patrick.net

BTW, does anyone still have any respect for Bernanke ?

Bernanke must save the banking system; it is the foundation of our worldwide economic system. If he does not, we are talking major disruptions to global trade supply chain and economies. I'm not even sure what would happen beyond an inability to get product to market, to move money around. It would be a cataclysm, no? So, he is doing what he can even if it is against my interests relative to real estate, and even if it is tilting at windmills or fools errand at this point. I actually think he was a sound choice for fed chairman given his management and leadership skills, and expertise on economic downcycles. The man was simply handed a lit stick of dynamite.

His priority must be to save the system.....inflation, dollar, and everything else takes a back seat.

His priority must be to save the system…..inflation, dollar, and everything else takes a back seat.

Let's profit from his heroic act!

I will hire techies at $11/hr to clean my house!

PeeterPee -- put up notices in the laundromats or on Craig's List, you'll get 'em.

ptiemann - I'm being hyperbolic, in truth, the most I made as a techie was $11 an hour. I just rounded it down to $10. And a lot work for $10 or less. I was a skilled repair tech, component-level repairs, PCB repairs and rework, and I hated seeing a unit come back, so my re-repair rate was very low. Basically, I had this thing about fixing anything put in front of me, so I fixed all kinds of wierd shit too, like people's printers and stuff. And this earned $11 an hour. The guys out in Shipping And Recieving made more. I really made a mistake not going into Shipping And Recieving. No oscilloscope to play with, but more per hour and get to play with a forklift? Should'a done it.

This is why if I move back to the BA I plan to have both street-artist and street-musician skills firmly in place, since those street performer types make more than techies OR forklift jockies and get to sleep in if they like.

I was going to post earlier agreeing with northernvirginiarenter - that BB has to do what his job calls for, keep the markets stable, save the banks, etc. yadda yadda. I guess it's like being head steward on the Titanic. It's sinking, but the linen WILL be clean!

@stuck

Thanks for the "props" earlier, just noted your note

I am thinking of refinancing my mortgage (to a shorter loan term), the rates for 10 and 15 year loans are the lowest I've seen in awhile. There goes the new BMW :(

How come it is so darn difficult to trade platinum. Is NYMEX futures the only viable choice?

I am thinking of refinancing my mortgage (to a shorter loan term)

Why do you hate freedom? Shorter term? :)

cb,

try to do a 15 year.

I did the WRONG thing looking back, I refinanced to a 10-yr one trying to be fiscally conservative and now I am kicking myself for not extending the period longer, you are essentially paying back worthless papers so why not drag it out longer?

I refinanced in April and my rate is still competitive, so doing a refi again is not worth the points or effort. If for some reason 15-yr FRM goes to 4% or lower, I will definitely refinance to 15 year - and pull equity out as well.

Peter P,

Is that your best eBrubed imitation :) Maybe I'll get a new bimmer afterall.

Realistically, how low will the mortgage rate go, I know they are tied to 10 year treasury, when the Fed left the rate at 1% a few years ago, lowest rate for a 15 year mortgage I found was a little below 5% (of course it depends on points, etc.).

OO

I have a 15 year right now and I am looking at 10 year fixed, like Malcolm said, it is hard to arbitrage and win, at least for me.

But, so far your investment advice's been pretty good, so it probably make sense for you to pull equity and invest to get higher yields.

ex_sunnyvale_renter

In previous post:

their=your

Holding a conversation and typing does not work for me. Obviously.

Second, I will have plenty of weapons quals on everything from the pistol to .50 Ma Deuce. Big thing is fire and movement now. I am in the Navy but we are taking up Army slack in the sandbox. Don't know if I will be doing any door kicking yet.

My thing was to be safe with my money, hence the CD. I will take a look a Chase's offerings and other banks. Is their a site that has the CD rates for the various banks ranked by return?

I have turned more than a few people on the this site and tell them the real action is in the comments since you can learn much from people smarter than yourself in various areas of real estate, finance, etc. I really appreciate the folks on here. Teaches me something.

their=there. Yowza, me no able to type tonight!

cb,

there's really no reason to hasten payment if you are already on a 15-yr loan, unless you want to lower rates.

Let's face it, even before we pay off our debt in 10 years, we will start to lose the tax shield advantage very soon in the 6th or 7th year because the interest amount starts to wind down rapidly in the amortization table. Essentially what you are opting to do, is to put more of your financial cash flow into your house - a depreciating asset, while losing tax shield at the same time.

If you pay it off over a longer period of time, you have to flexibility of putting your money elsewhere, which doesn't necessarily mean higher return, but it helps diversification away from a USD-denominated, depreciating asset.

If one is choosing between 30 years and 15 years, then there is substantial interest savings for the 15-yr loan. If it is only 5 years, you'd probably be better off sticking with a longer time schedule.

I am sure you can run a spreadsheet in determining what % of USD depreciation will justify paying extra USD interest expense (adjusted for tax) for the additional 5 years, or perhaps estimate what the breakeven % of depreciation is.

