comments by Bellingham Bill

Bellingham Bill   befriend (0)   ignore (3)   Fri, 22 Jul 2016, 6:30am PDT   Like (1)   Dislike     Share   Quote   Comment 1

The above graph is more what happens when you run a "welfare state" and enslave half the world to feed your idle capital population(s).

I hadn't made the connection, but The Hunger Games was some analogue of ancient Rome's system of exploitation.

As for Japan's baby boom, it was sharp and short, just 2-3 years in the late 40s. They actually legalized abortion to nip it in the bud for some reason (I suspect they wanted to limit the growing half-Japanese population during the American occupation). At any rate while our baby boom was going on into the 1950s, the Japanese were aborting 1 million pregnancies a year.

Is my favorite image of Japan's future demographic challenge. Doesn't look too bad. Compared to the youth-oriented 1970s and 80s, there will be a lot fewer young people, a lot more old people.

Bellingham Bill   befriend (0)   ignore (3)   Sat, 16 Jul 2016, 7:56pm PDT   Like   Dislike     Share   Quote   Comment 2

Banks say a safe mortgage is a maximum of 3 times the buyer's annual income with a 20% downpayment.

20% is in the past like balloon and assumable mortgages are now.

Now it's 5% and pay some more points to avoid PMI.

3X factor was based on the 8% mortgage rates. Now they're well under half that.

Landlords say a safe price is set by the rental market; annual rent should be at least 9% of the purchase
price, or else the price is just too high. Yet in affluent areas, both those safety rules are still being violated. Buyers are still borrowing 6 times
their income with tiny downpayments, and gross rents are still only 3% of purchase price.

Two things; 10 year rates have collapsed:

So what was 9% gold-standard cap rate is now a 2% cap rate.

Plus CPI is still the landlord's best friend:

Rents never, ever go down, not since 1930 at least. You want to own your customers by the balls, buy RE.

Bellingham Bill   befriend (0)   ignore (3)   Sat, 16 Jul 2016, 7:29pm PDT   Like   Dislike     Share   Quote   Comment 3

Our grandparents did not compete with Chinese money or the massive population we now have, nor did they prize metro-city real estate the way we do today

Heh, I'm reading some good, old histories of the original settling of Central California.

Ca. 1890 Somebody named E.B. Perrin owned land around Fresno by the square mile:

https://www.raremaps.com/gallery/enlarge/24804

His 9+ sections in the NE of that map are worth up to $5M an acre now . . .

And that's around 6,000 acres, LOL.

Somebody named Bullard bought 72,000 acres at around 25c an acre back then, around $500,000 in total in 2015 dollars.

Now 2 nice acres of it will set you back $1M . . .

https://www.redfin.com/CA/Fresno/6475-N-Sequoia-Ave-93711/home/58375844

But this was utterly useless land back then, when the town had more land (~8,000 sections within a 50 mile radius) than the people (all 3,000 of them) could use.

Bellingham Bill   befriend (0)   ignore (3)   Wed, 13 Jul 2016, 6:04am PDT   Like (1)   Dislike     Share   Quote   Comment 4

It'd be cool to have a tiny house / aka bungalow development with all the parking accoutrements being underground garages, so life there would be like living in the Middle Ages.

Bellingham Bill   befriend (0)   ignore (3)   Sun, 10 Jul 2016, 12:49pm PDT   Like   Dislike     Share   Quote   Comment 5

Similar consumer debt leverage in red, showing the timing of the Housing Bubble that gave us the Bush good times . . .

Bellingham Bill   befriend (0)   ignore (3)   Sun, 10 Jul 2016, 9:40am PDT   Like   Dislike (1)     Share   Quote   Comment 6

iwog says

mmmarvel says

Bottom line is that IF the coast cities go under ... other cities BECOME coastal cities.

No harm, no foul.

Good thing the fixed investments in urban infrastructure aren't so easily relocatable.

Excellent government Keynesian make-work program.

Bellingham Bill   befriend (0)   ignore (3)   Sat, 9 Jul 2016, 4:58pm PDT   Like   Dislike     Share   Quote   Comment 7

Scaling incomes by increase in workers in SCV shows "money density" per Patrick above would indicate a $1800/mo rent.

Thing is, people bringing in ~$140,000 can easily pay $30,000+ in rent each month.

It sucks, but what are ya going to do, live in a van??

Bellingham Bill   befriend (0)   ignore (3)   Sat, 9 Jul 2016, 4:54pm PDT   Like   Dislike     Share   Quote   Comment 8

Apple was spending $700M/yr in R&D in 2006, now it's $10B.

Last time I was in Sunnyvale I was shocked by how many office parks Apple had taken over.

