justme's comments

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justme   ignore (0)   2007 Jun 17, 10:55am   ↑ like (0)   ↓ dislike (0)     quote        


I made it in, finally. Thank you. It is unfortunate that registration is needed. I wonder if there are any other methods that may work. In some sense, in the original system, the combination of your username and your email address was your authentication, because nobody else would know the email address associated with the user name.

Perhaps one way of avoiding spammers is to require that any new user/email combo used to make a post goes either into moderation, or requires a loop through an email exchange, which ever comes first. Presumably that would be enough to stop spam.

I freely admit I know nothing about how Wordpress works, so my suggestions may not work or apply . I just got a bit frustrated with the email problems of the registration process, although likely none of Wordpress's fault.

justme   ignore (0)   2007 Jun 17, 11:04am   ↑ like (0)   ↓ dislike (0)     quote        

Cash is king?

I'd like to pose to the financial types on the blog a question about cash management. Since we are all more or less sitting out the bubble, we need a place to park (some of) the downpayment while we wait.

Now, various internet banks and such will give you about 5% APY, which is decent but not stellar. Recently, a largsih broker that I use recommended a place called "thereserve", which links up to my account and pays something like 5.5%.

My question: What do the financial types here think about this outfit? Is it likely that they are loaded to the gills with MBS, CDS and other toxic waste?
I'm asking from the perspective of conserving the principal, here.

justme   ignore (0)   2007 Jun 19, 10:01am   ↑ like (0)   ↓ dislike (0)     quote        

Wait a second. I'm trying to parse what the "agency offer' really means. I think it simply means that your listing is locked in with the agent until 2009, because practically speaking, nobody is going to want to wait that long (2 years) before they sell.

The whole scheme is just a roundabout way of extending the listing contract period by some huge and non-standard amount. Once 2009 rolls around, maybe the agent/agency can get out of the contract because they have an inspection contingency, a loan contingency or some such. That makes the offer at 2.19M (or whatever) not worth the paper on which it is written,

I don't think it is a coincidence that 3% of 2.19M is 65k. Basically, the listing broker is locking up their rights to a sale commission for 2 years.

Am I wrong?

justme   ignore (0)   2007 Jun 19, 1:57pm   ↑ like (0)   ↓ dislike (0)     quote        

I just can't see the agent actually following through and buying the property. It doesn't make any sense for them to buy something that nobody else wanted, and at a higher price. Realtwhores may be scum, but they are not that stupid, at least not with their own money.

I think the "agency offer" is made when they realize that the sellers wishing price is too high, it will take > 3 months for the seller to come to his senses, and they intend to lock the listing/commission up for longer than that.

Meanwhile, in the unlikely event of a sudden market turnaround, they have a "call option" to buy the house at a discount and flip it. If the market continues to go south until the option expires, they will invoke some contingency and get off the hook.

If the realtor *really* wanted to buy the house, they would buy it NOW for 2M, maybe discount heir commission to beat out other buyers. I don't think price collusion has anything to do with it. They want a transaction to happen, they don't care about the price. They only care about increasing the prices when it helps them to create panic buying, (read: more transactions).

justme   ignore (0)   2007 Jun 19, 4:45pm   ↑ like (0)   ↓ dislike (0)     quote        

The whole "agency offer" discussion also brings up the question of of how to deal with "insider transactions", and transparency in general.

I think there ought to be much stricter rules about reporting of real-estate transactions, and equally strict associated penalties for those who break the rules.

What is needed is

--rules about accurate reporting of sales and prices
--rules about open disclosure of all bids, to prevent fake bids
--mandatory reporting of "industry insider" selling and buying activity
--reporting of "off-market" transactions
--auctions should have published minimum bids

Total transparency is the goal. The stock market is much more transparent, although there is plenty of loopholes and shenanigans still going on there.

justme   ignore (0)   2007 Jun 20, 1:42am   ↑ like (0)   ↓ dislike (0)     quote        


got a pointer to such a study about Europe?

Peter P, I can't help but think that you live in some libertarian fantasy world.

Zero capital gains tax (and flat income tax) will do nothing good for society as a whole except conserving the wealth of those that have it already, and make it near impossible for anyone else to obtain wealth. Sitting around on ones ass owning stuff will be the only way to be wealhty.

