The Housing Bubble

Engineer is one of those semi-protected words. Only a member of an engineering society is supposed to call themselves that. Try engineering-technician or something like that. Or call yourself an alpha-sloth.

Try domestic engineer and see what happenes

FWIW - I’m an engineer and was selected for a jury, so I wouldn’t count on that as protection.

It was a DUI case, and we did find the guy guilty. It was a jury of 6 actually - something that I didn’t know existed until then.

maybe I’ll claim I’m the sun god

“The more unemployed, the more socialist programs he can introduce.”

And we have a WINNER!!

As long as people have jobs, they have an income and some degree of freedom. Freedom is a “bad thing” from the viewpoint of those who want to take over every aspect of everyone’s lives. So, get rid of the jobs and you can have everyone begging for handouts, food, Obama-care, and so on.

And the sheeple will buy into it, nodding their heads sagely at another jobless “recovery,” while happily agreeing to Tax and Trade, medical “reform” that results in higher costs, taxes on benefits, and vanishing health care coverage because the fines are cheaper than the care, etc… and nobody but us “tinfoil hat” people on this board will ask where all the money went or why we have to pay to support the crooks.

Chains we can believe in!

Wait, people with jobs and a mortgage have a lack of freedom. The people on social benefits are the ones hanging out in the hood all day (actually, it seems they sleep during the day then roam the streets at night).

Yes, he’s great at what he knows: value investing.

But he is straying from that with his advice to people to buy stocks for the long-term regardless of current valuations.

I’m sure glad I didn’t follow his advice last September to buy stocks!

I think the market went up yesterday not because of an uptick in housing sales but because Obamacare is faltering in Congress

Mikey, Wisconsin fella, it would seem Wisconsin figures prominently in being one of the states in the1920s that regulated heavily and had what is known then as the “Blue Sky” law. In other words protecting its citizens against companies and “ponzi” schemes promising nothing but blue skies as potential.
Learning alot from the book The Match King- Ivar Kreugman- Frank Partnoy writer.

Suffice it to say, since those times when it used to be more ‘ethical’, now it is-WS, is rife with a hierarchy of paying off shareholders, leaving the common shareholder without.
And the rest, nonshareholders, holding an empty bag economically.

..Which is fine, until they have to actually sell those assets.

Banks and businesses can, in theory, hold worthless assets forever..
If they go broke, it won’t be because a point was reached where they had to sell them. By the time they must sell worthless assets they are already broke.. busted. Selling worthless assets won’t gain them anything.

They go broke only if they can’t keep up with their current obligations. But as long as they can pay their bills the business can survive.
Many large businesses are always in the red.. always. It’s the normal condition.. and there’s no desire or need to be in the black.

Many large businesses are always in the red.. always. It’s the normal condition.. and there’s no desire or need to be in the black.

Isn’t that like saying it’s normal to have $40K in CC debt, with no desire or need to pay it off?

Isn’t that like saying it’s normal to have $40K in CC debt, with no desire or need to pay it off?

yup.. only in the case of a business you might change the $40K to $40 million.. As long as you can make that minimum payment at the end of the month, as well as cover all other expenses, life goes on.

i think it’s like this..
A business needs a new machine. No way in hell can they just go buy one. The bank says sure.. we’ll lend you the $700K.

The business has spotty income, which is normal, and plans on making just the minimum payment to conserve cash. The bank says that’s fine.

That $700K loan will probably never be repaid and account closed. Both parties are aware of that.
The bank doesn’t care because it figures the business will be around a long time.. and paying for decades. They will get back the $700K principle plus lots of profit from interest.. they might get back $1M.. maybe $1.5M.

Interestingly, the bank now has an interest in keeping that business afloat. If the business closes it’s doors, the bank may not get it’s investment back while fighting over remaining assets against all it’s other creditors.

joey,

I’m verklempt! Over the years I must have cold called 10,000 small/mid size job shops throughout the midwest. You’ve nailed their dilemma to the ‘t’.

In those cases, it’s about the relationship. If ‘you’ go down, ‘we’ go down. You sure you still want to go through w/ this? Think of the community?

joey,

I have to disagree with 2 of your points:

“Banks and businesses can, in theory, hold worthless assets forever..”

In the case of any kind of debt backed security, they become worthless because debtors aren’t paying it back. You can’t hold those forever.

“If they go broke, it won’t be because a point was reached where they had to sell them.”

If they go broke, they missed the point in time when they should have sold them, even if it was for less than what they want for it. You go broke because you don’t have enough cash to meet your obligations, not because you didn’t have a high enough book value on assets.

I do agree that many companies survive by rolling over debt for extended periods, but ultimately these companies underperform and eventually fail.

Al…
If i consistently pay all my bills and meet payroll, how can I possibly go under?

If you suggest that adding obligations that I can’t meet will force me under, i’ll agree because at that point i am no longer able to “pay my bills”.

Holding worthless assets may be a burden.. there are likely costs involved.. but i am able to pay my bills including those costs.

Just remember that when you are dealing with banks you are also dealing with regulators. They have to have so much capital to back their deposits or they get taken over. And the capital is affected by how they are allowed to value their assets for balance sheet purposes. Right now they are dealing with a “call it whatever you want” sort of world. It can last for a very long time, but it can’t last forever.

Wow. My “Accounting for Lawyers” professor would be so proud. I think I was the worst/most clueless student he had ever had.

