Bits Bucket for August 24, 2014
Post off-topic ideas, links, and Craigslist finds here.
The Housing Bubble
Examining the home price boom and its effect on owners, lenders, regulators, realtors and the economy as a whole.
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Name:Ben Jones
Location:Northern Arizona, United States
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California property flipper moves into Southwest Florida:
http://www.heraldtribune.com/article/20140821/article/140829933
Well, here we go. This is the exact same stuff that happened during bubble 1.0, just as the market was freezing up and about to descend, here in Florida. In fact I talked to a guy from the San Diego area who had some to Florida in search of property to “invest” in, because the market in Cali had gotten too rich for his blood.
It’s just amazing to me that this is happening again, so soon after 1.0
Flip side of your story: The 1/2 of a duplex immediately next door to us was owned by a absentee landlord who lives in FL. He refused to renew the lease for our long-time neighbors this spring in order to get the home ready to sell to our new “fresh off the boat” Chinese neighbors at a steep premium to the recent comps.
I wonder if your neighbors are illegal immigrants. Won’t matter to them. Their kids will still get free public education, and they probably have enough blood money to keep themselves going until the grandkids get born on native soil. Then, of course, there is the Dream act. Their kids are dreamers, ya know.
I wish I knew exactly how many Chinese are buying RE in the USA. I know they’re also doing it in Canada and Austraila. White-people countries. How come they don’t buy up land in Africa or South America, or some other Asian place?
How come they don’t buy up land in Africa or South America, or some other Asian place?
Probably for the same reason I wouldn’t consider buying there, no matter how much money I had.
Yet they all want to come here, then change it to be more like their homeland. Same with the people from, Mexico, the middle east, etc. They want to emigrate to the US, then change it to the same country they left. How about just staying put?
“How about just staying put?”
Racist
my appreciation (equity) has given me a lot of freedom to drink some tasty craft beers and wines.
Craft beers. The popularity of craft beers seems to have developed in tandem with bubble 2.0.
I prefer “hand-crafted” cocktails.
I suppose some bars have slushy concoctions where they just open the spigot and pour. Even still, someone had to use their “hands” to empty the bag/box into the machine…
Comparing an income statement item to a balance sheet item is like comparing an apple to an orange.
Consumption, in whatever form, is an expense on the income statement.
Have you realized your appreciation or is it unrealized? Do you understand what these terms mean?
“Comparing an income statement item to a balance sheet item is like comparing an apple to an orange.”
But due to the miracle of a cash-out one can turn his apple of a balance sheet asset item into an orange of some spending money.
The trouble is … once the cash out has been done by:
1. A sale, then one no longer has the apple.
2. By borrowing against the apple, then one is stuck with some debt.
The debt one is stuck with doesn’t matter. Since real estate always goes up, the debt will eventually be erased by future home equity wealth appreciation which can be turned from unrealized to realized gains upon a future home sale.
When the worm turns, it’s still just churning around inside your apple.
Have you realized your appreciation or is it unrealized ??
Can’t that be said for most investment assets ?? You may have a vintage painting or car but the gain may be unrealized….
By borrowing against the apple, then one is stuck with some debt ??
Well yes but, that money thats borrowed against the “apple” may have other objectives;
#1. That money is being used to improve the apple thereby adding value…
#2. The apple has the ability to generate income that will offset the debt service and the “tax free” liquidity can be used to re-invest in another apple…
“#1. That money is being used to improve the apple thereby adding value…”
How does drinking a craft beer improve the apple? I’m missing it…
I was responding to Combo’s comment as follows;
But due to the miracle of a cash-out one can turn his apple of a balance sheet asset item into an orange of some spending money.
By borrowing against the apple, then one is stuck with some debt.
If you have to borrow against your apple you don’t have SQUAT
have to borrow against your apple you don’t have SQUAT ??
That smells of “need’ not “choice”….Many choose to “Borrow” with much success and rates of return…Corporate America is the best example so your SQUAT suggestion is BS…
Wrong.
Debt is a moral failing that results in loss ALWAYS.
Balance sheet equity increase (to FMV), less related inflation; the net hypothecated - you could have a negative already.
Can you imagine the size of that negative once Yellen figures out how to repatriate all those dollars - or worse - the banks actually lend them out?
1. Will there really be an equity increase still available or 2. Will you have found another way to dig a hole ?
Debt is immoral. So 99 per cent of man should not be allowed to exist in your petty world?
That can be said for ALL investment assets.
One thing to keep in mind is that the pricing of certain assets is more transparent than others, and some assets are more liquid than others.
The pricing of publicly traded securities are readily available and they are easy to sell at the market price.
You may have to go through an art dealer or an auction to discover the price of your vintage painting, and it will take a considerable amount of time to execute the transaction.
and it will take a considerable amount of time to execute the transaction ?
Understood but that has little to do with unrealized gain which apply to almost all assets..
scdave:
I think people figure that if the value of their house goes up forever, then they will literally never need to dig into their pockets to pay the debt. They can refinance until they die, using the money to purchase craft beers and showy vehicles. If anyone is using vintage cars or art in the same way, then they are creating the same problem for themselves.
If anyone is using vintage cars or art in the same way, then they are creating the same problem for themselves ??
Big V…I just used cars and art as a example of an asset…I could just as easily used securities or real estate…Point is, they all may have “unrealized gains” which is where this thread started…
Also, with art & cars its the well healed that are invested there because they diversify over all sectors…Why ?? because they have so much friggen money they can…
I just saw a Titans At The Table on Ralph lauren…Started from humble beginnings and almost went broke a couple of times but the guy is tenacious…His fed-dish is vintage cars…Has about 100 of them and drives them all as time allows…God only knows how much he has invested and I am sure there are plenty of wealthy people that would take many off his hands at a tidy profit if he were in the mood to capture his “unrealized gains”…The guy is worth 7-Billion Dollars…His vintage car collection is small potatoes to him…Sell the cars to make some money ?? Why…He has more than he knows what to do with now…
Have you ever heard of VPELOCs or CELOCs? (I haven’t…)
Unless azdude is different than the majority of Ownership Society members, then I imagine he has used HELOC financing to fund his craft beer consumption binge. Of course HELOC financing of beer consumption is based on the presumption that real estate always goes up. So it doesn’t matter that the gains that fund the consumption are unrealized, as they will remain available to be realized into the indefinite future.
