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  • On 31 Aug 2014 in Iwog Idiocy Strikes Again, mell said:

    Reality says

    You are forgetting people chase high performers. Monetary inflation and artificially low interest are what makee high beta performers, like high tech and biotech companies and real estate where they are located, into high performers, which in turn then suck in more money from the monetary inflation for stocks and real estate near those companies.

    Very true.

  • On 31 Aug 2014 in On the other hand..., mell said:

    smaulgld says

    Stocks can rise higher and longer than the experts predict

    The author's, however, rationale makes no sense

    Other stories on zero hedge make it clear

    Artificially low rates, sovereign fund, central bank and the companies themselves are the majority of buyers

    The retail investor is largely irrelevant

    The bubble pops when the artificial support is removed

    Retail may be irrelevant. but people are not good at stashing cash, they often can't help spending it. And since savings pay close to nothing thanks to ZIRP/QE, they are looking to hedge fund managers for that yield. And those managers are forced to produce that yield, otherwise they will get no business, fame or are being ripped to shreds by know-it-alls on patnet. Nobody wants to invest Peter Schiff or Marc Faber style, so retail just puts their 401Ks and extra dough into the hands of hip fund mangers chasing that yield in tech trannys and other hipster stocks - they have no choice because nobody is able to look beyond a 1-2 year timeline anymore. Thus it is possible for that bubble to propel itself much further. I have no idea where this goes from here and hedging is certainly prudent, but I don't discount DOW 20K anymore as trumpeted by Altucher long, long ago. And that would also keep housing afloat. However if housing collapses or the tech trannies correct back to sanity, then watch out below!!

  • On 31 Aug 2014 in My first real estate bear thread (ever), mell said:

    mell says

    Using New York City property sales and property tax assessment data, they found that on average, subsidized housing is associated with a small increase in neighboring property values.

    I cannot get any clearer than that. All you posted was the opinion that the conductors of the study thought of the increase as a beneficial effect, hence they started out with the negative hypothesis. The only thing you could say about this is that the increases were not significant, which is as usual in the eye of the beholder. The fact remains that there was an increase, though, which is what we were debating. I also linked another article discussing this phenomenon. Not sure what else to say. It's like talking to a brick wall.

  • On 31 Aug 2014 in Iwog Idiocy Strikes Again, mell said:

    The idiocy goes even further, everybody is fine with buying cars and other crap that instantly depreciates 1/3 and continues to depreciate to shit, but for some reason it is bad for the economy if a house depreciates and we must print ad nauseam and keep ZIRP forevah to prevent the Zombie Apocalypse. The bailouts, QE and propping up of the housing sector are nothing but prime examples of crony capitalism.

  • On 31 Aug 2014 in Iwog Idiocy Strikes Again, mell said:

    bob2356 says

    Reality says

    What makes San Francisco land price go up is the fiat money printing being pumped into Silicon Valley; once the price starts going up at higher rate than other places, it attracts greater and greater share of further excess money printing

    So fiat money printing is driving up the prices of real estate in Monaco, Vancouver, London, Singapore, Hong Kong, Geneva, Sydney, Rome, Paris, Moscow, Shanghai, Bejing, Dubai, Mumbai, Istanbul, Sao-Paolo, Cape Town? All of which are more expensive than SF. That's some pretty powerful money printing by the fed.

    Maybe places are expensive because lots of people want to live there and it's landlocked either by geography or zoning. Nah, that would be too obvious.

    I'm sure there is more than one factor at play. But let's assume the difficult zoning laws in SF and a resulting "landlockedness" leading to sky-high prices, then why on earth is an overdue correction giving middle-class earners a shot at houses again a bad thing? I mean, you already have price-accelerating factors, and then you want to print for low rates, back mortgages, add special deductions (encouraging flipping), forgive debt and so on and on to support prices even more? Makes zero sense and only benefits those who earn the biggest chunk, the 1%.

