comment by RoundSparrow
2007-12-26 11:02:54

txchick: I spent 5 of the past 7 years living full time in an RV traveling from Seattle to Florida via Phoenix/Vegas midpoint. Like you, I work at home and telecommute (so I could work from on the road with cell phones).

I settled in Austin area in 2006 (ultimately renting in Canyon Lake closer to San Antonio mostly because Austin still needs to drop in both rent and house prices).

I want to comment: as for the _quality of life_ Austin really is affordable compared to a LOT of places.

Example: Phoenix or Las Vegas. despite all the people who did move there… Why in hell would anyone want to live there except for jobs? at least go for Prescott / Chino Valley or Lake Havasu City or Flagstaff.

Austin really is a special city. And yes, price needs to drop based on local historical housing prices… but compared to many many other cities in the USA really is a nice package.

From that perspective, I find it affordable. It was a nationwide bubble, and there are various levels of insanity ;)

Comment by GetStucco
2007-12-26 08:59:11

The 2005 Housing Bubble Blog forecast is turning into the 2008 MSM consensus forecast. I am having a hard time remembering which ‘experts’ (aside from blog posters) were ‘expecting prices to tumble’ back in 2006. And the ‘more than 20 percent’ prediction seems amusingly conservative now that prices are off by double digits

Real Estate
Pain Street USA: ‘08 housing outlook

The forecast is for a longer, deeper home-price slump than previously expected, with double-digit declines in many markets.
December 21 2007: 4:56 PM EST

(Top 10 worst hit markets
Where the home price slump will be most severe.
Metro area State Peak to bottom loss Peak quarter Bottom quarter
Punta Gorda FL -35.3 1Q ‘06 2Q ‘09
Stockton CA -31.6 1Q ‘06 2Q ‘09
Modesto CA -31.3 1Q ‘06 1Q ‘09
Fort Walton Beach FL -30.4 4Q ‘05 3Q ‘09
Naples-Marco Island FL -29.6 1Q ‘06 2Q ‘09
Merced CA -29.1 1Q ‘06 2Q ‘09
Sarasota FL -27.4 1Q ‘06 2Q ‘09
Reno-Sparks NV -27.2 1Q ‘06 3Q ‘09
Miami FL -26.7 4Q ‘06 4Q ‘09
Carson City NV -26.1 1Q ‘06 3Q ‘09)


NEW YORK ( — The United States is deep in its worst housing slump since the Great Depression, and according to a new report, it’s not going to get better any time soon.

In a new survey, Moody’s says many metro areas will record losses of 20 percent or more during the downturn, with the national median price for single-family homes dropping 13 percent through early 2009. Factoring in discount offers from sellers, the actual price decline would be well over 15 percent.

Eighty of the 381 metro areas covered by the report will record double-digit losses, according to the report. Most of the worst-hit markets are in once high-flying areas, such as California and Florida.

The steep losses were bound to arrive sometime. Throughout the housing slump, which began in the summer of 2006, experts kept expecting prices to tumble, but it wasn’t until recently that they dropped substantially, according to Mark Zandi, chief economist for Moody’s

Comment by peter m
2007-12-26 10:39:35

I don’t know about other metro regions but per my informal perusal and layman’s analysis of LA market I would say that the middle and lower end LA zips -85 to 90 % of total LA county zips- are getting creamed. Informally LA County is about -10% neg YOY average entire cty (Nov 06 to nov 07) including inflation adjustments. Quick glance at LA dataquick zip chart shows about 50% of all zips are down -20% yoy. Inner crapola slums getting hammered, and the banks haven’t even unloaded their POS REO ’s yet.

Get ready for major crime upticks in LA in 2008. Organized LA Criminal Rings will be the next big bubble in 2008.

Comment by Professor Bear
2007-12-26 09:10:24
Comment by Chad
2007-12-26 09:24:49


Comment by txchick57
2007-12-26 10:22:32

Yawn. Weren’t we looking for that back in June?

Remember I posted in August about Craig Hall saying the commercial market was over?

Comment by Anonymous Coward
2007-12-26 11:05:03

I remember.

All debt-financed markets are over. Residential RE, commercial RE, credit cards, student loans… I don’t understand why the sheeple can’t see the big picture.

Comment by Jas Jain
2007-12-26 09:16:17

David Kotok, on CNBC, said that the over supply of homes, new and resale, is 2-3 million. This means that the builders have to stop building for two years, but they are building new units at 1.2-1.3M rate. No bottom in sight until 2011.