Some people in Wisconsin are TRAPPED by their house asset investments and some buyers are scared off by high prices and taxes. Our lower mid-west wages, job insecurities and the 2005 Dream Prices aren’t helping sales and sales commissions on the low end of the higher priced homes here.

I was talking to some friends the other night and the topic was High Property Taxes. One couple has a nice house the next block over from me on a very desirable street where houses range at least 280k and well beyond.

An older “milwaukee cream city” brick two story house across the street is up for sale and would have sold as soon as it hit the MLS with an automatic bidding war a year ago. It’s a nice 300k house that needs a little work and the realtywhore says the “cheapsake” potential are buyers complaining about it’s 5k plus property tax bill.

The same used house saleslady said her company has a beautiful old mcMansion over in a once exclusive area of Milwaukee for about 425k and the 9k plus tax bill is keeping that place empty. I know the house across the street from my friends and looked the other up on the realty person’s website. They are both nice houses.

They will both eventually sell and get near asking prices BUT it is good to see some potential buyers finally walking away from Dream Houses and saying “No” due to high prices and taxes.

This is little old Wisconsin, we ARE in a Recession and despite what the MSM, the RE leeches and PTB say…Some people are finally beginning to NOTICE it !

Perhaps the paying customer is asking for REAL value for their money rather than “What’s my monthy Nut GOING to Be for this Place Oh Mighty Realty Professional?”

Better be prepared to plant a few low price Pansies among the over-priced Tulips and St Joe statues in the front garden NEXT Spring… IF you really want to sell HouseDebtors

Have the ‘just in time’ accounting methods described above, that can keep ‘broke’ companies still rolling and maintaining cash flow, always been the ideal or standard? My understanding is companies used to try to operate in the black, and had these things called ‘cash reserves’ to fall back on when times were tough. (You know, so they wouldn’t have to lay off valuable employees and set off deflationary spirals.)

Then in the 80’s (there’s that decade again) we deregulated and encouraged hostile takeovers that aimed for just such cash rich companies to plunder, thus encouraging businesse to operate ‘in the red’ lest they be targetted likewise.

And who benefits most from a system where businesses borrow continuously to stay alive? Surprise, surprise- the financial industry.

“Holding worthless assets may be a burden.. there are likely costs involved.. ”

A company that is carrying a heavy debt load and non-productive assets have costs that a leaner competitor doesn’t. Such a competitor can offer lower prices on their products and force the less efficient company out of business. Investors will be hesitant to put money into a company that is carrying dead weight and not getting a good return on its assets. Lenders will charge higher rates.

I’m not saying a company will go under if it can pay its bills, but a company eventually won’t be able to pay its bills if it burdens itself with debt and non-performing assets.

but a company eventually won’t be able to pay its bills if it burdens itself with debt and non-performing assets.
The whole discussion up to this point has left out the other side of the debt-burdened business: if the customers of that business simply scale back their purchases of whatever the business sells for a sufficient amount of time, the business must either increase its leverage or fail to meet its obligations. See GM & Chrysler. This seems to be a built-in problem with a national economy dependent on consumer spending.

alpha..
there’s another way to look at the corporate raiders..
Sure they were predatory.. but did they do us a favor as far as weeding out less efficient businesses?

It may be somewhat of a stretch to make that claim.. But when you think about the difference between one business which has every dollar invested and working for them, and another business that has huge reserves locked away in a bank, it makes a little sense. Money that’s locked away doesn’t do the economy any good.

“Holding worthless assets may be a burden.. there are likely costs involved.. ”

A company that is carrying a heavy debt load and non-productive assets have costs that a leaner competitor doesn’t. Such a competitor can offer lower prices on their products and force the less efficient company out of business.

I concur with Al. Matter of fact, I’m seeing in this in the graphic design side of my business. I’ve noted that, quite often, I compete for jobs against advertising agencies and design firms that have to keep a whole stable of creatives busy.

But, in the past few months, I’ve noticed something. The agencies/firms’ high overhead is starting to take them down. In many cases, the overhead (and by this, I mean things like the office space, interior decorating of that space, and the computers and other office equipment) has been fueled by debt.

So, I’ve become a bit more aggressive in going after business, that, in the past, would have been locked up by the agencies/firms.

And, I’ll be honest with you, I’m not a full-service operation the way the agencies/firms are. I’m a Web Standards-based designer, and my niche is the scientific and technical side of academia. I’ll wager that my fees are lower than the full-service agencies/firms. In addition, because my overhead is much lower and my business is debt-free, my profit margin is much healthier.

Interestingly, the bank now has an interest in keeping that business afloat. If the business closes it’s doors, the bank may not get it’s investment back

But wouldn’t they get back the $700K machine, and keep any upfront down payment on the loan? The bank would recoup principal and expenses as call it a stalemate.

Of course, if the machine isn’t worth $700K…

tresbo..
When customers stop buying.. the business must either increase its leverage or fail to meet its obligations.

there are other options.. a business can find new markets for their products.. they can shift emphasis to the products that are selling.. they can create new products.. they might buy out smaller companies that are offering products that are unaffected by the market downturn..
Some of these requires foresight and preparation.. and surviving a downturn might be more dependent on good management than on anything else.
More than a few market gurus put large emphasis on the value of good management.

joey- Money that’s ‘locked away’ is another word for cash reserves that once allowed companies to ride out hard times intact, keeping their valuable employees. This was great for the economy as a whole because it lessened the impacts of downturns. Also, this money wasn’t piled in a back room, it was in investments that kept it circulating through the economy, until and unless it was needed by the company.