Please feel free to correct any parts of the above explanation which don’t fit the facts.
Potential silver lining in case the “real estate always goes up mantra” fails at some future point: The Fed recently set a precedent for backstopping home equity wealth gains in perpetuity.
“Comparing an income statement item to a balance sheet item is like comparing an apple to an orange.”
+100
My great uncle’s philosophy was to never sell assets, and to only spend the income from those assets. What that meant is that he treated his mortgage as a cost, and paid off his house, and lived the rest of his life off of dividends from a stock portfolio he had amassed over his life. He lived a very comfortable, stress free life into his 90’s.
The sooner people acknowledge housing as a COST (shelter), and not an asset, the better.
So when the bubble bursts and you’re drinking your sorrows away, you can switch to Night Train or Thunderbird.
Hairspray coladas.
I guess you yourself are above all human failings.
My appreciation in fine wines is also being financed with all the money I have left over from renting. Here is the most recent brand I just bought: Blankiet Estate Paradise Hill Proprietary Red, 2006. I have more than one bottle of that in my wine cellar.
Got so much cash left over from renting that my mattress is getting too full. Need to rent more space for my investment wines and find more hiding places for precious metals!
http://rt.com/usa/182432-power-outage-quake-california/
Power outages following the earthquake that hit northern CA.
Last night I drank most of a bottle of a nice Argie Malbac that cost around $10 at Costco. Tasted just as good to me as some Paradise Hill Proprietary Red, 2006, and I saved a fair bit of coin.
“Investment wine.” What a concept.
Learn about the subject first. Foolish of you to write about what you do not know.
Hey, if you collect fine wines that someone will pay you more for down the road, all power to you. However, if you drink a wine that’s notionally appreciated in value, I fail to see how that was a good investment. But that’s just me.
Actually you assumed I only drink from $100 bottle wines. I don’t. In 15 years I will drink from $500 to $1000 bottle wines, that of my own.
I mostly drink two glasses of wine per day from $7 bottle Bordeaux. And I just got into Vinium North Coast Cabernet Sauvignon. You could buy a 101 oz container for $39.99. It’s all recyclable and you do not need a wine fridge for it. It can sit out on your countertop for up to 8 weeks. It’s drinkable now, not in 2018 or later.
That is my approach. But you, RKH, make assumptions that I am a wine snob. I’m not. I have had some Trader Joes $2.59 wines that were outstanding (and some that were not).
Hey keep buying those wines and reading the literature. It’s people like you who keep my wine publisher SIL in business.
SH…I too have a couple glasses per evening…Not interested in wine collection just drinking it… :>)
I am interested in a Cab or Merlot from Bev/Mo…Any recommendations for what you see as good value ?? We just usually buy something that is inexpensive…
does any of your wines contain antifreeze?
http://en.wikipedia.org/wiki/1985_diethylene_glycol_wine_scandal
The 1985 diethylene glycol wine scandal involved a limited number of Austrian wineries that had illegally adulterated their wines using the toxic substance diethylene glycol (a primary ingredient in some brands of antifreeze) to make the wines appear sweeter and more full-bodied in the style of late harvest wines.[1] Many of these Austrian wines were exported to Germany, some of them in bulk to be bottled at large-scale German bottling facilities. At these facilities, some Austrian wines were illegally blended into German wines by the importers, resulting in diethylene glycol ending up in some bulk-bottled German wines as well.[2]
I like the 0.05 for second bottle deals. My own tastes are in reds. I try to stick to Napas, Sonomas and nordeaux. Cellartracker ratings are the most truthful.
Drinking a $1000 bottle of wine that’s going to be passing through my kidneys isn’t high on my scale of life’s choicest investments. I’d rather buy a good backpacking tent.
Don’t get me wrong, SH - I appreciate your perspectives on most things, including fine wine. I’m kind of intrigued by the investment potential of wine and know a couple of guys who have impressive wine collections, it’s just not my thing. That’s not to say I don’t appreciate pointers on quality affordable wine for moderate consumption.
“That’s not to say I don’t appreciate pointers on quality affordable wine for moderate consumption.”
Low end Bordeaux is still good. Mouton Cadet 2012 typically sells for $7 per bottle.
Thanks.
$1,000 bottles of wine are no different than expensive art. They’re for show and bragging rights. There have been innumerable studies where an $8 bottle of wine fares better in blind taste tests than wine 100x the price. Price does not always equal quality in wine.
Yes, but chicks dig $1000 bottle wines. Or so I’ve heard as I pour the $10 Argie Malbac from that expensive-looking bottle.
The women I’m around mostly these days are more impressed with my abs than my wine investing (I haven’t told them about the wine anyway), and of course they don’t even think I have $ since I drive a cheap Japanese economy car and rent.
Shoot, almost all my engineering colleagues at the office are Orange County (South of Irvine) mortgage payers. So they “are rich and I’m not” is the aura there.
“Shoot, almost all my engineering colleagues at the office are Orange County (South of Irvine) mortgage payers. So they “are rich and I’m not” is the aura there.”
+1 You’re as loose as ashes in the wind, so no pink for you.
I suspect you will enjoy life a lot more than they will during the next leg down in the mania unwind.
Looks like somebody’s wine collection just got co-mingled.
http://www.zerohedge.com/news/2014-08-24/san-francisco-bay-area-hit-strongest-earthquake-25-years-wine-country-shakes-live-we
By the way, I am storing most of my wines in Phoenix in a wine storage place that has backup power generators.
Phoenix does not get 5.0 or stronger quakes.
How much does storage cost you per month?
