patrick.net

SP,

Fascinating link.

I agree completely that the Fed's/Treasury's goals of controlling inflation and maintaining US productivity are in large part dependent on a strong USD. I'm sure many of the more economically minded folks here can talk to this better, but it appears to me that the whining from investors, the NAR, etc. are completely narrow-minded and miss the boat. The Fed has bigger fish to fry than to worry that David Learah is crying about rising interest rates hurting "sensitive" markets.

I do disagree with the conclusion that Paulson's big issue coming up will be explaining the importance of maintaining the USD standard to the American public, The American public does not understand or care about this "abstract" concept.

On the topic of inventories, here is Reality Times:

Just like other surrounding cities, even Pleasanton is experiencing an explosion of new listings, compared to April and May ...
... Between $500,000-999,000 (none under $500,000 listed), there are 317 (compared to 105 in May) active single family homes on the market in Pleasanton, 143 are pending. Only 121 homes sold since January 1, 2006.

Emphasis mine.

If in 5 months, 121 houses got sold, and there 317 houses listed, do we have more than 12 months of inventory ? I don't know what 143 pending means.

SP, great article indeed.

I don’t know what 143 pending means.

Pending means not active. Some may be closed as sales. Some may fall though.

To BA Or Not To BA Says:

On the topic of inventories, here is Reality Times:

Reality Times, or is it UNReality Times? Funny slip up!

I assume pending means under contract, not yet closed.

I didn't read this Realty Times article you refer to, but what's even more interesting is this. I just did a quick MLS search for Pleasanton, all homes over $1M (don't know why they excluded this price range), and it's 85 active listings with NO pendings. Just like I've seen on the Peninsula, transactions in the high end of prices is dead. Amazing.

Pending means not active. Some may be closed as sales. Some may fall though.

Thanks. So it is neither part of the active nor part of the sold. Even all of the 144 close today, we still have more than 6 months of inventory in Pleasanton.

Not bad. Not bad at all.

- is
+ are

He caught my eye mainly because he was one of the few who published critiques of AGreenspan when everyone else was swooning at AG’s feet.

Sir Alan Greenspan?

more democrats are going to be in financial ruins than republicans.

How so?

Lettuce Picker is probably right. Blue states happen to be where most of the overvaluation of RE, and therefore much of the crazy loan practices, exist.

Lettuce Picker is probably right. Blue states happen to be where most of the overvaluation of RE, and therefore much of the crazy loan practices, exist.

Reasonable. Now, what if mortgage interest deduction is changed to a modest tax credit... :twisted:

Reasonable. Now, what if mortgage interest deduction is changed to a modest tax credit…

Yes, that would be evil for Blue Staters, wouldn't it? The severity of its effect would all depend on how modest a tax credit it becomes. Who knows if this will ever happen in this political climate, though.

The cynical view would be for the Democrats to actually engineer hardship for the poor/black/hisp./younger/etc. just to increase disenchantment with the incumbents.

The problems with this scenario are (1) Democrats are not organized to ever pull this off (2) those running the party are too stupid to come up with this idea, and (3) those demographic groups don't vote anyway.

The severity of its effect would all depend on how modest a tax credit it becomes.

If they cap the amount at the national median price level, many CA homeowners will be very unhappy.

The Home Mortgage Interest Deduction is already capped by the Alternative Minimum Tax. Those sneaky Demicans will stop at nothing to steal everything and debase what they cannot steal.

The simple solution: flat tax, or at least a major move towards consumption-based taxation.

I must respectfully disagree. You appear to be confusing “levelling the playing field” (i.e., providing equal OPPORTUNITY) with “making everyone equal” (i.e., Communism/Socialism). The former to me is entirely sensible, and should be the general aim of social policy for all democratic civil societies, while the latter is a thoroughly discredited political/economic system.

is it tho? certainly making everyone MORE equal could be a good thing, done the right way.

I am not in favor of government creating moral hazards by subsidizing lazy people (welfare for healthy people), money-losing industries (big agriculture), or trying to “pick winners” in the free market via ill-conceived tax-subsidies, price/wage-fixing or cronyism.