My It company (employer) is all pay-go. It’s been frustrating because there are always managers who think if we borrowed lots of money we could develop more killer apps, do big marketing stuff and get a leg up on the competition. Instead we just muddle along year after year.

I’m kinda appreciating it now.

..Of course, if the machine isn’t worth $700K…

it’s probably not.. technology marches on really fast these days.. almost all the big stuff is high tech. And anyway, like a new car it might be worth about half price once you drive it off the lot.

And lenders no more want to have to deal with a bunch of big old machines than mortgage holders enjoying dealing with a bunch of REOs.

“there are other options.. a business can find new markets for their products.. they can shift emphasis to the products that are selling.. they can create new products.. they might buy out smaller companies that are offering products that are unaffected by the market downturn.”

All of these things take cash. Another good reason to have reserve.

alpha.. no argument there.. except that it seems the business seems to be limiting it’s potential growth while anticipating failure.

Where is the most profitable place to put extra cash? In your own business. No other “investment” can come close the the returns you get by investing in yourself.
A manufacturer takes one dollar worth of raw materials and the finished product may sell for $100.

While some degree of failure might be inevitable at some point in the future, there are ways to prepare for it aside from retaining large cash reserves or storing it in outside investments (which, btw, are as likely to suffer from a general downturn as is your own business).

Alpha,

I hadn’t thought of corporate raiders that way. My understanding was companies with money went after weak companies that had something they wanted (access to a particular market, patents, technology.) A bit more reading shows that wasn’t the case. They targetted conservative companies, the types that could survive a downturn.

Looks like the trend towards heavily leveraged companies had both a pull and a push. The pull of cheap interest rates and a push from fear of corporate raiders. “Leverage or die!”

All of these things take cash. Another good reason to have reserve.

Hey! Banks have cash. They will loan you the money

..we’ve come full circle..

“Banks have cash. They will loan you the money”

As Mark Twain pointed out, banks will loan you an umbrella on a sunny day, and demand it back when it rains.

The value of these businesses (often found, yes, in their employees) was such that socking a little away was a wise insurance fund for hard times. Until the corporate raiders made it too dangerous to think wisely.

As Mark Twain pointed out, banks will loan you an umbrella on a sunny day, and demand it back when it rains..

“If you owe the bank $1000, the bank owns you. But if you owe the bank $1,000,000, you own the bank.”

i dunno who said that one.. might been Twain. He was a clever guy.

“Hey! Banks have cash. They will loan you the money”

And of course they give you the best rates when your business is struggling and needs to reinvent itself. They’re even more generous when your business is already highly leveraged. Full circle indeed.

Al- Oh yeah, don’t believe the hype about hostile takeovers. It wasn’t the weak companies that were snatched up and devoured by corporate raiders. It was the healthy, well-run companies with reserves etc that were taken over. This caused many companies to throw off their conservative bookkeeping and take on as much debt as possible- as a ‘poison pill’ to scare off the raiders. (Much like some butterflies eat plants that make them poisonous to predators, thus ensuring they won’t be prey. Except the poison they ate was debt) And hey, it freed up capital, just like a good MEW. And I’m going to guess that the financial companies made some profits on it. And what’s good for them is good for all of us, right?

..It was the healthy, well-run companies with reserves etc..

If big, bloated, inefficient firms carrying excess capacity in slow or declining industries are defined as “well run”, then yeah.. The well run firms were targeted.

look.. it’s not all that complicated.
You, a “corporate raider” are not going to target a well run company for one simple reason: Where is your profit going to come from?

If you pick a good, healthy company, what can you possibly improve on? What holes can you plug? How can you make this company you plan to purchase worth more than it is now, and therefore come out ahead?
———–

I’m a shareholder in a “healthy” company. My stock is trading at $100 at the moment. Someone tries to offer all us shareholders $115 a share. Why? Why offer $115? Is this guy nuts?
nope.. not nuts.

He sees so much inefficiency and so many problems he can fix that he has a plan that will make the stock worth even more than $115.
And that’s where his profit will come from… from fixing a broken company and reselling it, either in pieces or as a whole.

Most corporate raiding (especially the classic 80s style) involved the buying of a controlling amount of shares in a co that had a higher asset value (cash reserves, well-funded pension funds, real estate, etc) than share price. The new owners would then plunder these assets and, if any functioning company remained, sell it off cheap to some FBs who were foolish enough to think money was made by producing something.

It was really the first cancer cell of this whole sickness.

That’s your idea of a healthy company? One who’s scrap value is higher than the cost of it’s shares on the open market? Are you sure you wanna go there?

Lots of times an entrenched management team drives a business into the ground.. it draws it’s salaries and bonuses and doesn’t care about shareholders .. It doesn’t want to sell out and it doesn’t want to fix things. Management is the one who’s plundering the company.

Nobody can sell their shares cause the Street knows management sucks.. and nobody wants to buy the shares.

When a “raider” comes along shareholders are only too happy to sell a controlling interest, even at a loss.

They only needed controlling interest (51% or less in some cases) to be able to pillage the whole co. Back in those crazy days, businesses were often valued based on their earnings, rather than the value of their body parts and organs, if you killed and dismembered them. Also, prior to deregulation, such shenanigans weren’t allowed and therefore their outcomes weren’t calculated in the valuing of the co, nor was the easy money available to pull off such tricks . Like I said, different times.