Of course, it is pretty clear that what "conservatives" want to "conserve" is exactly that: The wealth and property of those who have it already.

justme   ignore (0)   2007 Jun 20, 9:31am   ↑ like (0)   ↓ dislike (0)     quote        

Way to go. HARM. Your description of the situation is spot on. Branding your ideals as a

" populist “tax-the-rich-and-give-to-the-poor” system"

is just branding it, and nothing else. The conservatives always try to confuse the issue by casting aspersions on you.

justme   ignore (0)   2007 Jun 20, 3:28pm   ↑ like (0)   ↓ dislike (0)     quote        

Peter P.

> I agree that a universal health care system is necessary. However, I

I'm glad to hear that from you. I think you are a person with high ideals.

justme   ignore (0)   2007 Jun 20, 3:30pm   ↑ like (0)   ↓ dislike (0)     quote        


>Eventually, the prosperous and happy descendants rename Laissez-Faire >Village to ‘Social Democracy City’. The end ;-)

A nice fable of how history tends to develop if no rules are followed

justme   ignore (0)   2007 Jun 21, 5:02pm   ↑ like (0)   ↓ dislike (0)     quote        


I don't know when HeadSet was in Europe and checked out "cars with no safety glass". Maybe 1955? I think Volvo has had laminated glass it since 1960 or so.

It seems that the general argument goes something like, "our rich people are richer than your rich people, therefore our system is better". Duh.

justme   ignore (0)   2007 Jun 22, 2:33am   ↑ like (0)   ↓ dislike (0)     quote        

>The “our rich are richer” was not even implied, and is actually counter to my >point. DUH.

I skipped a step. I should have said "we have more newly rich people than the Europeans, and ours are richer, too"

I think that the original argument was that there is "better opportunity for social mobility" in the US. In other words, it is easier to start from near scratch and become a gazillionaire in the US. Or just move up a few steps.

So let us try that one instead. The reason there is less social mobility in Europe is that there is fewer and less separated social strata to "move up" into. Also, people feel less of a burning desire to do so, because being middle class or less in Europe is not all that bad.

The problem is that most Americans never escape poverty and strike it "rich". The system does not work that way. The ones that strike it reach are highly educated and motivated immigrants, or rich kids like Bill Gates that leverage their parents social position into riches. But even Bill Gates is a Black Swan event. He is literally one in 300M. My point is that an argument (not yours) like "we create more newly minted millionaires per capita than any other country" does not mean that the US has "more opportunity" or is a "better society". It just does not mean that, unless your metric is exactly what I said:" "creates more newly minted milllionairs per capita than almost any other country".

I don't think that is a good metric of overall societal quality. And we may disagree on that.

justme   ignore (0)   2007 Jun 22, 9:21am   ↑ like (0)   ↓ dislike (0)     quote        


I know. I hate Your Freedom, too. At least that's what someone said :).

justme   ignore (0)   2007 Jun 25, 5:37am   ↑ like (0)   ↓ dislike (0)     quote        

Lereah-lite is starting to show signs that he has been learning from his former master:

“‘The market is underperforming when you consider positive fundamentals such as the strength in job creation, economic growth, favorable mortgage interest rates and flat home prices,’ said Lawrence Yun, the Realtors’ senior economist, in the report. ‘It appears some buyers are simply waiting for more signs of stability before they get serious about getting into the market.’”

In other words, the problem isn't that housing prices are totally out of whack relative to fundamental economic considerations. The problem is that the prices "flattened out" and lack of "signs of stability". As you can see, the mantra still is that prices can only go UP, and the P/E (price./rent equivalent) does not matter. Larry-boy, you would have made David Lereah proud.

justme   ignore (0)   2007 Jun 28, 12:35am   ↑ like (0)   ↓ dislike (1)     quote        

Astrid and HeadSet,

I'd agree that it is an age old tradition to BYOB when heading for Scandinavia,
or in more rural areas, perhaps have connections with a local "entrepeneur".