FAB,

>I’ll consider someone a “Californian” as soon as they stop saying “out here” and are not talking >about somewhere besides California when they say “back home”…

How about the ones that say "back east", but did not even come from there. That always baffled me.

There is no housing bubble in SF. Look, even this 4/4 is asking for close to $100M!

http://www.movoto.com/real-estate/homes-for-sale/CA/San-Francisco/955-Excelsior-Ave-110_336367.htm

Only multi-billionaires can afford to live here. :(

Well, as a Calfornian, let me put it this way: I was out in St. Louis and those people didn't seem to know they're Back East, even after I told them so!

Back East, to a Californian, is anything east of the Mississippi. Which St. Louis, is, just.

His priority must be to save the system…..inflation, dollar, and everything else takes a back seat.

That's what his priority SHOULD be. But he is idiotically trying to judge the health of the system from stock market fluctuations. Last week he became a joke for reducing the interest rates due to market actions that could have been triggered by a rogue trader.

So how many stock market crashes he is going to react to by cutting interest rates by 75bp ? At that rate he can "save" say 4 crashes. And after that ?

The guy is a PR disaster. He may have a Ph.D. in economics, but he hasn't even attended pre-K for communications. As I have said before, Greenspan was at least evil, this guy is plain stupid.

DinOR,

I looked up ETY EXG QQQX AGC on yahoo finance and there is no mention of yield, plus the value is dropping. What;s the deal? DO I need to go look at investopedia again?
:-)

I bought my safe yesterday!

Two observatioons:

1) A safe is very heavy and requires two people and/or a dolly to lift it.

2) Home Depot is very empty - I believe there were more employees than customers at the store where I bought the safe.

Cheers!

observatioons = observations

I watched one of those reality shows where ex-con professional home burgles hit a house that the home owners believed was very well protected a while back. The owners had 3 safes. 2 installed, one of those custom built into a cinder-block wall. And one portable safe that weighed something like 600lbs.

Needless to say, the pros emptied the 2 permanent safes in about 15 minutes and the loaded the other one up on a cart and rolled it out the door.

They said the best bet would have been to stuff all those safes full of "not that valuable" valuable stuff, because if they find a safe they always open/take it. They said you're best to put stuff you care about in a hole under the doghouse, or better yet, in a bank's safety deposit box.

Bap33,

not sure about your local market, but $130K for a house with 1.2 acres sure sounds good to me.

Except one thing, how will a semi-rural area fare in a $100+ oil environment? As long as you are comfortable commuting with $5 or more gas, then go for it.

BAP "I told him I would be suprized if they allowed contingencies. Do REO’s come with offers like that??"

Yes, they will evaluate all the offers and take the one that nets them the most.

@StuckInBa

Personally, I agree that Greenspan ultimately was incompetent insofaras economic philosophy, but he was a master at communications even if through intimidation and both false authority and false intellectual superiority. That's my impression of him anyway.

Bernanke has a steep learning curve on the communications stuff, I'd give him maybe a "C" there myself. I did catch one of Bernanke's appearances before some congressional committee, and the man did look like a completely nervewracked. Not what one looks for in a Fed chairman.

This said, we don't know for sure if the 75pt was directly result of unwinding of frog fraud, but if it was and he did not know of the root cause one might say he made a reasonable decision. I disagree that he is managing decisions based upon stock market alone, but recognize the market as a very important element of our macro-economy. A big market drop is itself an economic event, erasing spending power, credit availablity, wealth, confidence, and income. Not paying attention to major market moves risks real damage outside of the market alone. Keep in mind a large downward move in the stock market can directly lead to massive job losses and massive contraction in GDP.

I don't really appreciate all he is dealing with at the moment, but I suspect we are completely on the verge of total market breakdown, as in all the big and small banks failing, derivatives unwinding....an overall nasty mess. If he holds rates, or raises rates, housing goes down fast takes the entire financial infrastructure with it. That's not really ideal for anyone. Personally, I'd prefer much less government and central bank interference in the markets but we are where we are.

What scares me personally is I don't think there is anything he or anyone else can do about it now, housing will inevitably decline 30% or more and I surmise this takes the banks down, which then cascades into the great unwind to an unholy bottom.

Don't blame Bernanke for this collosal mess, it's not his doing. I'd actually give him an "A" so far, but we are still in the earliest stages of the matter. I'm not fan of the banksters, but if the banks fail, well the system fails, and we are all screwed. Most of us anyway.

Just because you can ask for anything doesn't mean that you will get anything. I'd be surprised if they would pay for an inspection. That is a conflict of interest and would hang future liability over their heads. It is a pure business decision for all the other stuff. My philosophy is, it never hurts to ask. In any case the reason I know how it works (a little) is because I used to buy VA repos, and they used to operate under the highest net principle. I also use a servicer/broker for my investments.

northernvirginiarenter :

For most part, we are in violent agreement :-) I do not blame BB at all for the mess we are in. No Sir, that honor belongs to one and only, The Great Greenspan.