Back in those crazy days, businesses were often valued based on their earnings, rather than the value of their body parts

Company value based on earnings is not exactly uncommon today.. in fact it’s the most common way to value a company. I think it’s called the PE ratio.

Yeah, and it used to avg 14, and now its N/A in most cases, 140 in others (tech).

Were you on the debating team at school alpha? I detect some familiar tactics..

Just trying to keep up with your slippery arguments. (I salute your judo). And I’ll accept your backhanded ‘compliment’.

In case I wasn’t clear, my point about non-existent P/Es was that valuation also aint what it used to be.

If you really believe that today’s PE valuations are out of whack compared to way, way back in them olden days (like around 1975-1990, I suggest you read Benjamin Graham’s “The Intelligent Investor”.

According to my experience here today I’ll guess it won’t change your views or opinions about much of anything, but you may pick up one or two useful facts and a few nuggets of truth you might throw at your opponent during your next debate..

i’m done.. go ahead and have the last word.

last!

Uhh…Avg P/E of 6.6 (1982-bottom of secular bear market)….avg P/E of 13 (1987)….44.2 (2001)-Who let the dogs out? Who, who, who, who, who….?

zealllc.com/2007/longwave3.html

Sorry dawgs…make that

http://www.zealllc.com/2007/longwave3.htm

Scroll down to long-term valuation chart. (cool website)

I saw that episode. The douche who does the ‘real estate interventions’ is good at pointing out that idiot’s asking prices are too high, but when it becomes apparent that the home owners are underwater and can’t scrounge up a lousy 7k to sell the house, he suggests ‘renting it out’ so they can bleed a little every month while watching the house price continue to erode.

I would like that show if he ended every episode with “Go get some boxes! It’s jingle-mail time!”

I think they ended up renting it out and only having to come up with 2-300 dollars a month extra to make the mortgage payment(assuming the renters pay every month and they always have it rented).

Oh! I just love happy endings!
*snarky giggle *

Only having to come up with 2-300 bucks a month, huh? Think of how much beer, candy, and flower bulbs that would buy! Oh, yeah, and that’s assuming the renters pay every month and they always have it rented, and not rented to meth-makers with a penchant for arson or po*0ping in the bath-tub and so forth.
Quickly, sign me up for this happy ending…

But who’d borrow money from a bankster?

“who’d borrow money from a bankster?”

Why, the masses of eager buyers depserate to ’snap up’ the great real estate deals available, of course.

Aren’t we taking the phrase ‘gunning for a promotion’ a little too literally? Oh wait, you have to be employed to get a promotion. Disregard.

Why do you use the term whore up on unemployment insurance?

Hahahah. I scrolled through the thread trying to figure out who used that term…apparently I had a freudian slip.

I meant *shore* up. D’oh.

i don’t think he graduated.. we were childhood friends and then didn’t have any contact for decades.. then we connected due to our mutual involvement with a third party. I don’t know all the details of his life.
Whatever the case, drugs eventually put him on the street.

Student loans imply a greater committment to studying compared with “bank of Mom & Dad” financing. It’s odd to take out loans and then not finish up a degree.

I was wondering what his major was although that’s moot now.

OMG, there are all kinds of dropouts running around out there with unpaid student loans. Many are from proprietary schools too remember, beauty college, school o’ rock..not all state U.

Ahhh…. more end of world hypocritical moralizing…. Kind of like Foley, Craig, Vitter, Ensign, Sanford, etc etc etc etc etc.

I get it now.

You’re the one who introduced the subject in a post a week or so ago.

Your sense of morals seems to be quite selective. Everyone in business is amoral. Everyone in government gets a free pass.

It’s your raison d’etre, exeter. It’s all you ever pro-offer on this board.

Everyone in business is amoral.

Well, you know what? Sometimes is seems like it.
Just sayin’

Yeah, it does doesn’t it? It’s sad. A good many people in business are immoral.

Ditto the government. Think about all the liars in government — the philanderers, tax cheats, pay-to-play, racketeers, gamers, opportunists, takers of trips on taxpayer dollars, pool boys, etc.

I should develop and post a list of all the immoral/amoral government officials and hacks. Maybe what anti-corporation folks need is a reminder that the other side of the fence ain’t any greener.

I’ve contributed more housing related posts to this forum in a week than you have since you been here. And further to the point; your plenty-plaint nattering about everything unrelated to housing is evident to all of us here so we have an suggestion for you… Take a sabbatical from the blog and make some substantive use of your time to analyze trends in your backyard and tell us what you find. Your incessant whining and worn out rhetoric means nothing to us.

It’s a not-small segment of the ‘business world’ that will seriously argue that corporations are and should be amoral- their only goal being the making of money.

When I ask if the co should sell a product to the unregulated third world that they know to be deadly, they will generally say yes. It’s a pose they learn in business school that many never outgrow.

“I’ve contributed more housing related posts to this forum in a week than you have since you been here. And further to the point; your plenty-plaint nattering about everything unrelated to housing is evident to all of us here so we have an suggestion for you… Take a sabbatical from the blog and make some substantive use of your time to analyze trends in your backyard and tell us what you find. Your incessant whining and worn out rhetoric means nothing to us.”

Testy! Hobgoblins, maybe?