BINGO
The expense of storage is another annoyance like storing precious metals at Monex. I have to work around it and live with it until my collection is large enough to not make it an annoyance. Kind of like my municipal bond funds. The “A” fund has half the expense ratio as the B fund. After six years of investing in the B, they automatically shift you to the A. Your expense are relatively lower by volume.
I have to get to several $thousands worth of wine before it is not an annoyance. But it’s worth it to not have to worry about power outages and earthquakes.
Every asset has some drawbacks and opportunity costs. It’s just a matter of balancing out the annoyances to your own individual tastes.
Until a power outage hits the wine storage and they file for bankruptcy. Backup generator power is not guaranteed. Phoenix is the last place I’d want to store perishables. That climate is ruinous.
Ah, the HBB. You can always count on at least one nattering nabob from the usual crowd to find something negative about your plan. So many pessimists and debby downers here.
Power outages are more common in California than in Arizona. I’m far more worried about a power outage in my part of Orange County than in Phoenix. In California they can easily go for a couple of days. Has never happened in Phoenix for obvious reasons. There would be a revolution.
Bill - if you drink the wine yourself (regardless of the timing), then you are consuming it and it becomes an expense.
If you sell the wine later for a price in excess of what you paid for it, then you have an investment gain.
If you sell the wine later for a price less than what you paid for it, then you have a loss (and you’ll probably consume it rather than realize the loss).
True - read my above post. Most of the wine I am drinking for now is costing me $2 per glass. Check out Vinium. The North Coast is very good.
If I started my wine collection in my 20s I would be drinking mostly $15 per glass, I would guess.
Some of what I buy for an investment will be for my own consumption, as I have had high quality wine before and know the difference. Some of what I buy will be for sale in 15 years.
Check out Vinium. The North Coast is very good ??
Bev/Mo ??
Whole Foods
“Bill - if you drink the wine yourself (regardless of the timing), then you are consuming it and it becomes an expense.”
If he is buying and consuming it today, it is an expense. If he is buying today to consume in 2025, it is an investment.
Okay… but you’re splitting hairs.
At the time of consumption the asset (wine inventory) disappears as an expense on his income statement.
No I’m not splitting hairs. I’m applying the distinction between consumption and investment to the specific example of wine.
Most wine goes bad in a few years anyway.
Most wine goes bad in a few years anyway.
Vinium is in box containers. You can also get a 20-bottle “barrel” for parties.
Vinium lasts 8 weeks. It is in the category of “most wine.” But rather than a few years it’s a few weeks.
The number one wine-producing region in California is not around the coast. It’s in the farming inland, such as Fresno, Madera, and Kings counties. It’s number one by volume. Incredible amounts.
My sister and her husband rented a house out in a farm area in Fresno county. It was surrounded by grapes. I house sat once. Checked out the area. Those were Thompson grapes, which are not wine grapes. Even so, the volume of grapes in general is so huge, there is a lot of room for wine grapes in the region.
Some of my colleagues taught me about the wines. The reasonable situation is you drink the ones that are drinkable. Otherwise you have to decanter the wine for awhile. It’s worth waiting until the drinkable year.
The resveratrol is the reason I drink the wines that are 86 to 88 rated regularly. But wine has sugars in it so I have to limit myself. The work I do on my abdominals by diet and exercise is my boundary and too much wine would defeat the purpose.
http://www.slate.com/articles/news_and_politics/explainer/2004/07/why_is_antifreeze_so_delicious.html
Sounds like you may need to consume more craft beer. Maybe you could share some with azdude when his home equity wealth appreciation boom eventually turns to bust.
With the money I save from buying inexpensive wine, maybe I can donate more to the soup kitchen azdude is going to be frequenting when his bubble dreams turn to dust.
I love beer, but it produces estrogen, so I severely limit that.
OK, that information would’ve been more useful about 20 years ago.
I’m sure you’ll find cause to drink a lot more when your equity gains eventually go into reverse.
Had that drinkin’ opportunity in 2000 and 2008. Didn’t take it. I was fucused on buying. Had bought too early in the 2000 crash but bought on time in late February / early March 2009. - equities that is.
“…bought on time in late February / early March 2009…”
Did you correctly guess the Fed would start pumping in QE3 to reflate the stock market beginning in late March 2009?
Nope. My former company stock share purchase happened to be around that time and I bought 1700 shares for $2 per share. Still have that batch of 1700. Earlier this year the price broached $39 per share.
My rentier status has given me plenty of freedom to go elsewhere when my new control-freak boss inevitably becomes intolerable.
Mr. Dollar seems to be doing quit well lately.
http://finviz.com/futures_charts.ashx?t=DX&p=d1
Cash rules. Debt sucks.
Mr. Dollar has the most fingers left in the leper colony. But the Fed’s work isn’t done yet.
Thank you, Mr. Positive.
That’s Mr. Realistic to you, missy.
How’s that $40,000 fortune in cash you held as cash since 1972 Mr. Combo? Back then you could buy an executive style house in Simi Valley. Try buying a house in Irvine with that $40,000 today Mr. Combo.
Cash is king - I am serious. But it’s king for short time periods, ten years or less. It’s best as a temporary refuge for emergencies and for keeping after realizing gains from stocks or bonds or real estate. Precious metals reigns over fiat. Always.
Jim Rogers, the investment guru in Singapore, puts it this way: He piles up cash in a corner of a room and when he stumbles on an investment bargain, he takes some cash off the pile to buy the investment.
Cash is always king. There is cash and then cash equivalents(securities, PM’s). A depreciation asset like a house isn’t one of them.
“Precious metals reigns over fiat. Always.”
Even gold from 1980-2000?
The Fed’s deranged money-printing since 2008 means we’ve entered a whole new era. When the Weimar Republic style printing ushers in Weimar Republic-style results, the purchasing power of those printing-press trillions will evaporate and the rush for true value (that can’t be created from thin air) and tangible assets will be epic.
You’ve very clearly stated the standard case for owning gold and other hard assets.
But since so many people are betting the same way based on the presumed inevitability of Weimar Republic-style results, isn’t there some chance that gold is overpriced for a future financial trajectory where this doesn’t come to pass?