Comment by Colorado Shadow
2007-12-26 09:17:25

We’ve all noticed there has been a rash of bad journalism lately that has been painting all the variable-rate FB’s as victims. We had an article in The Denver Post on 12/24 bemoaning how a veteran was about to be foreclosed on and we should feel sympathy for him, blah blah blah

However one of his in-laws, posted a comment to the story basically debunking the whole article and making the columnist (Al Lewis) look like an incompetent buffoon. Another poster added a link showing that the FB lied to the columnist about the ownership of his house! Finally a rare occasion where a FB gets called out publicly! And there is even a comment ripping Bernanke and Greenspan! Good stuff!

I’m going to paste two of the story responses here since I imagine ol’ Al will pull them as soon as he sees them:

The other side of Lawrence Garza I was shocked to see the article in the morning paper talking about how Lawrence Garza, a veteran that has served his country, was a victim of the mortgage industry and a family member who was a mortgage broker. I would like to make a comment as an outside observer on personal responsibility and then further comment on the character of this “upright individual” and put in check the sympathy many may feel after reading this glowing article of a wronged veteran. This part will be written from a person who was there and had family that was related to Lawrence Garza.

First, Lawrence states that he didn’t realize that his interest rate could jump from 7.15% to 13.15%. Maybe this is because he didn’t read the adjustable rate disclosure provided to him when he was signing paperwork in the PARKING LOT OF 7-ELEVEN! Any reasonable person would have met their mortgage broker - even if it was family - in their office or at their home to go over such important papers and then would have seen, very clearly, the caps on the mortgage which would have said the rate could go up 6%. Shame on you if you won’t even take a minimum level of care when dealing with your finances.

As far as Lawrence’s Real Estate Broker - Ron Castillo - characterizing Lawrence as a “very upright individual”, let me tell you how Lawrence ended up in this home that he can no longer afford. The article was accurate when it said that Lawrence’s son, Darrell, died in 2003 from a freak bout of meningitis. However, Darrell was not building this home for Lawrence - Darrell was building the home for his pregnant wife and himself. When Darrell passed away, Lawrence broke into the home and stole not only personal belongings and financial records of his son’s wife but also financial records of the construction business that Darrell and Lawrence were partners in. Lawrence went further to kick his pregnant daughter-in-law and his unborn grandchild out in the cold to find a place to live. Fortunately, she has loving family that took her in - of which I am one - and then she completed construction on another home that Darrell was building in order to have a place to live and raise her child.

Finally, Lawrence and Darrell were partners in the construction business that was doing well while Darrell was alive and running the business. The loans that Lawrence “co-signed” for were joint business loans not loans that a father co-signed for to help out his son. Lawrence fought in court to get all control of the business and was unable to run it effectively enough to pay the debts he jointly entered into.

In the end, Lawrence Garza made his own bed and now must lie in it. He had no problem acting so cruelly to his daughter-in-law and his unborn grandchild but now expects everyone to come running to his aid and have sympathy for him. Take my advice and save your tears for those out there that are truly in an unfortunate situation, not those that abused the system and got caught up in it. What goes around comes around and this time, it was more than earned by Lawrence Garza.
Heather Church
Joined: Dec 23
Points: 211 Posted by Heather Church (aka hchurch)
at 10:28 AM on Sunday Dec 23

Good Morning Al…
You should check all the details before you write a story. Please take a look at property detail 5560-2007 Lawremce is NOT the owner ! Also you might check some of the other details.

Have another foreclosure you might like to look into 2158-2007 - a Donald Wayne Beverly Jr

Bill DeBus
Joined: Dec 24
Points: 0 Posted by Bill DeBus (aka Homer987)
at 6:47 AM on Monday Dec 24

Comment by in Colorado
2007-12-26 10:11:10

Its unfortunate that Lewis dropped the ball on this story. Most of the time he is spot on:

Comment by Colorado Shadow
2007-12-26 10:29:08

Agreed. I usually love Al’s stories but this one was a glaring exception.

Comment by Chad
2007-12-26 10:21:03

Here is the reply I posted.