..is evident to all of us here so we have an suggestion for you…

Umm, exeter, I’m not sure who the “we” is that you’re referring to, but you certainly are in no position to speak for everyone on this blog..nor even the regular posters I’d imagine.

Eudemon, I personally appreciate your posts here.

We meaning those who were here when this blog was established 5 years ago.

If you like whining, hand wringing posts unrelated to housing, you’re in the wrong place.

We meaning those who were here when this blog was established 5 years ago.

I must’ve missed the blog meeting, exeter. I’m sorry but you have no clue who and how many people were here when the blog started. Regardless, I doubt you’re in a position to speak for everyone, and as far as I know you’re not the doorman here.

This is an open forum, and a variety of perspectives are appreciated. There are many here who grow tired of your posts as well (honestly, I’m one of them), but most of us are respectful enough not to try to chase others away.

I have a very good idea my friend. There were precisely 9 posters here for months. I know…. I was here and one of them. Where you? Nope.

If you don’t like my housing related discussion, you and your frightened little friend can get a room……. somewhere else.

I was here and one of them. Where you? Nope.

And that’s relevant…why exactly? You want your exclusive group of 9 people? Start your own blog. It’s pretty clear that Ben and the rest of the people here appreciate the commentary, insight, and opinions that having a large number of participants bring. If you don’t like that, perhaps you should look elsewhere. I’m not the one trying to stop people from chiming in on the conversation. Having been posting here longer does not make you ‘better’, nor does it give you any kind of authority.

And it’s not your housing-related discussion that bothers me. It’s your blatant partisan rhetoric. Same old schtick over and over. If you would stick to housing I would actually read what you post. I’ve had you on ‘ignore’ for a while now. Unfortunately I cleared out my ignore list to do some testing, and so I happened to read a few of your comments.

You don’t have the fortitude to ignore. This trail makes it obvious.

Turn to a personal attack. Very mature, exeter. Very mature…

Just stating fact my friend.

I can.

I believe it started with Reagan or even earlier.

I told you all It`s Wimpy`s fault.

“I would gladly pay you Tuesday for a hamburger today” was spoken by the comic character J. Wellington Wimpy in E. C. Segar’s 1930s comic strip “Thimble Theatre,” featuring Popeye.

LOL - I rather like you, SFBAGal.

Let’s go back to the 1830s or 1840s and blame it all on the Whigs.

we need to design a fool proof system but whenever we do design one, Mother Nature designs a Better Fool.

That’s backwards - I am not suggesting credit causes man’s irrationality - but rather man’s irrationality ensures that credit will be abused and will always cause bubbles and busts.

Bubbles and busts are, in a way, a macro manifestation of the manic behavior observed in many individuals.

In an emotional vacuum, yes, there should arguably never be a bubble or bust. But in an emotional vacuum no one would need more than the most basic of needs - so there wouldn’t be much need for credit to begin with.

edgewaterjohn.. i’m on your side when blaming individuals for the misuse of credit, resulting in bubbles and busts.

What do we do about it?
Will dumping the Fed or moving to a non-fractional reserve banking system, or going back to the gold standard prevent us from misusing whatever system results from those changes? I think not. I think we are capable of screwing up anything.

I hope you followed through on that urge, OlyGal!

Please report back on reactions and expressions in detail…

Just for you. Because I know you enjoy high drama.

Just recently a friend had a new roof installed got a 15% cash discount. I know a number of small contractors, including myself that are doing more work for cash and barter.

Work is harder to come by and we know taxes will rise, so we will see more under the table and tree top fliers. Just the way things work.

P.S. Some younger folks don’t really understand what “cash” is, on two occasions in the last year I have made cash deals. Only to have one fellow want to write a check, and the other bring a cashiers/bank check.

That is why Texas has the 2nd lowest unemployment in the country. A lot of the unemployed were never on the books to begin with.

Name one that doesn’t require debt.

Your pals, the Federal Government, doesn’t generate income of its own. Therefore, it subsists on credit.

Get it?

BTW, theft isn’t solely about stealing someone else’s money. It’s also about stealing their freedom, self-rule, civil rights, dignity and other such meaningless things.

Oh, I’m sure you can include the holy rollers that would believe something like that also

fire in the hole!

I’m referring to Weimar firewood, silly.

In the long run, we are all dead, and dead men attribute no intrinsic material value.

“In fairness to goldbugs, so long as men can breathe or eyes can see, so long shall indestructible gold hold intrinsic value above zero.”

Has EVERY culture on Earth forever valued gold?

Not the hippies! (Of course, they could always call their parents for money.)

The irony is that gold’s value has gone *up* substantially more than inflation since we as a country chose to “devalue” it by going off the gold standard in the 1970’s.

(P.S. you can eat gold - see Goldschlager; and it does have significant industrial use - in electronic components - there’s some in the computer you used to make your post in fact.)

Doesn’t always have to be just 2 parties involved. I
You have distorted my statement. I did not state nor imply there were “just” 2 parties, but “just” that there were “at least” 2 parties. Without another party to any currency transaction, there ain’t one.

Has anyone on the HBB ever tried to sell a used diamond? From everything I’ve read, they are not worth much. Only new diamonds, straight from DeBeers, are worth what people seem to think they are.

Exactly tresho.

