patrick.net

But a reality nonetheless, one that must be coped with, no?

Absolutely.

If that workd for you, fine, but there are many other ways to skin the cat.

Leave that cat alone, please.

My fear is getting stopped/wiped out of my short-side positions before the recession and bear market start.

Dipanjan, you have to be prepared for getting stopped-out. Taking losses is a very integral part of trading, no?

Lets say you made a couple/few million by saving/investing and you are in your 50s…How would you spend your energy?….Put your head down in your work/career, or look for ways to make your money make money?

If I have the resources, I will probably run some foundations to "save" the world. Helping others is important but it should be done and can be done only if you have the power and resources.

Caring more about family than the almighty toadskin…Not wanting everyone suffer/lose money…Being thankful for what you have…Kindness

Good thing for me to remember--that I shouldn't gloat over my gain/other's loss; miserable existence actually. However, a small part of me doesn't mind if smug investors lose their shirts; I hate seeing how this thing has stressed the incomes of people who simply want a home.

As a possible hedge, has anybody here considered foreign currencies? I know a guy that converted half of his cash to euros a few years back. Not bad, in retrospect.

Jack, hehe...happy to entertain.
And with that, I'll post my all-time-favorite rant:
http://tinyurl.com/d98kk
OT to be sure, but what the hey...

Economist: I worry about those things too. I hope those things don’t happen again. We went through that in the late 1970s, and I would hate to see our country’s living standards fall. But, if they did happen it would not be the end of the world. The average person would still have a higher standard of living than what was the norm a few decades ago. However, it would be a major adjustment for those who have only experienced the last few decades.

"Lets say you made a couple/few million by saving/investing and you are in your 50s…How would you spend your energy?….Put your head down in your work/career, or look for ways to make your money make money?"

At some point you keep working because your love of the game supercedes your financial incentives. Or you are hyperactive and can’t stop. The energy that propels you to such success often precludes withdrawing from the action. Unless you find a new passion…

Jack: Compared to a few decades ago, when we use the inflation adjusted incomes of the middle class from that time and carry it forward to today, we do find that the middle class is shrinking. But, the bottom class is also shrinking. The affluence of America has grown significantly over the decades. The real growth in living standards has averaged about 1% per year for the last 50 years, propelling the majority of Americans to greater affluence. Unfortunately, we are now becoming obese and soft as a consequence. Some would say spoiled. It has been referred to as affluenza.

I think that the average american now consumes so much, and has so much material wealth, that we are suffering in other ways.

Much of this wealth is good, to the extent we use it positively.

affluenza

The sickness of the affluent, it fits doesn't it? It's amazing when you think the poorest in this country live better than most people in the rest of the world. Kind of makes me feel like a schmuck complaining about the housing market but the more you have, the more you want.

I re charge by sitting outside at dusk until it gets dark. WAY easier than going to the airport, waiting, sitting on a plane, TWICE, to do nothing.

I recharge by reading a good book. If you buy them at half.com you can get a paperback for less than $4.00 with shipping. Good, cheap entertainment.

My biggest fear is that the government will attempt to bail them out in some made up reason to save the economy... so in the end, those of us who are wise with our money end up paying for it all

I have a question. Suppose there is a government bailout, what does that entail? Who benefits? If a homeowner defaults on their NAAVLP, and they're facing bankruptcy, does a bailout matter to them? I guess I'm wondering what are the consequences of both bailout/no bailout.

Re: healthcare

It's a reasonable fear with an aging boomer generation. Health care is going to face a real crisis soon.

All,

I have the misfortune of owning a domain that is very close to the domain of a small credit union, and I get email intended for the credit union all the time. I offer the following email I received today, edited only to protect the... well, whatever:

=====================================
From: l*** r******
Subject: my e-mail address
To: ***@****.org
X-Keywords: Junk
X-UID: 8583

[-- Autoview using lynx -dump -force_html '/tmp/muttZ7Xesa' --]

A reminder to send a loan appl. to me please.
_________________________________________________________________

Yahoo! for Good
=====================================

_smile_

The only way to win this game is... not to play.

Cheers,
prat

"Who benefits?"

I'm gonna go out on a limb here and say... the boomers.

Utter speculation, I admit. But call it a hunch.

Cheers,
prat

Face Reality,

Welcome back! Hope you stick around a while this time. Agree with you that BA prices are unlikely to fall by October, but seriously doubt they'll stay in the stratosphere forever. Nothing defies the laws of gravity forever (except Realtor hype).

My prediction for the start of a CA/nationwide crash is still no later than end of 2007, though I think modest declines will be underway in most areas by mid-2006. See out "FuckedCounty.com" thread for everyone's 2 cents. $1.3 trillion in adjusting/amortizing neg-ams & IOs + inevitable change in "investor" psychology is bound to pop this sucker by then. If it goes beyond '07, then its truly a New Paradigm.

Definitely agree on the healthcare crisis. No easy answers there, plus Americans seem to be getting LESS healthy and more obese by the minute.