The Japanese govt certainly tried to pick winners thru the actions of the MITI, attempting to marshal national resources and effort in strategic directions for development. And it has worked in terms of steering the Japanese economy towards hi-tech pursuits. I think govts have a role of employing sensible, real world people to provide advice on useful directions for research and development, and providing seed funding where private VC may not. Loads of successful inventions in Oz have to seek VC funding overseas because investors here are too risk-averse and want to plough their money into property or something 'safe' to guarantee a return. Investment in passive, non-productive bricks and mortar, just gouging other people for their wages, rather than looking to the future.

Solar research has just left UNSW in Sydney and gone to China, making a guy a billionaire in the process, apparently, due to laissez faire right wing govt indifference. another invention is the 'permo-drive', a hydraulic braking regeneration device - the ozzies who invented it had to get backing from the US army to develop the technology further - from US tax payers dollars.

'Three Australians saw an opportunity and developed a unique technological solution that will significantly reduce fuel consumption while at the same time boosting acceleration, lessen carbon emissions and dramatically reduce brake wear.'

This techonology can be retrofitted to any large truck or tank to reduce emissions, save 37% on fuel, save brake wear, etc etc.
http://www.permo-drive.com

sod, the old social ism problem...

must respectfully disagree. You appear to be confusing “levelling the playing field” (i.e., providing equal OPPORTUNITY) with “making everyone equal” (i.e., Communism/Social ism). The former to me is entirely sensible, and should be the general aim of social policy for all democratic civil societies, while the latter is a thoroughly discredited political/economic system.

is it tho? certainly making everyone MORE equal could be a good thing, done the right way.

I am not in favor of government creating moral hazards by subsidizing lazy people (welfare for healthy people), money-losing industries (big agriculture), or trying to “pick winners” in the free market via ill-conceived tax-subsidies, price/wage-fixing or cronyism.

The Japanese govt certainly tried to pick winners thru the actions of the MITI, attempting to marshal national resources and effort in strategic directions for development. And it has worked in terms of steering the Japanese economy towards hi-tech pursuits. I think govts have a role of employing sensible, real world people to provide advice on useful directions for research and development, and providing seed funding where private VC may not. Loads of successful inventions in Oz have to seek VC funding overseas because investors here are too risk-averse and want to plough their money into property or something ’safe’ to guarantee a return. Investment in passive, non-productive bricks and mortar, just gouging other people for their wages, rather than looking to the future.

Solar research has just left UNSW in Sydney and gone to China, making a guy a billionaire in the process, apparently, due to laissez faire right wing govt indifference. another invention is the ‘permo-drive’, a hydraulic braking regeneration device - the ozzies who invented it had to get backing from the US army to develop the technology further - from US tax payers dollars.

‘Three Australians saw an opportunity and developed a unique technological solution that will significantly reduce fuel consumption while at the same time boosting acceleration, lessen carbon emissions and dramatically reduce brake wear.’

This techonology can be retrofitted to any large truck or tank to reduce emissions, save 37% on fuel, save brake wear, etc etc.
http://www.permo-drive.com

'Climate of fear' in solar research

Australia's renewable energy researchers are operating in a "climate of fear", causing loss of expertise and tipping a former world-leading industry into decline, a leading scientist says.

Murdoch University Professor of Energy Studies Dr Phillip Jennings said scientists were fearful of losing research grants if they were perceived as criticising Federal Government policies on renewable energy or climate change

"They're afraid of being victimised because they have seen it happen to colleagues who have spoken up about government funding cuts to renewables research," he said.

Former federal energy policy adviser and whistleblower Guy Pearce has also called for "independent and credible economic research" to inform the Government's policy on energy options and climate change.

"It's important to understand that some of the same interests who have persuaded our government to avoid emission cuts domestically also have an interest in domestic nuclear power. Our two biggest uranium producers are also in the coal and aluminium business," Professor Pearce told a coastal environment forum in Queensland last week.

