The Housing Bubble

The problem is that every proposed solution only rewards the speculators and punishes the prudent. At this point they’ve already blown through a trillion in the bailout and they have trillions more in outstanding loans to insolvent institutions. So far none of this money has done anything to solve the underlying problem, that the people themselves have taken on more debt then they could ever afford to repay. Now they are giving Citi more cash and instructing them to pass their bailout along to the fools.

At this point, giving people another $1k stimulus check is worthless. If my math is correct, for $5T we could give every adult in this country $20k and every child some money to put aside for college. If we actually handed out checks that size the store shelves would be empty in a week and we would be pushing our paychecks around in wheel barrows. However, in this day and age we actually have three separate credit bureaus that track people’s debts. Why not give each person a substantial credit, like $20k, and pay down their debts directly? The government could pay each individuals debt off in order of earliest maturities first with particular attention paid to delinquent mortgage payments. Those that have less than $20k in unsecured loans and are current on their secured loans would receive the remainder of their $20k in cash. A bailout this size would have to be monetized, but if the credit is given equally we suffer the loss in purchasing power equally. Our foreign creditors are left holding the bag but that is going to happen anyway and they need their customers/junkies back.

Although I seldom post, I read this blog religiously and it has helped me maintain my sanity for the last four years. I have great respect the intelligent members of this blog and I look forward to your comments and criticisms on my proposal.

“Why not give each person a substantial credit, like $20k, and pay down their debts directly? The government could pay each individuals debt off in order of earliest maturities first with particular attention paid to delinquent mortgage payments.”

I have a couple of friends well into their 30’s whose parents do this for them every 5-10 years. Nothing changes, no lessons are learned and it is expected everytime financial problems loom for them.

This would be a very dangerous precident to set.

$20K to everyone? Hm, not a bad idea, but $20K is barely enough to dent the Escalades that people bought with their HELOC cash, much less keep them current on a mortgage.

And, if massive numbers of FB’s walk, then the government will effectively be paying their debts anyway: FB walks —> mortage is forgiven (for FB) —> Bank takes hit (because house is underwater) —> Government bails out bank.
FB debts are “paid,” bank starts up again on life support.

I’m not an economist, but I thought that the best way to rewards savers is to make interest rates ridiculously high (the heck with CNBC) and make prices ridiculously low (the heck with the NAR). Great house prices, but high interest prevents the debtor class from specuvesting, which limits demand and prevents another bubble. Great interest rates on savings accounts, but you need cash in the account.

I’m not an economist, but I thought that the best way to rewards savers is to make interest rates ridiculously high (the heck with CNBC) and make prices ridiculously low (the heck with the NAR). Great house prices, but high interest prevents the debtor class from specuvesting, which limits demand and prevents another bubble. Great interest rates on savings accounts, but you need cash in the account.

Hear, hear!!! Couldn’t agree more. Though it’s counter-intuitive, this is exactly what is needed to solve our financial “crisis”.

Yeah! Give Peter bucks so he can buy a kayak and a rack! Good idea, Peter. Kayaks are the answer. To everything.

Let’s just say that I’m glad I bought my kayak off of cragislist. So that as it sits there, silently accusing me of not being as outdoorsy as I think I am, at least I didn’t pay full price for it. Like most outdoors stuff, buying it used in the fall makes the most sense.

“Kayaks are the answer. To everything.”

No, being on or in the water/beach is the answer to the deepening US economic mailaise . Whether via Kayak, paddle board, surfboard, sailboard, kite surfing,ect. It is all good, and a way for me to stick it to the current corrupt economic system, which will destroy lives and values of an entire generation.

I choose to live out on the water whether than dwell on the current economic nightmare. Can do so as i have little debt and plenty of hard assets & cash to ride out this GD-2

“Let’s just say that I’m glad I bought my kayak off of cragislist. So that as it sits there, silently accusing me of not being as outdoorsy as I think I am, at least I didn’t pay full price for it. Like most outdoors stuff, buying it used in the fall makes the most sense.”

I can buy a good used kayak right now for a steal, dirt cheap but i need to get a truck racking system to transport it. I will get this system as dirt cheap as possible as bing like this should be selling for pennies on the dollar in this economic climate. Getting a truck racking system configured to your personal vehicle is easy if u get it from a dealer or sport shop or even online but buying it used from a desperate seller of craigslist at deep discount is another story.