  • On 31 Aug 2014 in My first real estate bear thread (ever), mell said:

    Or you can debate that person, too. But the trend seems to be clear, nobody on the interweb has a clue besides you!

    http://www.npr.org/blogs/codeswitch/2014/01/06/260282186/eight-reasons-why-the-rent-is-too-damn-high

  • On 31 Aug 2014 in My first real estate bear thread (ever), mell said:

    http://www.nhc.org/insights.html

    Does Federally Subsidized Rental Housing Depress Neighborhood Property Values? (2005)

    Authors: Ingrid Gould Ellen, Amy Ellen Schwartz, Ioan Voicu, and Michael H. Schill

    Research Question: How does subsidized rental housing affect nearby property values?

    Results: In this study, the researchers compared sales prices of New York City homes located near federally subsidized rental housing to sales prices of similar homes located in the same neighborhood, but farther from subsidized housing. Using New York City property sales and property tax assessment data, they found that on average, subsidized housing is associated with a small increase in neighboring property values. Benefits are larger in more distressed neighborhoods. In the case of city-assisted housing, the resulting increase in property tax revenue exceeded the cost of the subsidies provided by the city.

  • On 31 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    Then you post this:

    mell says

    http://furmancenter.org/files/publications/fedrentalC_march05ffr.pdf

    Did you read the outcome? Raised property values. There's nothing wrong starting out with a hypothesis in either direction - the outcome is what matters.

  • On 31 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    The opposite is true. The fed and government work to prevent it. How else is someone who works 40-hours a week for $25 an hour supposed to buy a home worth 6 figures when all his money is going into the pockets of a rich landlord? Low interest rates and government guaranteed mortgages is the only hope that many people have.

    The pricing action in 2008 directly contradicts/refutes this.

    iwog says

    mell says

    It is proven that section 8 raises prices for rents and houses.

    Link?

    http://furmancenter.org/files/publications/fedrentalC_march05ffr.pdf

    Some discussion here:

    http://www.npr.org/blogs/codeswitch/2014/01/06/260282186/eight-reasons-why-the-rent-is-too-damn-high

  • On 31 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    It is the nature of ANY capitalist economy to separate a tiny privileged class of people who hoard all the capital from the 99% who try to scrape by with whatever the 1% will share.

    Yes. at the top is the Fed helping with this. You are looking at it from the wrong angle. It is never one or another. Sure some cities are more desirable to live in than other, but that doesn't change the fact that the Fed/govt. has been making these distortions far worse. You want real price discovery then go back to 2008 without QE. I have no doubt that eventually people would have started buying and renting again, but much more carefully and for the right price. It is proven that section 8 raises prices for rents and houses. The mere fact that you advocated the Fed/govt bailouts and QE contradicts your thesis that it is organic demand only and that the govt./Fed meddling has nothing to do with it.

  • On 30 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    mell says

    If you look at gas prices over last 10+ years and don't see inflation then you need better glasses.

    Why did you switch the conversation to inflation? You were talking about market distortions. You consider inflation a market distortion caused by the government?

    Yes, government/Fed - I use them interchangeably because they are so intertwined.

    iwog says

    You must be out of your fucking mind if you blame real estate prices on Section 8, (which most landlords wont touch) ZIRP, (in a market currently dominated by cash) MBS, (ditto) and QE which is now almost gone while rates are FALLING!

    It's not just the vouchers creating artificial demand, it's developers passing the costs on to non-section 8 residents. You don't need to resort to Austrian websites to find info about this ;)

  • On 30 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    2. What distortions? You seeing wild swings in the price of toilet paper? Cell phones? Strawberries? Lumber? Cars? The only wild swings are in consumer goods that have been commoditized so rich people can fuck with them. Oil and corn for example.

    Drugs, rents/housing, energy, some food. Technology to a much lesser extent, because it can be manufactured globally and doesn't (currently) have to abide by protectionist regulations.

    iwog says

    1. Shelter in desirable areas will always be limited by geography. Blame the government on the fact that San Francisco is surrounded on three sides by water?

    Section 8, MBS, QE, Zirp (enabling large corporations buying up blocks of RE that they would not have otherwise touched with a 10 foot pole)

    iwog says

    2. Drugs are held as a monopoly and therefore drug producers can charge whatever they want. You blame the government? You can't have a generic for a drug that is still under patent.