Professor Jennings said Australia had been a pioneer and world leader in solar technology since the 1940s, but was rapidly losing its leadership status as research programs were closed and scientists moved overseas to take up lucrative research opportunities in Europe, China and Japan.

"Australia has already lost solar thermal technology to China because there were no funds for its commercialisation. It would have created an industry worth at least $1billion, but that's gone now.

Professor Jennings said the Federal Government had progressively stripped solar energy of research funding, closing the Energy Research and Development Corporation and the Cooperative Research Centre for Renewable Energy. There were now only two solar energy research centres - at the Australian National University and the University of NSW - despite Australia's strong international track record of innovative solar technology.

Federal Environment Minister Senator Ian Campbell was travelling in Western Australia yesterday and unavailable for comment. Science Minister Julie Bishop was also unavailable.

Greens energy spokeswoman Senator Christine Milne said solar energy researchers had been progressively shut out of national debate on climate change by the Government because "there are thought to be not enough dollars for the big end of town in solar energy".

She said Australia was already losing ground to China, which had set a 15 per cent target for achieving uptake of renewable energy.

China's first billionaire, Dr Zhengrong Shi, a graduate of the University of NSW's renewable energy centre, had recently donated funds to help support renewable energy research at the university "because he felt it was not getting an appropriate level of government support", Senator Milne said.

The Chinese billionaire and founder of Suntech Power returned to China in 2001 to set up a company to make photovoltaic cells for use in solar panels. In 2005, he listed his $296 million company on the New York stock exchange, and its market cap has since soared to $7.2 billion.

http://tinyurl.com/klx8g

Robert Coté Says:
The Home Mortgage Interest Deduction is already capped by the Alternative Minimum Tax. Those sneaky Demicans will stop at nothing to steal everything and debase what they cannot steal.

Peter P Says:
The simple solution: flat tax, or at least a major move towards consumption-based taxation.

all crap. vive la revolution!

SP,

good link, Liu presented a pretty convincing case.

However, I also have serious doubt if such an engineered crash can be done within a couple of years (post Nov election till 2008 election). Which means, the Republicans are very unlikely to embrace such a proposal which may put 2008 right in the middle of a major crash with no recovery in sight, and therefore tanking their chance with the 08 election.

If such a proposal is to be carried out, I believe a better timing will be AFTER the 08 election when the president has 4 years to play with. Therefore, I am more of the camp that Bush and the stakeholders will try to drag things out beyond 2008 and not take drastic actions till then. Politicians are innately complacent, they don't usually instigate changes unless absolutely necessary.

Anyway, I still believe that the RE crash won't be obvious will 2008/2009. That would be hell of a year to remember in history.

The problems with this scenario are (1) Democrats are not organized to ever pull this off

maybe they're too ethical to pull it off. maybe you're thinking with republican style ethics and projecting it onto the dems

(2) those running the party are too stupid to come up with this idea,

i don't know if they're stupid

and (3) those demographic groups don’t vote anyway.

that's partly due to electoral enrolment and vote rigging. for instance, 'culling' the electoral rolls to remove democrat registered voters. putting ailing voting machines in democrat areas. barring felons from ever voting again, even after they've repaid their debt to society. handing provisional voting forms to minorities at voting time. arranging for long voting queues in democrat areas so that people will turn away without voting. hanging chads. non-transparent code in voting machines. Walden 'Wally' O'Dell promising to 'deliver Ohio' to bush via his counting machines. other unknown but suspected tweaks and miscounts. all covered up with a 'veil of propriety' and officialese.

there was a massive effort at enrolling new voters for the 2004 election to get rid of bush, especially younger voters. however, collusion with partisan officials and a total corruption of the system at almost every level made sure their votes didn't count.

(apart from the fact that many hisp. and even younger people vote rep.)

the best 'democracy' money can buy...

Diebold CEO resigns after reports of fraud litigation, internal woes
December 12, 2005

The chief executive officer of electronic voting company Diebold who once famously declared that he would "deliver" Ohio for President Bush has resigned effective immediately.

