Bits Bucket For November 16, 2008
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The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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United States
Florida
Snowbirds, meet the repo men
Nov 13th 2008 | CAPE CORAL
From The Economist print edition
The property crash is devastating a boom town
…
In 2004 the Los Angeles-based Milken Institute rated the resulting sea of stucco and strip malls the best-performing city in America. Now it is 120th. One in 71 homes in Cape Coral’s Lee County has a foreclosure filing, and nearly half the mortgages on recently purchased houses in the area are under water.
Now repo companies are the ones doing the booming. Gulf Coast Recovery’s business is up about 80% from last year. Recently financiers have lengthened their grace periods, hoping that debtors will get their payments back on track. But the repo men anticipate a spike in calls once that time is up. Mike “Chevy” Gray can’t wait. “I love angry people”, he says. He brandishes brass knuckles: “Very effective.”
My old boss had a friend that was telling him how stupid he was for not buying in Cape Coral. His friend made money on his first sale and then bought 3 or 4 more. I am going to have to check in to see how that friend is doing. How high is the tallest building in Cape Coral? It’s probably getting a lot of use.
The tallest one I saw appeared to be a water tank or oil tank, maybe 60 ft high. Probably not high enough for anyone to kill themselves.
Have been posting about my financing a pair of C. Coral foreclosure flippers. The rapid flip they expected didn’t work out, no big surprise there. Their open house attracted about a dozen prospects, but they let it be known that the minimum bid they would entertain was $79K. My attitude always was, maybe I have BOUGHT a 2004 3BR/2BA in C. Coral for $54,400, the amount of the loan. However, I am keeping cool, as the wannabe flippers are very likely to make some number of payments of $585 each (10%, 15yrs) before they throw in the towel. In particular, I hope they pay the humongous property tax before they throw in the towel. I wonder if they may ultimately suggest a short sale in which they pay a realtor. No soap radio. I’d pay the flippers a small amount for their signature on a quit-claim deed; no RE agents are getting any money at my expense. You can see how much the idea that I may have BOUGHT this house enters into my thinking. I laugh to recall that the flippers asked if I’d consider financing two flips simultaneously. My answer was, “Let’s see how you do with this one.” Conceivably they can in fact break even (would require sale at maybe $74K).
Hey, I am not being any stupider in this case than I feel when I get tempted to buy 30-year-old Morro Bay houses for $350K.
Meanwhile back at the ranch, my other clients, all owner-occupiers, are still doing just fine.
Very interesting illustration of how much more time a responsible lender must spend managing an account with a flipper than with an owner occupant. Thanks.
az_lender:
granted, a $54K house sounds pretty cheap, but aren’t you concerned about trying to be a LL from far away? Or worse, if they save money by turning off the AC, couldn’t you end up with a mildew-soaked structure that is worth less than $0?
Seems risky to me, even with what appears to be good collateral.
“LL from far away” — I wouldn’t be an LL at all. I would become an owner-occupant. I would become a resident of the state of Florida and spend my winters there instead of watching paint dry (watching MB prices come down). It’s not my first choice, it’s just what’ll happen if I get stuck with the property. FL is a lot closer to Maine than Morro Bay is, and also my bro is in FL, so it’s not all bad.
You remind me of the kid in my junior high school who was surprised to learn first hand that you can break your leg by jumping off a roof (12 ft high or so). We had a similar unfortunate incident in our back yard when one of my daughter’s friends jumped off our roof (also about 12 ft high) and broke both arms.
60 ft would certainly do be high enough. Recall from your physics class that frictionless acceleration is 32 ft/sec^2.
v(t) = v_0 + \int_0^t 32 ds = 32t
Distance = x_f - x_0 = 60 ft = \int_0^t_f v(t) dt
= \int_0^t_max 32t dt
= 16t^2
t = \sqrt(60/16) \approx 3.87 sec
v(t) = 32(3.87) = 124 ft/sec
P.S.
124 ft/sec X (60 sec / 1 min) X (60 min / 1 hour) X
(1 mile / 5280 ft) = 85 mph
Thanks for the physics stuff, PB. Did you factor in the extra density that a bone-filled skull would add to the overall mass of the frictionless FB?
I was also thinking that if any REtards couldn’t manage to kill themselves jumping off a 60 ft high building, that surely a helpful soul could go out there and offer some assistance in the matter. Scrape ‘em up off the pavement and haul the mess back up the stairs and chuck ‘em off again and again until we get the job done right, by cracky!
“Did you factor in the extra density that a bone-filled skull would add to the overall mass of the frictionless FB?”
It has been twenty-seven years since I last sat in a physics class, but my recollection is that in the absence of friction, a feather would drop just as fast as a bone-filled skull.
I like your anger!
It’s not the fall, it’s the sudden deceleration from 85 to zero.
“Look Ma, I’m on top of the world a real estate tycoon” splat..
“…it’s the sudden deceleration from 85 to zero…”
Granted. Similarly, it is the metaphorical deceleration of the global economy from 85 to zero which is causing a few concerns amongst economic policy makers.
Sounds like Community Service to me.
‘Sounds like Community Service to me.’
ooooh, you sound so sexy, really.
Was his friend’s name Jeff? What ever happened to that guy? (aka - Taco Jeff)
Ahhh yea, Taco Jeff. Good times.
I am moving to Cape Coral this weekend. I have secured a six month rental while I get to know the area up close.
CC area came onto my radar when housing prices hit 75% off peak. Do I hear 90% off peak…..why yes I do and I will be in position when it does.
75% off peak= $62K
I came to Ben’s HBB in mid 2005 and freaked out as I was reading here. I sold the home in Virginia in September and moved to Texas. Texas has been a great host while holding out here.
I would stay here if I did not have to keep running for cover with tornado warnings, sinus issues and colder than I thought it would be. I love this Texas Hill Country but it is not going to work out.
Good luck on your move to FL!
Be sure it’s what you want, too; hurricanes and all…
United States
Government finances
Local zeroes
Nov 13th 2008 | CHICAGO, LOS ANGELES AND NEW YORK
From The Economist print edition
Cities and states are facing big budget deficits. It is partly their own fault
SOON after the election parties wound down, the gloomy pronouncements began. Arnold Schwarzenegger, California’s governor, waited just two days after Barack Obama’s victory before declaring that an $11.2 billion hole had appeared in this year’s state budget.
…
California has suffered about a quarter of all foreclosures in America. Yet the state’s fortunes are tied even more closely to the financial markets. More than half of all revenues to the general fund come from income taxes, and half of those taxes are paid by just 144,000 wealthy taxpayers. As stock options and capital gains disappear, California finds itself deeper in the red than any other state (see chart).
Like other states, California plans to put higher education and health on the chopping block (police budgets may be protected, thanks to the well-known link between rising unemployment and crime). Cities will neglect their parks and close swimming pools and libraries. Some plan to renegotiate union contracts and tell workers to stay at home for a few more days each year. Badly-behaved citizens will be fined a lot more.
“California has suffered about a quarter of all foreclosures in America. Yet the state’s fortunes are tied even more closely to the financial markets. More than half of all revenues to the general fund come from income taxes, and half of those taxes are paid by just 144,000 wealthy taxpayers. As stock options and capital gains disappear, California finds itself deeper in the red than any other state (see chart).”
So the proposal by Obama to raise taxes for the upper 5% is not going to work very well, if the upper 5% have dropping incomes…
Poindexter, I must have more fuel for my rockets.
Ve vill count on Felix the Kat to come through for us, Kallyfornia
Yeah, that 5%.. That’s a misprint. I believe that the correct number is 50%. We need to raise taxes on about 50% of the people to protect the govt spending that we have coming down the pike.
That’s interesting, since only about 50% of the people pay taxes. Bascially, if you pay taxes, plan to pay more in the future. And this isn’t a rant against Dem/Rep, this is just the simple fact. We continue to dig ourselves into the “home prices go up” myth; to the tune of a few hundred billion dollars at a time.
The only thing that will go up is taxes.
Inflation may come to the rescue
If the dollar drops 50% and wages/stocks rise 25% many people will move into higher tax brackets and get hit by AMT. So dropping the dollar is a great way for the gov to raise revenue even if the US sees a decline in the standard of living. This method spares the elite to some extent as they are already in the highest tax bracket it is the middle and upper middle class who get hit the hardest. The poor will be given just enough assistance to keep them from rioting.
That’s a lot of if’s, little boy!
California is an example of what happens when there are not two legitimate parties functioning in opposition to each other. The gay agenda is completely out of control in this state. They are going after contributors to the marriage proposition. Arnold is no Republican and could not have been elected without a very liberal social agenda. I’ll get flamed, but truth is truth.
What does the “gay agenda” have to do with California’s fiscal problems?
I think the implication would be that a party uses a social issue to get itself into power. The real goal of the party is to unleash a wicked economic agenda, the social aspect just being the tool by which they achieve power. In that context the issue of gay marriage, gay rights, etc. is used to buy votes to undergo the party’s true plan.
This is the same thing that the Republicans have done with the Evangelicals. They used them as their base for which to obtain power. The primary goal was never to forward the Evangelical social agenda. The primary goal was to obtain power on the backs of the Evangelicals and then unleash their true economic agenda which is outright thievery.
I think both sides dwell upon social issues to provide cover for their outright pillage of the nation. In California it is what are considered liberal social policies. On a national level it was by using what are considered conservative social issues. Theft was really the only goal of the Masters of the World.
NYCB….I agree 100% with your post . I have seen this BS you speak of play out time and time again in politics .So much lip service, but the true power powers are the ones that get the gravy and helping hand of the government .
Suppose the same were true of our recent national election.
Bravo NYCB. Excellent post.
Very astute post, NYCBoy.
Good post. For a more comprehensive discussion of this topic, check out Thomas Frank’s new-ish book the “The Wrecking Crew” (he’s the guy who wrote “What’s the Matter with Kansas?”).
Neocons, flame away.
It’s funny…
The gay people I know are the most fiscally fit, of all my friends.
(but let’s blame them for all of society’s ills)
I know both kinds - financially clued in and total FB’s.
Mostly they are better off because they are DINK’s not because of who they bonk.
What he said.
My brother and his friend were/are two of the most fiscally screwed up people I’ve ever personally seen. (When his friend filed bankruptcy, he had something in the vicinity of $40K bucks in credit card debt…..has filed for bankruptcy twice, that I know of).
Which is what makes me laugh when I see the propaganda that “Gay people are all solid, upstanding citizens, they only have a a different lifestyle..” They are just as screwed up as any other group of individuals.
‘I know both kinds - financially clued in and total FB’s.’
Ditto.
“Mostly they are better off because they are DINK’s …”
That is one reason that traditional marriage advocates don’t think ‘gay marriage’ is a sensible term. One of the reasons the institution of marriage exists has to do with its traditional role of providing a financially stable environment in which to raise kids. Now that some heterosexual couples use birth control to avoid the hassle of ever having kids, while some gay couples use artificial forms of sexual reproduction to have them, the strength of this argument is somewhat undermined.
Instead of focusing on real problems, pseudo-Republican California pols are lining up behind the Prop 8 losers. All I saw was peaceful protests by Prop 8 supporters, but now the losers in a fair election are taking the gloves off and relying on false accusations and sour grapes protests to vent their bitterness.
Hint for next time: The time for peaceful demonstration is before the election, not after.
Well - why are we voting on civil rights, at all? Civils rights are to protect the minority against an unpopular majority.
Don’t blame them for being pissed. Thought this was a *free* country. You should be able to marry whomever you want.
The fact that it’s subject to a vote, is laughable.
It is hard to avoid being black or hispanic if one’s genetic makeup is such, but being gay appears to some to be more of a lifestyle choice (not that there is anything wrong with that). Hence some commentators feel the effort to equate gayness with blackness or hispanic origin to be a bit suspect. Apparently a lot of blacks and hispanics are among those who find this argument spurious, as these minority groups were strongly in support of Prop 8.
I think you’re lacking a clue here, professor.
It’s no more a choice that the color of your eyes.
Or to reduce it down to a level where even you can figure it out, why would a buncha people “choose” to be discriminated against?
This is your domain, isn’t it?
“It’s no more a choice that the color of your eyes.”
Trouble is, I am not gay, so I don’t actually know this first hand, though I do know that I have no choice in the fact that I like brocolli and chocolate. My subjective belief is that there is a sort of continuum, from people who are totally grossed out by the thought of gay sex to those who strongly prefer it, but I am no expert. The gay people I have known personally have struck me as having little choice in their preferences.
Adherents of some religious beliefs (particularly the ‘Yes on 8′ crowd) tend to view gay desire as a ‘challenge’ faced by some individuals, but gay sex, not to mention any sex outside the realm of hetorsexual marriage, as fundamentally immoral.
‘…why would a buncha people “choose” to be discriminated against?’
