patrick.net

"Conservative fiscal policy is for losers"

Yup, it is interesting that so many people think this way, and yet everyone I know and talk to that has any sort of education in finance/economics almost automatically becomes a fiscal conservative because they both learn to understand the risks of excessive leverage and the long-term reward that conservative fiscal policy brings. I never thought I'd say it, but I truly miss the "old-school" Greatest Generation Republicans. It seems that the fiscal conservatism they espoused has fallen by the wayside of American Politics. And I'm sorry if I've offended any Boomers that also feel this way with my ranting, but I am deeply discouraged with the fiscal policies of the Neocon Boomers. As a member of Gen Y, they are mortgaging MY future so they can have their cake and eat it too right NOW, and naturally that really pisses me off. So I appologize to you minority of responsible Boomers--I understand you must be very lonely as is since there's so few of you. :)

Wow, lots of ideas to digest on this board in so litte time. DinOR, I guess I owe you a response:

"Many of the investment vehicles you talk about simply aren’t allowed in retirement accounts, period. Company sponsored or otherwise. Even if you took your rollover to E-Trade you can’t margin it. Covering a call would constitute an excess contribution. Can’t short either, downside can be unlimited. I’m not unaware of the alternatives you discuss it’s just that there is a reason they’re not allowed in retirement accounts"

I rolled a 401K into an eTrade account. I don't use margin. Most of my money is in CDs. I also own a mutual fund of gold mining companies and the metal. I've done well. I've done well in ARTIX, an international growth fund. I do not trade. I am placing hedged bets on macroeconomic scenarios that I believe are likely based on research. In my investing, I look to avoid the worst possible outcomes, while making money. I plan to accumulate into energy because I use energy (so do you), so I win if it goes up or down. I also think that it is going significantly higher over the next decade or more. My purchases of gold and holdings of foriegn equity insure the value of my dollars from inflation and dollar depreciation. Do not assume that you know my objectives or my view of risk. I am more than willing to tolerate fluctuations in commodity prices, because I believe that they must go higher, over the long term, that the S&P and housing markets must come down. Helicopter Ben must print money, and the dollar must slide as this happens. If I'm wrong, I'm wrong. I'll be fine. I do not have one penny of debt. I no longer own a home, preferring to rent a great house with a hot tub and pool for cheap. I own a used Acura and Honda Accord--in cash. I just closed an 8 figure deal today at work. (yes, 8 figures). I will put my bonus check in the bank when I get it.

BTW, I do not make any mental distinction between my 401k, my eTrade IRA, my brokerage account, or my ample checking/savings. I look at the choices availble (which are pitiful in my 401k at work) and allocate capital based on tax advantage. I manage my entire net worth as a single portfolio, NOT as individual portfolios. I am obessed with evaluating risk, preventing the worst possible outcomes, and preserving the real value of my capital. And I want a little growth while I am at it. My wife and I are allergic to spending money, and we seek to preserve and grow our wealth. The concept of "Saving for retirement" is for people who lack the focus to become wealthy through hard work over time.

As for what congress intended, I DO NOT CARE. I will use tax law to MY ADVANTAGE to grow MY WEALTH. What congress wants or what other people do is NOT MY PROBLEM.

Wow, that felt good. Did the "release" come across..........

Wow, lots of ideas to digest on this board in so litte time. DinOR, I guess I owe you a response:

"Many of the investment vehicles you talk about simply aren’t allowed in retirement accounts, period. Company sponsored or otherwise. Even if you took your rollover to E-Trade you can’t margin it. Covering a call would constitute an excess contribution. Can’t short either, downside can be unlimited. I’m not unaware of the alternatives you discuss it’s just that there is a reason they’re not allowed in retirement accounts"

I rolled a 401K into an eTrade account. I don't use margin. Most of my money is in CDs. I also own a mutual fund of gold mining companies and the metal. I've done well. I've done well in ARTIX, an international growth fund. I do not trade. I am placing hedged bets on macroeconomic scenarios that I believe are likely based on research. In my investing, I look to avoid the worst possible outcomes, while making money. I plan to accumulate into energy because I use energy (so do you), so I win if it goes up or down. I also think that it is going significantly higher over the next decade or more. My purchases of gold and holdings of foriegn equity insure the value of my dollars from inflation and dollar depreciation. Do not assume that you know my objectives or my view of risk. I am more than willing to tolerate fluctuations in commodity prices, because I believe that they must go higher, over the long term, that the S&P and housing markets must come down. Helicopter Ben must print money, and the dollar must slide as this happens. If I'm wrong, I'm wrong. I'll be fine. I do not have one penny of debt. I no longer own a home, preferring to rent a great house with a hot tub and pool for cheap. I own a used Acura and Honda Accord--in cash. I just closed an 8 figure deal today at work. (yes, 8 figures). I will put my bonus check in the bank when I get it.