I had some coworkers move jobs to Linked In in 2006, LI put in a new HQ on Mathilda not too long ago.

Ah, I see Apple took that, too

http://www.bizjournals.com/sanjose/news/2015/01/28/apple-snaps-up-two-large-buildings-from-linkedin.html

Shows that if rents were a constant % of area wages the rent would be $1600 not $2600.

The red line is the main reason rents are up so much of course. Employment up over 200,000 jobs since 2010.

Bellingham Bill   befriend (0)   ignore (3)   Sat, 9 Jul 2016, 4:35pm PDT   Like   Dislike     Share   Quote   Comment 9

I got a $181 check from the DOJ yesterday for the DRAM settlement.

Bellingham Bill   befriend (0)   ignore (3)   Sat, 9 Jul 2016, 8:54am PDT   Like (1)   Dislike     Share   Quote   Comment 10

Problem solved!

Bellingham Bill   befriend (0)   ignore (3)   Sat, 9 Jul 2016, 8:40am PDT   Like   Dislike (1)     Share   Quote   Comment 11

Great post bob, sad but not surprising you got a dislike for it.

The main economic thesis in my life is of course 'all taxes come out of rents'. I'd like to think the high-tax high-service eurosocialist paradises (Netherlands, Denmark, Norway, Sweden) give people more gov't services at less actual hit to their discretionary incomes, but as you say reality has a way of trumping theory so absent any good studies on this the best way to see if this is true would be to live in the countries for a good while.

I lived in Japan for 8 years and that gave me for a taste of the advantages and disadvantages we face here in the US.

For one, it is true if one lives in some Podunk town in a red state the cost of living can be quite low compared to e.g. Japan.

Good luck finding a job, schools, medical care, public transportation or anything outside of a Walmart and fast food, but it would be cheap.

I'm retiring next decade and am going to scout where to base myself for the last decades of my life.

I'd like to stay in the US, either in ~10,000sqft culdesac lot in a quiet corner of a decent city or up in the foothills somewhere (lakefront in Bellingham is still The Goal I guess), but ISTM every time we-the-people put conservatives in control here they just turn the screws on everyone and fuck things up.

Total debt to GDP ratio:

Conservatives are on record of wanting to eliminate PPACA and turn medicare into a voucher system. If & when they do that I'll be outta here in short order.

Economically we're not yet on an even keel here, the Miseans and the conservatives in general still want to make the ship list more, we're going to need more redistribution and government intervention in the economy, not less.

Too much of this country is still economically screwed, and we just can't keep using our DOD as a jobs program. Real DOD spending per worker:

Conservatives imagine the eurosocialists benefit from a low defense burden, but remove DOD spending from our economy and we'd crater instantly since so much of our economy is directly or indirectly dependent on this gravy train.

It'd be nice if we could replace this spending with more socially useful spending, but that's socialism and half this country has been indoctrinated to fear it.

Bellingham Bill   befriend (0)   ignore (3)   Sat, 9 Jul 2016, 1:06am PDT   Like (5)   Dislike     Share   Quote   Comment 12

Meanwhile here in the real world over 3/5 of people in the US don't have $1000 in savings

http://www.fool.com/retirement/general/2016/03/28/62-of-americans-have-less-than-1000-in-savings-her.aspx

Incomes is one thing, but something is really rotten with the US economic picture.

http://www.bea.gov/newsreleases/international/intinv/intinvnewsrelease.htm

$7.5T in collective debt and still digging the hole.

Sweden is at break-even now (NIIP as % GDP):

While Germany and the Netherlands are world-beaters:

Without question if I were entering as a newborn baby in 2016 -- of median intelligence, talent, and socio-economic position -- I'd pick to be the typical German or Swede over USAian.

Cuz the average person is pretty fucked here in the USA.

40 million people with student loan debt of $200-300/mo

https://studentloanhero.com/student-loan-debt-statistics-2016/

A healthcare system half as efficient as the eurosocialist model

Our public transit system is a big "fuck-you-get-a-car" in most places.

Now, if you're in the top 10% financially, the US is the place to be vs. Sweden or Germany. Thing is, not everyone can be in the top 10%.

Oh, yeah, let's not forget retirement:

http://www.marketwatch.com/story/the-typical-american-couple-has-only-5000-saved-for-retirement-2016-04-28

The average person only has Social Security, assuming the GOP doesn't BK it this decade or next. After all, the $2.7T in special treasuries it's been buying since 1983 isn't real money

http://thinkprogress.org/economy/2015/10/27/3716562/boehner-budget-deal-social-security/

Housing is the key sector not really touched on by the Mises dude making that dodgy post. Generally the better a place is to live, the higher the housing costs are, and this holds for Sweden as well as Tennessee.

