patrick.net

On an earlier note, I see the High Grade Structured Credit Strategies for Make Glorious Nation of Kazakhstan has been swept under the rug.

Where it makes an unattractive lump.

Which BS hopes the guests won't notice.

"Where it makes an unattractive lump" LOL!

Now where's my rug beater damn'it! I_ just_ can't_ get _ this _ (whack!) damn _ thing_ down!

What a mess. Oh, and I'm smack dab in the middle of it! Every time I think we're a done deal they keep asking for more income documentation! But..but..bu.. HEY! I don't have anything left to give you guys damn'it!

If we excluded capital gains and inheritance in a flat tax scheme, and provided a base exclusion of $20k or so, I’m told the rate would come to about 17%.

And if someone says that the scheme regresses against the poor we can say it is technically a progressive tax system:

Below 20K: 0%
Above 20K: 17%

People live happier in an "unfair" capitalist society than in a supposedly "fair" system like the Soviet.

Besides, fairness is subjective. Any system is "unfair" to the bottom half of the population.

EBGuy :

Real sad story. Seems like, guns don't kill people, mortgages do.

I have no problems with rich, spoiled kids. They spend quickly and unwisely. They create employment and keep our economy going.

Great posts as always!

Thanks.

It's actually getting a little harder to run burbed.com now that prices in the crappy areas are declining a bit. It's not as much fun to make fun of a $399k house that looks like it's about to collapse, as it is with a $600k house.

It's also on the harder side to make fun of $1mil + houses. They tend to have better curb appeal.

These are the challenges I face. :)

It’s also on the harder side to make fun of $1mil + houses. They tend to have better curb appeal.

I am sure there are still quite a few million dollar shitboxes out there.

Yes, "fairness" is pretty subjective. How about "incentivizes economically productive activities or socially beneficial outcomes" as a substitute? Also somewhat subjective, but at least a bit easier to define.

@eburbed,

Not at all! Just the fact that they're asking any money period makes many of them a great source of entertainment! (Some might say "irritainment"?) It's one of my our favorite pastimes. I guess the wife and I would have to call it "they're asking WHAT!?"

People, people... lets try to refocus (well, it looks like the last couple of posts put us back on track already). Okay, how is this for a seque. Sunterra terminated a contract with Hilton Hotels and rebranded their Embassy Vacation Resort Grand Beach to Sunterra Lake Tahoe Vacation Resort. I just glanced at the secondary sales market and it looks like these timeshares are off by around 25% from their secondary market prices around a year ago (this is, of course, on top of the 50% discount you receive when you buy a resale timeshare) . Not sure if this is just due to the rebranding or the "robust" Tahoe market. I imagine there will be some good deals in the secondary timeshare market when the downturn gets into full swing and people are trying (desperately) to generate some cash. Note to threadmeisters, I'd like to see a timeshare thread at some point to discuss the good, bad and ugly of these beasts.

Here are some quality quotes from an impovrished high school senior talking about his internship at a real estate company. At least he now knows what he doen't want to do.

Trenado talks about his experiences in real estate with dry wit.

"But I knew to get this project to completion, I had to learn about the housing market in the Bay Area and about loans," he said. "The loan application, it's like a whole different genre. There's nonfiction, fiction, terror and horror, and then there are loan products. I really had to read and ask my mentor, OK, what does this mean?"

I have no problems with rich, spoiled kids. They spend quickly and unwisely. They create employment and keep our economy going.

I do when other kids are going without their most basic needs met - food, clothing, shelter and medical care. Capricious luxury spending by the idle rich might be great if you're a yacht salesman or Tiffany jeweler, but not so helpful if you're a line cook or schoolteacher.

If the rich choose to waste their fortune on partying and expensive crap, then fine. But don't come to ME later boo-hooing about how you cannot afford to contribute a paltry 15% of it towards basic services for the poor, or to help pay for police, military, infrastructure, etc. When it comes to the "something for nothing" crowd, no group is worse than the rich.

Capricious luxury spending by the idle rich might be great if you’re a yacht salesman or Tiffany jeweler, but not so helpful if you’re a line cook or schoolteacher.

But can't you buy stocks of yacht salesmen or jewelers? ;)

When it comes to the “something for nothing” crowd, no group is worse than the rich.

They can whine but some social services must be maintained.