    Yes the government. Who is going after you if you buy a drug cheaper in another country and import it into the US? And who makes the patent laws?

    iwog says

    3. I already covered the fuckery of the commodities market. I personally increased the price of your gasoline back in 2008 and 2009. Thanks!!

    If you look at gas prices over last 10+ years and don't see inflation then you need better glasses.

  • On 30 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    A painting that costs $100 million isn't rational. It isn't supply and demand. It cannot be predicted nor can anything be said about its future appreciation or decline.

    That has nothing todo with essential goods, though. Essential goods, if left to the market forces, regulate their prices. There is only one hyped painter who can create an original. However there are tons of companies and people who can produce drugs, (generics anyone?), food, shelter, energy and so on. In these sectors it's mostly government intervention and cronyism causing the distortions.

  • On 30 Aug 2014 in My first real estate bear thread (ever), mell said:

    Call it Crazy says

    iwog says

    Are you even going to admit that your side

    Why is EVERY discussion with you about "sides"? Can't people have a view outside of politics?

    A good rule of thumb is that when the left calls you fascist and the right calls you communist, then you must be doing at least something right ;)

  • On 30 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    If we imagine a world where there is only two countries, and both countries doubled their money supply every year in a stable economy, prices would rise by 100% every year. It doesn't matter one bit if they are both printing at the same rate.

    Yes, both would experience price inflation, however relative to each other the currencies would remain stable. That's why you cannot use the dollar vs yen index and such.

    iwog says

    The United States will never experience hyperinflation under the current economic regime because demand for goods and services will instantly be met.

    They don't have to, significant or severe inflation is bad enough. I have not been advocating hyperinflation, because of the fact that demand for goods can still be met and goods can be transported swiftly these days.

    iwog says

    Are you even going to admit that your side has been horribly ignorantly wrong for three decades???

    I have always said that I consider anything 2%+ per annum significant inflation, and anything over 3% severe, simply because wages do not support that. Also I am using the EPI for everyday goods

    https://www.aier.org/EPI-Methodology-2014

    which has usually been consistently higher than the CPI and their methodology is sound. A "target inflation of 2%" is NOT good. It can be if it happens incidentally as part of an economic expansion, but as a yearly target it works against the middle class.

  • On 30 Aug 2014 in US Dollar headed upward - Goldman slashes EURUSD estimates, mell said:

    indigenous says

    mell says

    Yes. GS is usually a reverse indicator because they keep slaughtering the muppets by recommending one side while they are preparing to take the opposite side of that trade.

    They seem like real nice fellers, funny how they are so present in the white house all these years.

    Yes - nice fellas, selling AAA to the muppets while shorting the shit out of MBS - perfect posse to run the Fed and the government ;)

  • On 30 Aug 2014 in My first real estate bear thread (ever), mell said:

    iwog says

    This is why the hyperinflation

    No it's not. It's because the dollar is the world's reserve currency and because most nations/economic unions are engaged in actively debasing their currency. Severe inflation (in the case of Argentina they even call it hyper) happens regularly for smaller currencies not holding any significant status. You can glean the debasement from price inflation and golds seemingly strong resistance to drop significantly. The term hyperinflation is excessive and not very useful, I'd stick with severe/significant inflation.

  • On 30 Aug 2014 in US Dollar headed upward - Goldman slashes EURUSD estimates, mell said:

    indigenous says

    Not according to Steen Jakobsen:

    "The dollar's peaked and now's the time to short it; that's according to Saxo Bank's Chief Investment Officer, Steen Jakobsen."

    Is it possible that GS is front running?

    https://www.tradingfloor.com/posts/jakobsen-why-nows-the-time-to-short-the-dollar-1465225?utm_source=Trader%20I%20follow%20posts&utm_medium=Mail%20Notification&utm_campaign=TF_email_trader_i_follow_posts

    Yes. GS is usually a reverse indicator because they keep slaughtering the muppets by recommending one side while they are preparing to take the opposite side of that trade.

  • On 29 Aug 2014 in CA-if a woman smiles, enjoys sex with you-you still raped her, mell said:

    MattBayArea says

    There IS an epidemic of rape

    Actually it's the opposite, the rape rate has been steadily declining making all time lows year-after-year.