As for beer prices, I'd think you could get a pint for about $8-9, but in a hotel
bar it might be the $14 that HeadSet experienced in '93. I think competition has increased since then. Generally speaking, don't be surprised if consumables are about 2X US prices for comparable items, but it can be less as well if you shop around a little.

justme   ignore (0)   2007 Jul 1, 8:05am   ↑ like (0)   ↓ dislike (1)     quote        

After reading the various posts about the "section 8" program, it occurred to me what is going on:

Section 8 is a scheme for transferring tax money from the middle class to the property owning class, under the guise of helping the poor.

This is not a "welfare" program, but rather similar to a "corporate welfare" program, except it is more of an REIC (real estate indusrical complex) welfare.

If it was a welfare program, the money would go directly to the poor, and they would use it to BUY property, not necessarily in the same geographic location where they currently are living under the program. Section 8 creates a permanent and immobile underclass that serves the property owning class at the expense of the taxpayers

justme   ignore (0)   2007 Jul 1, 8:20am   ↑ like (1)   ↓ dislike (0)     quote        

(Wow, the new site software is fast. I hit the wrong button and it posted my text in a flash, before I could stop it).

In conclusion, section 8 gets a bad rap for being a "welfare" program, whereas in reality it is a subsidy program for slumlords.

justme   ignore (0)   2007 Jul 1, 9:47am   ↑ like (0)   ↓ dislike (0)     quote        

FAB, I'm not going to disagree with you. I think a lot of "government programs" are just corporate welfare in disguise.

What I don't understand is how the right-wing spin machine manages to hide this fact from the general public, while simultaneously blaming the supposed poor recipients of the benefits of the program. It is quite feat, really.

And in the case of the ICBMs, blaming the Russians for the expenditure, while getting 25% bang for each buck given to the contractors.

The problem with US government isn't that it is not run enough like a private enterprise, it is that it is run TOO MUCH like a private enterprise.

justme   ignore (0)   2007 Jul 1, 9:51am   ↑ like (0)   ↓ dislike (0)     quote        

Looking at it another way: This country seems to be chock full of people that think that the gub'ment is ineffective and wasteful, etc, etc, etc, and should be shut down.

No shit! They are being ineffective and wasteful because some frighteningly large percentage of the tax revenues are being used to line the pockets of private corporations, instead of benefiting the general public. It is all the contracting that causes the waste, not necessarily the programs themselves.

justme   ignore (0)   2007 Jul 1, 2:51pm   ↑ like (0)   ↓ dislike (0)     quote        

Brand, I think it is a problem that the people who rig/game/exploit the system do not get branded as lazy, but those who get scammed do.

Headset, good explanation of the (official, stated) intent of Section 8. I guess we have seen again how easily the intent of the system can be perverted.

Bap, could not agree more about cracking down on abuses.

It bothers me that it is the "government" that always gets the bad rap, and not the people stealing the money.

justme   ignore (0)   2007 Jul 2, 3:54am   ↑ like (0)   ↓ dislike (0)     quote        


I think I've seen a few of those fake "sale pending signs", then "sold" , up for 2-3 months

And then the same car shows up in the driveway again. Nice.

justme   ignore (0)   2007 Jul 3, 1:55am   ↑ like (1)   ↓ dislike (0)     quote        

Right on, Astrid. Hand me some foil, too. The 1930s may be coming back. That can only mean one thing: A new generation of baby boomers once the dust settles ;-). Everyone get ready. I can dig the idea of an illegal immigrant presidential pardon, too (for its ballsy creativity, not for the substance of it),

More seriously, the word "conspiracy" was introduced twice in this thread, both times by Brand, essentially in the context "stop invoking conspiracies".
Well, nobody was invoking them. People were just saying that the government is in bed with business, big and small, wasting tax funds in the process.

justme   ignore (0)   2007 Jul 3, 1:55am   ↑ like (0)   ↓ dislike (0)     quote        


>2) somehow get her to become a single mom, possibly with more than 1 kid

Maybe K-Fed can be pressed into service?

justme   ignore (0)   2007 Jul 3, 2:01am   ↑ like (0)   ↓ dislike (0)     quote        


Lots of activities relating to "blight" and "redevelopment" and "eminent domain" are just thinly veiled attempts at getting public entities to confiscate land and handing it over to some other private owner. It is almost funny how it is usually some rich developer that benefits, the kind of person that is adamant about typical "conservative values" suach as low taxes and (ahem) strong property rights.

justme   ignore (0)   2007 Jul 4, 2:20am   ↑ like (0)   ↓ dislike (0)     quote        


Those are very good points indeed.