I’d like to see a timeshare thread at some point to discuss the good, bad and ugly of these beasts.

EBGuy,
Thanks for the corralling efforts. I agree - timeshares would at least be a somewhat different from the usual stuff we talk about. It'll probably degenerate into more talk about japanese knives and sushi, though. :)

However, I think that not only is the timeshare market off considerably in second home markets like Tahoe, but the full-on condo and SFH market is significantly down there, too.

So, When will the credit party be over?

Will it be high interest rates (8% and up mortgages)?

Or can the last dance occur even with low rates, with the music stopped by much more strict borrower qualifications?

I remember that during the Savings and Loan collapse in 91, car prices fell rapidly not because interest rates went up, rather because loans were much harder to get. If you had the cash, bargains were easy.

I have read the well reasoned arguments on this blog that point to high stickiness for the ongoing house price correction, but I hoping that a tougher than expected loan approval process will insert a little teflon to the slide.

Oh I'd be open to talking about timeshares. Why not? At least there are discounter shops already set up to handle the excess inventory. We could learn a lot.

It was one of the first places I thought there would be bottom fishing opportunities. For those of you looking for a 75% correction, I think I've found it!

Speaking of "lifestyles of the rich and famous", check this out:

http://beta.cnn.com/2007/WORLD/europe/06/21/prince.william/index.html

--The heir to the British throne is serving as a second lieutenant ('leftenant'?) in the British army, and until today earned £22,000 a year. Obviously, his needs were lavishly well tended to as a child, but was the only money he directly controlled.
--Now that he's turned 25, he inherits a modest (by American rich standards) £250,000 to £300,000 per year.
--His future plans: "William will also do a stint with the Royal Air Force and the Navy, as well as carry on with his charitable work. He will also learn about state management and the constitution, Fitzwilliams said."

Can you imaging Paris or your typical spawn of the American super-rich accepting a similar lifestyle? Not saying the guy is exactly "roughing" it or that he's living like an ascetic monk, but this does provide an interesting contrast in terms of the social contract from across the pond vs. here.

HARM, comparing Prince William to Paris Hilton, only to conclude that the British have more class than Americans... that's just bullshit. Rich Americans are extremely generous with their money. Compare Bono to Angelina Jolie, Warren Buffet to Princess Diana, Bill Gates to the British royal family, and the playing field is pretty level.

If you want to compare Paris Hilton to her European peers, you will find a tremendous abundance of material from the Paparazzi. There is lots of old money in Europe (despite your idyllic vision of the place), and their trust fund babies can be every bit the reckless, hard-partying snots as ours.

@Brand

Ok, disclaimer: I posted that partly 'cause I knew it would get a rise out of you.

I don't doubt spoiled rich European trustafarians are every bit as bad as ours, human nature being what it is --they just have fewer of them, which is a good thing. :-)

Comparing the Bush twins to Prince William and Prince Harry, however, may be appropriate.... I think the Brits win that one.

skibum says:
However, I think that not only is the timeshare market off considerably in second home markets like Tahoe, but the full-on condo and SFH market is significantly down there, too.
One of my bellweathers is the fractional Marriott Grand Residence Club (they are not making anymore land at the base of the tram you know!) Resale prices for a one bedroom/1 bath seem to be holding steady at ~$130k and for a 1bed/2bath at ~$140k. I shudder to think what they were originally marketed at -- some place north of $200k? These are quarter shares (13 rotating weeks) and will bleed you $4k+ and $5k+, respectively, in yearly HOAs. If these ever hit ~$100k, I would say we are near the bottom. Anybody have historic data for Tahoe. I would be curious to see how they performed in the last up & downturn.

I have no interest whatsoever in Paris Hilton, you guys can do her on behalf me.

I actually think she is ugly. Julia Louis Dreyfus is far more attractive, and comes with a complete package. I actually know a guy from Northwestern who dated her for a short while.

How come this site is just as slow as before? Is this a problem of wordpress?

LOL, okay HARM, ya got me. :)

btw, when I think of 'trustafarians', I think of Boulder, CO and the University of Colorado. A bunch of kids whose parents have loads of money, but who wear hippie clothes, smoke a lot of pot and complain about "The Man" (who is probably their rich dad). A lot seem to be surfers from southern California who also like to ski. Whoooooaaaa, dude. Faaaar out, bro!