BTW, I do not make any mental distinction between my 401k, my eTrade IRA, my brokerage account, or my ample checking/savings. I look at the choices availble (which are pitiful in my 401k at work) and allocate capital based on tax advantage. I manage my entire net worth as a single portfolio, NOT as individual portfolios. I am obessed with evaluating risk, preventing the worst possible outcomes, and preserving the real value of my capital. And I want a little growth while I am at it. My wife and I are allergic to spending money, and we seek to preserve and grow our wealth. The concept of "Saving for retirement" is for people who lack the focus to become wealthy through hard work over time.

As for what congress intended, I DO NOT CARE. I will use tax law to MY ADVANTAGE to grow MY WEALTH. What congress wants or what other people do is NOT MY PROBLEM.

Wow, that felt good. Did the "release" come across..........

I have to apologize for the length, but the voices in my head all demand equal air time, and they plot against me if they don't get it. I'll try to keep it shorter.

RE: efficient markets. Is anyone out there a fan chaos theory? You can make money because you are a PARTICIPANT in the market. The "Invisible Hand" is the pattern that emerges as individual participants freely interact, governed by the same rules, but different interpretation of the same data. Your action and the action of others, in aggregate IS the efficient market. Wait, I was supposed to keep this short, wasn't I? Shit!

-D

If you thought the Housing Bubble was scary, wait until you see this puppy!

http://www.lifeaftertheoilcrash.net/

YIKES!

Let me repeat! RECKONING! It's gonna be a RECKONING! I've had a big mortgage that I couldn't pay before (because I was sitting on my dumb ass unemployed). It SUCKS! People will be reminded every month that they are SCREWED when they can't pay the bills. IT SUCKS! Believe me. And don't go thinking that you can stick it out. Life does not always bring roses. You CAN get worse than your worst case scenario. AND IT SUCKS! Believe me. There, that was shorter. The voices are at bay.

The BA? Paved with GFB, gold fucking bricks, Research? Only CS. Fuck Materials, Electrical, Mechanical. This is what more than all else what I do not miss about the BA.

Jack. Dude. You miss read my friend. The only intangible in California is the people, well, at least back in the day. People like you. As far as the view, water, ocean etc, these are all "tangible" and this is what the carpet baggers are paying for. The problem with your comments is that there only purpose is to illustrate just how much we've lost. Thanks though. Old, good, hippies are hard to find. Merry Holikwanzabong my friend. :)

Who stole Venus D'Milo's arms?

Anybody on here over 30 or 35 years old, have lived in the Bay Area for over 5 years, and rent? I’m just wondering how you guys reveal to people when they ask rent or own? I have lived here for 4 years now, and will be turning 30 next year.. so, i will be in that situation soon.

I honestly do want to buy next year and not wait another 5 years. I’m sick of it.

I have a similar situation. How I reveal to people when they ask? Just answer! I really do not give a damn what people think. Why should you care? :)

RE: efficient markets. Is anyone out there a fan chaos theory?

I did look into the chaos theory a while a go. It was was too chaotic. :)

Now, I just see the market as an expression of human psychology. The effects may be chaotic, but I am unable to understand it that way.

BTW, have you read "The Misbehavior of Markets"?

But spending $10,000 to faux paint perfectly nice kitchen cabinets is never a sign of finacial good sense.

I will only accept a real estate crash if faux paint crashes with it. That's my offer; take it or leave it.

Question:

With all of the outsourcing of jobs overseas, and businesses moving to more tax-friendly locations such as Nevada and Texas, is Silicon Valley
doomed to revert back to it's pre high-tech boom status?

Say, as it was around the early late 60's & early 70's before it radically took off?

Or will the brain trust, university research centers, and desireable living conditions keep it as a high-tech hub?

I think theoretical physicist Michio Kaku said something to the effect that Moore's law, coupled with cheap computing capacity/chips will turn it
into a ghost town, or something along those lines.

Just wondering what people think the fate of the Valley is. I grew up in San Jose, late 60s to the late 90s, though I live in Phoenix now.

Question:

With all of the outsourcing of jobs overseas, and businesses moving to more tax-friendly locations such as Nevada and Texas, is Silicon Valley
doomed to revert back to it's pre high-tech boom status?

Say, as it was around the early late 60's & early 70's before it radically took off?

