patrick.net

Prices are down 40-50% from peak. How much further decline is possible?

100% decline is possible. It's already happening in Cleveland, Florida and Detroit, where abandoned properties are being bulldozed.

I would definitely wait. As long as possible.

Even if you can buy a house for 10k in Brentwood, think of who your neighbors would be!

Nobody is *entitled* to have wealth.

Wow, so you are supporting 100% taxation of inherited wealth? Don't you think that is a little extreme? 90% I can see, but 100% is going too far.

Those who inherit wealth are not intrinsically entitled to it - but perhaps those who wish to give it are entitled to determine where or to whom it should go.

I have friends who are first time buyers ready to pull the trigger. I am advising them to wait, and not buy in Brentwood.

Thoughts?

I think what I have always thought, which is if you can find a home you like, in a neighborhood you can afford and you expect that you will be able to live there for a while, you might as well buy. A while in this case means at least five years, preferably ten. You should probably rent first, just to make sure the weather and commute are what you imagined them to be.

If you are trying to wring every last dollar out of your investment, you should probably wait until prices start to go back up to buy. If this downturn follows others, it will be more of an "L-shaped" recovery than a V shaped one. I actually think that we are close to the bottom, but my opinion is in the minority here.

Wow, so you are supporting 100% taxation of inherited wealth?

Huh?

I think what I have always thought, which is if you can find a home you like, in a neighborhood you can afford and you expect that you will be able to live there for a while, you might as well buy.

I agree.

The most important benefit of a buyer's market is the availability of choices.

Kewp,

right on.

Kewp,

this whole new vocal meme of being against "regulation" as being the cause of bank and wall street malfeasance is very clever. Karl Rove would be proud (maybe he *is* proud). Same goes for the whole thing of equating regulationsand bailouts. Very clever. Will confuse the heck out of many simple-minded voters.

(I just re-read what I wrote and It didn't quite say what I meant. Try again)

Kewp,

this whole new and very vocal meme of being against “regulation”, with "regulation" being the cause of bank and wall street malfeasance, is very clever. Karl Rove would be proud (maybe he *is* proud).

Same goes for the whole thing of equating regulation and bailouts. Very clever. Will confuse the heck out of many simple-minded voters in certain blue states.

This is one of those topic lines that is a dis-service to this board.

Paranoid, anti-government drivel about control and hidden agenda? Patrick, you need to laugh off the person(s) to whom you have been speaking.

Still, the article links are good. The one that piqued me is the prospect of service taxes and a temporary tax on high earners in CA.

I think that this site is quite relevent. http://www.sfgate.com/data/

We have 2,300 city of San Jose workers making 6 figures. We have over 200 firefighters making that. We have roughly 1,000 police making that.

Don't get me wrong. These people work bad hours, in risky jobs where they see tragedy every day. I like my firefighters and police.

But I am pretty sure we can get all the police we need from the labor market for something less than 6 figures.

Balancing a 20 billion short fall is not about cuttng services and/or raising taxes. Its about reigning in labor costs. Someon please inform Sacramento to look into what kind of pay cuts can help bring the budget into alignment.

Duke Says:

> We have 2,300 city of San Jose workers making
> 6 figures. We have over 200 firefighters making
> that. We have roughly 1,000 police making that…
> But I am pretty sure we can get all the police we
> need from the labor market for something less
> than 6 figures…

I can’t wait until some more of the East Bay Fire districts have to show their salary data since many are close to 100% over $100K with about 50% of the guys making over $200K.

What other job that pays $200K will pay you time and a half for working one hour overtime (double time if it is a Sunday).

When you have more than 3,000 people applying for every job opening that might be a tip that the pay is higher than necessary.

Perhaps it is time to privatize the fire departments.

Can someone tell me how unions are even legal under anti-trust laws? Why is organized labor not a form of monopoly?

These people work bad hours, in risky jobs where they see tragedy every day. I like my firefighters and police.

I agree. You cannot pay me 200K to do what they do. However, we should let the market decide.

Paranoid, anti-government drivel about control and hidden agenda? Patrick, you need to laugh off the person(s) to whom you have been speaking.

The guy did have a good point. Money in the bank has a downside. It can be used to control or penalize you.

And it does seem to be true that inflation is encouraged to some degree to get people to put money in the bank rather than in the mattress.

But I'll admit that the step from inflation to control is a bit paranoid.

EBGuy says

His most recent masterpiece, a collaboration with NPR news, takes on the subprime crisis (mpeg audio alert). Although the content may be familiar to all of us, sit back and take a breath as we go through the looking glass and get transported into a world where an average Joe was making $75k (?) a month selling junk to Wall Street.