Plain old rich kids are just trust fund babies or silver spooners to me.

I have yet to hear a good term for all the daddy's little girls who have ridden horses all their lives and never once mucked a stall. Where's dryfly when you need him? Maybe Randy's got a good Midwestern ag name for these girls?

OO,

Not sure, but Patrick's looking into upgrading to Wordpress 2.x. Hopefully that will help (assuming the problem really is SW related, not HW or BW).

Can you imaging Paris or your typical spawn of the American super-rich accepting a similar lifestyle? Not saying the guy is exactly “roughing” it or that he’s living like an ascetic monk, but this does provide an interesting contrast in terms of the social contract from across the pond vs. here.

I believe this was the premise of "The Simple Life."

EBGuy,

It's probably not my place to say but I believe FAB said the area took a pounding in the last CA downturn? I must admit, I see these "distance markets" as something of a bellweather myself! Like I say, it's like hypothermia (non-essentials get shut down first!)

EBGuy Says:

> Anybody have historic data for Tahoe. I would be
> curious to see how they performed in the last up
> & downturn.

With the heavy monthly fees many people in 1994 were “paying” others to take over their timeshares in Tahoe (and other places). Back in 1994 I knew a S. Shore Realtor with over 100 listings with many of them under $100K…

Please unmoderate my last post. Does mentioning a brand name cause the post to be held?

Does mentioning a brand name cause the post to be held?

Depending on what brand name.

It wasn't See Alice

Is moderation really needed anymore since we have a log in requirement?

However, I will concede that Britain could really use more skilled dentists.

Germans love their nationalized healthcare. An Italian colleague once remarked to me, "You cannot die in the street in Italy. But if you want *real* medical care, then you must have a private plan. These are very expensive." He indicated that merely moderate U.S. healthcare was equivalent to a private plan in Italy.

Now bear in mind that he is also a well-paid engineer, but you see that while the lower class is cared for better than here, he considers U.S. healthcare better for people in the middle-middle class and above.

Also, to claim that European healthcare is "free" is rubbish. I had a German offer cross my desk. The deductions removed from your paycheck are prestigious--I would have been taxed at almost 45-50%/year. My potential manager said that I should withdraw from the state health program and enroll in a private plan because it's cheaper for single people earning above the median salary.

Brand,

Never claimed there's such a thing as a free lunch or that Europe is some kind of utopian worker's paradise. But when we're paying 2-3X the per-capita average elsewhere with a coverage gap of 12-16% of the population, something's wrong.

I should also point out that Italy (and the old Soviet-bloc countries) is basically Europe's 3rd world. I bet healthcare in Scandinavia, UK, France or Germany is head-and-shoulders above it. I lived in the U.K. 1 yr. (exchange student) and travelled much of the continent. Can't say I went to the doctor very often, but I never went without coverage.

I should also point out that Italy (and the old Soviet-bloc countries) is basically Europe’s 3rd world.

For a third world European country, they have excellent cuisine and stupid hot women. :o Maybe I should retire there at 35 and get myself a Bella Donna.

Italy is a third world country?

I have lived in or have had extended stays in England, Germany, France, Italy, and Portugal. I would put Italy right in the middle of that group.

Bear Stearns Fund Collapse Sends Shock Through CDOs (Update2)

By Mark Pittman

Merrill Lynch & Co. mascot June 21 (Bloomberg) -- Merrill Lynch & Co.'s threat to sell $800 million of mortgage securities seized from Bear Stearns Cos. hedge funds is sending shudders across Wall Street.

A sale would give banks, brokerages and investors the one thing they want to avoid: a real price on the bonds in the fund that could serve as a benchmark. The securities are known as collateralized debt obligations, which exceed $1 trillion and comprise the fastest-growing part of the bond market.

http://www.bloomberg.com/apps/news?pid=20601087&sid=a7LCp2Acv2aw&refer=home

>> Italy is a third world country?

Yes, Italy is a third world country ..... like INDIA

PermaRenter: The kool aid must be good where you're at. :o India still has open sewers and a shocking amount of disease and poverty in the non-industrial areas. In Italy, the worst you can say is that people are too lazy to pave your driveway in less than three weeks (also that little La Cosa Nostra thing, but we'll ignore that, si?).

Or you're being sarcastic, and I'm just dense tonight...