Yeah, a girlfriend of mine was going through hard times a couple years ago, tried to sell the 3 carat rock she bought from one of those Zales places. Claimed she paid something like $20k for it and couldn’t even get 2K when she tried to cash it out. Diamonds are really a scam. I just bought a honkin’ CZ ring for $15 bucks just for laughs and giggles and you wouldn’t believe how many compliments I get. Hah! I tell you.

Your sarcasm needs work, edgewater. I’ll give you credit, tho, for being transparent.

Unfortunately, I can’t give that same credit to Obama, however. He’s a creep.

Taxing imports to add in the cost of the pollution put out by making them is not entirely a Washington issue. The WTO has to decide if it is an illegal tariff or not. This is mostly a European decision. I’m not sure exactly how it would play out. The environmental leaning of Europe should make them lean toward allowing it, but the colonizer guilt might push against It sure as heck is going to be fun to watch.

I should mention that I’m not necessarily against protectionism. It isn’t clear how the costs would weigh against the benefits, so it shouldn’t be presented as a simple and painless way to fix things. A benefit to protectionism is that is should spread wealth a little more evenly, as big corporations would lose some profits to higher wages and more of the populace would get to share the wealth through higher employment.

Here in Southern Arizona, there was much unhappiness earlier in the week. And what was the source of this woe? A dust storm. A big one. It descended upon Our Fair City of Tucson and caused a lot of people to cough, wheeze, sneeze, and otherwise act miserably.

We didn’t stir up the dust here. It blew in from elsewhere. Just like human-caused air pollution does.

Umm…don’t septic system drain fields have to be fairly dry or they don’t “perk” or something like that?

Umm…don’t septic system drain fields have to be fairly dry or they don’t “perk” or something like that?

The water has to go away. And it does go away, if it’s on the highest point of a nice steep slope and there’s a handy and already draining hydrological system just below.
See, then you get to argue about cumulative impacts, whether or not that’s a ditch or a filled-in wetland, if it gets a buffer, ‘innovative technologies’, etc etc.
And THAT’S where the highly paid who*ores, er… I mean ‘consultants’ …come into the picture.
Hooray.

Oly, by chance, does this have anything to do with Shorty?

Oly, by chance, does this have anything to do with Shorty?

What? Jeebus, no. Pay attention, Mr. Stream-of-Consciousness!
Shorty is a wicked furry jerk and he lives in UTARR. Oh, and he’s a mustang horse. You know, like on teevee. THIS wicked furry jerk lives here, and wants to pour human waste-water into the Puget Sound and/or the neighbor’s wells. Who cares, long as he makes some of that lovely, wonderful money? Oh, and he’s a human.
…Well. Sort of.

I heard that the bauxite plant in Portland TX (used to be Reynolds, don’t know what it is now) is laying off 30% of their work force. A friend who is retiring from there soon feels bad for the young guys getting laid off - said there were quite a few who don’t have skills, but took good wages and benefits for granted, went out and bought big houses, fancy trucks and boats.

There is a good chance that the bauxite plant will end up closing completely within a year.

said there were quite a few who don’t have skills

As bad as I feel for people who become unemployed, if someone doesn’t have skills, the bottom line is that they don’t bring value to the table and ultimately aren’t worth that much. There’s no shortage of humans w/o skills out there, and they must compete for those *with* skills, even for the unskilled jobs.

It is a shame people take such things for granted, and don’t plan for a rainy day. Hopefully that’s one good thing that will come out of this downturn. Heck, even though I have been conservative in life and had a good chunk of savings, I’ve been shown that I wasn’t conservative enough.

Why is there a bauxite plant in TX? I thought most bauxite came from Carribean islands, and most was processed into aluminum where electricity is cheapest e.g. the PNW (this answers the question “why was Boeing located in Seattle?”).

DennisN, I’ll ask my friend more about why there is a bauxite plant in TX and post after I know more.

Reynolds built this plant in 1953. It’s Sherman Alumina now, and it’s in Ingleside, not Portland as I wrote above.

A few years ago the plant was bought by overseas investors, after which it was Chinese-owned for a while. My friend was upset about that, and IIRC, the Reynolds company had previously asserted that there SHOULD be a bauxite plant in the US, even though they also owned plants in the Caribbean.

drumminj, I’m with you as to the skills question. My friend feels bad about the young guys without skills and with lots of debt for lots of stuff. But there seems to be a strong generational difference. The older guys are Vietnam vets without higher education, but have spent their lives acquiring on-the-job skills like welding and off-the-job skills they used to repair, remodel, or even build their own houses. Their consumption is rather utilitarian and they get the most out of old trucks and boats before getting new (or new old) ones and they take pride in the skills they use to do that.

I get the impression that the young guys have been complacent about getting good wages without skills and took advantage of all the credit available to them to buy fancy new stuff to show off. (howmuchamonth…?)

I’ve heard that.

Oh, then both of you can hear this, then:

*administers a brisk virtual wallop at about 81% effort *

…Say, what’s that translate to?

(Ouch!) Hey! How you doing, pretty lady? Got any fries to go with that shake?

I translated it as “He’s dreamy!” Of course, I’m a glass half full kind of guy.

Overdog, go to TSG and read the top of page 2 of the police report. The cop asked asked Gates to speak with him and Gates refused. So, again I ask, what do you expect a police officer to do when responding to a B&E and finds a man unwilling to cooperate?

If anything, the cop should be commended for not using force at that time.