I listened to it and it really is the poster child for why we need public radio. Absolutely fantastic, particularly if you compare to how national media and newspapers have covered the issue. However, I still couldn't get two things:

1. how could they be so blind (the banks I mean, because it seems quite a few investors got out in time). The only excuse offered is that they believed in the wrong models. Couldn't they have spoken to Peter P? He would've set the straight :-)

2. The second (and biggest for me) question is who else (other than the banks) is stuck with these "investments", particularly abroad. I just can't understand how they managed to leave all the losses sitting on them (the banks I mean) when there are investors who so don't know what to do with their petrodollars, they're buidling empty skyscrapers and ski resorts in the desert. Unless of course all these "private" losses are just not disclosed so we'll never know

By the way, if I understood correctly, the guy making 75-100k/month putting people into crappy mortgages is now left with nothing. He somehow managed to piss it all away......

But I’ll admit that the step from inflation to control is a bit paranoid.

You know, this tutorial will liberate us!

http://www.ehow.com/how_2049858_make-tinfoil-hat.html

Can someone tell me how unions are even legal under anti-trust laws?

II see nothing wrong with employees of private companies organizing. It's no different than Safeway banging each supplier against another for a better deal.

What I do see as an abomination and can't fathom why it's legal, is public employees (civil "servants" if you will) organizing. They're double dipping because they get to vote in their nominal bosses too. I say ban their unions and we'll all be far better off.

But I’ll admit that the step from inflation to control is a bit paranoid.

Indeed.

Occam's razor guys. Why bother going through the trouble of raiding your bank account when the Fed can just print money and devalue your dollars wherever you stash them. In your bank account, wallet or under your mattress, it doesn't matter.

Police and firefighters are insanely overpaid. Teachers are underpaid.
Free market solution: Equip the teachers with guns, and they will soon earn respect and much higher pay :-) :-) :-).

Wit alert: That last part was a joke, but it contains a grain of truth. Not policy advice.

With violent and dangerous teenagers nowadays, perhaps having armed teachers is not quite a joke.

Teachers are . . .an intersting mix of under and over pay.

To begin, it is aweful.

With their union, they get increases every year until they retire. Their merrit is based on years alone. Eventually they will be at max scale - which I believe is something like $100k after 35? years.

Then, they get benefits and FULL PAY with Cost of Living adjustments. Forever.

They have the kind of retirment plans that bankrupted the auto idustry, was bankrupting the Fed civil servant system until they fixed it, is bankrupting cities with firefighters and police, and will soon be bakrupting the state. Especially since Calpers (the state retirnement system) bought a bunch of the mortgage backed securities. . .

Teachers are certainly wayy behind the salary curve for many, many years, but WOW do they have great retirements.

Any teachers out there feel free to correct me since I have not looked at this in at least a coule of decades. Sionce then I have only hearsay stories.

looks like there is no stopping of oil prices until they see a real big drop off in demand.

The second (and biggest for me) question is who else (other than the banks) is stuck with these “investments”, particularly abroad.
Off the top of my head... there were a couple of small towns that did (or almost) went bankrupt in Norway. Early on Italy claimed some pain and several German banks were hit hard. BoC also had some limited exposure. And those are just the institutions who had to admit it as they were hit hard enough....

The only criticism I have seen of the This American Life piece is that it seemed to go with the "subprime, its contained" meme. Then again, the underbelly of this beast was so ugly, I suppose, they didn't want people panicing in the streets.

I imagine San Jose has a similar problem.

The beauty of inflation is that it allows the GOVT to steal your purchasing power no matter what. It doesn't matter if you save or spend, earn or leech, bury your money in the back yard or put it in a bank, the govt can always steal your purchasing power!

At this point in time I have 2 words for teachers:

hazard pay!

"Perhaps it is time to privatize the fire departments."

Not a new idea. I know that in Chicago we still have buildings with a sign attached at the front regarding the private fire insurance coverage for the 19th century. That's how they did it "back in the day"

The problem is that safety is a public good. For example, Mrs. Oleary or Peg leg Sullivan causes a fire of a barn,etc.. that spreads to a neighbor without insurance. No one is contracted to put that fire out and so it spreads to the next property and so forth until it is out of control even for properties covered by private fire protection (insurance).

Bap33,

You can say about any profession what you just said. That is a very lame excuse for not paying teachers well.

Re: Police and Firefighters.

Their pay should be relative to the median income of the area. I'll admit that the compensation is way to high for many counties. Unfortunately, all solutions are unpleasant for everyone involved.

Not to put down their hard work and sacrifice, but fire/policemen make do with modest salaries in other areas of the country.

I don't know. I think paying teachers more would be a good thing. If the wages were competitive you'd have a lot more applicants. I taught before I had my daughter and I hate to say it, but tenure is baaaad. It makes teachers complacent and unmotivated. I think that the competition a higher wage brings would result in a much more motivated workforce.