“Simply an ad
Posted: 10:20 am, Wed Dec 26 0
Report Abuse | Report Good Comment


Don’t you see what is happening here? This is obviously a paid ad for a home to sell!!! There is absolutely no need for a description and a price on the property, including how much “equity” there is. So, Al, how much did Castillo pay you? Let me tell you another thing, if he could only get 7.15% intro on a teaser mortgage, there is NO POSSIBLE WAY that he had “good credit” when he took out the loan. Total sub-prime junk priced accordingly. And he should have taken that 10.75% refi and ran as fast as he could.

p.s. Isn’t H&R closing Option One? “

Comment by Not_In_Montana
2007-12-26 09:27:42

WHAT a scream! I just now discovered that my local paper has started a mortgage lenders’ Q&A blog here. Apparently it started 12/12 and I have no idea who the “bloggers” are of the posts:

” It seems with all the negative publicity going on that everyone is afraid to buy a new house or refinance. In my humble opinion it is a prime time to buy a new home or refinance your existing mortgage. Rates are at two year lows and houses in most parts of the country are sitting on the market for much longer periods of time. I do advise too that there are certain areas of the US that real estate prices will get even lower but in most areas of the Northwest I feel that if you buy smart you will get a real good deal. Contact a local realtor and look at houses that have been on the market for 6 to 9 months or motivated sellers. You can lock in a great rate and finally have some negotiating power with the seller. Be patient and you will find a deal. “

Comment by Deflationary Jane
2007-12-26 10:02:24

Everyone thinks they are different. It’s like mass hysteria.

Comment by txchick57
2007-12-26 10:09:37

My response would be, “there’s a very good reason your opinion is humble and you just displayed it for everyone to see.”

Comment by Jas Jain
2007-12-26 09:37:53

Billions of dollars in gift cards are never used!

Q: Why are people so stupid?

I grew up in a culture where cash and gold jewelry (very little mark up over the price of gold) was very common form of gifting. I know that some Americans also give cash, but why so many give gift cards and “force” the recipients into buying something?

Just curious,


PS: 99% of the gifts (dollar amount) that I have given in the past ten years are gold and platinum coins. I even paid a contractor in gold coins at the rate of $350 an ounce, in 2003, and he is very grateful. He loved the liberties and was emotional about it.

Comment by txchick57
2007-12-26 10:24:25

When I get gift cards, I sell them on Craigslist.

Comment by Jas Jain
2007-12-26 11:51:09

Are you kidding? If not, what kind of bids do you get (%)?


Comment by txchick57
2007-12-26 14:42:02

I usually offer 10% off the face value and get it.

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Comment by Anon In DC
2007-12-26 09:51:25

Hi. For several years my family have thought me nuts talking about the RE bubble. Yesterday at Christmas dinner the subject of RE came up. (Not by me) The place EXPLODED with talk / raised voices / all different angles. Everyone was completely conversant in the RE bubble. They for the most part all agree with us here. But it was so FUNNY. No secret - cat’s out of the bag. ;) Another topic. Saw yesterday a glossy magazine (Don’t know the title) that looks to be a freebie with lots of ads targeting upscale households. Was something like Palm Beach Living or something. It looks as though it is also also distributed to Charleston, SC and to Fairfax, VA. My folks did not order it. It just came with the rest of the junk mail. Magazine has an ad for an apartment tower in Atlanta. A Robert Stern (famous architect) development - Mansion on Peachtree. Looks to be a 20 - 30 floor tower. Residences starting at $2.5 million. Stern’s website says the place is underconstruction. Is this a joke ? $2.5 million for an aparment in Atlanta ? Altanta is very nice. But there does not seem to be the kinda of amenities that command a $2.5 million. Any comment from Altanta readers ?

Comment by HBBLurker
2007-12-26 11:39:52

Like to same the same about the NYC tristate area, but from the majority of poeple I talk to or overhear they think this is temp, and it’s a great time to buy, the old “It’s different here”…I don’t even bother to convince them otherwise anymore…

Comment by arroyogrande
2007-12-26 09:57:40

For those that haven’t seen the parody of Dr. Suess’s “Green Eggs and Ham” making the email rounds (warning: PDF):


“I will not sell it here or there
I will not sell it anywhere
I do not like your CDO
I do not like it, Broker Joe

Our SIV has had a few rough knocks
Get in now, you sly old fox!

I am slyer than a fox
And I don’t think you have the docs
That you must have if you foreclose
And so a judge will thumb his nose
At you, your SIV, and CDO
Who owns the mortgage?
I don’t know
And you don’t either, Broker Joe
I would not know it here or there
I would not know it anywhere
I will not buy your CDO
I will not buy it, Broker Joe!”

We have some hedge funds who are long
Those guys are smart! They can’t be wrong!