I guess that would depend on the perceived benefits of membership in the discriminated group. This particularly goes for religious adherents. The Mormons I know all feel very discriminated against at the moment for their collective belief in the immorality of gay marriage, but that does not stop them from continuing in their faith. Eternal rewards which come with a 100 percent (subjective) probability of occurance apparently have a very high present value.
‘Thought this was a *free* country. You should be able to marry whomever you want.’
That’s damn well right! In fact, just the other day I was telling you all that I was going to marry my beautiful, radiant cast-iron skillet, which I got from a Free Box at a yard sale. Because seriously, this is a great cooking implement. Which is better than can be said for almost any husband in the universe, if you think about it. It could make anything delicious.
Anyway, my point is, do you all think a traditional veil is best? Or else is a paper towel from Costco more ‘a propos’ for this event? Assuming my skillet accepts my proposal, that is.
Me and you, lady!
If there’s one thing in the whole wide world that I would marry in a heartbeat is my cast iron skillet!
“It is hard to avoid being black or hispanic if one’s genetic makeup is such, but being gay appears to some to be more of a lifestyle choice (not that there is anything wrong with that).”
That’s a load of crap. Why would one choose to be a second class citizen?
Recommended reading for OlyGal:
Secret Ceremonies
by Deborah Laake (Author)
Laake’s heartfelt account of her strict Mormon upbringing and two disastrous Mormon marriages includes new material.
Under the Banner of Heaven: A Story of Violent Faith
In 1984, Ron and Dan Lafferty murdered the wife and infant daughter of their younger brother Allen. The crimes were noteworthy not merely for their brutality but for the brothers’ claim that they were acting on direct orders from God. In Under the Banner of Heaven, Jon Krakauer tells the story of the killers and their crime but also explores the shadowy world of Mormon fundamentalism from which the two emerged.
A Gathering of Saints: A True Story of Money, Murder and Deceit
That’s a load of crap. Why would one choose to be a second class citizen?
‘Cause we like screw*ing skillets?
Wow - I havn’t checked in since this morning.
With all due respect, Bear - based on the evidence from everyone I know who is gay, it is genetic. They all tell me that it is the only attraction they have known. Many gay people I know have commented that it would be so much easier if they were straight. Several seem to have sincerely tried to be, but couldn’t do it.
We are all wired differently - I think this is the lesson. We are all people, though - and we should have our freedoms.
Now, this is totally anecdotal and means nothing in the grand scheme of things, but I used to work with young children, and I knew at least one who was 100% gay by the time he was in first grade. He loved jewelry and pretty dresses, walked in a very flamboyant way, and tried to kiss another boy when the other boy was using the restroom.
I agree that there is a spectrum, and some are genetically gay while others are born more bi-sexual and others 100% straight…but there is no denying (at least in my mind) that some people are definitely gay “from birth”.
BTW, isn’t divorce — especially no-fault divorce — much more damaging to “traditional” marriage than gay marriage? What’s funny is that some of the gay rights opponents are on their second or third or fourth marriages.
I agree we are all wired differently. But I am still confused over the experts explination that some of the wiring can be cured. Don’t take this the wrong way I have no issues with anyone being gay and I imagine it will be much less of an issue in the not to distant future.
The problem I have is all the experts saying all the other sexual issue for which people get jailed for (rightly so) can be cured of those fealings. Which is just a load of bull.
I believe they are right when they say people are born with the sexual desires they end up with as the enter into puberty and beyond. What I don’t agree with is that some of them (because most of us think it to horrible for anyone to think that way) can be cured from thier thought or as others have stated in here WIRING.
When it’s wrong it’s wrong, but don’t tell me becuase it’s not moraly excepted that it can be cured. It’s the same phycoligical malpractice homosexuals have been dealing with until the last few years where it is becoming more socially accepted.
I just hope soon they will realise that those other people cannot be cured and should never be left on thier own to repeat what they cannot be cured of.
but being gay appears to some to be more of a lifestyle choice
This is one of the more stupid comments I’ve ever read here.
I have an aquaintance who is gay, and did not want to be. He tried very hard through much therapy to rid himself of his gay “lifestyle choice”, and even made an attempt at suicide when the therapy failed. This man did not want to be gay, but he was. Luckily he survived and eventually learned to embrace it, somewhat.
If I were a Calif voter, I would vote for Arnold any time. He had the nerve to talk back to a bunch of whining nurses and teachers. A “very liberal social agenda” doesn’t cost anything, it’s the expenditures that prevent me from becoming a Calif resident. Arnold has tried to push back; it’s just not easy.
“The gay agenda is completely out of control in this state.”
What are you talking about? The hate/discriminate agenda won the day in California. It always amazes me how afraid people like you are of gay people getting married. It would have zero affect on your life. You couldn’t tell if they were married or not unless you asked them right. I can’t remember what comedian said it, but I agree “let them suffer like the rest of us”
It would have a good impact on mine …. gay people’s money is just as good as yours…a Wedding is a Wedding and all people need a great DJ!!!!
—————————————————————-
It would have zero affect on your life
What do you mean “us”? I rent.
What do you mean by “gay people getting married”? Marriage is a traditional religious practice, and most traditional religions (including Christianity) deem homosexuality to be immoral. In this light, “gay marriage” is apparently a bit of an oxymoron. How about if we agree to call the new institution “gay civil union”, so religious types don’t think gays are trying to encroach on their territory?
People, I just want to say, you know, can we all get along?
–Rodney King–
Why don’t we just lump the civil bits of what is now called marriage into “civil union”, and let “marriage” be an entirely religious thing? Caesar’s bit (as recognized by, say, the IRS) can “civil union”, God’s bit is “marriage”, and it will make everyone equally (un)happy.
Imagine all the food banks the Mormon church could have opened-fully stocked, with the $25 Million they spent in California, because they were afraid of people that aren’t like them?
No kiddin’!!!
Most Mormons I know are not afraid of gays, but many are fearful of California politics which could easily lead to
subjecting their school-aged kids to “gay marriage is a lifestyle choice” propaganda, in the interest of “fairness.”
Gavin Newsome has already started the movement.
I like ReverendDave’s solution best: Keep the government out of the bedroom, and let individual groups define marriage as they see fit. More generally, our country could use a lot more separation of church and state than latter-day politicians employ.
Who cares?
A buncha kids will realize that the world is a little more complicated than they thought it was.
Nobody “turns” gay — either you are gay or you aren’t.
This is all a buncha BS and I’m really really surprised to see this coming from someone who has devoted his life to being a “rational skeptic”.
‘Most Mormons I know are not afraid of gays…’
You know different Mormons than me, is all I can say.
I have good friends who point out the cute attractive cleancut Mormons in their white shirts and conservative ties.
They talk about “bending them over” and “showing them a good time” and I can see why they would see things that way.
I love New York.
Ha, back in the day(1987) a friend of mine had a couple of Mormon Missionary kids living in the apartment above him. They were actually pretty good kids. They would come down and watch us drink a huge amount of beer and not tell us we are going to hell or anything, but I often wondered if they wanted to tell us about Mr. Smith or drink beer.
I think they wanted beer, but I ain’t Morman….and I still ain’t right in the head.
“Why don’t we just lump the civil bits of what is now called marriage into “civil union”, and let “marriage” be an entirely religious thing?”
I agree completely, separate the legal from the religious.
“I have good friends who point out the cute attractive cleancut Mormons in their white shirts and conservative ties.”
Sounds like New York Mormon missionaries have to watch their back sides.
Sigh.
If only you had the data I did (from my friends) on their “response functions”.
Cleancut only in looks, I’d say, and I’ll leave it at that.
Things are not what they seem.
is a traditional religious practice, and most traditional religions (including Christianity) deem homosexuality to be immoral
Uh I got married at the court house, my brother got married at the court house. Religeon wasn’t part of the ceremony.
It’s a legal matter now.
but I’m all for civil unions, take any mention of marriage out of the law and replace it with civil union. All you have to do to get a civil union is go to the court house and sign papers with your partner and shazam. If you want you can then get a mormon marriage,a jewish marriage, a catholic marriage, or a wichan marriage if it makes you feel better. These marriages will have no legal standing, except to make you believe that you are going to heaven and everyone from the other religions is going to hell.
Bear,
You are going to make my head explode, with your archaic thinking. What does religion have to do with *anything*. Why do we give a fuck what some dumbasses wrote in a book ages ago? Last time I checked, marriage was a license granted by the government - and government (supposedly) is separated from religion. People should be able to marry whomever they want.
Why be subject to the bias of opposite sex marriages?
“Things are not what they seem.”
Of possible interest:
Angels in America (2003)
(Features a subplot about a gay NYC Mormon and his forlorn wife)
Seems to me the hole arguement is about the word “marriage” since civil unions are already legal. What real difference would it make to change the licence we pay for from a marriage licence to a civil union licence?
The answer is it would make no difference at all. It’s the hole “marriage” thing that is seen as a right. Which is why they are fighting for the right to marry. It has nothing to do with being able to see a loved one in the hospital or any other legal right you have when married or in a civil union (which by the way are the same legal rights).
It is however a fight for ligitimacy and equal standing in the community. There are pro’s and con’s argued by both sides which have no baring on any legal rights, but do have everything to do with tradisional moralities. Neither side will ever agree and this can become one of the most decisive issues seperating the country. It has even become a bigger issue than abortion at this time in history.
“Seems to me the hole arguement…”
Paging FPSS…
The established religions “own” the word “marriage.” That’s the true issue. Just like Disney owns “Magic Kingdom.” Let a group try to exploit the Magic Kingdom brand for its own purposes, and see what happens.
Are you suggesting that we should all have s*ex with Mickey Mouse? !? My Heavens, man!
Crazy! But, well, hmmmm… I have always been a strong advocate for freedoms, long as those freedoms don’t hurt anyone else.
Oh, and that ‘Snow White’! Man, she could change MY mind about ge*nder orientation, for sure, what with those puffy sleeves and those adorable little shoes she’s got.*
*That’s a joke, for illustrative purposes. **
**Mostly a joke.
I think.
It’s OK to swing both ways.
It increasess your odds for getting laid.
‘It increasess your odds for getting laid.’
Oh, whatEVER. Like either you or me needs help with that. Fook, scheduling’s a nightmare at this point. Too bad I lost my Blackberry.
‘Too bad I lost my Blackberry.’
I think I dropped it in the ocean. Seriously. I seem to recall leaning over the side of my kayak to kiss the moon’s reflection on the water, just like ‘Li Po’, noted Chinese poet, who drowned whilst trying to kiss the moon’s reflection, and I heard a splash. At the time I thought it could have been some oysters in my pockets escaping, but now I don’t know. These things are tricky, and ungovernable.
True, true.
And that just takes time away from our important food and drink schedule.
Oh well, as long as you can squeeze them in between the soup course and the risotto, it all works out. Doesn’t work too well between the risotto and the whisky course but we all knew that, right?
What I like about you, Faster, is your sense of perspective. It comforts me to know that there are such reasonable beings in the Universe.
—’And that just takes time away from our important food and drink schedule.’
Heaven forbid! Let’s not have that. Nohow’s.
— ‘Doesn’t work too well between the risotto and the whisky course but we all knew that, right?’
Oi? Hmmm? What’s a ‘whiskey course’?! Is that some new sort of fancy and debauched New York fashion? How about you tell the details. And remember, I’m just a simple Utarr farm-girl, unaccustomed to towns with traffic stop-lights as well as exciting cosmpolitian ways.
But I’m a quick study.
I wonder if I would find my Blackberry, if I were to row out there and shout for it. After all, I found my rear kayak hatch-cover*, which got washed away on last Thursday’s serious rain and major high-tide event. Right down there, as I walked along. Boy, was I excited. I wouldn’t have bet a hundred mushrooms on it, but there it was.
*No jokes from anyone! There really is such a thing, so there. And if you don’t have it, your kayak fills up with water and sinks, while you aren’t looking. That sucks.
I am sure you know what a whiskey course is better than me.
It’s where you can have any food you like as long as it’s a whiskey.
Oh, well, then, yeah, verily. I was thinking it was some sort of fancy New York thing, served on the supine bodies of Asian maidens.
If it’s just drinkin’ whiskey, or as I like to call it ‘uisege baugh’, or, ‘the water of life’, yes, I do know about that.
But let’s have have Asian maidens, anyhow. Those do go good with any decor, I’ve noticed.
The fancy part would be that you get your choice between different kinds of “waters of life”.
And the term is uisce bheatha (still pronounced as above) if you were ever to be so geekish as to learn Gaelic.
‘if you were ever to be so geekish as to learn Gaelic.’
I would never! Be so geekish! But then again, I never got paid by taxpayers to read ‘Finnegans Wake’ for a year. I imagine that THAT took a whole bunch of ‘uisce bheatha’.
Whatever. Like your liver noticed the difference in pronunciation. Actually, maybe it did. You probably have a discriminating liver.
‘You probably have a discriminating liver.’
My liver is probably not so fancy and so learned, ’cause it never got paid to do anything but sit there and marinate. But then, it only ever has to read wetland regulation manuals and agricultural bulletins and sometimes, if it’s good, then cookbooks. That’s like a hobby sort of thing, really.