O'Dell's resignation comes just days after reports that the company was facing imminent securities fraud litigation surrounding charges of insider trading. It also comes on the heels of an interview with a Diebold insider, who raised new allegations of technical woes inside the company, as well as concerns that Diebold may have mishandled elections in Georgia and Ohio.

Sean, you're much too much of an idealist. Of course the Dem leadership might consider such a thing.

And what's with the conspiracy theory stuff? It's not as if the software was written by someone with felony convictions for doing exactly that sort of underhanded code-tweaking. *cough*

@HARM

Thanks for explaining to John M. about my "it's madness" post. Yes, I was just expressing the insanity of the current situation and having a little fun doing it.

The Japanese govt certainly tried to pick winners thru the actions of the MITI, attempting to marshal national resources and effort in strategic directions for development. And it has worked in terms of steering the Japanese economy towards hi-tech pursuits.

Sean,

The Japanese system certainly worked quite well for them from about '46-89. Back in the lat '80s I remember all sorts of articles, news programs and boks (like Rising Sun) which depicted the Japanese as some sort of super-race that was threatening to supplant Western capitalism due to their "superior" model of close corporate-government collaboration.

Didn't happen.

Since then, all that corporate-government "collaboration" turned out to look a lot more like good, old-fashioned cronyism and corrupt back-scratching. By the early 90s, Japan had simultaneous twin bubbles in housing and equities, which on a per capita basis dwarfed even those that occured in the U.S. later on. For over 15 years now the B.O.J. has been steadily pumping liquidity into the system, trying to fight off the ravages of asset deflation and soften the economic aftermath of non-performing business loans made during the boom.

I'm all for government spearheading technological and medical R&D, especially in areas that may promise long-term benefit to society, but may not produce an immediate profit (and therefore cannot attract much private capital). However, once big business and big government climb into bed together like that, the end result is never pretty or beneficial to the average citizen. The more government tries to "manage" the economy on a wide scale --regardless of intent-- the greater the dangers of systemic corruption and creating moral hazards.

-lat +late
-bok +book

crap, must remember to spellcheck

Someone wrote that the Dems should try and make things bad for the poor to get votes...

Then Different Sean (who day after day sounds like a PR guy for the DNC) wrote:

> maybe they’re too ethical to pull it off. maybe you’re
> thinking with republican style ethics and projecting it
> onto the dems

As I have posted before it drives me nuts that most members of the GOP “and” Dem. Party seem to think that “their” party is clean when the other party is dirty. Just this morning I read that a Dem. was kicked off a committee after piles of marked cash was found in his freezer and a GOP guy from IL made $2mm after he made a freeway go through his land. There may be a clean guy on some little city council somewhere but EVERY politician from BOTH parties that has been elected to higher office has made back room deals to get the money they need to get in to (and stay) office...

> This guy is obviously is pessimistic because he missed
> his chance and lives in his parents’ basement.
http://money.cnn.com/2005/05/01/news/fortune500/buffett_talks/

Both old guys sound like bitter renters who were too stupid to work with a REALTOR tm and make some real money in Real Estate by flipping condos…

Jon Says:

Someone wrote:

> Apart from the fact that many Hispanic and even younger people vote GOP

Then Different Sean (pushing the big DNC/Gore Conspiracy Theory wrote):

> The best ‘democracy’ money can buy…

I think that a lot of Dem’s will be disappointed to learn that many Hispanics and young kids are not just Republicans, they are “Conservative Republicans”.