Fundamentally I agree with Patrick that the mortgage deduction is a housing price inflation driver. But the fact that a landlord (classified as a "business" ) will be able to deduct, no matter what, is a big downside to disallowing the owner's interest deduction. The owner interest deduction is a big "equalizer" between business owners and personal owners.

I think it is worth keeping.

justme   ignore (0)   2007 Jul 4, 5:58am   ↑ like (0)   ↓ dislike (0)     quote        

Flat income tax, national sales tax, consumption tax only......

Good grief, now I'm really starting to feel that a tin foil hat would do some good.

For the record, tax that penalizes a private jet is not a tax on abundance, it is a tax on FREAKING WASTE!! I don't give a rats ass whether it is "an important business tool".

Abundance is what we will have if we do not waste resources. Abundance does not mean to spend it like there is no tomorrow, abundance means to preserve so that future generations can also enjoy it.

And I find myself disagreeing with Peter P yet again, as is the case maybe 90% of the time.

justme   ignore (0)   2007 Jul 4, 6:00am   ↑ like (0)   ↓ dislike (0)     quote        

"No oil left behind"
--could be a good slogan for US energy policy and practice

And I didn't make it up -- it was already on google, probably soon after the "no child left behind" law got enacted :),

justme   ignore (0)   2007 Jul 4, 4:26pm   ↑ like (0)   ↓ dislike (0)     quote        

>Besides, what is wastage? For the same thing, some may call it excesses

The waste I'm talking about is mainly oil consumption. A small business jet burns kerosene (jet fuel) to the tune of something like 1 mile (*) per gallon, for 1-4 passengers, compared to flying coach at 50-100 mpg per passenger (100mpg== boeing787). It is hugely wasteful. The resources being spent on building the jet could also be spent better elsewhere. Most business jets are just genital extenders and serve no practical purpose other than massaging big egos. Much like Hummer cars in that respect.

(*) HeadSet or someone else may have the right background to provide some accurate consumption numbers. My small jet estimate is just an estimate using some wikipedia info about a Cessna Citation small jet.

justme   ignore (0)   2007 Jul 4, 4:32pm   ↑ like (0)   ↓ dislike (0)     quote        


Yeah, Friedman was a total wank. Typical theorist that either didn't understand, did not care, or perhaps _wanted_ the practical consequences of his idealized theories. Of course, the laizzes-faire right-winger types are more than happy to put Friedman on a pedestal and invoke his theories when they can smell a tax break for the rich coming out of it.

justme   ignore (0)   2007 Jul 5, 1:32am   ↑ like (0)   ↓ dislike (0)     quote        


EXACTLY! Why do CEOs need to jet around when they can video-conference. The answer is "to impress people" and "to be exclusive".

The emperor has no clothes.

justme   ignore (0)   2007 Jul 5, 1:41am   ↑ like (0)   ↓ dislike (0)     quote        


What other Great American Oil-Burning Industry got destroyed by "class warefare"?

I was thinking NASCAR, but they still seem to be driving around in circles every weekend when I flip through the channels...

justme   ignore (0)   2007 Jul 6, 2:35am   ↑ like (0)   ↓ dislike (0)     quote        


>How about also taking away the deduction for property taxes?

For this zinger, I predict the "no-double-taxation crowd" will be coming after you with a flamethrower or worse :). Actually, I don't think this is a good idea,
again because it creates an advantage for businesses to own a home relative to an individual homeowner. If you are a business, you can always pay anything with pre-tax income. That is pretty much the defining characteristic of a business in the US, if you ask me.

justme   ignore (0)   2007 Jul 6, 2:46am   ↑ like (0)   ↓ dislike (0)     quote        


Thanks for the numbers on airplane MPG. It struck me about a year ago that too little was known about the energy effectiveness of air travel, and I have been trying to calculate the MPG/passenger of a 737,. 747, 787 and so on. You can calculate some pretty good estimates using various consumption figures that are available on the web, wikipedia et al.