“So many people are betting the same way”?
Hardly. Probably fewer than 1% of Americans have the slightest idea that the Fed’s money-printing is debasing the currency. Fewer still would ever think of investing in tangible assets or precious metals (the real metal, not the JP Morgan paper kind) as a hedge against the Fed’s endless QE. Until we have a dollar crash - and it’s coming - Boobus Americanus simply has no idea that the dollar has become unsound and will be completely blindsided when a flight to safe haven (and out of the dollar) begins.
“How’s that $40,000 fortune in cash you held as cash since 1972 Mr. Combo?”
Held since 1972? Shirley, you joke.
“Cash is king - I am serious. But it’s king for short time periods, ten years or less.”
Or until something better comes along.
“The Ever Liquid Account” was an interesting chapter contained in the book “The Battle for Investment Survival” and its main thesis was that one should remain liquid at all times UNTIL a jucy opportunity presents itself and this is the time he should tap into his liquidity - tap into his stash of cash - and go for it.
Once the opportunity has spent its course one should get liquid once again, meaning get back to cash.
I like the concept. It goes against the concept of “One should at all times have his money working for him, invested for him” but, hey, different strokes for different folks.
Dude, that’s EXACTLY what I said to Brent (Brett?) from Austin. Eventually, if you have a big chunk of cash, then an obvious investment will present itself. Bigger chunks net better results. For instance, I really wish I had like $500k so I could buy a Yogurtini franchise.
I realize that I will need to invest in smaller chunks along the way before I have a bigger chunk like that. I also realize that if I just dollar-cost-average into a perpetually rolling bubble (like the stock market), then I would be better off keeping cash.
Yogurtini franchise ??
never heard of it Big V…What do you like about it as compare to others ??
I don’t know much about the profits (seeing as I’m priced out), but I LOVE Yogurtini. I eat it for dinner or lunch quite often.
Thanks for the link, Combo. I checked out the site and the longest time frame I could find for the charting feature was 1 year.
I recall back in the 2001 time frame the US dollar was strong, especially compared to the Canadian dollar. Had I known then what I know now, I would have allocated more of my investment portfolio outside the U.S.
The rise in the other currencies relative to the greenback (reversion to the mean) provided a nice boost to the returns (measured in US Dollars), which brings me to my current question:
With the strengthening U.S. dollar, does this mean that it’s an opportune time to invest outside of the U.S.? In other words, when your currency is strong you can get more bang for your buck in the overseas markets. (Think of Vanguard’s VDVIX and VEIEX mutual funds as the vehicles to capture the investment thesis).
“Thanks for the link, Combo.”
You are welcome. ”
“I checked out the site and the longest time frame I could find for the charting feature was 1 year.”
Select “weekly” and you can go back five years.
Cash rules. Debt sucks ??
Tell it to the guys developing around here…They are borrowing money at ridicules rates…
Q for the board;
If you could borrow long term money for 2%, would you borrow it and how much would you borrow ??
Are the terms recourse or non-recourse?
recourse….
I do borrow at those rates. I borrowed just enough to buy me a very nice cash-flowing investment. Beyond that, I don’t borrow.
I do borrow at those rates ??
Well then, borrow $500,000. and buy a Yogertini franchise…
:>)
They won’t lend me that much, and Yogurtini requires their franchisees to have a certain net worth. You have to already be rich before you can get rich with Yogurtini. I think maybe because they’re fledgelings, so they don’t want to take the risk of their newish business exhibiting the signs of credit deterioration.
“Developing” eh?
You’ve been bamboozled for so long by chump change operators that you don’t understand what profits are.
You’re enRAGEd.
Speaking of bamboozled.
The Fed is talking about following through with plans to taper QE3 to a conclusion.
If they follow through, what are the implications for the future value of the dollar versus dollar-denominated risk assets?
following through with plans to taper QE3 to a conclusion…what are the implications for the future value of the dollar versus dollar-denominated risk assets ?
No implications now in the face of whats happening in the world economies…The flight to safety has made the end of QE3 mute…
What if the US ends QE3 as other developed economies ramp it up? Wouldn’t that tend to suck assets out of other economies into the US, leading to a strengthening dollar?
leading to a strengthening dollar ??
Well, it would surely lead to more purchase of our securities…Debase the foreign currencies will lead to more flight to safety…
Cash is queen?
America, we are your future!
http://news.nationalpost.com/2014/08/22/police-hunting-for-man-with-contagious-drug-resistant-tuberculosis-after-he-stopped-treatment/
Democrats-on-Arrival and Pelosi’s DNC Supermajority will certainly decide our political future. You should learn to be grateful for your opportunity to enrich a corrupt DNC perma-regime and the ever-growing entitlement class, especially the Wall Street welfare queens, that perpetuates their hold on the levers of power.
Moar America, we are your future:
http://www.foxnews.com/us/2014/08/24/texas-police-chief-fatally-shot-during-traffic-stop/
http://latino.foxnews.com/latino/politics/2014/08/23/veteran-california-police-officer-gabriel-garcia-in-critical-condition-after/
These mestizos are not deterred by the po’leece, that’s for sure.
And here’s another immigrant grievance group offended by the word “bacon”.
http://www.wptz.com/news/vermont-new-york/burlington/advertisement-removed-after-resident-expresses-offense/27693396#!bJilMn
They took the sign down. Unbelievable. It just majorly sucks to see the “enrichment” of traditional small American towns.
So what’s next? Will Muslim immigrants demand that restaurants not serve food that isn’t hallal? Will we have to kiss pulled pork goodbye?
LOL…
“So what’s next? Will Muslim immigrants demand that restaurants not serve food that isn’t hallal? Will we have to kiss pulled pork goodbye?”
That right there is a self-inflicted wound. It’s Vermont, dude. Makes California look like a Puritan colony. Vermont’s the #1 state for youth heroin addiction, as I understand it. I lived there for like a year back in the day. What a complete freakin’ mind-fark. Beneath all that picture postcard snowy mountain and New England village landscape lurks Fellini’s Satyricon.