It is pretty cheap to rent a kayak at the local waterhole ( $10 for all- out hard paddling for two hrs) so i can just rent out for a while and take my time to set up my rig for that personal kayak. I bodysurf a lot so already have my water fix habit satisfied somewhat.

“No, being on or in the water/beach is the answer to the deepening US economic mailaise .”

Waterworld?

“WTF were the Republicans thinking putting complete morons in every key position?”

Apparently loyalty tests don’t require arithmetic.

So much for the ability of “executive” leadership. This crowd held the concept in such high regard with zero consideration for depth of knowledge and expertise. Much like the Sara Palin factor.. all flash and no cash.

Empty skulls and twisted ideology is the trademark of the gop.

Im really glad we’ve got an intellectual administration waiting to take over; just where are those extra 7 states Obamma thought we had? Would be some nice extra tax dough he could spread around. And just how many three letter words did our new VP pick up since the election? Yep, this new gang shows real depth of knowledge…..this cycle aught to be a doozie.

Oxide, I’m surprised there is even one knut left that is willing to defend the failure called reaganomics/supply side.

Mike, you will be surprised at how much more pain there is left in the marke… Miami after all has how many years of inventory in the pipeline? 20, 25? Condos in MIA will be worth negative numbers, in that you would have to pay someone to buy one…

Condos maybe, still tough to find a sucker to pay $200K for a 2/2. I am looking at a house built in 2004. 1450 sqft 3/2 for $115K asking. The place last sold in 3/2006 for $430K. That’s cheaper than I can rent a similar place right now.
What else to do with $$? Gold or energy stocks? There’re not too many places to hide these days. The dollar might be worthless once our government is done bailing out everbody under the sun. I am mostly in cash right now but long term that’s probably not a wise move.

In my opinion it is better to have cash and mobility than put your money in cheap drywall. House prices aren’t going up any time soon. There will be plenty of time in the future to buy a house. Let others set the new comps in the neighborhood and screw things up. Florida will be raising taxes heavily as second homes come on the market and people exit Florida. Boomers will be selling their houses for a long time. The best thing anybody can do is wait this one out. I think one should find opportunities in their own field of expertise. Being a jack of all trades and master of none also applies to opportunities in business.

Mike,

You’re seeing 75% off in Miami? It’s pretty hard to find 50% off in Palm Beach; I’m a bit surprised to hear that you’re already showing down 75% in your neighborhood.

And, I do agree, now is a reasonably good time to buy. Don’t pay anything over 100/sq/ft for the home, make sure the neighborhood is good, established and STABLE, and you should be fine. Taxes are going to go up (the mill rate) in FL, so be prepared for that. Insurance will probably go up again as well, so be sure to figure in the extremely high carrying costs of FL. Many/most of the homes for sale in my hood are all still outrageously priced, but, I do agree, I am starting to see some that are coming down into the range I think is “reasonable”.

The question isn’t “can I afford it”, the question is “how low will it go”. Condos in FL (that aren’t oceanfront) are going to see their values erode to 0. However, SFH are massively overbuilt as well, so how far below construction costs will they fall? At some point, investors will come in, buy them, and rent them out, making money on the rent (vs their carrying costs). Until that starts to happen, I think we’ve still got some way to go down.

I’m pretty much set on my target of 100/sq/ft, I’m now seeing plenty of homes in that range. Depending on the location, the land may have some value, so add a bit over the 100/sq/ft mark for some locations. However, most of these big “mega developments” that were built in the last 10 years; the land has close to 0 value. If you’re not on the water, or right downtown, pretty much assume a value of the land around 0.

They almost got to that point in the 90’s when you add in taxes insurance Condo HOA fees assements etc….and realize you can never ever get a positive cash flow unless its near zero.

——————————————
Condos in MIA will be worth negative numbers, in that you would have to pay someone to buy one

NYC,

They are already at that point in many locations in Palm Beach. Add taxes, insurance, and HOA together. Rent is LESS then the fixed costs. Actually, I was renting a condo like that for a while in downtown WPB, my rent was ~1200/mo, the fixed costs were about 1100.

That’s going to happen all over the place down here (including my favorite 2 projects, the Landmark and the Marina Grande); which is going to make for interesting times! However, the thing that we all have to remember is that the taxes are based on assesements, which are based on sales prices. So taxes would come down dramatically if all of the sudden these 500K condos started selling for 50K. That would alter the equation significantly (from 10K a year in taxes to 1K a year!), and would probably push the unit back to cash flow positive.