    MattBayArea says

    This requirement to hear 'yes' will help in cases where men force themselves upon women who are too frightened to say no

    This is utterly retarded and totally impractical. Plus, it violates the 14th. Any society defining crimes where the accused has to prove their innocence is slipping into fascism fast.

    MattBayArea says

    Changes need to be made and who the fuck gives a shit if they're perfect, if they help

    I do and everybody who has a son should. There is a reason why most bay area men are frightened pussies, too scared to walk up to a girl at a bar and ask her out, and usually bossed around and abused should they find a gf once in a while.

    I often have to look twice to figure out who's a boy and who's a girl in preschool because almost all manly behavior has been eradicated.

  • On 28 Aug 2014 in My first real estate bear thread (ever), mell said:

    debyne says

    Why not just do 50/50 in stocks/cash? That way, you have some money free to invest if stocks take a dive, but some money to ride the wave up if the theory is wrong.

    Agreed, however you have to take into account that the Fed has skewed the game so much that there are not many shorts left. And because so many wealthy and retirement funds/401Ks are simply long the index (for which they have the audacity to charge money, another middle-man skim-off), they cannot allow the markets to return to their intrinsic values because it would spark protests and ruin the 1%. There will be a point where they cannot prop it anymore without dire consequences, but they can always outlaw shorting. And they will if they have to. Don't fight the tape, err.. the Fed I mean ;)

  • On 28 Aug 2014 in STEM graduate says he can't find a job, mell said:

    Peter P says

    mell says

    Agreed. Although it pains me a bit to write Javascript jon the back-end just because node.js (no doubt a good framework for smaller projects) has become hotter than J-LO ;)

    To me, any large-scale project that uses a non-typed language or tool is suspicious.

    People have forgotten how much a well-designed type system can help with code quality and maintainability.

    Agreed. My favorites are currently Scala (though Java 8 looks pretty pretty good) and Groovy. Groovy is prob. one of the most concise languages that allows duck typing as well as strict type checking where necessary, and it has a lot of functional plus all the OO goodness.

  • On 28 Aug 2014 in STEM graduate says he can't find a job, mell said:

    drew_eckhardt says

    Hardly. There is absolutely a shortage of competent software engineers.

    Agreed.

    drew_eckhardt says

    Starting compensation packages for fresh graduates who can pass a minimal competence exam at big companies are now in the $170-$200K/year range.

    This number seems inflated. I'd say 120K, and 170K-200K for senior. Of course there are exceptions and companies which have seen crazy appreciation in their stock which can bring the total compensation much higher. As a base that number is far too high though.

    drew_eckhardt says

    Knowing Turquoise on Tracks or tomorrow's other hot new technology isn't the problem - competent people quickly pick that up.

    Agreed. Although it pains me a bit to write Javascript jon the back-end just because node.js (no doubt a good framework for smaller projects) has become hotter than J-LO ;)

  • On 25 Aug 2014 in Nearly everyone on earth is blaming the federal reserve, mell said:

    Reality says

    Whose wage growth? The real producers' or the counterfeiters'?

    That's it. Better raise the minimum wage to make up for all the counterfeiting and keep the people appeased!

  • On 25 Aug 2014 in Nearly everyone on earth is blaming the federal reserve, mell said:

    There is no contradiction between low saving rates and higher prices. In fact the delta is what's crushing the middle class. Continued Inflation has never been good for an economy, and certainly not 2%+. Inflation and Deflation kept at a stable minimum is best, they are symptoms maintaining a stable equilibrium (and can occasionally be higher). Any institution counterfeiting while aiming for a "target inflation" rate is a criminal enterprise.

  • On 24 Aug 2014 in Why I Love "Burning Man", mell said:

    Agreed. Big days where the city is suddenly empty are the best. Therefore 2008 should have kept the city in its natural equilibrium and breathing. But since the Fed/gov intervened, a lot of SF neighborhoods are suddenly suffocating again in traffic, shit, nerds, and dogs. SF is best enjoyed in peripheral neighborhoods and days where everyone is gone, such as when they are paying $300 to harass the desert ;)

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