‘That’s like a hobby sort of thing, really.’
Do YOU read cookbooks? And do your hands shake when you do? I was just wondering. I don’t want to be alone in my infirmity. Hahahaha!
Faster, it’ 5:30 here, pitch dark, and I have to go. I’m tired. I hurt my girly bum falling off a cliff the other day, and in a bit I have to go down to the shore and shoot at the tribes floating out there with their gill nets. You know how it is. How about I track you down later, once your liver is calmed down and dictating ‘Finnegans Wake’ to the rest of you yet again. It ought to take a liver more than one reading to grasp that excellent work, I should think. Although, as I have remarked, your liver is probably above standard.
I’m worse than you think.
Not only do I “read” cookbooks, and not only do I have an absurd collection of books on food, I indulge myself weekly by borrowing cookbooks from the public library!
I’m practically a tax menace all to myself.
BWAHAHAHHAHAHHAHAHHAHHAHAHAHHHHHHHHHHHH!!!
Ok. You two get a room.
We already might have.
Like we’re gonna sit around here waiting for your advice.
Okay. Thanks for the advice.
Hey, Faster? I live in Olympia, Washington.
When I pick my muddy bum off of the floor we can talk some more, whcih I hope for. seriously, I am so tired.
Okay, I’m back . sorry for being so gushy. My hands was cold and muddy. But! You know what sustained me, climbing up tyhe cliff? That I was gonna get online and be comforted.
Is that sad? That that’s what sustained me climbeing my wet girly self up the cliff in the night? F–ck no!
Baybee, I’m a going to win here
“Like other states, California plans to put higher education and health on the chopping block (police budgets may be protected, thanks to the well-known link between rising unemployment and crime). Cities will neglect their parks and close swimming pools and libraries.”
In Long beach Ca they hav been talking about closing the main city library. I see more aggressive parking code enforcement and ticketing. LB has revenues from oil leases and the port facilities to offset declines in property and gen revenue taxes. But LB will still be in the red like the entire state . Fees for utilities are up 10 % in one year.
Park services and social programs will be cut but police will be protected. Financial distress means more crime activity and the citizenry will always favor more policing over maintaining parks and social programs.
I notice there is nary a suggestion of getting rid of Prop 13.
May it be that soon Californians will actually get the services that they actually are paying for?
I wouldn’t be surprised to see another attempt of taxing imputed rent.
Why doesn’t California just announce that all businesses are banned from the state. No offense, but California is getting exactly what it deserves. NYC is next.
“Why doesn’t California just announce that all businesses are banned from the state. No offense, but California is getting exactly what it deserves. NYC is next.”
Heres the secret to surviving in this CA depressed economic climate. Start a small pop and pop quick food, chinese food/donut shop, nail salon,liquor store,whatever. Put mom, kids ,grandma, all extended relatives to work . Eat rice in back of shop to save on bills, fix the books to pay as little in taxes as possible. Locate in a bad part of LA, which is 90% of the city, so that you can run business beneath the radar of the tax grabbing local Gov’t robbers.
Make sure you install bullet- proof glass if a liquor store, and keep a shotgun handy. It will get nasty for small business owners in the inner city.
After living here 25 years, that sounds about right. Orange County, too.
RE: keep a shotgun handy.
Over the weekend, got to handle a Saiga 12 with shortened barrel; combat sight; custom folding stock; and 20 round 12 gauge clip.
It is one, super bad MF weapon!
$1250 plus special $200 BATF registering fee because the “Feds” want to know where this shorty is hanging out at any given time.”
What’s the population of CA now ~ 38 million. 144k is about 0.38% of the population. Assuming 3/4 of the population is taxpayer age > 18, that’s about 0.5% of the taxpayers paying 50% of the income tax.
“Badly-behaved citizens will be fined a lot more.”
HA just about anyone can and will be fined a lot more in Cali
Cameras at every corner
More than half of all revenues to the general fund come from income taxes, and half of those taxes are paid by just 144,000 wealthy taxpayers. As stock options and capital gains disappear…
——————–
Looks like those really wealthy people aren’t so productive after all…assuming one considers “stock options” and “capital gains” as their main source of income, which seems to be what the above quote infers.
Local obs:
Yes, the Chicago Association of Realtors H.Q., located at Peterson and Talman (not Washtenaw as I thought), is up for sale. This single story corner building has a large FOR SALE sign on each side. It’ll probably be on the market for a while. That stretch of Peterson is looking shabbier and shabbier - even the enduring Fondue Stube looks tired.
Nomination for haircut of the week - or how there is no bubble in the Midwest:
Chicago posters might remember how a year ago I posted about the McKinley Park Lofts. For our nationwide friends - lets just say that putting loft conods in McKinley Park is about the furtherest stretch of gentrification I have witnessed as developers pushed further into the margins.
Back then they were asking in the mid-300’s for these units. This weekend there’s an ad for an “absolute auction”, suggested starting bids?……drumroll……..$85,000.
Yeah, there was no bubble in the Midwest. Right. Sure.
Let me add that the Illinois politicians were on the news last night pushing for income tax increases. Naturally they picked a Saturday night (fewer viewers). I expected this. Property taxes are already among the highest in the nation here, so there isn’t much blood left in that stone.
Springfield needs to realize that just because the rest of the Rust Belt is on the ropes that does not mean that IL has the tiger by the tail. Capital is more mobile than ever, and nothing gets capital moving like more higher taxes and more regulation.
Meanwhile, every up and coming mid-sized city is going to be gunning for IL employers to move and they’ll sweeten the deal to the greatest extend possible. What can IL offer? These tax increases won’t go to better infrastructure - they’ll go to meet pension obligations and government payrolls.
McKinley Park was a missed opportunity if there ever was one. It’s less than 20 minutes to downtown via bus, train, or highway, has a massive park with baseball fields, soccer fields, a small lake, tennis courts, basketball courts, an Olympic pool, an ice rink, a fieldhouse… The neighborhood was mostly modestly-size single family homes. It has good access to grocery stores, Target, and other places to buy all your necessities.
It could have been a perfect place for young families. People could have made a good profit buying the homes from the elderly eastern Europeans that make up a large part of the neighborhood demographics, fixing them up, and selling them as affordable single family homes extremely close to downtown. Instead, they tore the homes down and built 3 and 4-flats (maximum allowed under zoning), targeting that mythical urban dweller/flipper that, it turns out, wasn’t really interested in this type of neighborhood.
It’s a perfectly fine place to be during the day, but all the empty and foreclosed units make great hiding places for the gang members who fight turf wars at night. They had been making great progress pushing gang activity farther west of here up until the greedy developers undermined all the efforts. What a waste.
GAIL MARKSJARVIS
Bernanke and Paulson have their hands full
November 16, 2008
Investors have been fixated on Humpty Dumpty.
Or at least it appeared that way last week, after Treasury Secretary Henry Paulson left the impression that perhaps all the king’s men weren’t sure how they were going to put the economy back together again.
“But Farrell asked: “How does one know? Have the facts really changed?”
Oversight, accountability, and the election outcome are new facts. They might have been able to skirt the first two were it not for the third.
Troubled times call for return to thrifty roots
By Kara McGuire
MINNEAPOLIS STAR TRIBUNE
November 16, 2008
After Sept. 11, 2001, President Bush suggested that it was a citizen’s patriotic duty to shop as if the nation’s economy depended on it. But he wasn’t the first to promote this idea.
In 1931, economist John Maynard Keynes told the British people that saving more was the worst thing they could do to end the Great Depression. Keynes’ fix? “Patriotic housewives” should “sally out tomorrow early into the streets and go to the wonderful sales which are everywhere advertised.”
But a call to shop is wholly inappropriate when it’s all too clear that spending beyond our means with the help of easy credit contributed to our current financial mess. Notice that the president hasn’t asked the American public to hit the malls to solve this latest crisis.
Do you think that little girls will finally look at Paris Hilton and their Gucci bags as Trashy pathetic wimmin and demand better in their role models?
Trashy wimmin that look like Paris Hilton are a bundle of JOY.
Yeah i know but for how long? Till your wallet gets emptied out?
The average woman would rather have beauty than brains, because the average man can see better than he can think. ~Author Unknown
No, the average STUPID woman would rather have beauty than brains, due to shallow fellows such as yourselves who run after the next beauty after the current beauty’s looks have faded. Paris may turn out to be quite beautiful in her 40’s/50’s, or she may be a hag due to her lifestyle of choice. Either way, beautiful or not, women need to opt for brains. They can make their own money and don’t have to depend on someone else to support them.
‘The average woman would rather have beauty than brains’
How ’bout we have both. That’s an exciting menu option that should be explored with chopsticks.
No, the average STUPID woman would rather have beauty than brains
Just take it easy.
I think women can have beauty and brains. The love of my life has beauty, brains, education, taste, class, money, and career etc. A woman should have her own purse I agree with your statement. I was only joking when I posted that comment.
I have not been “shopping” for 3 1/2 years, outside of a grocery store. I have been to a mall once in about 7 years and I mindlessly bought something, then promptly took it back.
I am in replacement mode and needs only mode. I own about one third the stuff I used to. It is very liberating to not be owned by stuff anymore.
I was never a shop til you drop type and still embraced buying even less. The China crap is what set me in motion and carried me through the housing bust and economy washout that is still in progress.
I replaced the cushions on my furniture this year so I am good for another 8 years or so. My 1995 Auto is going to rust around me before I buy another vehicle.
I never thought I would squeak when I walk….but my family members are copying me….more pain for the retailers coming.
“It is very liberating to not be owned by stuff anymore.”
Yep, the less is more lifestyle is quite liberating indeed.
My GF and I have almost finished our xmas shopping already (we make gift nice, inexpensive gift baskets) and will be happy to be done before thanksgiving.
We’ll be able to enjoy our holidays/xmas vacations w/out running around like freaking zombies, which will be nice.
DOC
DEAN CALBREATH
Economic recovery is a matter of principles
November 16, 2008
“There is no rule book for an economic crisis,” former Federal Reserve economist Douglas Elmendorf recently wrote.
Which helps explain why our friends in Washington have been acting with such wild abandon when trying to come up with remedies for the Great American Credit Crisis.
The Treasury Department and Federal Reserve have sometimes resembled fire tenders shoveling coal into the furnace of the Titanic as they feed billions of dollars into the likes of AIG, a vast portion of which may never be seen again.
Support your national Money Hole! (a cute spoof courtesy The Onion) [video]:
http://www.theonion.com/content/video/in_the_know_should_the_government
The Debt Trap
Downturn Drags More Consumers Into Bankruptcy…
Plummeting home values, dwindling incomes and the near disappearance of credit have proved a potent mixture. While all the usual reasons that distressed borrowers seek bankruptcy — job loss, medical bills, divorce — play significant roles, new economic forces are changing the calculus of who can ride out the tough times and who cannot.
http://www.nytimes.com/2008/11/16/business/16consumer.html?_r=1&ref=business&oref=slogin
Good thing the banks saw this coming and got their puppets in congress to roll back bankruptcy protections in 2005. Of course they all say they didn’t see this crisis coming, but I’d say their actions speak louder than their words.
Absolutely! Another thing we all saw here on the HBB.
They knew what was coming even when Ben Bernanke was appointed to chairmanship of the Federal Reserve. A short time before Greenspan’s retirement, George Bush appointed Bernanke Chairman of the President’s Council of Economic Advisers, and that was my clue that he would be chosen next…because of his knowledge of the Great Depression.
Credit woes find shoppers ‘hunkering down’
Many consumers will switch to cash
By Penni Crabtree
STAFF WRITER
November 16, 2008
With credit card companies clamping down on spending limits, experts expect more shoppers to cut back. Through years of easy credit, buy now and pay later became the mantra of the American consumer.
Now, with recession-shocked consumers fearful of taking on more debt and credit card companies imposing tougher restrictions and spending limits, those may no longer be words to shop by. That could deal another blow to retailers already facing one of the weakest shopping seasons in memory.
Here’s a sucker:
“Ryan Wolfrum was one of about 100 people who stood in line early, waiting for the Best Buy doors to open at 8:30 p.m. Wolfrum said he was there to “bargain hunt” and was weighing the desire to buy a flat-screen television against the possibility that he might lose his job next month as a truck driver for a television production crew.
“I thought, ‘What recession?’ when I saw all these people standing in line,” said Wolfrum, 27. “Then I realized that’s why they are standing in line.”
He worries that he might lose his job next month and he’s considering buying a TV? He can’t wait a month to see what happens? Or how about just live with his current TV? “What recession” says it all, I guess.
I had to read that 3 times just to wrap my head around that level of stupidity. What a moron!
The line between MSM stories and stories in The Onion, is getting blurrier by the day.
I unplugged my TV and covered the screen with an I Love Lucy poster.
Top shelf post - love it!