Sorry Muggy. You are wrong on this one. He did provide the police an ID. He got arrested for yelling at the cop. Seems that yelling in his house was OK, but doing it on his porch was a step too far.

Cops need to be able to take verbal abuse. If there had been anything physical, go ahead and arrest. If there had been threats of physical violence and the slightest move to actually do it, go ahead and arrest. If there had been yelling in a context (like a crowd) that the yelling could be expected to incite others to anything physical, you are getting close to 1st amendment issues, but go ahead and arrest. But one man yelling at many cops while standing on his own porch? Get in your car and leave. You were called to investigate a possible break in. You confirmed that the house had not been invaded and that the home owner was fine. Your job is done.

I have read the police report. I’m not confused about the facts. I think you misunderstand me.

The cop should have put him down for 2 counts: ‘Breaking and entering’ and ‘resisting arrest’, and used any necessary force. But he didn’t. He arrested the guy because he was being a dick and for nothing else.

That’s what makes this case wrong.

Well, we’re misunderstanding each other.

Let’s agree: he was arrested for being a dick (wrong). BUT, he shouldn’t have been a dick in the first place, and this is not about race (he justification for being a dick). It’s still about a cop doing his job, responding to a B&E call, and encountering resistance.

That’s what makes Gates wrong.

There should be no doubt that the actions of the cops would have been different if Gates was of the caucasian variety.

This is about profiling and presumption based on one thing…… race.

It wasn’t Professor Gates’ job to not be a dick. It was the cop’s job to not arrest someone for something that isn’t illegal.

He arrested the guy because he was being a dick and for nothing else.

Man, someone warn me when they start arresting people for being a smartass.

Man, someone warn me when they start arresting people for being a smartass.

Shoots, you’d already a noticed, I should think. ‘Cause you’d be typing from jail.

Always nice to hear smart people talk about stuff…

I believe, bottom line is, unless the entire gig was videotaped from beginning to end, it is conjecture as to what happened, with inflammatory variables pushing people one way or the other.

By the way, my comment was sincere and non-condescending. I am not near as intelligent as the people who post here.

I just simply was offering my opinion on the matter.

P.S. Where’s Shorty when ya need him?

P.S. II. Oly, how do you spell, condo-ceilings?

You! Put it down! Let go of Shorty.
Why ARE you so enchanted with Shorty? Jeebus, he’s a furry BBF with Satan! He can’t even talk, but if he could, it’d be terrible to hear, all vulgar and cuss-words. Plus, he tries to step on your head when you fall off him.

Accept this.

“He had already ID-ed himself as I understood.”

No, not at first. That’s where Gates failed.

That’s my point, Gate’s blinked and got it all wrong. If had controlled his emotions in those 2 seconds he would have simply chatted with the cop and none of this would have happened.

But he did provide an ID before the cop arrested him. The cop failed to switch from “this man may be a thief” to “this is the man I am here to protect” mode once the ID was produced.

(Sorry Ben, this is way OT)

Polly, read the report. The officer only arrested him after Gates followed him outside and continued yelling at him.

Part two of Gates’ fail.

“Polly, read the report. The officer only arrested him after Gates followed him outside and continued yelling at him”

Sorry, that’s confusing: Gates was arrested after following the officer outside and continuing to yell at the officer.

“Gate’s blinked and got it all wrong”

So what does a big haired douchebag pop economist say about a cop blinking becuse he got his widdle feewings hurt?

LOL, man, let’s chill!

Let’s respect the bits bucket and let it go. I honestly didn’t think it would blow up like this.

Besides, you’re totally wrong

“So what does a big haired douchebag pop economist say about a cop blinking becuse he got his widdle feewings hurt?”

That you cannot control your negative predilections toward police and big-haired douchebag pop economists.

Everyone, drunk or not, ought to know that it’s a very very bad idea to yell at a cop.

So, it seems Prof. Gates was arrested on his own property, but not inside his own home. Big difference.

it’s a very very bad idea to yell at a cop.

“The house always wins”

I ride a beach cruiser the entire length of the Las Vegas strip almost every Sunday morning. I decided it was a good idea to read what the law said about bicycling in Vegas, so I did.

The sidewalks do not belong to the casinos - they belong to the city and bicycle riding on them is permitted unless there’s a sign placed there by the city council saying that it isn’t.

The Sunday after a Saturday-night shooting at O’Shea’s (across from Ceasar’s) we were told by a security guard that we could not lock our bikes up to the lamppost on the corner of Ceasar’s Palace Dr and Las Vegas Blvd. He said he would have the locks cut and the bikes hauled away.

I realized that even though it would have been illegal for him to do that, when the cops showed up, they would side with the casino.

The only difference between yelling at the cop inside his house and outside his house (on his porch) is that the cop had more potential for losing face or being embarrassed once they were on the porch and the neighbors could see. That is not a good reason to arrest anyone, especially the person whose life and property you were sent out to protect. The cop should be ashamed of himself.

So should Gates. To immediately accuse someone of racism without warrant sure seems like defamation to me.

If no such law exists, it should.

that guy would be the first to sue Yes, there’s an office of the law firm “Dewey, Cheatham, and Howe” on Harvard Square. Or at least, the office window is painted that way.

It doesn’t take a Ph. D. to figure it out. In reality, it took a Ph.D. NOT to figure it out while it was happening. There’s nothing worse than a stupid professor.