Their pay should be relative to the median income of the area.

Thanks! That is a good way to say that their pay should be decided by the market. :)

OT apologies, just can't let the vaccination discussion from last thread stand.

It is absolutely irresponsible to vaccinate children without an understanding of the risks. Fact is, vaccination DOES cause onset of autism in a subset of children. It is not even a subject for debate.

I've researched it myself extensively, and there is no way that I would vaccinate my children based on what I now know. It may well be that the greater good is served by the suffering of the few, but no russian roulette for my kids.

Some on this list seem to buy the "company" line without question, which is the equivalent of buying the AAA MBS ratings. Just because someone says it is so does not mean it is so. It is easy to dismiss as a conspiracy theory by those that don't really understand the complex machinations of interests and influence at work.

One must understand how our medical research establishment is corrupted by special interests to understand the current case study base and direction of research.

Draw your own conclusions, but Healy is in a better position to judge than anyone on this board. While she doesn't say that it is a direct casual relationship, she acknowledge the enormous pressure and meddling of the financial interests at work on the science and public health establishment.

Quoted today, CBS news, former head of NIH.

Dr. Bernadine Healy is the former head of the National Institutes of Health, and the most well-known medical voice yet to break with her colleagues on the vaccine-autism question.

Healy said: “There is a completely expressed concern that they don’t want to pursue a hypothesis because that hypothesis could be damaging to the public health community at large by scaring people. “First of all,” Healy said, “I think the public’s smarter than that. The public values vaccines. But more importantly, I don’t think you should ever turn your back on any scientific hypothesis because you’re afraid of what it might show.”

Bap, you can't pay teachers according to results unless you give them the authority to enforce the discipline required to achieve said results.

In addition to discipline, schools must also be able to expel students at will. This way, bad apples can be removed. There must be powerful incentives for students to learn, or else.

On the other hand, juvenile delinquents should be locked up.

Back on topic again.

What inflation are you talking about ? There is no inflation - just see the latest CPI. The gubbermint says that the gasoline prices actually declined. Pay no attention to prices on the pump. It's all illusion. Repeat after me, "gas prices are down, gas prices are down, gas prices are down ..."

The hedonic adjustments, seasonal adjustments, ignoring upwardly volatile food/energy prices - thank God we have enough intelligence to trick ourselves into believing anything.

Any "welfare" should be used to help people help themselves. If they do not want to help themselves, let them eat cake.

Is Obama Too Far Left on Taxes?

http://abcnews.go.com/Politics/Vote2008/Story?id=4852958&page=2

Me think that all three candidates are too far left on taxes. Any president who allows the existence of social security tax is a centrist at best.

It may well be that the greater good is served by the suffering of the few, but no russian roulette for my kids.
Oh boy, this is sounding more and more like the Prisoner's Dilemma from game theory. I think we're hosed :-)
BTW, I probably did come down hard on the Waldorf parents. They're from the "thermisol generation" and I might have had second thoughts with my own kids if that was still around. I think vaccination schedules are probably the important issue to pay attention to now.

OO and others, there was a very good thread on CR yesterday regarding Non-Borrowed Reserves and the Fed's Balance Sheet. I learned a thing or two. For instance, you can pledge subprime credit card receiveables at 60% of value at the discount window (or TAF).

SBIA,

I say, give us a 10 year of Paul Volcker, we can be even with rest of the crowd.

Paul Volcker on Inflation

northernvirginiarenter,

>Fact is, vaccination DOES cause onset of autism in a subset of children. It
>is not even a subject for debate.

False. No current research proves this theory. No matter how many times you repeat it, there was no link found between autism and vaccination.

> Draw your own conclusions, but Healy is in a better position to judge
> than anyone on this board.

Healy did not prove you point. She merely suggested that there is a certain lack of research on some side effects that might affect some subgroups of children. She is saying that officials do not want to scare public. People are easily scared and if they see an article with a headline like "SCIENTISTS HAVE FOUND A LINK BETWEEN VACCINATION AND FATAL BRAIN MUTATIONS" they won't read the rest of the article that tells a story about a single case of a poor kid in Nicaragua but will stomp each other on their way to the courtoom. What't worse, they will stop vaccinating their kids endangering not only them but the rest of the population. Just like it happened in Sweden with pertussis (1979–96), Netherlands with measles (1999–2000) and Nigeria with polio, measles, and diphtheria (2001 onward). Children and adults started to die en masse due to virtually extinct illnesses after the immunization programs have been stopped or weakened.

Your kids are your responsibility. Just do me a favor and lock them up in a Waldorf school if you decide not to vaccinate them, I don't want my kids to die because of polio outbreak.