Even the house I rent right now, the break even (without any MTG costs) is about 8-9 months of rent. Taxes are 10K/yr, insurance about 3-4K, and HOA another 3-4K. Call that 16K a year, my rent is 24K/yr. That leaves VERY little room for any kind of MTG payment!

They would raise the millage to compensate for the decline…so not much saving there..

Or how do you lay off 25% of the police in WPB?

Even the show COPS loves WPB and the high crime rate… it seems like every month they go to WPB.

———————–
that the taxes are based on assesements, which are based on sales prices. So taxes would come down dramatically if all of the sudden these 500K condos started selling for 50K.

“So taxes would come down dramatically if all of the sudden these 500K condos started selling for 50K. That would alter the equation significantly (from 10K a year in taxes to 1K a year!)”

This is definitely NOT true. When valuations drop the Mill rate skyrockets to yield the same tax bill, unless your taxing authority spends less which is unlikely to happen! Your tax bill is valuation times mill rate. While the falling values may redistribute the tax burden (a little) between certain types of property (commercial, SFR, Condos) it is highly unlikely that with most local costs being labor and fixed, and state and federal aid going south, that your tax bill will actually go down, even if you assessed value goes down 50-75% (it won’t either….). You may end up paying more, for less services. Sorry, but it doesn’t work the way you think, as nice as that might sound.

I’m waiting for “The New American Homestead Act of 2010″

After meeting certain qualifications, you can stake your claim on a vacant house/condo….”improve” the property (do koi ponds count?)…..after, say, 1-2 years, and paying the back taxes, the place is yours!!

Eventually, it would not surprise me if some areas came to this

“This is definitely NOT true. When valuations drop the Mill rate skyrockets to yield the same tax bill, unless your taxing authority spends less which is unlikely to happen!”

In the “normal” world, that’s certainly true. However, in FL, with SOH, it’s not going to work the way it would in a normal taxing environment. The mill rate will go up, I have no doubt about that. But it won’t work the way it would in the rest of the country. Mill rates stayed constant (because of SOH) while properties went up 2-4X over a 5 year period. If the values drop (as they are), the mill rate increases will be blunted.

Does this mean that tax increases are capped and that local budgets get decimated? I am not familiar with SOH, sorry. In MA, we have proposition 2.5, meaning that taxes can’t be more than 2.5% of assessed value, without a 2/3′ds local vote that “overides” that law. In tight years, to preserve schools or police and fire, overides have about a 50% success rate. I’d be interested to know what SOH is. Thanks.

Hi Michael,
” When valuations drop the Mill rate skyrockets to yield the same tax bill,”
Aren’t the mill rates capped at 3% or something like that? I’ve been wondering about that. Once home prices drop so will tax revenue unless they can increase the rate. I thought there’s some item in the Florida constitution that cappes those rates…not 100% sure. Any more datails, anybody?
The 75% prices declines in Miami are mainly on foreclosures in “blue collar” neighborhoods. The slums are hit worse with declines of up to 90% on some foreclusres. Those are usually tear downs that somebody paid $300+K for at one time. There must have been an incredible amount of fraud. The nicer n’hoods are holding up better, but 50% off on foreclosures is not uncommon.

It’s good to see that people are starting to think it’s a good time to buy. I’m starting to see that here in a relative stable part of Ohio. The happy-talking self-congratulatory homebuilders are still overcharging for shiny new cookie cutter and shiny new attached product, and there is still a premium on luxury-ish stuff. But a regular Joe-six-pack type home is selling for about 10% more than I would pay, and handyman specials are going at much less. I don’t know the history so I can’t give a % haircut, but butter-knife catchers appear to be snapping up anything reasonable.

Is 10% over a bad hit to take? At prices near $100K, it’s better to overpay $10K than spend $10K rent waiting for the final price drop, especially if you find something you like, and especially if inflation eats up the down payment cash.

“Now is a good time to buy, seriously.”

-1 — You must learn to be patience, Grasshopper.

“Personally I try to stay healthy, eat right, excercise and ride my bike.”

+1 — Excellent plan; one medical episode can ruin everything.

oxide, I’m glad we are talking about inflation.
Shows, we are ahead of the crowd.
But a lot of info above is false.