Actually, being shouted at isn’t at all uncommon for a cop. Every other situation they get into involves emotionally overwrought people. If this cop couldn’t handle being shouted at by a little old man, already established to have been both the ‘owner’ of the house, then he probably has neither the temperament nor the ’street smarts’ to be a cop.

“Every other situation involves emotionally overwrought people…”

I don’t think you got the point: You could have the calmest coolest demeanor and STILL be arrested for disorderly conduct in today’s environment. So why tempt fate?

I was arrested once, and was present a different time when a male friend was hauled off. He was starting to mouth off but I blurted out: SHUT UP AND DO WHAT HE SAYS - and he must have heard something in my voice because he immediately STFU. And saved himself a serious beatdown in the process. And all parties happened to be caucasian, po-po as well.

(That’s an example of “street smarts” - knowing the appropriate time to STFU. The Professor wasn’t street smart, he was just street.)

See Palmy’s post below.

Another form of street smarts (vital to a cop) is recognizing threat from non-threat. Eloquent little old men who have been established to be both a Harvard professor and the legitimate ‘owner’ of the house in question are as low on the threat meter as they come, even if they are being jerks. Any half decent cop would have walked away chuckling. The fact that this cop got so riled really calls into question his ability to handle tense situations- since this clearly wasn’t one.

He remained calm. The guy asked for his name, because the guy indicated he would use his power to put the cop down / get him in trouble, even though the cop did nothing wrong. From the get go, Mr. Powerful Professor was threatening the cop (look at the police report mentioned earlier).

You know the type. Quick to blame the white man, when really the professors skin color probably got him the professorship (Affirmative action).

Black or white, he’s a small, old man who walks with a cane who had been established to be the homeowner. Disorderly conduct in your own home is an extremely dubious charge. Not one I’m comfortable giving every cop in the US carte blanche to do at will. Following your line of reasoning, any cop could come to your door and start asking questions, and if he didn’t like your response or demeanor, arrest you. I like the Constitution, even when it protects jerks.

Here’s what it’s like to ride 5 miles in 100 degree weather:

The first and most important thing to do is cover up. As in, no shorts, no tank tops. Cover your arms and legs. (I wear lightweight cycling tights and sun protective shirts made by companies like Sunday Afternoons, Ex Officio and Solumbra. I also like to wear a bandanna around my neck.)

It may seem counter-intuitive, but you’ll be cooler.

Second, drink water. Lots of it. Yes, I know. Water tastes boring, but if you dehydrate yourself, your next ride will be to the emergency room.

Third, ride at cruiser speed, not racer speed. Take it easy. It’s hot outside, so conserve your energy.

Fourth, wear sunscreen on the skin that’s exposed. This will help you avoid sunburn. I’m not so sure about its cancer-preventing ability. I’m becoming more and more convinced that it doesn’t. But Southern Arizona sunburns aren’t fun. So, don the sunscreen.

A really wide assortment of vehicles aren’t allowed in the States.. probably has more to do with the cost redesigning them to run DOT approved headlights or similar than anything else.
Once you start shopping for anything besides a Toyota sedan clone you notice these things.

Once you start shopping for anything besides a Toyota sedan clone you notice these things.
I’ve never owned a sedan in my life, and so have noticed these things. The Ford Transit Connect is (or will be) a one-of-a-kind. The closest historical resemblance is to an old time panel truck. I’ve always wanted a panel truck.

Second, drink water. Lots of it. Yes, I know. Water tastes boring, but if you dehydrate yourself, your next ride will be to the emergency room.
I know about that. I lost 10 lb. the first overnight shift I ever worked as an intern in early July, in a hospital with only one air-conditioned ward. Fortunately I was young & tough. When I noticed the weight loss coming off duty (on my bathroom scale), I drank of quart of coolish (not cold) water, then set my alarm clock 20 min ahead, got up & drank another quart, etc., until I had ingested about 1 1/2 gallons (12 lb.) of water. Now I drink a pint of room temperature water as soon as I get out of bed in the morning, and try to get another 7 pints during the rest of the day.

I just took a look at the Ford Transit Connect. I like it. Give me the option for personal use (seating for people) and I may be in the market.

Give me some luxury,comfort and attention to detail and I’ll be in the van market.
There are a couple SUVs that i like.. the Lincoln Aviator comes to mind (discontinued in 2005 but still available with low milage) .. but they have no cargo space to speak of.

How do you find this out?

Here in Norfolk / Virginia Beach (which is actually perhaps the 20th largest metro area in the USA) there is a serious lack of numbers. No PPSF, weak articles from the local paper, etc.

How do you find this out?

I find this out by pedaling my little bicycle all over town. It’s a great, unobtrusive way to assess the local real estate market.

I have spoken with several realtwhores and everyone of them confirmed that there were numerous listings and foreclosures that are not being listed.

Some were on the market last year and want to sell but there is so much available now, they don’t want to see the market flooded and drive prices down even farther.

Almost all of the foreclosures in our area are being handled by realtwhores, and they do have sway with the banks.

The latest in the packman graph series :

Home vacancy rate

This is the real vacancy rate - not the one that’s only based on homes for sale or rent, but all vacancies. At least - it’s the data published by the Census Bureau anyhow.

Packman:

What bugs me most about all those vacant homes is their tendancy to push up rental rates. Why don’t all these FB just rent the damned things out already? JUST RENT THEM OUT!

What were apt prices in Manhattan aound then? (1988) Or were you not there then? If not, anyone else know?