Some funds are long and some are not
The ones who are, are feeling caught
The short ones make a lot of sense
And they are up lots of percents
No SIV, no yen
Not now, not then
Not here, not there
I would not touch it anywhere
I will not buy your CDO
I will not buy it, Broker Joe!

But you can trust the agencies
They’ve rated this stuff Triple-B!
This tranche is still investment grade
You buy it here, your year is made!

The agencies have been asleep
Their ratings are just like ‘Bo Peep
That is, they’re from a fairy tale
As fiction goes, they’re off the scale
And I do not believe them, Joe
And so your tranche is a no-go
You think at 50 it’s a do
Until it falls to twenty-two
I do not like your CDO,
I will not buy it, Broker Joe!

Have you met our in-house quant?
He’ll model anything you want!

Except, that is, transactions costs
No thanks, I do not want the loss
From any quant’s sexy black box
Or mortgages unbacked by docs
Or mindless buys of kiwi-yen
Or ABX headed to 10
Or any other credit turd
I’ve spoken, Joe, so hear the word
I do not like your CDO,
I will not buy it, Broker Joe!”

Comment by sm_landlord
2007-12-26 12:51:35

I just spit all over my right monitor! That is FUNNY!

P.S. Download the PDF, it adds to the humor.

Comment by matt
2007-12-26 10:47:18

Short oil via cvx today.

Comment by Chad
2007-12-26 12:31:34

Why? CVX up .58% right now, and light sweet crude up $1.88 / barrell to $96.01.

Comment by matt
2007-12-26 13:03:19

I think oil is locked in a trading range, 87 to 97. Willams %R and stochastics are overbought, momentum is waning. Stock might have another .5 in it before it hits the upper bband.

Comment by Chad
2007-12-26 13:16:39

I see, thanks.

(Comments wont nest below this level)
Comment by matt
2007-12-26 14:08:58

I’m looking at this from a short term perspective, any disruption in supply, they will tap into the SPR. That should cap oil short term.

Comment by tj & the bear
2007-12-26 23:09:11

Ha! Fat chance. Even after Katrina they didn’t tap the SPR, they simply suspended filling it (and only temporarily).

Comment by Tyrone
2007-12-26 10:50:37

Stuck in the housing slump
“There’s a lot of people out of business right now,” said Geoff Craighead, president of the San Mateo County Association of Realtors. “Lots of people came in to get rich in the last few years, and now they’ve got to get realjobs.”

Craighead is talking about the shrinking number of real estate agents countywide, and how he expects many of them to balk on paying their association dues next year because sales are so bad.

Comment by Jas Jain
2007-12-26 10:55:22

CNBC on Housing: “No Silver Lining.”


Charlotte Case-Shiller is up 4.3% YoY but is down from the recent peak. Most importantly, Charlotte home prices are up a sum total of 34% for the past 8 years (Radar Logic data, which is similar to case-Shiller has it up only 20% for 8 years).

Seattle is up 3.3% YoY but it has definitely turned down from peak during the summer. Radar Logic has it down 6.4% since June.

So, there really is no silver lining for home prices.


Comment by Lost in Utah
2007-12-26 11:13:30

Hope this isn’t a double post, OT, but if I buy a BlackBerry now (needed desperately) with my business CC, can I expense it next year when I pay the bill? Thanks.

Comment by Chad
2007-12-26 11:51:09

It is, LIU. Here is my above response.

Comment by Chad
2007-12-26 11:15:57
Expense it when you pay for it. It’s not like you’re capexing it and showing as a depreciable asset. Besides, you can say you didn’t use it, therefore it did not provide any value, until 2008

Comment by Chad
2007-12-26 13:57:05

So, October is a record for national home price declines, but the DOW is still up a couple bucks?

Comment by bill in Maryland
2007-12-26 16:07:08

Realwhore Connie De Groot is on Stuart Varney’s show on FNC tonight cheerleading again for RE. She’s with Coldwell Banker. She is plastic and fake, but if “they” are fake, they still can be a turn on! LOL.

Comment by bill in Maryland
2007-12-26 16:09:03

Hee Hee! Stu Varney has Peter Schiff on now. Right after RealWhore Connie DeGroot! Didn’t they debate a few months ago? Peter Schiff Rocks!

Comment by erik
2007-12-28 14:42:23

Here is an interesting post in craigslist–someone looking for cheap drywall so that he can finish a basement so that he can add equity so that he can refinance out of the ARM he is in. The fact that he is doing it himself and is looking for cheap drywall might point to a cash flow problem

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