There are obvious ways to solve the healthcare problem... for example, we can introduce some form of "subprime" program. IMO such program is much better than no program in terms of solving a clear and present problem.

The "subprime" healthcare program can be supported by imported medical personnels. Alternatively, we can create some 3 year accelerated medical associate degree to quickly reduce the cost of medical care.

To me, providing medical care at 70% competency to 100% of the public is not a bad choice at all.

I am not kidding.

It would not surprise me if America resurfaces from the soft depression of the early 21st century with a national healthcare plan. But the plan will be a disappointment, because it will simply be a veiled attempt to get young people to pay for the health care of the boomers.

True. If the Katrina disaster has demonstrated anything it's how inefficient government is on all levels. I don't want to get into a political debate, but does anyone really think the government does anything better than can be done private sector? (though private sector hasn't been a rousing success-- but that's another discussion) All government does is tax and spend the money on a committee to decide how the money should be distributed to various state committee's who then vote on which branch of government gets the next raise. How many cents on the dollar of our tax money actually gets spent on anything we vote for?

We must relax our standard of doctors or create another tier of medical care before it is too late. Why should all doctors go through so much education? Why is it considered ethical to keep healthcare so expensive? On the other hand, why is it considered unethical to reduce standard and make sure that healthcare is more accessible?

How many cents on the dollar of our tax money actually gets spent on anything we vote for?

Good question.

Why should all doctors go through so much education?

Since my life is in their hands, I kind of like the "lots of education" part of the standards. I had an emergency delivery with my daughter and had a lesser skilled surgeon taken care of us the outcome could have been a bad one. There are just some things that demand a high standard.

SactoQt, how about having two standards:

1) Regular doctors for those with insurance or those who can otherwise afford high healthcare costs.

2) Associate doctors for those who can afford less.

Patients will be well-informed and they will be able to choose between the two. Providing only high-quality but expensive healthcare options is not necessarily an ethical thing to do.

Peter P

I get where you're coming from, but the liability would probably be too high. Doctors can barely afford mal-practice insurance as it is, and even if people sign waivers, they'd probably still sue, and I doubt there'd be a shortage of lawyers to help them.

I get where you’re coming from, but the liability would probably be too high. Doctors can barely afford mal-practice insurance as it is, and even if people sign waivers, they’d probably still sue, and I doubt there’d be a shortage of lawyers to help them.

I think this is one of the big problems too. As I have said before, we ought to limit lawsuit payout. At least, punitive judgements should be restricted. Reasonable medical mistakes should be punished mildly. Serious mistakes should result in non-monetary.

There needs to be a re-vamping of the legal system too. My former neighber told me that in Great Britian whomever loses a lawsuit has to pay legal fee's for both sides. It dramatically limits frivilous lawsuits, which is something we need here in the states. Maybe if that was in effect it would be easier to limit lawsuits against doctors too.

Anyway, getting late. Nite.

Good nite.

I have particularly enjoyed Randy H's opinion on this site, perhaps because I agree with most of his analysis.

I have enough cash to pay off my current home in BA entirely, and I still have quite a bit of cash sitting on the sideline waiting to get in should the market crashes. I am a conservative person so although I am much more qualified than most folks to "flip" properties, I chose to stay away hoping that I could descend as a vulture when foreclosures go up. However, as the bubble really starts to inflate, my biggest fear begin to emerge. Never underestimate the power of fools, in masses. That means, if the foolks have hujacked the market, the government may have to bail them out and I may no longer pick up dead meat that easily, and my waiting would have been meaningless. If the crash is so hard that unemployment shoots to 25% like the Great Depression, buying RE would be the last on my mind, I might as well take whatever I have and flee the country. But then, where do I flee to? We have been the world's buyer, if our buying power dries up, I see China going to hell first, followed by Japan and a whole slew of players.

So here is my burning question. If the market does crash hard, what is the best way to take advantage of the situation suppose you have quite a bit of cash (80% of my money is in commodity-based currencies, Euro, oil and gold). So, if housing keeps its norminal value, I assume dollar will crash, so I am set up in a position to bet against the dollar. However, lately I have been thinking what if all the governments coerce to keep the dollar up since a crashing dollar does nobody any good (except people like me)? I guess my biggest fear and anguish is BOTH housing and US dollar keep their nominal value!

@OO: "if the foolks have hujacked the market"

Beware the foolks my son!
With the hands that grasp and the head that unthinks!
Beware the hujacker
and shun the frumious Loan Officer!

_smile_

@Jack: The fact that people don't pay for large chunks of their healthcare seems to distort the market. Radiologists, with whom I have some experience, are constantly looking at expensive and (relatively) unnecessary scans ordered by doctors who know that insurance will cover it, and that if they miss something they will be sued until they are blue in the face and a bit bluer in the wallet.