California is a Puritan colony. Their Puritan instincts are just re-directed, that’s all.
Fellini’s Satyricon ??
Chit Palmy…Your posting stuff I never heard of so needed to go to Wiki…Got your point…
Pretty hilarious. Jewish people don’t complain about non-Jews eating pork, but of course Muslims have to control the world through coercion.
Jewish people also have the ablility to laugh at themselves, which the muzzies, with few exceptions, never quite mastered.
They can’t be Democrats if the Republicans can prevent them from ever being citizens. They are guest workers, and no more.
Looks like more “economically nonviable” Mexicans will be flocking to the US as globalism wreaks its havoc.
http://wolfstreet.com/2014/08/23/spains-silent-reconquest-of-mexico/
http://news.yahoo.com/quake-6-0-magnitude-registered-california-104056703.html
Small earthquake in the San Francisco area.
More on the earthquake that hit the Bay area overnight. Nothing like earthquake damage to lower property values.
http://www.theguardian.com/world/2014/aug/24/california-earthquake-northern-san-francisco-bay-area
Nothing like earthquake damage to lower property values ??
Please expound why & how ??
Evidently this hasn’t happened in CA over the past several decades, except when accompanied by riots (Rodney King, R.I.P.).
Is it different now?
The quake woke me up immediately…Looked up at the fan and the pull chains were swigging…Was not till this early morning I found out it was in Napa and with the vintage buildings downtown there is a lot of damage…
I heard the epicenter was near American Canyon, which is the southern gateway to the Napa Valley. I used to pass through there often en route to gigs up in the wine country.
The quake was STRONG and lasted a good while, woke us up in Sonoma Co., no damage at home but lots of flashing outside from exploding transformers…am a native Californian and this was one of the biggest I’ve experienced, pretty scary at the time. Not so sure it will have much effect on RE prices in itself (the much larger ‘89 quake didn’t IIRC) BUT it could be a factor in the inevitable popping of Bubble 2.0 locally, the market is stalled at the moment, maybe this will help tip it.
It was not much down here in Santa Clara…A little bang then rolling for 5 seconds or so…
I’m about 60 miles away from the quake and was awake when it hit. A jostle for about 10-20 seconds, then done. Didn’t wake the kids. Never lost power.
Was up in the North Bay when Loma Prieta hit (outside). That one seemed to have longer duration. Then again it was 25 years ago, so my memory might not be so good.
We live in SoCal and we just dropped our CEA EQ (state based) ins last week. $1,300/yr.
The deductible was $38K (upgraded % even), and that would mean some serious damage. Page one says if they run out of $ you’re sol. This house did well in 1994. Yeah I know, but cross fingers and toes.
To all my NorCal neighbors-
Happy to hear everyone is OK.
The earthquake threat will be one more risk factor that people will have to take into consideration before taking on a mortgage for insanely overpriced housing. For more than a few, it’ll be the factor that tips them toward renting instead of buying.
All the other earthquakes caused property values to go up. RE is a religion in CA.
The RE idol has feet of clay.
Or was it simply because EQs reduced the supply of habitable structures while they were being repaired?
2012 “Realtor of the Year” Sentenced to Prison For Theft
07/29/2014 05:41 PM
http://www.pahomepage.com/story/d/story/2012-realtor-of-the-year-sentenced-to-prison-for-t/37444/O3mgdpCYy0muaTEmsAyLKg
Former Realtor of the Year sentenced for theft of $376G
REBEKAH BROWNPublished: July 31, 2014
A former Realtor of the Year will spend up to 23 months in jail for theft from clients whose property he managed.
Lackawanna County Judge Vito Geroulo sentenced Peter Lamandre, 36, to 11 to 23 months in county jail, five years probation, and ordered him to pay almost $377,000 in restitution.
Police say Mr. Lamandre, who owned real estate company Better By Design, sent little or no rent to landlords who owned properties in Lackawanna County. One of his victims, Theresa Saulque, said he stopped sending her the rent for her Olyphant property in 2012 and later stopped all communication with her.
The Carbondale man was named Realtor of the Year by the Greater Scranton Board of Realtors in June 2013. Police served a search warrant on his Dickson City business and arrested him for theft one month later. He is a past president of the Scranton board.
thetimes-tribune.com/…er-realtor-of-the-year-sentenced-for-theft-of-376g-1.1728050 - 220k -
If he was such a successful realtor, why was he committed to all of those rents in the first place? For his real estate offices? Shouldn’t he have been collecting rents?
Phoenix Metro Homeownership rate drops to 62.9% from 67.3% in 2009. Also from yesterday’s article I posted, Phoenix area incomes fell 9% from 2009.
http://www.azcentral.com/story/money/real-estate/catherine-reagor/2014/08/24/phoenix-homeownership-levels-drop/14520313/
Point of correction, sir: those homes are bank-owned until the last mortgage payment is made. Which means real levels of home ownership are in the single digits.
Since he didn’t seem to know about this maybe while he’s at it he could order a review of the military exercises in cities like Minneapolis, St. Paul, Dallas, Phoenix, Houston and Miami where the Police Departments are coordinating with the military.
OBAMA ORDERS REVIEW OF MILITARY EQUIPMENT SUPPLIED TO POLICE
Obama ordered the review of federal programs that provide military equipment to local law enforcement amid criticism of police tactics in Ferguson, Mo.
by MARIO TRUJILLO | THE HILL | AUGUST 24, 2014
President Obama ordered the review of federal programs that provide military equipment to local law enforcement amid criticism of police tactics in Ferguson, Mo.
The White House confirmed the review but said no other information is available since the details are still taking shape.
The New York Times first reported the review would look into whether the administration should continue with the policy, which supplies equipment such as generators to M-16s and mine resistant vehicles to local law enforcement.
The review, according to senior administration officials cited in the newspaper, will also look at whether local police units are receiving proper training for the equipment they receive and whether that equipment is being effectively tracked.