Are people around here seeing issues with their credit limits? I haven’t heard a peep about any lowering. I only have 2 credit lines open (one has two cards on it, but the limit is shared). Each one is pretty darn high as far as I am concerned. One got there the long, slow way. The newer one seems to have been set up to match the other. I rarely (maybe once a year) spend either one up to more than 5% of the allowed balance and even then I pay it off at the end of the month. This month was more like 2.25% of the limit on one of them (other was zero) and that was almost entirely an airplane ticket for Thanksgiving.
Seems to me that if they wanted to lower their “exposure to risk” that cutting my limits in half would do that and be very, very unlikely to piss me off. They could at least ask if I minded. Is the risk of outstanding cerdit limite weighted differently depending on the credit score/payment record of the holder? Because the newspapers keep finding people who claim to have good credit who get their limits cut, but I’m just not seeing it.
I recently had my limits raised. As you may recall, Citi (not my bank) just raised their rates. I believe that banks will be offering more credit and raising rates in an attempt to saddle people with more debt while collecting even more in interest. No doubt, their “models” show increased defaults, but those are more than offset by the rate increases. Or so they dream…
I recently had my limits raised.
Same here. Citi raised my limit without asking. I think they are trying to get a piece of my American Express card business… I put all my monthly expenditures like food, gas, etc. on it and pay it off the next month. Works out to be a good amount cash back at the end of the year: $500 to date. Unless Citi can do better than 1.5% general, 5% grocery and fuel, then that Citi card will just be for emergencies.
Also of not, I have almost a year’s worth of income in available credit… I definitely don’t need more. We’ll see if they start closing unused accounts.
No cuts here, but it would hardly be worth the trouble. I only use it for gas and such and pay the balance every month. They keep raising my limit (not in the past few months though).
Just had mine increased to 29,000. Never asked for it, 5/3 just wants me to go bankrupt, I guess. I’d never be able to repay 29,000 unless I married it. They know Im retired, my SS check gets direct deposited in my cking acct. They obviously dont care. They just need us to borrow in order to keep their game going. Maybe one last trip to Vegas…..
I had a friend of mine with perfect credit (780s) and a business citi credit card with a $4000 limit. She does a lot of traveling and has other business expenses that can easily eat up $4000 depending on how far in advance she is planning.
She called up to ask for her limit to be raised - she never had problems increasing her credit limit before - and they said “no”. It was just not there to give. She has been with them for years.
It was her first personal experience with the credit crisis.
Much of Little Lake appears to be underwater.
Street of risk and loss
Otay Ranch neighborhood is a model for the region’s mortgage meltdown U-T special report South Bay: Heyday to mayday
By Eleanor Yang Su
STAFF WRITER
and Agustin Armendariz
STAFF DATA SPECIALIST
November 16, 2008
It produced easy money for specula-tors and mortgage brokers and short-lived happiness for families who bought houses they couldn’t afford to keep. Few streets in the county have witnessed as dramatic a turnaround as Little Lake.
Good summary of the current state of housing.
Gee, I always thought San Diego was different.
At least the article doesn’t parrot the stereotyped “victim” of the housing downturn”
Housing analysts have characterized the problems in the South Bay as young, first-time home buyers being taken advantage of by predatory lenders. But Little Lake Street attracted people of all motivations: amateur investors, speculators and even one man who said he was part of a fraud scheme. More than half of the buyers gambled by purchasing multiple properties during the housing boom, according to deeds filed with the county.
And don’t forget all those investor seminar groups that lured in the
dopes to than lead them to bogus RE investments . Remember all the signs on telephone poles whereby a investor was looking for a
apprentice to invest in real estate ……better known as STRAW BUYERS. Still can’t get over the fact that the government is attempting to bail out this crime wave . Remember the locust speculators that would go from State to State running up the real estate and than split, leaving a false market of fake value behind .
People bought houses they can’t afford because they were part of the scheme and now they are taking down the rest of us .Sure there were some that were so stupid they didn’t know they couldn’t afford the house ,but for most part the gamblers were betting on the come ,IMHO . Lenders are suppose to prevent fraud ,not make it easier .
Nobody goes on a stupid adjustable loan or buys a house that
the payment is 90% of gross income unless they were simply part of the scheme to cash in on appreciation . This RE Ponzi -scheme
that was promoted by Wall Street/ real estate and loan industry was so out in the open by the height of the boom that loan fraud was considered business as usual and you were stupid if you didn’t get in on the bandwagon . The gaming of the system is still taking place and solutions are not working in part because the gaming of the system is still taking place . This is what happens when crime is not addressed and Justice is obstructed or failure isn’t allowed to take place .
I say purge the evil cancer from the system ,or keep wasting money on bail outs that will create the moral hazard of more foreclosures . Admit that we have had a false economy and explore how we can have a real economy and real jobs ,and not waste money on losers . Can’t bail out crime ,can’t bail out a
Ponzi-scheme and it’s just a destructive black hole that sucks up money and ends up never doing what you want it to do . Bail-outs that are designed to change bag-holder positions are really evil . But you saw our wonderful Politicians endorse Blank Checks with no over sight to King Henry Paulson ,a interesting party who was part of the problem in his career prior to becoming the Treasury Sec.
“Admit that we have had a false economy and explore how we can have a real economy and real jobs ,and not waste money on losers.”
This is the crux of what needs to be done. Most of the bailout efforts have failed this test.
Amen, Wiz!!!
BTW, have you guys heard about the scam where a seller enters a short-sale agreement with a pre-arranged buyer for a very low price (even lower than REOs, in some cases)…all before putting the house on the market.
Then, the listing agent (who’s in on the deal) lists the home but marks it as pending an offer on short sale — basically not taking any other offers — and only submits the friend’s lowball offer to the bank.
If the bank agrees (and they are partly to blame for not questioning the appraisal), the new buyer flips the home and splits the profit with the seller who listed the original short sale.
Basically they flip it for the money that rightly belongs to the bank, and the seller doesn’t get a foreclosure on his/her record and the new buyer gets a pretty guaranteed profit (they know the real market price because they got to see all the offers, often much higher, which were NOT submitted to the bank).
According to everyone I’ve talked to, this is supposedly legal, but I am checking with the FBI, among others…because if the taxpayers are bailing out the financial industry, then their losses are our losses.
Anyway, just seems like the govt is hell-bent on continuing the environment of fraud and theft…just another day on Wall Street.
Thanks for the link.
(from the article)
“I thought I did the right thing” in buying the house as an investment, said Washington, who used an inheritance from her grandmother for her $118,000 down payment. “People told me it’s the way to make it in life.”
Washington is one of four foreclosed homeowners on the block who put down more than 5 percent. She is the only one who did not refinance and retrieve the down payment before losing her house.’
Sighhhhhhhh.
Lots of people had some skin in the game, and lost it.
Right you guys ,people who put skin in the game lost because of the other opportunist that didn’t have skin in the game . People who put huge down payments were not putting the financial system at risk . I’m a person that put a huge down payment on the house I live in now ,I got a low fixed rate and I bought the house to live in for as long as possible …forever maybe . To bad I was to dumb to know a Ponzi-scheme was going on around me .I actually thought people were qualifying for those loans during the boom . Why would anyone think that the lenders would shoot themselves in the foot ?
“Washington, who used an inheritance from her grandmother for her $118,000 down payment. “People told me it’s the way to make it in life.”
What a freaking waste. I seriously doubt she’ll see a chunk of change like that w/in her grasp ever again. Stupid. If her Grandma was still alive, she’d probably strangle her.
DOC
“Otay Ranch”
Really, if anyone has the time they should be writing a novel about all of this. Seriously.
OTAY RANCH?!?!
WTF, LMFAO
““Otay Ranch”
Really, if anyone has the time they should be writing a novel about all of this. Seriously.
OTAY RANCH?!?!
WTF, LMFAO”
“Buckwheat has been shot!!”
Good story by the U-T, but way late. While this was happening, they were busy cheerleading. None of the questioning that should have been done then by the U-T was done. They are complicit in the collapse.
I would also be surprised if there wasn’t more fraud than indicated in this latest article. Fraud seems to have been barely mentioned and only in passing.
opinion
Stabilize stock market
Article Last Updated: 11/13/2008 03:55:49 PM MST
Good News for the descendants of H. Hoover, this one term train wreck pulling into D.C. soon , will made old Herb look like a financial genius.
WASHINGTON (Reuters) - President-elect Barack Obama said struggling U.S. automakers need a government rescue, but help should be conditioned upon changes in the industry, according to excerpts from a TV interview to air on Sunday.
He also urged more assistance for troubled homeowners and added that he is offering the Bush administration occasional advice on handling the worst U.S. financial crisis in decades.
http://www.reuters.com/article/newsOne/idUSTRE4AE3WR20081115
Any industry that constantly needs costly government assistance to make the very changes that the market is telling it to make for free - needs to go away!
All this small minded backward looking nanny state sh*t stinks. Where is it written that the U.S. cannot survive and thrive without the Big 3? Leaders who cannot envision such changes do not have the capacity to guide this nation through the very challenging future. In fact, I’ll argue that those same pols do not think that their own people are capable of learning and adapting. Meanwhile, its the pols who hold the nation back.
Edge:
Its the Unions and especially Civil Service unions are next on the chopping block
Here in NYC we have school janitors make=ing over $100 K a year by putting in a lot of OT……Cant anyone figure out how to time shift employees so this doesn’t happen?
And what about San Diego and LA $100K for police officers huh? The clamp down has to start yesterday. But they will counter our home prices are so high we NEED high salaries to attract people…
Not for long
It won’t be long before we start hearing calls for pension fund bailouts. Especially from the the likes of California and New York. The pension benefits in these states make the auto industry look down right stingy. We need the rest of the country to help pay the bloated pension’s in these states.
Can someone tell me how to turn off “Bold” type?
Sorry the type was only in bold while I typed. It posted normal.
The only way cities will be able to afford police/fire/ems unions and their benefits is to eliminate everything else. Lets see how this plays out.
in DC, we’ve got Metro drivers making north of $80k. That’s sickening.
“Cant anyone figure out how to time shift employees so this doesn’t happen?”
At least in some sectors of government and some private sector employment too, not enough workers are hired to do the work that needs to be done. Overtime is used to make up the difference. As odd as it sounds, some federal workers actually take a pay cut when working overtime. It’s not the workers who determine what work is to be done or set the staffing levels.
Any industry that constantly needs costly government assistance to make the very changes that the market is telling it to make for free - needs to go away!
Three problems
The foreign competition gets tons of gov subsidies
Car manufacturing sales and finance account for 13% of jobs according to someone on FOX news this AM.
People lament the loss of US manufacturing base. If you let the Big Three close their doors manufacturing in the US will be slashed.
If bankruptcy can be done without shutting them down it may be the best answer. If gov could take health care off their shoulders it would help them, but free marketeers hate that even though that’s what the big three have to compete against.
If you and your buddies had the power to create hyperinflation in the US how exactly would you go about doing it?
The mechanics of it that is, how do you bake this cake.
Set Fed funds rate to -1%.
Take a nap.
Wake up.
Hyperinflation.
Mail every household a check for $100K.
Stealthier way to do it?
A very good article in Forbes some years back detailed one way the US govt is inflating - by sending money into areas of natural disasters. Before Bush I, natural disasters got no federal money. Now it is I think about 80%+ of natural disasters are covered by uncle sam. To me, this is one of the many ways the govt engineers inflation as the economy gets weaker.
Create new govt jobs (infrastructure and R&D in energy, healthcare, and transportation technologies) and “print money” to pay the new employees.
Shazzaaaammm! Jobs, money, and everything is all good again!
First create artificial deflation through a credit crisis. This overly strengthens the dollar giving confidence in subsidizing trillions in new loans and refis directly from the Fed.
We are at this point currently and Bernanke is locked and loaded, the mass helicopter drops are imminent. Flee the dollar in 2009 or be fleeced worse than home debtors or stock holders were in 2008.
Where should you flee to?
Buy a foreclosure? Possibly, if it’s in a good neighborhood in a growing area of the country and you want it as a place to live in.
Buy index funds? No, 90% of companies are still grossly mismanaged.
Buy foreign stocks of well managed companies? Possibly, this is the safest bet for wealth preservation.
Buy selective small cap stocks including home builders? Yes, the return for the next few years will most likely be extraordinary.
What about hoarding Gold?
Where is the demand for gold going to come from?
Iran and India will be unloading gold faster than California soccer moms next year as oil and real estate continue falling off a cliff.
Commodities peaked this year, pigs get slaughtered. Increased buying in America won’t even come close to the dumping overseas.
People in India always have been hording gold. It is passed on from one generation to the next. Indians don’t sell gold to buy oil or real estate. The country is a basket case and Indians know how to live in it.
Point in fact is Iran just stated publicly they are converting more reserves to gold. Same a Russia, same as India same as China…Only need a small drop of US$ confidence, and the already short supply will be gone.Especially look at silver lease rates almost triple a month.half ago…still. I have read several times there is going to be a large physical redemption on the comex at the end of the month…time will tell…?