I don't have a good solution, although my neocon-fascist-i-hate-poor-people-and-small-defenseless-puppies gut says: more market. Market for those who can afford, with a strong social net (non-governmental, community and, dare I say, religiously, based) sounds great to me, and it has the delightful advantage of not having even a snowball's chance of being implemented, thereby allowing me to sit idly in the back sniping at whatever solutions do come along:

"Oh, myyyyyyyy solution would be soooooo much better than [insert next failed govt. program]. But will you people ever try it? Noooooooo. Heathens."

See? Now isn't that fun?

Cheers,
prat

Hey surferX, Kurt,
Just bought a Haut last October...I used to drive by that shack of a surf shop on my way to natural bridges (to go boogieboarding) back in high school. I didn't really know if/how good they were. It's nice to know they're thought pretty highly of! Nice looking board though...simple & clean looking.
I found this Yahoo! Bond Ticker talk pretty interesting...the writing is kind of informal...like reading a blog posting...the guy actually mentions the "national ADD" as a reason why there's an 85% chance of September fed rate hike.
http://bonds.yahoo.com/bt.html

I'm 31, solidly GenX and I don't think of this generation as very pissed off (though we have every right to be for reasons that have already been stated). We seem to be the generation that wants balance in our lives, when that is becoming increasingly harder to have.

My husband is researching his next career field, and the one he's interested in is populated mainly by Boomers right now, soon to be retiring. The thing he has heard again and again from people he has talked to in the field is their bewilderment over the fact that this younger generation about to fill their shoes doesn't want to work 60 hours a week and wants to have time to spend with their families. Imagine that!

What selfish, lazy slobs we must be to think that life isn't all about working ourselves into the ground and ignoring our kids. (I guess we learned something from being the latchkey generation.)

Time to post an amusing conversation just overheard...
(from my RE-investing coworker)

"Sell? no I'm not thinking of selling anything until next year (Marin)
So, you're renting that waterfront place in Tiburon, for what--$2000/mo ? (A 2br cliff house)
Are you serious...that makes no sense, that area's very desireable (sounding perplexed). I bet they owned it for a long time...that's why the rent is so low"
(is reality sinking in for this guy?)

Face Reality, I agree with you to some small extent. Except that I think I do have it both ways. I work in a difficult, competitive creative profession, but I can do it at home, and I've made choices that allow me to be home with my kids and be there for them when they need me. I've chosen to work smarter when I can rather than harder--to use my work time as efficiently as I can so that I have time with my kids. To sometimes work at night so that I'm with them during the day--that sort of thing.

I realize everyone can't work at home, so I'm lucky in that respect. But I can't write it all off as luck, because I took risks and made difficult choices and worked hard to have the job that I have.

My husband's career field is a better example of where it's harder to have balance. There's a workaholic culture that doesn't buy into the "work smarter rather than longer" philosophy. I think the balanced attitude there is for people to get as much as they can done during work hours so that they can leave the office at 5 or 5:30, rather than competing to see who can stay latest. It means the difference between having an hour or so with the kids before they go to bed, or only seeing them on weekends.

So I wasn't arguing that everyone should just take the easy, low-stress jobs. I just think making family a priority that's larger than work is a difficult but worthwhile choice.

There’s a workaholic culture that doesn’t buy into the “work smarter rather than longer” philosophy.

Exactly!

If you short them and are wrong, you can lose big $$$$ - so use a stop loss. I am neither long or short the builders, have a short position in one of the mortgage lenders

Very true. Stop loss is not exactly a silver bullet because the market can gap. Keep getting stopped out is no fun at all.

I am implementing some "short" positions using deep ITM Put options, which has minimal time-decay and reasonable leverage. This way, I do not need to worry about whipsaws.

IMO, the secular bull market of the homebuilders has not ended yet. It is not prudent to take straight short positions in them.

(Not investment advice)

And, for a little more irony–the guy’s an economics editor for one of the larger academic publishers.

I am going to pen a publication on brain surgery. :mrgreen:

Part of the problem is that people think that pills work–they greatly overestimate the potential effect of medical intervention at every level.

East Bay Renter,

I am just amazed at the biochemical smorgasborg of patent drugs that some people think they "need" to carry them through the day. I have one aunt in particular who takes a panoply of drugs according to a rigid daily schedule. She has been doing this for years and is in awful health. I (and her husband) believe she would feel much better if she just weaned herself off all these drugs, ate right and exercised more. Of course, by now she'd probably have severe withdrawal symptoms.

I would expect to see more evidence of them in my everyday life outside this blog, but I just don’t see this.

Well, I guess you do not personally know people who "own" 10-15 properties using NAAVLPs. And you must not have chatted with realtors who believe that the risky loans are reaching a boiling point.

BTW, I do not see any evidence of problems in the educational system outside of this blog either. (smily face goes here)

Face Reality, by the way, welcome back too. Can you ask Fake P to come back as well, please? :)

dear all,
I was in brazil. I saw 2 bed room apartments for 100,000
us $. in rio de janeiro. its a very nice country as long as you know portuguese.

so why should you spend millions of dollars on housing in sanfrancisco?

New thread: Stage 1: Denial