RE: a regular Joe-six-pack type home is selling for about 10% more than I would pay, and handyman specials are going at much less.

The continual pumping of residential real estate is all a trap.

The fixed target bagholders for enormous state tax and local deficits will be residential homeowners.

Expect property taxes to blow thru the roof in the next decade as the non-essential “foo-foo” businesses increasingly fall by the wayside diminishing the commercial sector tax base.

Plus, everybody’s got to pay the coming avalanche of public sector pensions

I wonder if people thought Atlantis real estate was dirt-cheap?

aladinsane
“I wonder if people thought Atlantis real estate was dirt-cheap?”
Alad, the koolaid runneth over this morning, enjoy and have at it.

Muir,

I hear you have climbed often in the Sierra Floridita Mountains, in the Sunshine State…

With the high peaks topping out @ 345 feet, you probably tend to be more afraid of widths, than heights?

I believe that you misunderstood, as you have other times.
I was actually agreeing with you.
Be careful where you live, where there is smoke….

‘Be careful where you live, where there is smoke….’

There’s Muir, with a match?

After meeting certain qualifications, you can stake your claim on a vacant house/condo….”improve” the property (do koi ponds count?)…..after, say, 1-2 years, and paying the back taxes, the place is yours!!

Eventually, it would not surprise me if some areas came to this

I think you may be right, in some distressed areas. But if people don’t feel safe or can’t make a decent wage, they won’t take a place even for homesteading.

It’d be nice if some developments were just flattened and returned to farmland or greenspace, too. Undo the exurbs!

You may fire when ready, Gridley.

Muir, which info is false? (serious question). I’m basing this on my observations. I still think the market is like catching butter knives — not the best time to buy, but at least it’s not financial suicide.

And hd74man, if the foo-foo businesses (candle shops) are failing, then there was no revenue to collect taxes on in the first place. If you mean foo-foo as in Home Despot, then I agree with you. And won’t those tax increases just get passed on as part of rent? So you’re taxed no matter what you do.

“With the high peaks topping out @ 345 feet, you probably tend to be more afraid of widths, than heights”

Going from florida ‘peaks ‘ to the somewhat higher Sierras:

I would love to live out in 3 rivers where U can drive up to Wolverton in less than an hr and take the lakes trail to heather lake for a short day excursion or take the alternate route and climb 11600 ft Alta peak as a good long day exercise. And do it on a weekly basis. Have done Alta once before and it took 10 hrs.

There are a few folks who become obsessed with Sierra Peak climbing. I was once one of those and will someday in the future take up this rarified obsession again.

Once bitten by the lore of the high sierras U are hooked forever.

I have heard that Humpherys Peak is one hell of a class 3 thrill.

I wouldn’t pay 100$/sqft just to live in FL. I paid 60$ for hurricane ravaged mosquito infested former swampland in Texas

Same here. My parents are barely pre-boomer and my brother and I are post. They eat out a lot. I think my mom has this ridiculous fairness idea going on where since my dad is retired, she should get to stop cooking - very silly, but there it is. I cook way more than she does and I am not all that good at it (neither is she, but she, by necessity, had more standards to call on). Anyway, they coupon, plate share, senior special, etc. all over the place. They can eat out for very little more than eating in, though the food would be healthier if they ate in. It is an art. A rather low brow art, but an art all the same.

I, on the other hand, regularly get over a third off on a grocery bill. I used to be able to do a lot more than that, but healthy food has way fewer sales and coupons and the supermarkets in MD don’t do the same specials as they did in NJ. I remember once getting paid to take away a bottle of soda from the market. The final cost was negative five or six cents. Even if you don’t drink the stuff, you could volunteer to bring soda to a group dinner. It was completely amazing to me that they didn’t put a barrier to that sort of gaming in the cash register program. It would have been trivially easy, but they didn’t do it.

Ok, enough falsehoods.
There are some falsehoods on the above posts.
1st. Forget what you pay for a property as being anything close to what the property appraiser’s office will assess for your property.
2nd. 75% off peak is meaningless. In Miami-Dade outright fraud made prices go up over 200%
I saw this! First hand. This is not something I read about.
I saw straw buyers buy property at 50% above asking price with an illegal kickback at closing and then resell the property a month later at 75% increase and the entire thing repeated in less than 6 months.
I saw this!!!!
3rd. Could we please stop talking about replacement cost?
That is unless we talk around $50-60 sq/ft because that is what it takes to build a house, from permitting to Certificate of occupancy in FL.
4th $100 sq/ft in a decent area in Miami does not exist.
It doesn’t, I do not care who says so.
I’d buy tomorrow 3 houses if that were true.

