patrick.net

IV on GOOG options is *very* low at about 25%. Perhaps we should implement long vega strategies like long straddle?

(Not investment advice.)

Macroeconomic concerns aside, Google has the potential to be a much larger company in a few years than it is today. Some of that is definitely factored into the valuation, but I am not convinced it's overpriced yet.

That doesn't mean it won't go down 50% in a month. Or up 200% the month after. In the short term, the madness of crowds will dictate. In the longer term, it has room to grow.

(However, don't believe the bunk about Google singlehandedly raising tech salaries in the valley. The truth is, except for some tech celebrities (e.g. Rob Pike, etc), Google pays less than most employers. They give their employees other benefits, engage them intellectually, and treat them like adults...but they don't skew the pay scales.

Is stupidity the American way?

TBD, but arrogance is definitely popular.

From Ben Jone's blog...

"Lenders are now adjusting buyers STATED income to whatever level they need to "QUALIFY" them for the desired loan ammount."

Sounds like a stated-OUTCOME loan to me.

HARM, should we add stated-outcome loan to the glossary?

To Patrick or whomever can administer posts,

Would you mind deleting my last 2 posts that are "awaiting moderation"? I have a couple of links that were translated into tiny urls but something is still wrong. :-( Let me know if there is something else I should do.

Thanks!

BayQT~

Here's another post from Ben Jones's blog that I thought was interesting. Sadly, it does relate to the bankruptcy topic.

What is the freaking deal with Californians?

What do they put in the water in California?

Talk about risking your life savings......

BayQT~

@BayQT,
Peter P's the thread moderator, so he can do it for you.

@Peter P,
From Ben Jone’s blog…
“Lenders are now adjusting buyers STATED income to whatever level they need to “QUALIFY” them for the desired loan ammount.”
Sounds like a stated-OUTCOME loan to me.

HARM, should we add stated-outcome loan to the glossary?

Sure - I'll also add "Liar Loan" as a synonym.

He can’t cover the mortgages by renting so he is forking out $1,500+/- a month to cover his costs.

sfbayqt.
Yeah--a scary scenario, and too close to home. My sister and husband recently bought a home, and now want to buy a second in C. Valley as an "investment". They both quit biotech jobs to do photography (a seasonal business), have a baby boy, and now they want to burden themselves with a 2nd mortgage. When I raise concerns about rent not covering mortgage, I get blank stares. They've already decided they have the economics figured out--and won't be talked out of this "sure thing". :(

@BayQT,
Peter P’s the thread moderator, so he can do it for you.

But I cannot touch moderated comments though... only Patrick can help.

I wrote on a thread a few weeks ago about a friend of my husband who had sold his tiny house for $450,000. We we astounded he got that kind of money, but in this market....
Anyway, the buyers are a couple that got lucky on home purchases in the last couple of years and thought they had this whole thing figured out. He's a janitor and she's a nurse. Anyway, they sold a rental and used the money to buy this house. They wanted to rent it out for about $1550 a month, but that's proving difficult because there's a house for rent down the street that's bigger and the asking rent is $1400. So now they're complaining to my husband's friend that they're negative on cash flow.

They're just NOW figuring this out. They bought the house before they calculated what they could get in rent. And really, they paid waaaaaay too much, even for this market. I don't think there's any chance they're going to get out of this without getting burned. I should ask if they're aware of the new BK laws.........

But I cannot touch moderated comments though… only Patrick can help.

Are you sure Peter? On my first post I had a comment in moderation and I was able to take it out of moderation and post it.

Are you sure Peter? On my first post I had a comment in moderation and I was able to take it out of moderation and post it.

I see. I could not take them out of moderation directly but I could delete them. Thanks.

Obviously, you are more powerful than me.

Seriously doubt that. Look at the post again where you would normally edit the comment and see if there is a button to delete or post the comment. I think that's how I did it before.

I see you figured it out. :cool:

Obviously, you are more powerful than me.

You guys are TOO funny. :lol:

They’re just NOW figuring this out. They bought the house before they calculated what they could get in rent. And really, they paid waaaaaay too much, even for this market. I don’t think there’s any chance they’re going to get out of this without getting burned. I should ask if they’re aware of the new BK laws………

Yet another example of people NOT doing their homework. And they tried this on a janitor and nurses salary? Boy, oh boy.

They both quit biotech jobs to do photography (a seasonal business), have a baby boy, and now they want to burden themselves with a 2nd mortgage. When I raise concerns about rent not covering mortgage, I get blank stares. They’ve already decided they have the economics figured out–and won’t be talked out of this “sure thing”.

Kurt....I really don't know what to say about what your sister and bro-in-law did. One would think that at most only ONE of them should have quit their job to test the waters...especially knowing that photography is a seasonal business. Good for you for trying to talk some sense into them. It's so bad to watch family and close friends do stupid things.

BayQT~

Seriously doubt that. Look at the post again where you would normally edit the comment and see if there is a button to delete or post the comment. I think that’s how I did it before.

I bow down to you both. :lol: :-P

BayQT~

It’s so bad to watch family and close friends do stupid things.

It is very bad... but I stopped trying recently. They are so leveraged that it is diffuclt to turn back anyway.

They have done some innovative work to manage that. In addition to the talent and creativity needed, that task is also capital and infrastructure intensive.
But I agree with you that the stock is overvalued at this point.