—————————————————————————
Helicopter training over cities continues through Thursday
By Frederick Melo and Tad Vezner
Pioneer Press
POSTED: 08/19/2014 12:01:00 AM CDT
The Army’s 160th Special Operations Aviation Regiment has a saying — “Night Stalkers Don’t Quit.” It apparently doesn’t always let people sleep, either.
The airborne unit’s Black Hawk helicopters arrived without warning Monday night, rattling for hours over Highland Park and around apartment buildings in downtown St. Paul and Minneapolis, and angering residents and elected officials alike.
They’ll be back.
The copters are taking part in U.S. military exercises that will continue sporadically into Thursday evening — local law enforcement officials said — but now with a little more public notice.
“It’s something that we do 10 to 15 times a year throughout the country,” said Maj. Allen Hill, a spokesman for the unit — known as the “Night Stalkers” — based out of Fort Campbell, Ky.
“It provides our pilots an unfamiliar environment — an area they’re not accustomed to. Towns like Minneapolis, St. Paul, Dallas, Phoenix, Houston, they’re all great hosts,” Hill said. “The cities invite us.”
When they flew over the Twin Cities in 2012, St. Paul and Minneapolis police began notifying the public three days before the training ramped up. At the time, police said they didn’t want to tie up 911 centers with calls from alarmed residents.
This time, though, no such warning was made. And beginning about 7:30 p.m. Monday, about 200 callers clogged the Ramsey County Emergency Communications Center’s 911 and non-emergency phone lines.
A host of Highland Park and downtown St. Paul residents complained about the four-hour trainings, which were photographed and posted to social media by alarmed observers.
St. Paul police, who also fielded calls and inquiries on social media, directed media inquiries to the Minneapolis Police Department, the lead agency coordinating with the military.
http://www.twincities.com/…/night-stalkers-continue-helicopter-training-over-cities-until - 358k -
Wrong spot, although Phoenix has had drills.
Well, now there is going to be a review, we can finally stop holding our breath.
Phoenix area incomes fell 9% from 2009 ??
There is the important data point right there….Because, that data point effects things far beyond housing cost…
Now if the Chinese bought in Arizona it would be a different story.
Why do they like CA so much more than AZ?
Oh Pbear…Being from San Diego you know the answer to your own question…
I like AZ, though I have never enjoyed the pleasure of surviving a summer there.
I like arizona also particularly Tucson…
Because the H1-B program has already created a nucleus for them in CA.
Both Arizona and California are incredible places. My druthers, I’d be taking one road trip per week on forgotten roads. Some great spots in Arizona are reachable by mountain bike - not car. Same for Cali, I would imagine.
So why did AZ incomes drop 9%? I don’t know. But it was mentioned in the Catherine Reagor article I posted on Saturday (not the one today).
Once while driving on the I-10 in southeast Phoenix, a stretch of it just “east” of the broadway curve (actually a north/south part), an incredible orange sunset filled the sky. A group of motorcyclists had stopped for an “emergency” and I’m sure their emergency was they had to look at the sunset.
But, but, won’t all the Asians and wealthied Ruskies buy these houses:
http://www.citylab.com/housing/2013/03/aging-baby-boomers-and-next-housing-crisis/4863/
Given rising geopolitical tensions with both Russia and China, some of those Russian and Chinese oligarchs and embezzlers might want to rethink the wisdom of buying illiquid assets that might some day be subject to seizure. Just ask the tens of thousands of Japanese internees of the WW II era.
Just ask the tens of thousands of Japanese internees of the WW II era.
Many of them were supposedly US citizens with all the rights & perquisites of other US citizens, until they weren’t. The US Supreme Court approved the loss of their rights, perquisites and property for no good reason, setting the precedent for future, approved losses yet to happen.
“National security” will always trump the Constitution and Bill of Rights. And enable TPTB to get their hands on other people’s property without recourse.
‘Just ask the tens of thousands of Japanese internees of the WW II era.’
Did they lose their homes? Meanwhile, Muslim extremity pokes at the sleeping tiger daily and they get a pass?
Yes, Americans of Japanese descent were stripped of their property and their confiscated assets were never restored. Don’t think it couldn’t happen to any other ethnic or religious group that falls into official disfavor.
Looks like UK oligarchs will soon be picking up farmland on the cheap, thanks to farmers who overextended themselves financially.
http://www.independent.co.uk/life-style/food-and-drink/news/farmers-in-debt-and-despair-as-dairy-market-collapses-9687838.html
Is a semblance of sanity starting to creep back into mortgage markets?
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/11050573/The-borrowers-with-an-85pc-deposit-denied-a-mortgage.html
Sh!t just got real….
http://www.zerohedge.com/news/2014-08-23/isis-just-crossed-line
Good luck to all the parents out there at balancing child-rearing costs against your own retirement income needs.
Why it’s so difficult to raise kids — and save for retirement
Published: Aug 22, 2014 5:46 p.m. ET
By Chuck Jaffe
My youngest daughter was born 21 years ago this week. At the time, I called an economist named Mark Lino from the U.S. Department of Agriculture, who told me to expect to spend as much as $300,000 to get her to age 18; toss in college costs, and it was well past $500,000 to get her to adulthood.
As a result, after she was born my lifetime financial priorities were reorganized. They became:
- Live in a home with at least one more bathroom by the time my girls were teenagers
- Pay for my girls’ college educations
- Pay for their weddings
- Collapse, after all that, into retirement with some measure of financial security
When I wrote about those priorities for The Morning Call in Allentown, Penn., where I worked when my daughter Whitney was born, I recognized that what I lacked was a plan to achieve my goals.
I’ve realized over the years that the one financial “plan” that most parents have is to handle all of their most immediate needs and goals first, and assume everything else will just work out somehow. That’s how it was for us. And that’s why while my first two goals have been met — and the third may not be an issue for a while — it’s the fourth one that has me most concerned.
So when the Department of Agriculture recently released its latest child-rearing numbers, I talked to Lino again, this time about financial planning.
Adjusted for inflation, the cost of raising a child born in 2013 to age 18 is $304,480, according to USDA numbers.