Or will the brain trust, university research centers, and desireable living conditions keep it as a high-tech hub?

I think theoretical physicist Michio Kaku said something to the effect that Moore's law, coupled with cheap computing capacity/chips will turn it
into a ghost town, or something along those lines.

Just wondering what people think the fate of the Valley is. I grew up in San Jose, late 60s to the late 90s, though I live in Phoenix now.

Oops, double post...

correction: "Say, as it was around the late 60’s & early 70’s before it radically took off?"

I guess it’s going to take a state of emergency declaration from the White House before anything is done. Maybe.
This is not a good thing to hear right now, this levy situation. There is a long storm track developing that has the potential to dump plenty more rain on SF & SCTO this week...could be some hydro issues.

(But of course even with the handful of computer models to choose from, >24 hr forecasts are still 50/50 :) )

Re: Ha Ha's post at 9:15 AM, I saw a similar article in CNN.com this morning, except cnn said that it got its data from the census bureau

http://money.cnn.com/2005/12/23/news/economy/newhomesales/index.htm?cnn=yes

Looking at the graph on the right side of the article made me think, were there similar declines in new home sales during the same period in 2003 and 2004? The article said its the largest decline in a decade, but are there declines every year from Oct-Nov? The number of new homes sold in Nov 2005 is really no less than Dec 2004, so what's the dif? I get a feeling it was an unusually large decline since Oct was abnormally strong. Not that I mind or anything. I'm really glad things are slowing down.

All y'all seem well educated and informed, so I wonder if anyone has kept track of the data for this preceding 2005? If there is a website that has the info, that would be great.

What I'm really hoping is that there are usually some declines in the late fall, but this one is so large it will precipitate less buying through the spring and summer of next year.

"so I wonder if anyone has kept track of the data for this preceding 2005?"

Here's a site that tracks MLS listing data:

http://www.benengebreth.org/housingtracker/

Scott J,
Yes, from what I've gathered, sales and even price declines in the fall are fairly typical. However, this year there was increasing inventory when it typically decreases in the fall, and some expect much greater inventory surges in winter/spring 2006.
Also, the CAR data for November shows a large declining YEAR OVER YEAR sales volume, so it can't be seasonal by definition.

As for slow sales & high inventories, here is a chart that shows what's happening to the inventory (I think the data is for east SFBA, not sure though):
www.realtyworldcal.com
So, the case for a huge spring inventory is getting stronger.

Scott J,
Oops, my mistake; I thought HaHa's link was for CA November 05 sales volume, which show >10% year over year sales volume decline:

www.car.org/index.php?id=MzU3MjI=

Wow look at the treasury yields:

.5 yr 4.11
2 yr 4.34
3 yr 4.32
5 yr 4.30
10 yr 4.36
30 yr 4.54

(source: finance.yahoo.com/bonds/composite_bond_rates)

errr...the yahoo chart for the yield curves is dated 14Dec05....?
I didn't remember this yield condition back then...anyone else?

Yahoo...becoming unreliable with some things lately, it seems.

Thanks for the links San Francisco RENTER and SJ_JIM!

Although the links were for existing home sales, I think the numbers from these links can translate to new home sales too.

I live in the bay area, so the realtyworldcal.com link is still relevant to me SJ_JIM.

Scott J.

Scott J,
You're welcome.
Well, I may as well empty some of my links on you:

Here you can get home sale data by zip code:
melissadata.com/lists/ezLists/ezHomeOwners.aspx

Here, someone has put together long-term house price charts for many areas based on government data. There are also very detailed charts for the SF bay area (but not updated too frequently, I think):
sonic.net/~jrmagers/re/

Here are nice charts for sacto/central valley RE sales:
golyon.com/pricingtrends_f.htm

Also, these folks have compiled DataQuick weekly housing data for bay area counties, including breakdown by resale/condo/new homes...but it is only for 2005:
viewfromsiliconvalley.com/id141.html

See "Weekly housing stats" at top right of the page.
They also have some interesting articles.

Enjoy!

SJ_JIM,

Thank you again for all your links, these will provide me with some very informative reading over the holidaze.

Scott J.

Had a quick conversation w/a friend who sells screenrooms/awnings/patio covers. He says people better buy 'em now before being priced out of the market.
Prices are going to shoot up next year due to increased costs of shipping the raw material (aluminum). Also, perhaps aluminum prices are up like copper, etc...not sure...haven't checked.
At any rate, this reflects my feeling that increased energy costs have been a little slow to creep into consumer prices.
I mean, seriously, aftera a 1 month small spike in CPI, than a decrease the next month, people were saying "oh look we shrugged off katrina-related oil price spike and now everything's hunky dory." I don't necessarily buy it.
I think there will be surprising (to some) inflation numbers throughout Q1 2006, and the Fed may have plenty of reason to continue "measured" increases. But then again I'm not good at predictions. :)
Any other opinions?