I still refuse to believe that Microsoft cannot duplicate their effort and integrate its own search in the next version of Windows.

Think Netscape! I switched to IE soon after using NS1.2. I knew the battle was lost for Netscape back then.

Speaking of switching careers...
I wonder what the newbie RE moguls are thinking right about now, that is if they're paying attention. There was a cover story in the Sac Bee earlier this week about the housing market and Placer Co. (where I live) showed that sales were down 16% from last year. So that means fewer homes selling but more realtors vying for sales. I wonder how long before it sinks in that maybe they made the wrong career choice.

I bow down to you both.

BayQT~

If you start a thread then you too will have the power to delete at will. :twisted:

If you start a thread then you too will have the power to delete at will.

If you do not start a thread you can still delete...
... your own comments before you hit the "Submit Comment" button.

One of my sisters-in-Law in SB Miami just called to brag about the $500K 2Bdm condo she and her boyfried just bought. This is the same sister who once chided my wife for "still" driving a '96 Honda Accord, while bragging about her fancy new (leased) S-class. She told me she was a little worried about it "possibly losing some value if there's a bubble."

I told her not to worry, in fact I told her to go ahead & take out a nice, big HELOC and buy some new furniture, and a plasma tv for each room. Just kidding --that's what I WANTED to tell her. Since it was already a done deal, there really any point in being critical, so I just said, "congratulations, enjoy your new condo." I'll give her this much: she bought with 10% down using a conventional fixed-rate. Unusual these days.

10-year yield back down to 4.19%.

See, the market is anticipanting a slowdown. You may win the yield bet though... although I will probably win the yield-curve inversion bet. Should we bet a modest sushi dinner?

If you do not start a thread you can still delete…
… your own comments before you hit the “Submit Comment” button.

If only more people exercised this power. :mrgreen:

An alternative meaning of NAAVLP...

National Association for Assistance to the Very Leveraged People

We will need this organization in the coming times.

All,

Here's something that I bears mentioning and that is about the new credit card minimum payment increase. That is going to go into effect in September/October and there is not that much info splashing across the media.

tinyurl.com/d69wx

Can you imagine? Supposedly, the average number of credit cards that folks hold is 10. Geez, that's sounds crazy to me....I only have $200 Macy's and $600 Visa bills, and THOSE puppies will be paid off soon. But what about those folks who hold 10-15 credit cards that are max'd or close to it? With limits of thousands of dollars? I read a story the other day where the guy was saying that he's just getting by by paying the minimum on all of his cards.

PLUS...it happens just before the new bankruptcy law. Some people will surely have their hats handed to them.

This is not good people, not good at all.

BayQT~

If you do not start a thread you can still delete…
… your own comments before you hit the “Submit Comment” button.

Very true....but the problem seems to come up with the urls, which you may not know will create the problem UNTIL you hit the button. I'm SURE I used the tinyurls before with the www...maybe not.....but I thought I was ok. :-(

Hmmm...lemme see....thinking of a topic. :-)

BayQT~

Hmmm…lemme see….thinking of a topic.

BayQT, I recommend checking back under "Lurker's Turn" if you need new ideas -that's what it's there for.

BayQT, I recommend checking back under “Lurker’s Turn” if you need new ideas -that’s what it’s there for.

Thanks, Harm....I'll check it.

BayQT~

Good for you for trying to talk some sense into them. It’s so bad to watch family and close friends do stupid things.

Thanks Sacto, I can alwayshope they're smart enough (imho) to pass on this "deal."

On topic, the new bankruptcy law is probably a good thing as it shifts the risk from institutions to individuals.

Only if those individuals can reasonably repay a meaningful portion of debt. Doubtful.

the new law certainly protects the public from idiot debtors. it is much harder to claim bankruptcy. I think Bush made a good move with this.

Hopefully, the new law wwill deter irresponsible spending.

However, if the debtors just cannot pay anything back it would be impossible to get anything from them. Unless we let them sell their kidneys... :evil:

Real Estate Does Not Go Down

There will be lot of people losing their shirts like this owing to fraudulent appraisals and over-valued properties..., thus, becoming upside-down.

BayQT~

My wife teaches high school Econ and spends a disproportionate amount of time teaching about personal finance (not supposed to be a big part of the curriculum but she thinks it’s more important). She stresses the wise use of credit so much the students get sick of the repetition. She’s also warned them all about the housing bubble, too. Some of her students are worried because their parents recently bought houses in AZ, etc.

That's a very good thing what you wife is doing. Hopefully, it will help these kids to not repeat any of the mistakes that people are making now.

BayQT~

MarinaPrime, on Aug 13 I said "The yield curve will be inverted late this year or early next year", so give it until March?

What modest sushi dinner should we bet on?

Hmm.. win I get to eat sushi, lose I get to eat sushi, not bad a deal at all. :)

Why is no airtime being given to the news that median home prices have been falling for three months, and are already down to 2003Q4 levels?

I took Home Econ in high school in Chicago circa 1960's.

BayQT~

50 is a pretty late year to be getting your RN. when i was in BS CS they told me that the job market would continue to grow for 40 years at least!

They also said telephone switch operators would grow at incredible rates... that was before automated switch boards.

Why is no airtime being given to the news that median home prices have been falling for three months, and are already down to 2003Q4 levels?

It does not matter any more... people will face reality very soon...

Where is Face Reality?