One limiting aspect of figures is that they tend to be "cruising speed" numbers. I have not been able to find good numbers for the takeoff/climb portion of a flight. It must be significant, especially for shorter flights. After all, it takes quite a bit of work to lift 100ton of airplane to 10km altitude, and the process is probably quite ineffective relative to cruising, apert from the pure consideration of potential energy. Do you have any KC135 numbers for this portion of the flight?

Another aspect of airplane travel is that although 50-60mpg/passenger sounds pretty good, people tend to fly much farther than they drive.
Also, a car that gets 30mpg will get 60mpg/passenger if you have two passengers.

justme   ignore (0)   2007 Jul 6, 2:50am   ↑ like (0)   ↓ dislike (0)     quote        


I think the "handshake/face-to-face business meeting" has its place. I
just don't think anyone needs to do this so often that flying commercial
is a real problem. There are notable industry leaders that insist on
flying coach. John Chambers of Cisco is one of them, and I think his
company has been doing quite well over the years.

justme   ignore (0)   2007 Jul 6, 6:47am   ↑ like (0)   ↓ dislike (0)     quote        


That's really cool!

justme   ignore (0)   2007 Jul 27, 5:01am   ↑ like (0)   ↓ dislike (0)     quote        

Slightly OT, but let us all keep in mind that the Dow 30 is about as accurate an indicator of stock market value as the current median sales price is of housing value. And we all know how accurate that is.

Both measures however have the property that the MSM and the average person seem to take them as the gospel about the markets.

justme   ignore (0)   2007 Jul 30, 4:45am   ↑ like (0)   ↓ dislike (0)     quote        


The reality distortion field has taken over. Ask her if there will be any shared
*de*preciation also, and on what time scale, and by what criteria.

justme   ignore (0)   2007 Aug 10, 5:48am   ↑ like (0)   ↓ dislike (0)     quote        

Can someone deconstruct the concept of "injecting liquidity" for me?

The news is full stories about French, Canadian, US, Australian central banks "injecting liquidity". From what I have seen, it amounts to having a one-day "sale" on loans at a lower interest rate than the discount rate or federal funds target rate or whatever.

Do any of the experts care to correct me or further illuminate the concept?

If my explanation is essentially correct, how does "injecting liquidity" differ from "temporarily reducing interest rates, and without giving official notice".

justme   ignore (0)   2007 Aug 10, 9:12am   ↑ like (0)   ↓ dislike (0)     quote        

Good explanations, everyone. It seems that these short term (3-day?) loans can have many uses.

SP, can you elaborate on why a mortgage issuer cannot "continue to carry them on their books"
without getting a loan? Does this have to do obligations with respect to a third party, such as a margin call that needs to be fulfilled, and otherwise could not be fulfilled without selling of the holdings (which could lead to panic selling)?

I know what a margin call is for a retail investor such as myself, but what is the margin call concept for a mortgage broker or a bank? I'm imagining something like the following:

ACME Mortgage Co. gets formed and capitalized with $100M. ACME then proceeds to borrow $900M by issuing MBS paper, and then lends out $1000M worth of mortgage money. At some point, the loans starting to go bad and the (estimated,expected) losses start to near the $100M capital of the firm. At this point, Wall Street firm XYZ that bought the MBS paper issues a margin call and say they want (some of) their money back, and pronto.

Is this roughly how it works? Then uncle sam steps in with a short term loan (injects liquidity) so that the fire sale can be postponed and be made into an "orderly" sale. Hence the mantra from the fed about "preserving orderly operations of the financial markets".

justme   ignore (0)   2007 Aug 10, 9:17am   ↑ like (0)   ↓ dislike (0)     quote        


How can one watch the Federal Funds rate in real time?
(our last two posts crossed, thanks for the information)

justme   ignore (0)   2007 Aug 10, 1:51pm   ↑ like (0)   ↓ dislike (0)     quote        


I'd recommend to everyone to follow that link you posted!

There is an email subscription service that will provide
daily updates on what the NY Fed is doing.

It looks like the NY Fed gave 3-day (weekend) loans against $38B worth of MBS today!!!!