“Mike, I do not know what you are talking about.
Unless you mean Homestead/Florida city/Cutler Bay.
Yes, in the cities above you can get houses built in 04 for 115K”
In the 33127 Zip Code. Not a great n’hood but not a slum either.
“That is unless we talk around $50-60 sq/ft because that is what it takes to build a house, from permitting to Certificate of occupancy in FL.”
Nope, costs about $100/sqft, especially with all the hurricane codes.
“$100 sq/ft in a decent area in Miami does not exist.”
Depends on what you define as decent. In Coconut Grove you shell out a lot more in the 33127 & 33142 Zip codes you get a decent house for $100/sqft if you can deal with the n’hood.

Mike 33127?
Is that a joke?
Miami Ave, around 36th St.
I lived in Miami 40 years.
-
Let me be very clear for those not familiar with Miami.
This is a ghetto area, next to Liberty City.
Let me be explicit: there’s crack whores in the street corner.
-
Obviously, you were just typing in your keyboard for no reason.
-
I will not reply any further, as anyone in this forum is intelligent enough to research that zip code area for themselves.
You have no credibility for me to even answer your second statement on cost per square feet in Miami. But, I will say this, if you are saying $100 sq/ft that must be what you quote your clients, as after your post that is what I strongly suspect you are: a builder.

(sorry if double post, filter’s probably didn’t like the first post.)
-
Is this a joke Mike?

33127? Miami Ave and 36th street?!!

I lived in Miami 40 years.

For those not familiar with Miami here’s the skinny: 33127 is a place for street hookers that abuse certain substances (I think the filters had trouble with my previous version) in a neighborhood that you do not want to be caught after the sun settles. (filters)
-
As for your $100 sq/ft.
Are you a builder?
You sound like one.
Be honest.
-
If you start telling me about “Midtown” and the “Windmar district” and “fashion district” or “Park Lofts” I’ll have my answer.

Really, no one has to go anywhere.

What they do need to do is to refocus their resources to match their beliefs. The system is gamed to take advantage of people’s expectations - change those expectations and the system breaks down.

It really doesn’t matter where you sleep - it matters where your money goes.

CrackerJim is correct.
And, if some here that site Jared Diamonds’ work, specially “Collapse” would read it without having a hobby horse to ride, they would realize that there is nowhere to run to if things get bad enough.
Oh, and that’s not just for Alad.
Some think that they will be welcomed by the natives in Chile if things get bad enough.

I’m resigned to my fate as I determine it.

Sorry, Alad.
The point that you miss is that if things get bad enough as you predict, you will not have that privilege.

I have a lot of tricks up my sleeve…

“they would realize that there is nowhere to run to if things get bad enough. Oh, and that’s not just for Alad. Some think that they will be welcomed by the natives in Chile if things get bad enough.”

I had a serious conversation with a friend of mine a few months back, he’s, well, freaking out (we are both from upstate NY, but live in Florida and Ohio)… anyway, he asked me what I would do if TSHTF. My opinion is that you take a stand in a town worth defending, and defend it as best you can. I guess I would call this the Jericho plan, for those that saw that series.

This town would be where you have some roots and know everyone: the mayor, police, lawyers, doctors, etc. You all agree to go at it as a town and that’s that. The kind of town where your last name is known, and who you have helped and worked for means something.

I don’t think he liked my answer, but that is my plan. There are 2 towns in my Apocalypse play book, meaning, if I have to die with the sheriff transporting food on horseback, these are the places that I am o.k. with that.

I would really not want to be anywhere in Florida in these scenarios.

Rapes of Graft

‘but another to watch Henry Fonda in the Grapes of Wrath.’

Or even another to read the book. That was some sad readin’, for sure.

I don’t think the government has the cojones to fire 53,000 people. The best they could do was 11,000 air traffic controllers. They need the private sector for some things;)

only a tv generation could believe that…

As many of us here probably know, there are times when getting it “free” is too high a price to pay

Its never free.

Look, credit happens with or without a gold standard.