Germany is an outlier here, they have less home ownership but a cheaper housing market for some reason.

But if you don't own your own home in the USA, you're fucked too.

http://blogs.wsj.com/economics/2016/04/28/u-s-homeownership-rate-falls-again-nearing-a-48-year-low/

Mises guy probably didn't adjust for actual time worked, either.

Germany has 34 vacation days per year:

Bellingham Bill   befriend (0)   ignore (3)   Wed, 6 Jul 2016, 6:11pm PDT   Like   Dislike     Share   Quote   Comment 13

Adds the real prime rate in green, for the timing of the Fed tightening

Bellingham Bill   befriend (0)   ignore (3)   Wed, 6 Jul 2016, 6:07pm PDT   Like   Dislike     Share   Quote   Comment 14

iwog says

f you count women as participating in the expanding work force, there's no reason whatsoever why the 1970s and early 1980s should have been an economic quagmire

Shows real GDP was up 5% during the Carter years, until Volcker got going:

https://fred.stlouisfed.org/graph/?g=5fzc

Shows the tight correlation between recessions and consumer credit contraction

(Red is real consumer debt YOY growth)

Bellingham Bill   befriend (0)   ignore (3)   Mon, 4 Jul 2016, 5:38pm PDT   Like   Dislike     Share   Quote   Comment 15

iwog says

2. The coming deflationary depression which will drive down prices of all residential real estate.

I had half a foot in this camp 10 years ago but I'm out now.

I thought we might follow Japan, being so over-indebted, but as you know our BK rules are very debtor-friendly.

Plus their population is falling and median incomes are flat. Ours keep going up somehow.

And our Fed was willing and able to take their balance sheet from $800B to over $3.5T.

Corporate profits rebounded very nicely since 2010 and looking at the latest Z.1 I see total household assets are up $20T (40%) since 2010 and consumer debt is up 5%.
Total mortgage debt is still at 2011 levels. Consumer credit is up 8% but student loan debt has gone from $850B to $1.35T since 2010.

I just don't see what cylinder is going to throw a rod this time, except if the GOP retains control of Congress but Hillary wins -- in this hell-future we could have GOP shitfits that make 2011 look like the Tip & Ronnie show.

Bellingham Bill   befriend (0)   ignore (3)   Sun, 3 Jul 2016, 5:44pm PDT   Like   Dislike     Share   Quote   Comment 16

Real median driver earnings 2000-2015

better try driving for uber

Bellingham Bill   befriend (0)   ignore (3)   Sun, 3 Jul 2016, 1:21pm PDT   Like (1)   Dislike     Share   Quote   Comment 17

In ten years we'll be at 250.

That's arguably a cooler milestone than 200 and I remember the bicentennial stuff pretty clearly.

Ironically that's exactly when my general monitoring of the world kicked in -- the late 60s stuff, Nixon, hell even us getting booted out of Saigon in '75, no memories.

But the party we threw in '76 was pretty cool.

Wonder what the nation will look like then. Probably more and more BS, not less.

By 2026 I'll either be back in Japan permanently, on a boat, or laying low on some rural acreage within striking range of a Trader Joes.

Theoretically I could do all 3 I guess, buy a big enough boat that can make the passage to & fro Japan every year. Stopping off at Lahaina might be a good thing, too . . .

Sorry for the derail.

Bellingham Bill   befriend (0)   ignore (3)   Sun, 3 Jul 2016, 8:39am PDT   Like   Dislike     Share   Quote   Comment 18

Logan Mohtashami says

They said the same thing about technology in 1970's - 1990's the future of human displacement in mass force

Yeah I got a FRED graph for that, too:

Before GUI PCs one out of 60 working-age people had info jobs.

Between Windows 95 and the Dotcom crash this rose to one out of 50.

Now it's one out of 75

Bellingham Bill   befriend (0)   ignore (3)   Sun, 3 Jul 2016, 8:34am PDT   Like   Dislike     Share   Quote   Comment 19

Heraclitusstudent says

My take is capitalist is doomed. The norm will be not to work.

Actually that's what capitalism is -- the legal framework that allows people to receive income without working.

In the future we're just going to even this out a bit more . . . like the Scandinavians.

Or we can go the Latin American route, the wealthy have their ghettoes and 95% are outside the wire.

Bernie Bros want the former, the GOP is fine with the latter, as it's good business for the NRA.

Bellingham Bill   befriend (0)   ignore (3)   Sun, 3 Jul 2016, 8:29am PDT   Like   Dislike     Share   Quote   Comment 20

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