Prevent Joe 6pack from buying small denom gold or silver; Tell him its really going down in value so just stick with the fiatscos. Fast forward one year, his new moniker is Joe 2pac; another year, Joe suckyerthumb.
“Buy a foreclosure? Possibly, if it’s in a good neighborhood in a growing area of the country and you want it as a place to live in.”
As long as you’ve still got a job.
Being mobile in order to stay employed is looking more and more advisable for many of us, IMO.
Local Dodge dealership has left three phone messages in the last three weeks reminding me I need “service.” Never got those calls before. Wonder how long before they close up shop.
DOC
How to create hyperinflation? Very simple.
In Russia in early 90s the government just printed money (expanded money supply), by granting companies “loans” from Central Bank.
Here’s a link that explains how it was done in detail:
http://www.sjsu.edu/faculty/watkins/russianinfl.htm
Government buys gobs of assets with funny money through front corp. Two birds with one stone. Shortage of goods, abundance of money. Pay taxes and rent both to government. Shop in the government store. Inflation Matrix style.
We drove into a burning ring of fire…
My wife and I are presently surrounded by flames in the city of angles, althought the fires are 20 to 30 miles away~
I’ve been watching tv, and in the pre-dawn hours, the infierno looks somewhat like the Great Wall of China snaking through the hills of Yorba Linda and Chino-which seems to go on forever, and nobody really knows when the Santa Anas winds will abate, despite jibber-jabbering by the talking heads on the boob tube.
Be safe Lad and wifey!
Leigh
Only 20 miles? yikes. Fire moves fast in those winds, stay safe, Laddie.
My sister & hubby and their boys had a 3 hour drive that would normally take 15 minutes, as many of the freeways are closed and everybody had to use side-streets to get around.
My B.I.L. said they’d go 100 feet and stop for a few minutes, and then do it again, and again for 3 hours, like so many mice caught in amaze.
Maybe time to by a helichopper…
Just went on a donut run, and the skies above me were smoky taupe and ashes were slowly falling all over the place.
Dude, GET OFF the computer and get your go-bag together! Collect your passport and papers, memorabilia and grandma’s wedding ring et al, along with 3 days of water and supplies. You may need to make a run for it.
We packed my mom’s goodies into her car, and it gave us all a chance to look through photo albums of way back when…
The winds have died down somewhat, so things look ok for now.
I took some lovely surreal photos last night of a 10-mile-wide fire front, with the moonrise to the south.
Many of the homes burned in the OC so far are brand new million-dollar-McMansion developments snaking up into tight canyons with chaparral all around. During the fires, people were driving into cul-de-sacs on ridgelines to watch the fires race upwards towards them. Firefighters were having trouble negotiating through the looky-loo’s cars.
I photographed from a comfortable 15 miles away.
“Many of the homes burned in the OC so far are brand new million-dollar-McMansion developments snaking up into tight canyons with chaparral all around”
Yes! Very expensive homes both north of the 91 which is Yorba Linda, and south of 91 which is Anaheim Hills. I once went up into the hills of yorba linda almost to the end into a clump of million $ homes. There was some new mega- mansions being put up in that area as well. This was back in 2006/ early 2007. The brushy canyons would be in back of these homes , and they were tinder dry.
Very bucolic settings and highly desirable if you like to be away from the bottom city flats, but very easy to ignite in a long dry spell .
THe problem is these areas such as Yorba, chino hills,Sylmar. Montecito have had such built- up brush without fires for a very long time that any ignition would be catastrophic. Other areas such as the IE, malibu, riverside,SD have already had their hills torched last year or year before so that this conflageration is hitting the untouched areas, or areas which need the hills cleared of built-up brush via natures way.
I have to admit, as loopy as our pols can be, thankfully they aren’t as ridiculous as what’s found overseas. I was just reading how in the UK, Gordon Brown has insinuated that the Brits could feel the effects his country’s stimulus plans before Christmas! And a big component of their plans: more subsidized (council) housing.
The G20 claim they are looking to the future. I sure hope they mean it, because the answers they’re looking for won’t be found in Europe, or Detroit, or in New Deal retreads. Like it or not - the 20th Century is over.
The milkman (yes we still have them) stopped to chat with me last week. He was discussing his son who had bought a house several years ago. Apparently he had been proclaiming his good luck ever since to his “council house” father and mother. You must buy property chaps was his refrain. Last week the young man coughed to his father that his house needed £10,000 of repairs. His father then took great joy in informing him that over the last five years, the house he rents has had a new roof, a new kitchen and new heating system all for the princely sum of £65 per week. Dumb renter, I think not.
“I find myself in a lonely position. While many states and local governments are lining up for a bailout from Congress, I went to Washington recently to oppose such bailouts. I may be the only governor to do so.”
~Governor Mark Sanford, South Carolina.
Lonely are the brave.
Bankers would love to Kneecap State Regulators from Bloomberg
The North American Securities Administrators Association, an investor-protection organization made up of 67 state, provincial, and territorial administrators in the U.S., Canada, and Mexico, tallied 2,276 enforcement actions and returned $616 million to investors in 2007, racking up 1,062 years of jail time for offenders who ended up being prosecuted. And that’s only a partial tally that excludes 32 members that haven’t gotten around to sending NASAA their data.
By comparison, the SEC in its most recent annual reporting period brought 671 enforcement cases and returned more than $1 billion to investors
If you take away the states’ power, there is only one game in town — the Securities and Exchange Commission,” says Renee Jones, associate professor of law at Boston College. “That’s a risk to investors.
A non-partisan research organization with an ungainly name, the Transactional Records Access Clearinghouse which is associated with Syracuse University, looked at the numbers and found that prosecutions of white-collar criminals have fallen 27 percent between fiscal year 2000 and 2007.
http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1193821429242
Perhaps the most curious of our findings — and one not highlighted by the Department of Justice — is the precipitous decline in the number of major corporate fraud indictments in the two years since the re-election of President Bush. After issuing detailed reports in 2003 and 2004, the task force stopped reporting on its efforts in 2005, just as corporate fraud indictments slowed to a trickle. Our analysis shows 357 indictments in major corporate fraud cases between 2002 and 2005. But only 14 indictments were identified by the Justice Department as significant corporate fraud cases in 2006. There have been only 12 major corporate fraud cases indicted so far in 2007.
That decline raises a critical question: Has the problem of corporate fraud really been solved, as Gonzales suggested at his celebration in July? Or has the Justice Department simply stopped trying as hard to prosecute it
A few years ago, my wife and I told our family we neither wanted gifts, nor wanted to give gifts to adults @ xmas, anymore. (kids still get gifts)
You would have thought that we were the grinches that stole christmas, when we so informed our family, and my sister was especially distraught, as she’s into the “christmas spirit” of things…
Fast forward to today, and I asked my mom about xmas-and whether any other family members would be joining us in our strike?
I was somewhat shocked when she told me everybody else was now on board with our plan…
We are just doing our part to destroy crass consumerism.
All eyes are on the consumer right now. So, every dollar withheld - especially from Wall St.’s favorite retailers - carries more weight today that at any time during the past two decades.
Everyone can have their debate, but this season cash truly is king. And those who aren’t thrilled with hyper-consumerism and bailouts have a chance to be heard like never before - by simply staying out of the stores.
NO NO NO…Even Time inc. has canceled xmas parties
I love holiday parties i used all the money to pay down my Credit cards and put money into my IRA all worked fine for years until 9/11…did ok in 03-04 but no so good the last 3 years…it WAS a great investment idea.
That’s why Thanksgiving is my favorite holiday. I love the the non-consumerism values and the sense of gratitude it communicates.
Every Thanksgiving I make a big dinner the day before, then pack a nice lunch and head out for the backcountry, where I eat the big dinner with friends, dogs, whoever wants to come along. Even share with the ravens.
I sit and look at the beautiful scenery and am truly thankful. I have everything that matters - food, shelter, friends, good bad dogs, a good 4X4, my health, and no debt. True freedom, not owing the man.
Oh, and an iPod.
Now that is a cool way to spend Thanksgiving.
Thankgiving and New Years Eve; absolutely my favorite holidays. Thankgiving is a great time to get together with family and enjoy each other’s company. And New Years.. Well, it’s a great excuse to go out, get drunk, and have a great time.
My least favorite, by far, is XMas, followed closely by my birthday. I’m still trying to get my GF into the spirit of “give to others, not to each other” for XMas, but… Well, it’s not working very well. I wanted to make a large donation to an animal shelter in my area for the holiday.. She want’s more crap from the mall.
Go to the mall and buy dog/cat stuff, then donate it to the shelter.
You guys are all boring.
The local radio station asked people to call in with their best Thanksgiving/Black Friday stories. Some of the highlights:
-Family gets drunk, gets in big argument, progresses from brawl inside house to shotguns at 50 paces out in the front yard……everyone too drunk to hit anything other than each others cars. Most of family get Thanksgiving dinner at the County Jail.
-Guy goes with 50 year old mom to Walmart to get X-Box. Doors open, stampede ensues. Mom gets into wrestling match with another woman, rolling around on floor, fighting over last XBox….son lends support by cheering “You can take her, mom !!!!”
When I was younger, I thought Jerry Springer was BS….
ROFLMAO!!! Oh geez, “you can take her, mom!!!”
I’m dyin’ here.
‘And New Years.. Well, it’s a great excuse to go out, get drunk, and have a great time.’
You need an excuse for that?
And as for:
“I’m still trying to get my GF into the spirit of “give to others, not to each other” for XMas, but… Well, it’s not working very well. I wanted to make a large donation to an animal shelter in my area for the holiday.. She want’s more crap from the mall.”
Just be patient with her, Michael. She’ll probably see the light, with your excellent example. And that’s a very good thing you wanna do, about the animal shelter.
“We are just doing our part to destroy crass consumerism.”
Laddie,
Couldn’t agree more. Thanksgiving has always been my personal favorite.
BTW, keep that mellow below 1948 F.
Mike
I doubt he takes it on vacation with him.
That would be insane.
Well, unless he hides his gold like Goldfinger.
I saw my entire family yesterday and gave them all xmas presents as I mentioned earlier. I had fun and I only had to drive thru two fires to get to LA.
I propose combine TG and Xmas into one holiday. Works for me.
Judging from the way the stores decorate, there’s one big holiday from Halloween to the Superbowl.
Absolutely! And they’re doing their darnest to fill in the gaps during the rest of the year. So far, St. Patrick’s and Cinco de Mayo remain drinking holidays, but the merchandising for them is growing too.
Notice how many isles of crap there were this year for Halloween?
Wouldn’t the turkey have to rise from the dead on Easter?
Only 2 fires!! Sounds like the West Coast is getting all the experience in surviving those yet to come MadMax days when the SHTF. Im jealous. If I want that, I have to go visit my old GF in the ghetto.
I have FINALLY convinced my mother to stop sending me “something to open” for every night of Channukah. She started it up (after a long pause since I was an actual child) a number of years ago. Just eight small somethings. A few years and piles of unused stationary, refrigerator magnets, key chains, etc. later, my brother and I convinced her to let us send her a list of consumables (meaning they are used up, not necessarily eaten) to choose from instead. High on my lists were things like cold medicine, microwave popcorn, trouser socks, stamps, etc. My brother got out of it last year because my niece now gets something for every night. I managed to convince her to stop mine this year because I am on vacation when the family party is planned, and, barring bad weather, I will be there.
It is a triumph! Oh, damn. Now I’m going to have to buy my own ibuprofen. Maybe this wasn’t such a great idea…..
“A few years ago, my wife and I told our family we neither wanted gifts, nor wanted to give gifts to adults @ xmas, anymore. (kids still get gifts)”
Our family adopted that strategy years ago, but I’m taking it further this year- no presents for the kids, only cards (will I have a change of heart come December?). You see, my sisters children are so disgustingly spoiled, that they literally tear through gifts, not even relishing the moment, much less appreciating the gifts. They yell and scream as they make their way, like demolition experts, through the thin paper, casting aside the gift as they reach for yet another. After a few scoldings from the woman who created the nightmare, they proceed to bicker amongst themselves, receive more scoldings, throw massive temper tantrums, then head into their bedrooms for pouting and time outs. I won’t even be going to Christmas in hell this year.
any solvent countries nor printing money ?
http://biz.yahoo.com/ap/081116/meltdown_summit.html
I received a call from David Dreier right before the election. He is one of the most powerful Republican congressmen in Washington. During the phone question and answer session, his pandering to the racism and fears of the elderly was unconscionable. The moral bankruptcy of both the Democrats with their gay/spend agenda and the Republicans with their pandering to fear, warmongering and hypocrisy is unparalleled.
Given that David Dreier is well known to be openly gay in Washington circles, I find your post to be most ironic.
Surely you could pick a better example, no?
That’s 2 anti-gay posts in one day. You must have a lot going on in your head Little Al. Do you wish to step out of the closet?