Stock market drops have happened, and will happen. What happened last week was nothing compared to many previous crashes. It did not warrant a rate cut of 75bp just a week ahead of the meeting. And this is not the only time. In summer he tried to save the market and cut the discount window rate on a triple witching day ! Another rate cut of 50bp happened after a market crash in fall.

BR put it very eloquently. Fed has become the Wall Street's bitch.

There are only so many rate cuts that you can do. Hence using then to counter market crashes is stupid at best.

@OO

Let’s face it, even before we pay off our debt in 10 years, we will start to lose the tax shield advantage very soon in the 6th or 7th year because the interest amount starts to wind down rapidly in the amortization table. Essentially what you are opting to do, is to put more of your financial cash flow into your house - a depreciating asset, while losing tax shield at the same time.

I have and will pay AMT again (we don't really make that much) so the tax shield might work the other way, if it relieves me of AMT then it might be worth it assuming congress don't repeal AMT completely.

justme,

http://bigcharts.marketwatch.com/quickchart/quickchart.asp?symb=EXG

shows the yield at 11.20%. Additionally over the last few weeks it's gone from 15.25 to 16.96. So like I say, you're not getting as deep a discount as you would have in Nov/Dec (and I didn't mean to imply any of these should be considered mmkt substitutes)

NIA

OO/cb,

I'm there... I'm there. I would love to see one of the techies assemble a calc. to "estimate what the breakeven % is". Is that so much to ask! :)

Randy H,

We use a "Sentry" safe but primarily for passports, kid's birth certificates and a Dan Wesson .38. The feature that I felt was of the most value is that the plastic shell is filled w/ a compund that melts and seals in the event of a fire and is small enough to "fit under the doghouse".

I'd like to get a safe for my office in which I can place valued items like Jack, Johnny and Jim (if ya' get my meaning)

DinOR said:
I’d like to get a safe for my office in which I can place valued items like Jack, Johnny and Jim

Hmm... you must be looking forward to liquidating _those_ assets. :-)

BTW, thanks for the ETF pointers.

So, what came out of Bernanke's 125bp rate cut?

Dollar tanking, stock market still going down, recession still 'in the bag'. The only nice thing I can say is "well, it would have crashed even harder without the cut"...

Nice going, Poindexter.

"recession still 'in the bag'." LOL!

"Son of Gary Watts"

Yeah, I'm not trying to "talk up" some of those ETF's it's just that I see them as an incredible value especially for anyone that's looking to steer clear of any kind of debt paper/int. rate risk.

StuckInBA Says:
I do not blame BB at all for the mess we are in. No Sir, that honor belongs to [...] Greenspan.

The fact is that Bendover Ben is in the leadership position now, and has a responsibility to do the right thing - regardless of who fucked it up so far.

So the quality of his leadership should be judged _only_ by whether you think _he_ is doing the right thing.

The problem is that he has to choose between protecting the banksters and protecting the purchasing power of the dollar. His loyalties appear to be with the former, it is just that current circumstances make it impossible to for him to keep hiding the fact.

It's an oversimplification to reduce his decision-making to banksters vs dollar. I disagree that he is a purely dancing to the stock markets tune, even recently he held tight against a wave of criticism and screams of fury to loosen.

I have zero doubt that if it were not for frozen interbank lending and complete loss of confidence which is now inherent in all transactions he would be more than happy to be an inflation fighter, hold interest rates high, and let the housing market fester.

The reality is it's the too big to fail problem. The key question to ask is what happens if the banksters do fail? Though I'd be the first in line to deliver their comeuppance the unfortunate fact is if the banksters (who include all involved in high finance, right? Hedgers, M&A folks, Private Equity folks, and of course debt folks) go down that would end the current construct completely, at least that’s my guess.

So one might make the argument that we need to move to a new construct anyway, too which I might agree, but there is no way that happens as the incumbent power structures are set up to maintain the current status quo. Those that are busy dispossessing the masses of wealth are not about to let that happen. Are we to burn it all down and start over?

I happen to be of the opinion that the crisis is getting much worse than we are being led to believe, and it all may just crash down in a great credit contraction unwind in any event. But Ben's employer demands he does his job, which primarily now means saving the system.

As we all know however, they all seemed to have missed red flags flying in housing that we all noted so clearly here, Ben included.

I don't know, maybe I've got the whole thing wrong. Fueling the contraction with more credit, the very credit that stoked the flames to begin with? Probably there was a window early where that approach (a solution in 2002-2004) would not have shocked the system but the thing just went too far. Now, in 2008 tight fed policy makes in tough to digest the losses without serious secondary effects, even fatal ones.

DinOR,

Thanks, I think I need to read up on closed-end mutual funds and oil&gas trusts to understand these stocks. My experience is more in the area if technology stock.