The changes in the last few decades have come in a few key areas. Health-care costs accounted for about 4% of child-rearing costs in 1993 when my daughter was born, but they amount to 8% of the tally today.
The biggest change since the USDA started keeping the numbers back in 1960 comes in child-care costs, which the agency lumps in with education costs (which can range from preschool and nursery school to private school). On average in the 1960s, child-care costs were roughly 2% of the total paid to get a child to the age of majority; today, child-care/education costs make up nearly 20% of the total.
…
Today’s comment from Captain Obvious:
You don’t have child-care costs with a stay-at-home mom. You also don’t have a second income. Duh.
Has anyone paid attention to the recent econochatter coming out of Jackson Hole?
The Fed
Fed’s Bullard: Europe is biggest risk to outlook
Published: Aug 23, 2014 11:40 a.m. ET
Fed debating how, when, not whether to raise rates
By Greg Robb
Senior economics reporter
Bloomberg News/file 2013
James Bullard, president of the Federal Reserve Bank of St. Louis.
JACKSON HOLE (MarketWatch)—For a few months now, St. Louis Fed President James Bullard has been saying the first rate increase by the U.S. central bank should come at the end of the first quarter 2015.
That puts him ahead of the consensus of the Fed’s policy committee, which sees a rate hike after midyear. But Bullard is often ahead of his colleagues. He was one of the first Fed officials to spell out the need for bond-buying to support the economy. Former Fed Gov. Laurence Meyer ranks Bullard as the Fed official who moved markets most in 2013.
Bullard sat down for an interview on the sidelines of the Fed’s Jackson Hole summer retreat. A few highlights: Bullard thinks the economy is on track for 3% growth in the second half, he’s worried about the European economy. On the exit strategy, Bullard said that unlike many of his colleagues, he would be prepared to sell assets from the central bank’s balance sheet and he is worried that Congress might object to the Fed paying interest to excess reserves that the banks are holding at the central bank.
…
At Jackson Hole, central bankers eye varying goals
Federal Reserve Chair Janet Yellen (left) and European Central Bank President Mario Draghi speak during the Jackson Hole Economic Policy Symposium Friday at the Jackson Lake Lodge in Grand Teton National Park near Jackson, Wyo.
Posted: Saturday, August 23, 2014 12:00 am
Associated Press
WASHINGTON — The central bankers meeting this week at their annual conference in Jackson Hole, Wyoming, aren’t exactly in sync. Many are taking steps that clash with the policies of others.
The Federal Reserve is preparing to reduce its economic support. By contrast, the European Central Bank is considering more stimulus. So is the Bank of Japan. The Bank of England seems to be moving toward raising interest rates.
It isn’t just the biggest economies whose central banks are pulling in different directions.
This year, central banks in Mexico, Sweden and South Korea, among others, have lowered rates. Others — in Russia and South Africa, for example — have raised them.
It’s a long way from the coordinated efforts that major central banks made after the 2008 financial crisis erupted and economies began to stall. As governments slashed taxes and spent stimulus money, central banks shrank rates to unclog credit and avert a 1930s-style depression.
Today’s diverging central bank strategies aren’t without risk. Consider what happened in developing markets last year after Fed officials hinted that they might soon slow the pace of their monthly bond purchases. Those purchases have been intended to keep long-term U.S. loan rates low to encourage borrowing and spur growth.
With the prospect of higher U.S. bond yields, some emerging markets went into a tailspin. Investors pulled their holdings from those countries for fear their value would plunge as capital fled for the United States.
Some emerging economies responded by raising their own rates and bolstering their shaky currencies. The tumult proved temporary. But it showed what could happen once the Fed ends its bond purchases this fall and eventually raises short-term rates — something it says won’t happen for a “considerable time” after its purchases end.
Many economists say central banks have no choice but to pursue divergent interest-rate strategies now because of their economies’ varying growth rates.
…
You mean the banksters are starting to bicker among themselves? No.
The chatter was drowned out by the slurping sounds as Yellen serviced the banksters.
Now THERE’S a mental image. Thanks a lot, pal. lol.
A hero for our time.
http://news.yahoo.com/video-black-man-stands-looters-ferguson-205441828.html
It seems some of these Ferguson looters have a very black-and-white view of race relations in America.
How is it again that robbing a store promotes racial equality?
Maybe the store isn’t owned by a black person, idk. Maybe if they loot it, then the owner of that business will go away and never come back, and a black business owner can buy it on the cheap??? Then black people could be more segregated, which would make it possible for them to compete in the world because they wouldn’t have as many ambitious people around to compete with. I’m just trying to get inside the minds of the people who are doing it.
Maybe a decent person said “enough of this shit!” and stood up against evil. Ever think it could be as simple as that?
Is it kind of like this scene from Network?
“I’m as mad as hell, and I’m not going to take this any more.“
LOL, garnishing Social Security for student loan debt. The gov giveth and the gov taketh away.
http://money.cnn.com/2014/08/24/news/economy/social-security-student-debt/http://money.cnn.com/2014/08/24/news/economy/social-security-student-debt/
open borders check
takeover of healthcare check
target political enemies check
spy on all Americans check
militarize police check
What’s still on the to do list besides Mr. and Mrs. America turn em’ all in and $20 a gallon gasoline?
Progressivism at work.
You already know that the definition of progressive doesn’t fit that bill, Bill.
All that stuff mentioned above is “for our own good” plus statism. Ergo “progressive.”
Scratch a “progressive” and underneath you’ll find a would-be tyrannical nanny statist.
Like this one:
http://www.wa6smn.com/DF.JPG
Aaahhh!!!!
You need to put a…
WARNING: Dianne Feinstein photo
on those links
Region VIII checking in.
Roger that Region VIII
OK, I’ll bite: What’s with the whole “Region VIII check in” thing?
phony scandals started it by posting “Everyone must check in” and it seems appropriate to check in according to your region as numbered by FEMA’s operational regions
I still don’t know what “Do you want me to read the card?” means
It all comes from a little skit in Region I
Would you please rise for the singing of our NAFTA Anthem
God Bless North America,
Land that I love.