"...and made only to last until the very first wave of Interest-only NAAVLP’s EXPLODE into a seven-sigma palimset, setting off a “fantasmagorical resonance” of hallucinagetic color and light"

Jack-
LMAO!
So when are you going to paint that scene?

Nice confession Jack.

Not quite St. Augustine or Dostoyevski's Notes from the Underground
but coming out of denial is definitely a first step in recovery.

Too bad 99.99% of your Clintonesque generation still believe the Coke
commercials when they nostalgically-pimp Woodstock 1969 saying, "we changed the world for the better!" Actually the Boomers really screwed it up as they tuned in, turned on and dropped out (acid).

Given the direction places like Oregon, California, and Vermont are going, I think many Boomers may opt to end it all with one last collective middle finger to the establishment through assisted suicide and euthanasia. No doubt, some will choose to fasionably "check out" as they have lived--a la Hunter S. Thompson--on their own selfish terms.

Oh, sorry Jack. You were talking to Surfer-X, not me.

Anyway...

I can see it now:

"Jack Kinkade: Painter of the Apocalyptic Post-Bubble Lightâ„¢"

Eh?...Sorry! ;)

Selling my home in Southern California last year was the BEST decision I have made. I moved to Colorado Springs where my new mortgage is almost paid off. (Thank you California RE market)

Margie-
I can understand where your coming from: subsituting a little less income for a lot more life. A client of mine moved from the Bay Area, trading his small shitbox for a lovely hilltop home in Boulder. I think if you like the outdoors, the lifestyle tradeoff can be a net gain. Good luck out there!

well I just stockpiled as much cement as I can. my basement is now filled with sacks of cement. i will let you know when I get rich.

And you know, it's very hard to blow bubbles with cement; those increases are here to stay.

That is one flat yield curve. Interest rates aren't going to bring this bubble down--it's going to keep going untill there's not a single soul left who can afford to buy. We're basically there right now, and it ain't gonna be pretty.

Did you see the 10-yr yield action today? It’s fallen to 4.38%, the same level before the 10+ rate hikes since last year!

Yes. Joy to the world!

Marina is Prime

any one on this message board has experience and knowledge of the forex markets?

specifically want to know if going long on canadian loonie,swiss franc,
australian dollar are a hedge for the decline of usd
thanks

Jack, you will not sell me on the pink toilet no matter WHAT means of persuasion you think you have up your sleeve. Pink is for...other stuff...not toilets.

"I think pink toilets are very funny."

I will give you that. If you're going for a toilet with a sense of humor, pink is definitely THE color.

And BTW, flak, don't stop following the dreams. there IS no other way to live.

"any one on this message board has experience and knowledge of the forex markets? Specifically want to know if going long on canadian loonie,swiss franc, australian dollar are a hedge for the decline of usd"

I have zero experience but a good amount of knowledge of forex, and recommendation one is to leave it alone--too many variables in that game. Next, I doubt that going long on the loonie is going to hedge you against a falling dollar too much--reason for that is the US economy is the main consumer of Canadian export commodities. So when the dollar goes down it should drag the loonie down quite a bit too as our economies are very closely linked through NAFTA. Swiss and Aussie money have close to zero correlation with the US dollar, so again, not such a good hedge. Anway, if you want to play the forex game, it's YOUR money, but I couldn't sleep at it night in that casino!

"And BTW, flak, don’t stop following the dreams. there IS no other way to live. "

Oh crap, I've started sounding like a motivational calendar. The quote above will appear on the same month as the Jack Kinkaid, "painter of light-filled voids" winter scene.

Heh, nice x-mas card, Jack...you can remove tongue from cheek now :)
By the way a former co-worker of mine was at Altamont...maybe you guys shared a bong or 2???

Hmmm...where to park the proverbiel wad...faux paint business (is there a faux paint investment trust fund yet???)...cement...I dunno.

pink...LOL!

BTW I hate shopping; but it was nice that the stores (Target, Best Buy) were pretty empty today...I might even go back tomorrow LOL.

"Hmmm…where to park the proverbiel wad…"

Oh no, do we really need to have another parking the wad discussion? I thought we'd already settled on the inflatable doll.

I thought we’d already settled on the inflatable doll
LOL I think I may have missed that one...sounds good to me...(now to find a prime doll...Marina is Prime, no?