There are two unrelated problems here - credit bubbles and government intervention to devalue currency to mitigate the credit bubble.

The former happens in ALL regimes; the latter is sorta kinda modern - they tried that with gold too by devaluing.

Is this so complicated to grasp?

Not at all, FPSS—-I totally agree. It was just less convenient and more noticable when you had to devalue under the gold-standard.

You’re suggesting we follow Bush’s Dictum that Consumerism Is Patriotism?

Debt Is Wealth?

Liabilities Are Assets?

We’ve seen how well that particular economic plan works out, haven’t we?

No, sorry. I’m saying we’re doomed either way. If we spend all our money, we go broke. If we save all our money, businesses go broke and the g-ment steps in to take our magic tax dollars to save the businesses, and we go broke anyway.

Well, they’ve made a very specific claim: “Many” long futures buyers will ask for delivery, and the Comex will step in anf force cash settlement this Friday (11/28).

This is an extraordinarily specific and precise claim. We shall see is the response because we only have to wait until Friday.

I will be playing with my grandson on Friday. It will be a double good day.

Show me the money!

Too bad I will be out of communication range for most of Friday at our cottage to find out how my GLD, Krugerrand stash and rest of my investments held up. I am sure it would rock the markets for a while and hurt the stock market so it would be negative for me, personally. I just wonder how much demand for delivery there will be in the large COMEX quantities. At 100 oz a pop, they are not all that affordable for the average investor, and if you need to sell less, not all that easy to get into a more reasonable/exchangeable form (thus goes my lamebrain theory of the decoupling of 100 oz COMEX spot from 1oz physical coin price…). Maybe worth a drive on Friday to get back into cell phone range.

I’m pretty sure I could turn a 100oz bar into more reasonable-sized/exchangable form with a hack-saw and a bench-vise. Wouldn’t quite have the seal-of-approval of a nice gov’t mint though, would it?

Quite true, who would take your hacked off pieces of “gold.”

but….but…

Comment by aladinsane
2008-11-06 08:13:21

For those of you keeping score @ home, November 28th is judgement day for the Comex.

He’s a gold dealer, and hence a liar.

He is here to spread fear no different than the NAR people. He has been caught out and exposed for the duplicitous rascal that he is.

Pussy Galore,

You’ve repeatedly called me a liar, why?

You’re a gold dealer and you’re here p*mping gold. We can no more believe you than we can believe a NAR chump.

You conveniently ignore all facts that don’t fit your hypothesis. This is like the NAR liars and thieves except you’re a gold-sellin’ liar and thief.

Pussy,

Somehow, my timely recommendations make me a liar and a thief in your twisted world of making ridiculous accusations that can’t be backed up, except by using innuendo.

You are rather pathetic.

Possibly.

But I’ve blown your cover and I’m calling you out.

From now on, you are going to have to present reason rather than preying on fear, and I’m on to you. I’m gonna make sure that you don’t prey on the fears and weaknesses of people who don’t understand finance.

I think the laddie’s opinionated to a near-religious-fervor degree. But I haven’t seen any evidence that he is a gold dealer. My take is that he’s just “all in”, which makes sense if he believes that strongly.

Personally, the scarcity in the coin markets makes me a little nervous, and I wish I had picked up some as an insurance policy, which is how I view it. I don’t expect total societal collapse, though, so I wouldn’t need a lot for that.

I also expect that paper and physical markets should not and cannot stay uncoupled forever; the mints can arbitrage the difference.

If I were dyin’, my first concern would not be the mall. It would be to eat well, and try and make fun of as many people before I get shuffled off this mortal coil.

‘It would be to eat well, and try and make fun of as many people before I get shuffled off this mortal coil.’

So, just like right now, actually. And I approve of that.

Hey, I’m just preparing ahead of time.

‘Hey, I’m just preparing ahead of time’

What, you like some sort of Boy Scout? A cruel, gourmand Boy Scout?
Say, now THERE would be some exciting badges for decorating along the little outfit sash. One badge could be a pot of risotto, and another, say for advanced snark, could be an image of someone crying. Hahahahaa! Pretty! And also more valuable life skills than making fires with flints and all that other nonsense, come to think of it.

FPSS, there’s a lot to be said for living each day as if it’s your last… So I was glad to see your description of your last days matching up very nicely with your normal every-day blog-personality here…

Good answer.