Stand beside her, and guide her
Thru the night with a light from above.
From Newfoundland, to Guatemala,
To the oceans, white with foam
God bless North America, My home sweet home.
DEM: GIVE ILLEGALS CITIZENSHIP OR THEY’LL BECOME TERRORISTS!
State rep. uses propaganda to promote expansion of Democratic voting base
by TRISTYN BLOOM | THE DAILY CALLER | AUGUST 24, 2014
Democratic State Representative and candidate for U.S. representative Pat Murphy said Tuesday that if the underage migrants who have come to the U.S. from Central America aren’t given a “pathway for citizenship” they could become terrorists.
Speaking with Iowa Public Radio host Ben Kieffer, Murphy said that “we need to make sure that we take care of the children that are coming up here.”
“They’re not from Mexico, they’re coming from further south,” Murphy continued. “We need to make sure that when we’re talking about these children we need to treat them like they’re our children or our grandchildren. If they’re gonna be refugees, which several of them are going to be, we need to make sure that we have—one, we take care of them, and we create a pathway for citizenship and set up education for them so they don’t become the same problem that we’re currently having in the Middle East—that they’ll be terrorists a generation from now.”
It’s for the children.
give them a food stamp application now!
I’m confused. I thought the markets had priced in “de-escalation” in Ukraine.
http://rt.com/news/182404-donetsk-forces-trap-hardware/
http://www.zerohedge.com/news/2014-08-24/cornel-west-blasts-obama-brown-faced-clinton-post-traumatic-depression-will-follow
Outspoken Union Theological Seminary professor Cornel West goes where very few ‘thinkers-of-color’ have had the courage to go in this interview with Salon’s Thomas Frank: “The thing is, [Obama] posed as a progressive and turned out to be counterfeit. We ended up with a Wall Street presidency, a drone presidency, a national security presidency. The torturers go free. The Wall Street executives go free… we ended up with a brown-faced Clinton. Another opportunist. Another neoliberal opportunist… So you got low-quality black leadership. Al Sharpton is who? He’s a cheerleader for Obama… Eric Holder won’t touch the Wall Street executives; they’re his friends… I think a post-Obama America is an America in post-traumatic depression.”
Testify, Brother Cornel!
The rule of law, oh my God. There’s one law for us and another law if you work on Wall Street.
That’s exactly right. Even with [Attorney General] Eric Holder. Eric Holder won’t touch the Wall Street executives; they’re his friends. He might charge them some money. They want to celebrate. This money is just a tax write-off for these people. There’s no accountability. No answerability. No responsibility that these people have to take at all. The same is true with the Robert Rubin crowd. Obama comes in, he’s got all this populist rhetoric which is wonderful, progressive populist rhetoric which we needed badly. What does he do, goes straight to the Robert Rubin crowd and here comes Larry Summers, here comes Tim Geithner, we can go on and on and on, and he allows them to run things. You see it in the Suskind book, The Confidence Men. These guys are running things, and these are neoliberal, deregulating free marketeers—and poverty is not even an afterthought for them.
They’re the same ones who screwed it up before.</b?
Absolutely.
One last thing, where are we going from here? What comes next?
I think a post-Obama America is an America in post-traumatic depression. Because the levels of disillusionment are so deep. Thank God for the new wave of young and prophetic leadership, as with Rev. William Barber, Philip Agnew, and others. But look who’s around the presidential corner. Oh my God, here comes another neo-liberal opportunist par excellence. Hillary herself is coming around the corner. It’s much worse. And you say, “My God, we are an empire in decline.” A culture in decay with a political system that’s dysfunctional, youth who are yearning for something better but our system doesn’t provide them democratic venues, and so all we have are just voices in the wilderness and certain truth-tellers just trying to keep alive some memories of when we had some serious, serious movements and leaders.
The previous federal program is under review.
After review, the SWAT officer had both feet on top of the mine resistant vehicle and control of the M-16 laser trained on the peaceful protester so the program stands as called.
OBAMA ORDERS REVIEW OF MILITARY EQUIPMENT SUPPLIED TO POLICE
Obama ordered the review of federal programs that provide military equipment to local law enforcement amid criticism of police tactics in Ferguson, Mo.
by MARIO TRUJILLO | THE HILL | AUGUST 24, 2014
President Obama ordered the review of federal programs that provide military equipment to local law enforcement amid criticism of police tactics in Ferguson, Mo.
The White House confirmed the review but said no other information is available since the details are still taking shape.
The New York Times first reported the review would look into whether the administration should continue with the policy, which supplies equipment such as generators to M-16s and mine resistant vehicles to local law enforcement.
The review, according to senior administration officials cited in the newspaper, will also look at whether local police units are receiving proper training for the equipment they receive and whether that equipment is being effectively tracked.
“Hey, Albuquerque Dan, are you out there?”
The Jackson 5: I Want You Back - YouTube
http://www.youtube.com/watch?v=Qz7zo7wIlbU - 341k -
Hey Albuquerque Dan, this one’s for you:
Tom Petty & the Heartbreakers: Don’t Come Around Here No More.
https://www.youtube.com/watch?v=h0JvF9vpqx8
I haven’t seen that video in like 30 years.
2banana never comes around anymore either. I wonder if he’s still living.
It is more or less off season as regards political campaigns. I expect both those guys plus myriad other political shills will come out of the woodwork as the 2016 presidential campaign heats up.
“more or less off season”
Do you live in a cave? It’s election season 24/7/365, this is ‘Merica, dammit.
Stay plugged into your TeeVee, your TeeVee has all the answers.
“TeeVee”
That may be my problem. Other than occasionally hearing the sound of Homer Simpson’s voice from the other room when my kids watch the show, I don’t have much TeeVee exposure.
http://www.readyforhillary.com/
Oh flying spaghetti Monster! Hillary is another progressive. I’m ready to vomit now.
http://www.picpaste.com/a_hillary_campaign_colorposter-22ldMmE8.jpg
LOL
http://maine.craigslist.org/fbh/4635230430.html
phony scandals