I was talking to some Hispanic parents with kids in the Mission Dolores school a while back and when I noticed they were having a hard dime understanding me in English I switched to Spanish. They told me to switch back to English since they “need to get better at English to teach it to their children”. They then started talking about how much they loved George Bush and how the Catholic Church needs to work harder to stop gay marriage and abortion in SF. I was thinking to myself “I wonder if the DNC knows that the fastest growing group in CA has a lot of GW Bush loving Conservative Catholics in it (Most Anglo Catholics in SF are pro choice and could care less if their gay interior designers got married)…

As far as young kids go I’ve been talking to a few of my 40 something friends who have reported that their new hires are surprisingly conservative. It turns out that a lot of these kids were raised by left wing pot smoking Democrats. Many of these kids are bitter that their parents masters degrees in African Tribal Music did not really help them get great jobs so they had a tough time growing up poor compared to their friends with GOP parents who got degrees in Engineering or Accounting. It turns out that that a lot of these young people are even going to church on Sundays (almost no one in SF in their 30’s or 40’s goes to church) since they were never “forced” to go to church but “forced” to go to protests on Sundays instead…

SQT,

"Kind" of funny? That was freaking hilarious! Especially the standard retouched photo of David Lereah at the end! If you look carefully his business card is slightly askew on the page adding to the "cheese" factor. Very well done.

hmm, another great set of FAB anecdotes, similar to the ones which prove that all firemen and roof tilers are closet billionaires...

in terms of rep. vs dem. corruption, it seems from the jack abramoff affair and other washington lobbyists that reps are by far the more corrupt, altho that may tie in to actually being in power, i suppose. however, dem. policy on paper at least is more left-wing and less business and more social justice focused, so i would suspect that they, on average, are less into corruption than reps. i find it particularly offensive as reps like to pretend they are on the moral high ground in the context of 'bedroom morality' more than anything, but they are really corrupt stooges of big business, and involved in the constant revolving door of big business and big government -- just look at some of the lockheed martin appointments of late, a washington favourite at present.

e.g. 'a government of thieves'
http://www.e-book.com.au/got2.htm

Some "Lockheed people" on board with Bush:

*Peter B. Teets, former Lockheed Martin Chief Operating Officer, has been appointed Undersecretary of the Air Force and Director of the National Reconnaissance Office.

*Former Lockheed executive Everet Beckner has been appointed administrator for defence programmes at the National Nuclear Security Administration. (Lockheed Martin jointly with the Bechtel Corporation and a third company has a contract to run the NNSA Nevada Test Site where it is planned to test nuclear weapons again. Lockheed will also earn almost two billion per year running the Sandia Laboratories nuclear weapons design facility in New Mexico).

*Stephen Hadley, formerly a lawyer with Shea & Gardner representing Lockheed Martin, was appointed Deputy National Security Advisor.

*Otto Reich, formerly a lobbyist for Lockheed Martin when they were seeking to reverse the ban on US hi-tech weapons sales to Latin America, was nominated for Assistant Secretary of State for Latin American Affairs.

*Norman Mineta, Secretary for Transportation, and Michael Jackson, Deputy Secretary for Transportation, were both Lockheed Martin vice-presidents before their appointments by President Bush.

*Lynne V. Cheney, wife of US Vice-President Dick Cheney, was a board member of Lockheed Martin for the period 1994-2001, picking up a handy US$120,000 per year for the privilege. (Mrs Cheney other lucrative directorship's include AXP Mutual {an American Express subsidiary}, the Union Pacific Resources Group, & the Reader's Digest Association. As a director of Union Pacific when it merged with Anadarko Petroleum, Lynne Cheney received Anadarko stock worth $250,000 to $500,000. Her husband's major source of vast wealth, Halliburton, had done business with Anadarko Petroleum since 1959.

We've all heard of Halliburton, so closely associated with Vice President Cheney. But here are a group of giant American corporations now doing "very nicely indeed thanks" out of the Iraq war as at the second half of 2005: Lockheed Martin, Boeing, Northrop Grumman, Raytheon, General Dynamics, Honeywell and United Technologies. Behind them come dozens of medium-sized companies and hundreds of smaller ones for whom, far from sacrifice, war is a bonanza.

Lockheed Martin's net profit, for example, jumped 41 percent in the first six months of 2005. With orders worth US$73 billion to hand, their gravy train looks like rolling on for quite some time. Boeing's military division reported sales of US$15.3 billion in January-June 2005, with operating profits rising 16 percent to US$1.7 billion. Northrop Grumman's half-year earnings rose no less than 45.3%...