’sides that, it is a good old fashioned way of watching where your money goes and when.
Mom still uses checks. Am considering the same.

I just use a spreadsheet. You don’t need to use outmoded technology to keep track.

Sorry, some of the ol’-people Luddite-stuff gets on my nerves. Whenever I hear a “back in my day”, I have an inbuilt urge to rip out their eyeballs with plastic forks.

why plastic?

How is a check different then a debit card for “watching where you money goes.” Do you really need to see you canceled checks? I can see not using a credit card, but I use my debit card all the time.

why plastic?

It hurts more. Particularly when it snaps off.

Plus plastic is ‘newfangled’. See, that’s like adding insult to injury.

Did anybody else picture the Scorpions’ when they saw the words “eyeballs” and “forks” used in the same sentence?

I would if I but knew what or who the ‘Scorpions’ were. How about you tell the iggerant me.
Oh, I do have a lollipop with a little scorpion in it. I haven’t eaten it yet, no matter how starving for candy I get. ‘Course, the day is young, and all the rest of my candy appears to be gone…

I just dug it out of my desk and took a look. It appears to be ‘lemon and scorpion’ flavored. Yum yum.

“Did anybody else picture the Scorpions’ when they saw the words “eyeballs” and “forks” used in the same sentence?”

I did. Awesome album.

“I would if I but knew what or who the ‘Scorpions’ were.”

Oh, stop being so coy.

http://www.youtube.com/watch?v=naSPSTZsHYA

Or, if you prefer to watch Asian headbangers lovin’ the German metal, try this:
http://www.youtube.com/watch?v=2UqCkFTtOOs

‘I did. Awesome album.’

Oh, yes, well THAT. I knew that.
Show-off.

By the way, I’ve been doing research to support your 1983 thesis. Lots of info, some charts showing a clear upturn in credit expansion about that time, but still no solid info about why.

Fed funds target rate started dropping about that time, but only back to historical norms.

Reserve requirements changed, but its hard to tell if they became more or less stringent. Carter passed the MCA that forced banks to go federal and tightened up reserve requirements with a gradual looseneing through the eighties, but again it was still tougher than historical…

Been busy with school, but I plan to hit it hard over thanksgiving. There’s a tidbit about the Fed changing its focus from control of M1 to a broader focus of money and credit that I’m gonna chase down next. Off hand I can’t figure why that’s important yet…

Start with what the Fed does. The Fed does not print money. It lowers the cost of money “below” the free market rate which is the functional equivalent (but not literal equivalent) of printing money.

Ah, I think I see what you’re getting at, FPSS. 1983 was when the Fed’s balance sheet began a rather significant up-trend relative to it’s long-term trend-line of the 60’s and 70’s.

So, with the Fed’s engine spewing out liquidity, laundered and multiplied through the fractional-lending system, we had the impetus for a major credit bubble.

Obama’s team’s economic plan: Inflation or bust.

use an sos pad and you can get it back to a shine.

Hmmm. That does sound reasonable. I will give it a try on one, and let you know how it goes. I can tell you are a fellow who loves his knives.
Hey, have you tried this on one of YOUR knives?

Nothing is more pleasing than a fine edge. Wood carving is my passion. I make my own chisels and knives. I would use poly cut 50% with paint thinner. Not mineral oil. If you like the wax, just use the wax. Mineral oil is what you soak a baseball bat in before going downtown.

I don’t have any wooden handle knives. I guess all mine (folding knives, kitchen knives and a long 8 inch buck) are synthetic material…

But I agree with Skye, a fine edge is nice. I still remember honing my first knife for hours and finally getting a really, really sharp edge for the first time. It’s a skill I have actually lost somewhat due to lack of practice.

In the last year however, I’ve started shaving with a straight razor, so I am sort of relearning how to put a fine edge on a blade, except this time its a very, very fine edge.

And skye, one issue with the poly vs mineral oil, is that this knife is going to be handled with food. So from that standpoint would you not prefer food-grade mineral oil over polyeurothane? That’s why I liked the bees wax idea. It would provide a decent sealant and still be food-grade.

So true! We’ve sold five properties in 2004-2007, four of those during the “credit crisis” — a couple of those in really hard-hit areas. Priced each well, and all were sold fairly quickly with multiple offers.

There is no shortage of buyers or credit. The only problem is sellers who refuse to sell at market price.