Can you describe the line of reasoning that you use to conclude that he must be gay himself if he is anti-gay? Where’s the logic in that? When you figure it out, see how that line of reasoning works in other areas of life. For example, how does it work when applied to people who are anti-fur? anti-leather? anti-eating meat? Anti-France? Anti-Bush? Anti-Obama? anti-gun?
If people want to do something to change the feelings toward gay people, I don’t think saying they must be gay themselves or saying they must be afraid of gays (”homophobes”) is the way to go about it. Name-calling never seems like a good plan.
I think the idea is that people are over-compensating for their own perceived faults. There’s a long track record of homophobic zealots being caught in the handicapped stall of a public park. Not too many closet Republicans being caught with their pants down in public, so to speak.
bingo. mental conflict often channelizes into outward hatred. Usually doesn’t work the same for things that aren’t deeply personal and come with a deep sense of societal shame.
Of course, he/she could be totally straight, or even asexual.
He is probably not gay if he is talking about the anti-gay agenda. In fact, it seems likely from his post that he voted for Prop 8 if he is a Californian.
David Dreier is gay. In fact, he had hired his lover in a typical Washington boondoggle for mucho bucks, and there was a scandal which all got hushed up, etc.
Look it up. This is hardly some “out there” news.
I wonder how many closeted gay republicans there are?
More than any of us could imagine, methinks.
According to some friends who work in Washington, there are not only hordes but it’s commonly known to all as well.
There was a complicit sense of “decency” about not “outing” them but the bitter campaign of ’shrubbery in 2003 made that go out the window, and tons of names were named on various blogs during that time.
“closeted gay republicans”
Nah, they are stalled gay republicans
Who are the Log Cabin Republicans?
Dammit, that question never shows up on Jeopardy!
But if it did, you’d win! hahahahaha!
And I approve of that, and would bestow a gumfrop upon you for winning.
I mean a ‘gumdrop’. Jeeze. Gotta put down the nourishing Sunday martini, obviously.
I’ll just have one in your honor instead.
We all need a little bit of nourishing sometimes.
I posted this late last night:
Tomorrow can we have a fruitful discussion about the future?
I posted the above crow/squirrel/armadillo joke after getting off the phone with my sister; her husband is most likely going to lose his job and his brother just got laid off. I also have a friend who is going to declare BK soon.
I need to make some hay while the sun doesn’t shine. I want to short some retailers before the great Christmas shit of 2008. I just resigned a very secure position for a riskier position that will allow me to work from home, saving money while raising my son. I avoided buying a house in Florida and now I am ready to put my money where my mouse is and place some bets.
I say fruitful because I really want to hear everyone’s plan… as in the specifics of what they think will happen and what they are doing to prepare.
If you’re blogging from a bunker in Wyoming, I want to know about it. If you’re buying foreclosures in Vegas I want to know why. If you’re a boat manufacturer tell me about closing down for the rest of the year. If you’re in school, will you continue to pay tuition with no job prospects, or will you take a leave of absence? Are your friends thriving? Struggling? Have you taken a pay cut? Are you killing it in the stock market?
I want an anecdotal sharefest.
Also, Ben, is your PO listed above current? It’s time to break you off some…
Just hunkering down Muggy.
No, brilliant ideas here.
With deflation, I’m richer by comparison with the rest of the population by doing… nothing.
“put my money where my mouse is”
Does this mean you’re big on Disney? Or does it mean you’re keeping your cash with that mouse in your pocket. LOL
Seriously, I think things are much much worse than we hear from the MSM. Much worse. It’s getting to where It’s unusual (for me) to know someone with a secure job, or even a job. Unemployment and BK is the new black. I’m a contrarian, I guess, cause I’m thinking about going back to school this winter and studying something just for fun, no job prospects from it (film), but I’ve already qualified for financial help (not loans) and maybe I’m looking at that as a way to avoid the whole mess for a couple of years. But I really don’t know anyone who’s doing all that well, except the guys here in Moab working for the DOE on the tailings removal project for big bucks.
I am considering having a huge yard sale and just giving some of my possessions away for free!
I actually thrive when fewer people are driving fancy cars and those horrible realtors are broke and getting broker. They will never be able to make me feel small again. Those fancy Italian eateries that I don’t go to will be emptier and I won’t have to feel so left out of the good life. Being envious is a bad thing for me and no mortgage, no college bills and no debt makes me feel safer for now.
Hi SD bloggers!
Sane.
Very sane.
And less Hummers too, H2s and H3s
‘I am considering having a huge yard sale and just giving some of my possessions away for free!’
Where do you live! And what do you got?! Quickly! Tell me!
Olygal,
Have you checked out this show (I saw it on late night TV last night)? I expect popularity this genre to rise as the need to sell off household possessions for financially survival steadily increases over the next couple of years. By contrast, Flip that House is so 2005.
Cash in the Attic
You’ve heard of the expression - money for nothing. Well, imagine discovering a priceless antique or picture that’s been in your home all along and you didn’t know it.
Host Alistair Appleton (House Doctor), aided by experts, Jonty Hearnden and Paul Hayes, walks one family through the process of turning what they thought was trash into treasure.
Be it a trip to Disney, a flight to New Zealand, or a brand new patio, Cash in the Attic works with families who want to raise money for a specific project. Invited into the family’s home, the show’s experts, Jonty Hearndon and Paul Hayes, help them go through their possessions, sniffing out potential items of value. Anything that is found then goes to auction.
oooooh! Thanks, PB!
Oly, I collect vintage aprons and indian saris, and chinese vases. among many other things. I was hoping to part with stuff without throwing it out.
I spend many hours a day performing technical analysis on companies in various sectors. This gives me a feel in a given sector for how the companies are doing compared to one another. It’s easy to see the sore thumbs once all the analysis is complete and the results are lined up. I short the sore thumbs one by one (one at a time, the tallest pole in the tent). At some point I will invest for the long run in the remaining companies. The weak will get weaker and the strong will get stronger because as the weak companies fold, any real demand must go up for the remaining companies.
(Not trying to incite riot)
Alad, explain to me the scenario in which ou become wealthy. It seems that part of your plan is unencumbered, long-distance travel. I am simply not interested in living life on the run. Please ’splain.
Combo, what assests do you intend to buy with cash? F350s? Office furniture? Real estate (cough)? Stocks?
Don’t worry, none of your responses will be construed as “investment advice”
I have to be honest that this is the first week where I have imagined this affecting me in a negative, long-lasting way.
Muggy,
I made my money travelling all over the world buying and selling stuff before the internet came along and everybody knew as much as I did about my field of endeavor.
I flew perhaps a few million miles in pursuit of profit, but in some ways it was an empty life, as living out of a suitcase is highly over-rated.
We only travel overseas on holiday nowadays, no business.
More informational efficiency = disintermediation (less middlemen.)
Not chiding you just stating the general principle about it.
Muggy,
I plan to plunge into quality stocks when the lemmings finally throw in the towel. I suspect this will happen in a year or so.
I am not interested in bonds, real estate, commodities, or anything else. Quality stocks are what I am into, but only when offered at end-of-the-world prices.
I like selected junk bonds too towards the end of the bust. You get real yield to compensate for default and the default rates are never as high because it’s the end-of-the-world.
Needless to say, I like quality stocks at end-of-the-world prices too. Same idea.
What I think will happen: GD II, either the old-fashioned deflationary type or the Weimar hyperinflationary type.
What I’m doing to prepare: Avoiding debt, buying FXF, working on making my boss happy so I keep my job. Luckily the company I work for is very large and VERY profitable, so their recently announced tightening of expenses is fairly minor. But they basically have a hiring freeze, so it’s a good thing they hired me 5 months ago; today they wouldn’t be able to.
I am positioned with puts on RTH, double inverse ETF’s QID and SDS. Looking to possible add puts on the S&P with SPY.
If you’re interested in following the markets, go to bigcharts and stockcharts. Read about head and shoulder reversals under chart patterns; this one was a classic. The left shoulder formed Jul-Aug, the head Oct-Nov, and the right shoulder Dec-Jan. The neckline and uptrend line broke mid Jan. The uptrend line became resistance from Feb through May; if you were long, this was your last chance to get out before the downtrend. It also was a good time to go short.
Afraid my method won’t work for all as I sort of stumbled into it when I got laid off (after the 9/11 recession, but while jobs were still evaporating) and couldn’t face trying to get a job at a hedge fund or a law firm serving them. I’ve been in a federal government job (in a high priority agency) for nearly 4 years, protected by a union agreement and with significant seniority as we have been replacing retirees at a slow, but steady pace since I started. Got my retirement money out of the market in early August of 2007. Don’t have time to do shorting properly so I’ve stayed out of it (except for a small position in BEARX, thanks HBB).
The most important thing is to try to keep your job or be ready to find a new one if you need to. When was the last time you polished up that resume? What combination of skills do you have that makes you more valuable than the next guy (at your current job and the next one)? I got through being unemployed by having serious money in the bank (enhanced by the package they gave me). But that is also a slow process. So, we are back to “penny saved is a penny earned” territory. What can you save?
Really aggressive investing is not for newbies. If you already know what you are doing, OK, but your post doesn’t read that way. It is hard to know that there are big bucks to be made somewhere and not to participate. But that is what brought down the flippers, too, so you have to be careful. Building up a small business on the side is also a possibility if you have any skills that people really need. Handyman for stuff that doesn’t require a license would be great if you have the know-how.
I run a 25 year old franchising company. Our business model has needs and wants for products and services. The wants part of the business has slowed down dramatically. The needs part is thriving. I am also seeing a lot of people who have been laid off and can not get decent jobs looking to get into their own business.
In my opinion there are good franchisors out there but majority are pretty bad. Most franchisors main goal is for you to put your ranch on the line and buy yourself a small paying job. I do not recommend it.
here’s a cheap thrill.
Tomorrow is a hedge fund forced selling kinda day, and that will include gold getting sold off. However, as the futures contract is currently in backwardation to spot price, a move similiar to the October expirations in oil may manifest in a massive short squeeze in the near future.
just something Im mulling over on a Sunday.
full disclaimer: dgl is the way Im playing it.
Yeah, everything is being set up for a classic short squeeze.
I would be very reluctant to go in short right now.
Agree.
If I jump back in at all (closed all my positions mid-October), it will be long.
I’m *guessing* we’ll see a drop, and then a fairly strong rally between now and January. At that point, I plan to go short again, which is my usual position, and what I’m really waiting for (the rally).
I’m not sure how you would translate this for your own situation, but:
I have a peculiar professional expertise. My dad used to say “Be better than everyone else at something.” My company is rapidly headed for trouble. We live on big manufacturing projects. Orders have fallen off a clif. CEO is sitting in a pool of piss. I give it six months if trends continue.
My customers are all people I have solved problems for and helped make their stuff work. I am sure I can freelance some for all of them that survive.
I’ve been working on the process of downsizing for several years. Out of debt. Saved, diversified. I’m already living pretty close to the lifestyle I would have (and be able to sustain) without a job. I live on my modest boat for six months of the year. This is very cheap living. This spring bought a decent old airstream for winter quarters. If the job goes south, I’ll put the furniture and stuff I want to keep for the kids sake into a small storage bin and just go lost in NY (on the boat), lost in Ontario (gf there), lost in Arizona (kids there), etc.
Life is an adventure if you don’t owe anybody anything.
Life is an adventure if you don’t owe anybody anything.
Wise words indeed. Cash rich and zero debt is my mantra. I will enjoy the downturn actually looking forward to it. There will be lots of opportunities if you have money and confidence in yourself.
The future ain’t what it used to be.
–Yogi Berra–
“when you find a fork in the road, take it”
That’s my plan.
In answer to your question .
I’m retired ,so my options are limited . I have been thinking about a
real estate purchase ,sometimes it gets real tempting ,but I think I will wait a little longer ,or pass all together .
It’s a odd time right now because its hard to call the directions or where
the trends will go or what the Government will do next . I don’t trust neighborhoods because of the flippers and future potential walk-a-ways. I’m just holding , but I’m watching a lot of other
people go into serious pain and financial stress , and the job loss
is really bad . I run into people who are battling for their lives because of medical problems ,and financial problems just add a
lot of stress to that already difficult situation . Hard for me to ignore the pain I see all around me . I’m a lucky son of a bitch myself ,maybe because of the choices I have made in my life ,but maybe because of some dumb luck also . I don’t take anything for granted and I thank the dumb luck Gods everyday .
The ability to survive is a great trait and keeping your wits about you and being flexible is also a great survival trait .Having purpose in life will also keep you steady when the World around you is
going out of their minds .
“It’s a odd time right now because its hard to call the directions or where the trends will go or what the Government will do next.”
Our plans are fully a fuction of this variable. The forecast is vague until we determine how the fed govt. will address their 27 year long stint of leaderlessness.