The latest Bush appointments on the blood money gravy train:
The new Deputy Secretary of Defence Gordon England, (replacing prominent Iraq war advocate Paul Wolfowitz, who became president of the World Bank), has previously held executive positions with both Lockheed Martin Corp and General Dynamics Corp. Below him, being nominated by President Bush as Secretary of the Air Force is Michael Wynne - even though the US Senate has previously refused to confirm Mr Wynne as the Pentagon's acquisition chief, because of concerns about a whole range of Air Force weapons-buying scandals. And who has the White House put forward for a replacement Secretary of the Navy? None other than Donald C. Winter, a current executive of Northrop Grumman Corp. Remember them from the windfall profits list?

And what happens to the honest ones? A senior contracting official, Ms Bunnatine Greenhouse, who criticised the Pentagon's decision to give Halliburton a multibillion-dollar, no-bid contract for work in Iraq, was sacked at the end of August 2005 for "poor performance". Yes indeed, the people in power find any criticism of all this revolving door corruption to be a very "poor show", from their point of view. The dismissal, described by her attorney as bearing "the hallmark of illegal retaliation," handily scotches the investigation into her embarrassing finger-pointing at the thieves in action. Said Ms Greenhouse, "I can unequivocally state that the abuse related to contracts awarded to KBR (a division of Halliburton) represents the most blatant and improper abuse I have witnessed" in 20 years working on government contracts.

more on the 'revolving door':

http://www.sourcewatch.org/index.php?title=Government-industry_revolving_door

only 57 names and cases on that list...

these terrible conspiracy theories, only borne out by mere facts...

DS, why do you hate Amerika? Oh that's right your in Oz. ahahahahha

Wasn't it Eisenhower that warned against the military industrial complex?

D.S.,

If you check the background of these people, I bet most of them climbed from humble backgrounds. It is not their country, per se. They didn't own it. So when given power, they would exploit it for their own benefits. The same thing has been happening in China throughout centuries. These people's mentality is different from that of many old money folks who want to give back.

Do you guys think we will ever hit to the point when you can buy a 1700 sq feet 3/2 SFH on a 6000 sq feet lot for $384,000 in Man Jose (Not in the East side-Senter/Tully area)??

Will not be surprised. But will not count on it.

Public school could work too if you simply didn’t let undesirable people in.

Absolutely.

Maybe that’s the solution - divide everyone into “winner” and help them move forwards, or “loser” and let them die.

I actually agree. A society most learn to leave people behind. Deadweights will only drag everybody down.

I actually agree. A society most learn to leave people behind. Deadweights will only drag everybody down.

good ol' social darwinism at work. and who defines who the deadweights are? employers? my local church? my next door neighbour? should we start a network of informers like the STASI in our 'free' society? what happens if i decide YOU are a deadweight by my own criteria? will they then come for you? who will enforce the weeding out? (Nazi soldiers once had this duty as a good example)

First they came... is a poem attributed to Pastor Martin Niemöller (1892-1984) about the quiescence of German intellectuals following the Nazi rise to power and the purging of their chosen targets, group after group.

When the Nazis came for the communists,
I remained silent;
I was not a communist.

When they locked up the social democrats,
I remained silent;
I was not a social democrat.

When they came for the trade unionists,
I did not speak out;
I was not a trade unionist.

When they came for the Jews,
I did not speak out;
I was not a Jew.

When they came for me,
there was no one left to speak out.

Pastor Martin Niemöller

Sean,

I suggest creating a social network site called Deadster.com to help people nominate dead-weight people...

good ol’ social darwinism at work. and who defines who the deadweights are? employers? my local church? my next door neighbour? should we start a network of informers like the STASI in our ‘free’ society? what happens if i decide YOU are a deadweight by my own criteria? will they then come for you? who will enforce the weeding out? (Nazi soldiers once had this duty as a good example)

DS, this is why I like you so much. You are always so caring about people.