Housing Wizard,
Have you considered REITs? If I were going to buy real estate as a conservative investment (with no personal benefit to owning a home I could live in), I would wait until everyone says real estate is a terrible investment, then get into a severely oversold REIT whose management I trusted. This protects you from the risks associated with holding individual properties, while giving you potential appreciation when the credit storm ends.
Went back to work in order to stock up the bunker. Told myself I’d quit as soon as things got back to “normal” and laugh at myself for being so pessimistic about what’s happening. Cut out cable because the news was making me worse. Its been a year and a half into this plan; bunkers near full; debts paid off, so now what? Tell myself that as soon as things get back to “normal” …….
Fourth of July has been my favorite holiday from way back when I was a kid.
I think that consumerism (spending beyond ones means) is not dead yet. It’s still the denial stage, although I see I can get a seat at popular bars now in many places.
My sister is looking for work - was told to resign or be fired a month ago. She resigned. Things are not looking well for her. I think I have a good 2 years of work from now. Then I don’t know what’s next. But I could use a long vacation in Arizona. Make that a several years-long vacation!
I was coerced into going shopping yesterday, can’t remember the last time I went shopping…
We wandered around the little artsy shops in my little tourist town, and there was no one around. But the shopkeepers said that was normal for this time of year. Half the shops were closed.
I spent $20 on a DVD of the canyon country made by a friend of mine. An early Christmas present to myself, I guess, but my friend must’ve spent at least $200 on t-shirts and such for her family in Cali. The whole time she protested that she had to do this or the kids would be mad. I was vastly entertained by her so-called obligations. Been there, done that, you buy cool stuff for family back home and they don’t even notice how cool it is cause they can’t relate, having never been there…
‘…you buy cool stuff for family back home and they don’t even notice how cool it is cause they can’t relate, having never been there…’
That’s mostly true. It’s like how a pebble you pick up on the beach never looks as pretty when you see it sitting on your mantle.
I don’t pick up stuff on the beach anymore, except litter to carry off, for that reason. And for another reason–when I first got here to Olympia I picked up an oyster to look at, put it in my pocket, and then forgot it. Hung my jacket back up in the closet, all tidy like. I located the oyster by smell about 1.5 weeks later, and Sweet Baby Jeebus, I ’bout had to call a HazMat team.
Kids, don’t put oysters in your pocketses, is Olygal’s Good Advice on this Sunday.
A question, and competition of sorts.
Mrs. dude and I will have been married 20 years in December and I’d like to get her something nice, before she divorces me for not buying her a house.
Why don’t you all give me suggestions for a gift under 20K that she might like, Especially the ladies among you. I have no idea how women think.
Thanks in advance,
squatting dude
www dot mottsminis dot com
Seriously, Dude, these things are cool. Keeps you outta trouble, sort of satisfies the nesting instinct, and you can actually spend a fortune by the time you’re finished.
Tell her a Cheap woman is extremely hard to find these days and she should be proud of it!
Cheap women should be put on a pedestal.
What if I fall off?
Yeah! And bruise your cute girl bum! Can’t have that, polly.
Better sprinkle shoes and purses and candy around the base of the pedestal, to cushion the fall. But they allllll were bought on sale, see. So it’s okay.
Diamonds and sparkly things.
Dude, I’d help you out but I don’t seem to think the way other women do; ie mall rat stuff. If some guy tried to buy one expensive thing for me, I’d ask him was his ulterior motive was (besides the obvious.)
What does a house have that your rental does not have? Gear your gift toward that. Can you substitute with state park camping, B&B’s, boat rental, community garden, compost on the patio, farm vacation, weekend jaunt to Oil City PA? New drapes, Steak of the Month, hypoallergenic puppy? I wouldn’t buy her one big thing — find out what she likes to do or be, and buy lots of little stuff over time.
And btw, don’t do Valentine’s Day on Feb 14. Do it on JAN 14 and tell her you “couldn’t wait” until Februrary. She’ll love it [and you avoid the usual price-gouging *cough*].
‘I wouldn’t buy her one big thing — find out what she likes to do or be, and buy lots of little stuff over time.’
That’s a good idea even beyond the anniversary thing. I know I love to get and give little presents, and it seems more fun to spontaneously do it, rather than at some required occasion. That seems commercial and bossy.
I love my garden and all season long I ADORE giving bouquets of tulips and roses and herbs. I get the various little vases from estate sales around here, especially I like milk-glass. It seems like every old lady on this peninsula has a zillion cute little milk-glass vases she was saving for later and ends up selling to me for a quarter.
One of my favorite presents ever was when my best friend was driving through some podunk town over in eastern WA and spotted two small copper beehives in a thrift store window on main street. They’re old salt and pepper shakers, made from copper from the gigantor copper mine by Salt Lake City, and I LOVE them. If there was a fire, I’d probably head for them first of all. They’re right here sitting on my desk this minute. I liked them even more when he revealed, after serious probing, that he only paid a buck for them. It’s not the bargain getting, or entirely the cuteness, it’s that he remembered I like bees and copper and am from Utarr.
Dude, pull off something like that for Mrs. Dude and she will be a gushy heap of sappy putty in your manly paws, believe it.
In fact, just writing this made me decide to forgive him for his latest intolerable act*, and to call him up. That’s how potent the right gift can be! Yes, it is so. Mrs. Dude will forgive you later when you are an oafish barbarian.
*Working on something that will probably have the end result of decreased water quality protection along shorelines here in WA, for next legislative session. He’s a lobbyist. They get paid to be evil. He gets paid a lot, because he’s super evil.
Okay, I changed my mind again. I’m NOT going to call him up, because now I’m mad again. Water! Trees! Water! Trees! And f–k lobbyists!
Sigh. Look, dude. Give up on any and all of it. Women are fickle and changeable. You may as well spend all your anniversary money on beer, is my advice.
Sleeping with the enemy…
It’s so true. That evil, evil fook. And it hasn’t even given me any advantage at public hearings, either! He won’t talk no matter what the inducement, and I can’t pry his briefcase open.
On the other hand, I did get these here cute salt and pepper shakers. Look! They pour salt and pepper out of them!
‘…and I can’t pry his briefcase open’.
And don’t think I didn’t try. I normally have a very delicate and good touch with small tools, but nope. And I realized it would leave scratches if I used a crowbar. Any of you know how to jimmy a briefcase scratchlessly?
Inquiring minds really want to know.
‘I have no idea how women think.’
Shoots, me neither. And I even am one.
Seriously, you should ask a few of her friends. Make sure to tell them they can’t tell her you asked. Offer to take them out to lunch while they show you the stuff they think she would like. Call this a research trip. Then, when they do tell her what you did, she will get all the satisfaction of her friends telling her that she has such a great husband that he was willing to take a bunch of them to lunch just to get ideas on a gift. The “you are so lucky to have such a thoughtful husband” envy will be better than anything else you actually get her.
My dad got my mom an “engagement” ring for their 20th ’cause she never had one when they got engaged. But what she liked most of all was that he saved for three years to get it and had the bank account in her mother’s name (with her help) to keep it a surprise.
Or you could do a luxurious long weekend away someplace romantic and have lots of sex. Maybe some combination of one and three.
‘Seriously, you should ask a few of her friends. Make sure to tell them they can’t tell her you asked. Offer to take them out to lunch while they show you the stuff they think she would like. Call this a research trip…Maybe some combination of one and three.’
My heavens, polly. You are like a freakin’ genious! You ought to be a lobbyist. Forget being a dumb ol’ lawyer.
Seriously.
This is pure gold.
(But what if she becomes a lobbyist for developers?)
Then I’d have to kill her. And then I wouldn’t care if my crowbar left scratches on her briefcase; now would I?
I promise never to be a lobbyist for developers. With sugar on top. Cross my heart and hope to die, stick a needle in my eye and all that stuff.
Does Mrs. dude like to travel? For me, the excitement of travel compensates for the frustration I often feel in my present circumstances as a renter.
That was my suggestion. My favorite gifts from my husband have been trips - a weekend away to somewhere new, that kind of thing. He asks where I’d like to go, but then he makes all the plans without me having to worry about it. I get a nice relaxing trip, time with my S.O., and no extra clutter in the house!
I like the trip idea. It doesn’t have to be long, just low stress and fun. Is there some place she’s always wanted to go? Krakow is very nice and very romantic. You could see churches, take a carriage ride around the old city, etc. I also liked Estonia when I was there for a short trip. Another option would be going to whichever country she identifies with most ethnically, or some place that speaks a language that she has studied, or visit some place that was important to you as a couple, that you haven’t visited recently. You don’t need to go abroad, but for a 20 year anniversary, you should do something special.
Just lost my post…
Agree with the travel plans. Since you live in CA, IIRC, how about the Ahwahnee Hotel in Yosemite. It’s beautiful in the wintertime!!
http://www.yosemitepark.com/Accommodations_TheAhwahnee.aspx
Whatever money is left over, you could buy her some gold jewelry with two purposes…one for the girly jewelry, and one as an inflation hedge. You could buy her coins, but she would probably like necklaces, etc. better. Make sure you are getting good quality gold (18k+) and look for deals from quality sources (ok to buy used!).
Congratulations on your 20th anniversary!!!
$20k?!? How about some divorce papers?
I’m only kidding of course. But I guess I don’t understand why you have to spend so much money. Is that what’s important to her? What about waking her up in the morning with a kiss, an “I love you”, a nice bouquet of flowers and breakfast in bed, to start. Then, you could take her out for a nice day at the beach, a few shops if that’s her thing, and some other activities which you know she enjoys. Plan an exciting day, and execute that plan.
Dude ,did you mean 20 thousand or did you mean 20 bucks ?
One thing I do know ,don’t give her something that you really want . I learned that lesson in my youth .
A 20k present -new car or down payment on a house
A 20 dollar present = Candy or maybe a cheap dinner out . Oh don’t listen to me ,don’t know . Come on ,come up to 40 bucks at least .
20k cash, trow her a beatin’ and separation papers.
OK, I’ll beg to differ on this opinion.
Normally I’m the resident cynic and curmudgeon combined but when the cynic starts giving the other side …
Someone who’s been with you for 20 years is literally worth their weight in gold.
Life is hard enough. It’s harder without friends who are on your side.
I would not reduce such issues to a simple monetary calculus. The figure he quotes may be high but whatEVER. If he has the dough, you gotta live a little sometimes..
OK, that’s it. No more “happy peppy” posts from me. I’ve used up my quota for the year.
Any of the following, if appropriate
Water her plants for a year. That doesn’t even cost anything. I hate carrying the water out to the deck, but love to garden once the water is there.
Carry in the groceries without being asked.
Say “its so good to see you!” everyday when you come home from work (ok - for as long as you can remember to). It almost incites suspicion.
There are a lot of things that don’t cost 20K that women love. It really is the thought that counts. Especially for women who are minimalists. Anything that she REALLY hates to do and has to do that you can either do or mitigate the awfulness of?
Dude,
It depends on her taste, of course - but I think some nice oriental carpets would show appreciation for your wife’s reluctant willingness to forego home ownership. They are portable. They will make any rental home beautiful and elegant, until the time they decorate your own home.
I think that you can get good deals on Persian or other oriental carpets now.
How about a gift of a good book about oriental rugs and a rug buying fund account of up to 20k in the bank. Doing the research and shopping (bargaining, trying out different carpets, trading, etc) would be interesting and fun …
You are a genious! No, really. I already told polly she was, but now I’m getting lavish, and that is because I really mean it.
I LOVE Oriental carpets. Just this week I had a life changing even, when my adored county commissioner announced his incipient retirement, and I meditated a long time, and you know what I came up with? Here’s what: Life is short. Time to get out ALL the Persian carpets, and slap them down on the floor. No more storage crap, I’m putting them all out, and I’m walking my little pink girly feet all over them, and sitting on them and poring over the details.
even=event.
Gosh, I’m tired. It’s been solid misty all day out here.
Oly,
Persian carpets are MADE to be walked on and sat on (and perused)! Do it.
The only storage should be - a good supply at (hypothetical) Balbakians’ or Bijan’s or wherever, so that Dude’s wife can have absolute piles of them to sit on and look through - deciding her preferred colors, silk or wool - and take home for a test run.
Sounds like a nice reward for foregoing the choice between countertops and Pergo types and wall textures at the model home / sales office, huh?
You’re kidding, right? I’d whack my husband side the head if he ever spent more than a couple hundred dollars on me for christmas.
Design and print out on your computer a batch of coupons, each redeemable for one 20 minute massage given by you.
Nice one, combo.
It depends, Dude, on whether 20K is a percentage of your annual take or a whim. Assuming the latter:
A beautiful emerald or ruby solitare on a simple chain necklace is a pretty safe bet.
A Smithsonian cruise with cuisine-oriented side trips. First class accomdations.
Excellent season tickets (Opera? BaseKetBall?) with extravagent dinners beforehand.
Two weeks at a great spa with you joining her for the last weekend.
Major ski trip with new equipment. Preferably Gstaad, Davos, Klosters?
Two weeks motorsailing with private crew in Greek waters.
An oil portrait.
This is all assuming she’s a romantic and not adverse to the extravagant gesture on your part. It’s hard to know without an idea of your circumstances and preferences…. Hope these give you ideas you can start with.
Shades of the early 80s in W. Colorado, things got very very ugly during the energy crash then:
“Harpole, president of Mercator Energy, calculated that the number of drilling rigs operating in the gas-rich Piceance Basin could decrease by 35 to 40 percent, perhaps in the next few months.
A drop in prices for natural gas being produced in the region, problems in the nation’s lending markets and the anticipated impacts of new state oil and gas development rules all are causing companies to take a harder look at their investment plans in the Piceance Basin, Harpole said.
He worries about what that could mean for state severance tax revenue and for local communities that benefit economically from gas development.
“It’s not a good thing for the West Slope,” Harpole said.
But Parachute Mayor Roy McClung isn’t too worried.
“With the way things are, I don’t think we’d notice a whole lot. It might make it easier to get off the interstate,” he said.
Parachute has been struggling to relieve congestion at its Interstate 70 interchange, which has been clogged by traffic related to increasing gas development. McClung said a dip in activity could give communities a chance to catch up in trying to address effects related to drilling.”
gjsentinel dot com
One of my many cousins is a driller (runs the rig) and he makes about 120k/year. He just bought a house a year or so ago.
An intelligent government would try to budget/plan major construction projects during economic slowdowns. This would help the local economy and they could get a better price for the project. At least you would think……
Or does the government work in some kind of Bizzaro world, where the rules of gravity don’t apply?
Agree 100% gulfstream!
This is the time to create jobs, not shut them down.
All the bailout money should be redirected to these efforts, IMHO.
Parachute. My employer transferred me there in the early 80s to engineer for some of that shale oil stuff. They closed the gates before I could buy myself an $80K boom town house.
Tosco.
No way!! Did you know Linda Kors____ (fill in the blanks)…???
wow, that’s goin back. you should see the place now.
I don’t remember a Linda. There were 200 of us. I was out of Bayway.
Did anyone see Suze Orman last night? Watching that show usually makes me feel pretty good about my financial situation, but not so much last night. I felt sick, actually. Got to hand it to Suze for keeping her cool.
An FB named Dawn was on. She and her husband “take home” $9K/mo. Her problem is that their expenses are $19K/mo. They have (IIRC) about $230K in CREDIT CARD bills. Dawn has a pimped up house worth about 900K and it is HELOCed to the gills. She has a $2K/year jewelry habit, and it looks like she is spending at least that much on hair (oh what big hair!) and sparkly cloths. They have a 7-year-old daughter, and (again IIRC) less than $50K in retirement savings, which they’re now tapping in order to pay bills.
But Dawn didn’t want to sell the house and rent small as Suze and a credit counseling service both suggested. Oh nooooooo! She apparently wants to declare bankruptcy, screw the credit card companies and KEEP the house. Yeesssssss! Suze tried to tell her that she might make too much to declare bankruptcy, but Dawn wasn’t having any of it. Oddly, Suze didn’t bring up that HELOCS, at least in Cali, I believe, are recourse.
No doubt, Dawn is effed. Scadenfreude, baby.
I saw it. She got me crazy over her stupidity and arrogance. It immediately got me thinking about all the talk about bailing out homeowners, which got me even more incensed. She should be the poster child for the morons that the rest of us are supposed to bailout.
They will end up in bankruptcy, and probably a divorce will follow.
“She should be the poster child for the morons that the rest of us are supposed to bailout”.
Yep, but we keep voting in people who say screw the prudent, and ‘bailout’ a worthless POS like Dawn.
Hey, Dawn may yet rescue the economy by keeping a lot of lawyers well paid.
I have no doubt she’ll be taken down a peg or two and sell off her fine jewels and move to a smaller home rather than face the public humiliation of foreclosure.
She sounds like a real shrew.
To me someone like that is a thief and just looking to get someone
else to pay for her inability to say no to herself . 250k in credit card debt on the income that was quoted ,along with the housing debt, are just the acts of people who game the system . God ,do these
goofs think that the world owes them the lifestyle of the rich and famous ? I think fraud was involved with her real estate loans ,so I don’t care what happens to this nut-cake who called in trying to act like she even deserved to be put in the same class as a person worthy of being helped out .
The fact that the lenders ,banks ,and credit card companies did not take into consideration that the world is filled with mad-hatter
opportunist ,who aren’t even intelligent about how they game the system , and didn’t put that risk factor in any risk models they had ,is unfortunate .
My wife and I watched that segment in horror, disbelief that left us feeling ill. “Dawn” clearly will not let go of the lie and will ride a train of misery right into the poorhouse. The woman is so deluded and entitled in a way I have never experienced in my 40 something years. Her deep denial and sense of entitlement is beyond description. We all here can see that she owned NOTHING, even Orman told her so but it went right over the broads head… didn’t even phase her.
I’m still disturbed about that segment…. much like a really good movie sticks in your mind for days after.
Bargaining power
In a weakened economy, no price is final and ‘neo-hagglers’ are calling the shots
By Susan Chandler and Wailin Wong
CHICAGO TRIBUNE
November 16, 2008
…
As neo-hagglers succeed, they are getting bolder, trying their tactics at places they would never have before, such as restaurants, chain stores, boutiques and even therapists’ offices.
Their ranks are growing. Half of consumers surveyed in April by BIGresearch reported they have started haggling over auto repairs and appliance and electronics purchases. More recently, nearly 60 percent of Britons surveyed said they are now more likely to try to negotiate discounts than they were a few months ago.
…
Of course, some retailers, including many department stores, won’t budge on price, and they would frown on employees giving customers their discount.
“We don’t negotiate price with our customers,” Elina Kazan, a spokeswoman for Macy’s East, said flatly. “Macy’s popularized the ‘one price’ policy decades ago.”
That doesn’t discourage Ashley Thompson, 21, a Maryland resident who has raised retail haggling to an art.
When a clerk approaches and asks if she needs help, Thompson never asks how much an item costs. She asks, “How much can you give it to me for?”
Typically, the salesperson smiles back and says they’ll see what they can do.
“I say, ‘Don’t see what you can do. Make it happen,’ ” Thompson said. “Some of the guys in a clothing store will give you their discount. You can usually tell who you can strike up a deal with.”
Thompson said she wouldn’t try haggling at a department store, but she isn’t shy at chains such as 5-7-9, Rave or Old Navy. She has talked employees into giving her their discount at restaurants from McDonald’s to a steakhouse, where she paid $34 on a $100 tab.
Ben, check is in the mail (no, really). Thank you for assisting in saving my family from financial ruin.
I suppose I should have asked how you prefer compensation first: beer, gold, cash, ducats, autographed Mickey Mantle bat, maybe tickets to Disney, a house in Detroit, chex mix… hell, I don’t know.
Question for Alad…
Are you still hearing from your coin dealer friends that they’re having a hard time getting gold ounce coins?
Local dealer here has krugerands and maples, not a lot though, and he wants $70 over spot.
DOC
I was over at a friend’s store yesterday, and he said that they are able to buy limited quantities of most bullion items on a wholesale basis, and premiums have come off a little bit.
He said he’s still not buying anything over the counter from the public, though…
From Don Stott’s web page…
http://www.coloradogold.com/archive/The_Bailout-809.html
I heard from a source I consider reliable, that on the 28th of this month, Russia will demand full physical delivery of metals from all their contracts with the COMEX. No more rollovers or dollars. If this happens, the prices will shoot up pretty quickly, and it will maybe be the ruin of the Comex. Who knows? Rumors abound. It may not be true, but I do believe that this period of low prices has about run its course. The Plunge Protection Team (PPT) doesn’t seem to have done too well, does it? Where is the bottom of the stock market? I say about 3,000 on the Dow, but my crystal ball quit, just as it was about to give me the answer, and my astrologer was too busy with Hank Paulson to give me any time, with Michelle Obama next in line.
“Local dealer here has krugerands and maples, not a lot though, and he wants $70 over spot.”
Sounds bubblicious, indeed.
I *finally* remembered my password over on the HBB forum and I started a new thread post thingie over there. A ‘Squatter Forum’. Losty, dude, and nowadays palmy’s plans were the incentive. Sign of the times, man.
So, let’s give it up, in the name of helpfulness, all you known and unknown squatters out there. Dish your squatter tips and thoughts. Or else we could just talk about mushrooms and shoes, which works good for me, too.
‘Squatter Forum’
That’s not fair, men should be allowed to post too…
Helmets vs anteaters.
Jim Rogers on the massive dollar short squeeze and its eventual demise…
I’ll just observe that Jim Rogers has done a lot of wrong.
Wrong on China
Wrong on Commodities (+ bubble)
Wrong on Dollar
That’s a lot of wrong.
And he hasn’t even managed to sell his Riverdrive Drive apt. which is literally up the street from me. You’d think that being a billionaire would allow him to understand bubble economics and lower the price until it sells?
So what’s the chance that he’s telling you the truth and not hustling you?
He’s not hustling me, because I only have a passing interest in what he says — not taking his advice as the basis for investing decisions.
I’ll just observe that it’s different to invest $10M and $1B and leave it at that.
Size matters, and he’s playing a different game (assuming he’s 100% honest.)
Jim Rogers on the folly of taxing capital and protecting American workers (key elements of Obama’s economic plan)…small wonder the stock market never seems to bottom out these days.
NOW they tell us!!!
Wall Street Journal
GETTING GOING
SUNDAY NOVEMBER 15, 2008, 10:45 P.M. ET
How to Invest Well and Sleep Better
In this devastated market, “risk tolerance” is an oxymoron. Those little tests the online investing sites give you to assess how much risk you can handle in your investments don’t do justice to the kind of crash we’re living through.
Most of us can’t stomach 40% free-falls in our fortunes, and we certainly can’t — or don’t want to — suffer a shellacking like the one we had in October and then watch what’s left trickle away day by day as it did last week.
You don’t have to. This may be too late for many investors who have already seen their stock-heavy nest eggs scrambled, but some research and simple number-crunching indicates you can keep less money invested in stocks than conventional investing wisdom would have you believe — without giving up your retirement goals and with a lot less risk.
It’s All in the Mix
Indeed, a portfolio that mixes 50% stocks and 50% super-safe long-term U.S. Treasury bonds will perform almost as well over decades as a portfolio that carries an 80%-20% blend of stocks and bonds. And if you’re the guy holding the first portfolio, you’re probably sleeping a lot better these days than the other fellow.
“If your goal is to be very confident about having a certain amount of money at a point in time, lower-risk portfolios are actually a cheaper way to get there than a higher-risk portfolio,” says Christopher Jones, of Financial Engines, an investment advisory firm.
Interesting idea, and perhaps one whose time has come:
WSJ
* OPINION
* NOVEMBER 17, 2008
To Prevent Bubbles, Restrain the Fed
Obama would be a fool to trust his economy to the discretion of central bankers.
By GERALD P. O’DRISCOLL JR.
On Nov. 14, 2008, the Dow Jones Industrial Average closed at 8497.31. On Nov. 13, 1998, the adjusted (for dividends and split) close was 8919.59. There has been great volatility, but no net capital accumulation as measured by the Dow in a decade. Other indexes, such as the Nasdaq, tell a similar story. Capital has been invested but as much value has been destroyed as created.
The U.S. cannot afford to have another lost decade. Or to see the dreams of another generation of Americans who had been told to take responsibility for their financial health by investing in the stock market dashed by failed monetary and fiscal polices.
Today, the most urgent task facing President-elect Barack Obama is stabilizing financial markets by instituting policies that foster economic growth and prevent the type of boom and bust cycle that has just wiped out a decade’s worth of wealth accumulation.
…
Mr. Obama needs to stop the next asset bubble from being inflated by imposing a commodity standard on the Fed. A commodity standard (such as a gold standard) imposes discipline on a central bank because it forces it to acquire commodity reserves in order to increase the money supply. Today the government can inflate asset bubbles without paying a cost for it because the currency isn’t linked to the price of a commodity.
With a commodity standard in place, the government would also have price signals that would alert it to the formation of a bubble. Why? Because the price of the commodity would be continuously traded in spot and futures markets. Excessive easing by the Fed would be signaled by rising prices for the commodity. In recent years, Fed officials have claimed that they cannot know when an asset bubble is developing. With a commodity standard in place, it would be clear to anyone watching spot markets whether a bubble is forming. What’s more, if Fed officials ignored price signals, outflows of commodity reserves would force them to act against the bubble.
The point is not to deflate asset bubbles, but to avoid them in the first place. Imposing a commodity standard is a practical response to the repeated failures of central banks to maintain sound money and financial stability. What would be impractical is to believe that the next time central banks will get it right on their own.
Mr. O’Driscoll, a senior fellow at the Cato Institute, was formerly a vice president at the Federal Reserve Bank of Dallas.