patrick.net

Do you seriously believe that “boomers” are:

1. The only homeowners on the planet?
2. The only RE speculators?
3. The only greedy bastards out there?

Bay Are Homeowner,

I can understand how you might get that impression as a casual observer to the blog, but the reality is that a number of regular posters here ARE boomers (disclaimer: I'm not), and I think, good people. And no, the rest of us don't all believe that 100% of Boomers are greedy, self-absorbed, narcissistic hypocrites, though to be perfectly honest, MANY ARE. To also be perfectly fair, many of my generation (X) and younger (Y) are every bit as greedy, self-absorbed and narcissistic as your stereotypical boomer.

Yes, there's quite a bit of Boomer -bashing/ranting from time to time --some of it well deserved, IMO. I guess it really comes down to numbers and cultural trends. As a generation, the boomers trump everyone else in size and power to influence national politics and economics. The boomers were also responsible for promoting an extreme form of individualism during the Counter-Culture period of the 1960s-70s. Remember "The ME Generation", "Tune in Turn on & Drop out", drug culture, etc.?" These socio-political movements are not some figments of a Gen-X's delusional mind --they really happened.

As a result, Boomers get the lion's share of blanket criticism, which may not be fair to those boomers, such as yourself, who did not participate in such nonsense. If you feel personally slighted, I apologize --that is not my intention. But please take a hard look at other boomers around you. Are the criticisms you read here really all that far off the mark?

HARM, any chance we can start a housing deadpool? IE, predict the prices on overpriced BA properties, and get points based on how close we are?

We did have a F*cked County thread a long time ago. Perhaps it is time to have a version 2.0?

I do not like the flamboyant personality of Ellison too much. For the same reason, Steve Jobs is not my favorite either. I prefer the low-profile type like Buffett and Soros.

Peter P,

Jim Collins (Built to Last, Good to Great) would definitely agree with you. Buffet & Soros are closer to what he describes as "Level 5" leaders.

"Level 5 leaders channel their ego needs away from themselves and into the larger goal of building a great company. It's not that Level 5 leaders have no ego or self-interest. Indeed, they are incredibly ambitious --but their ambition is first and foremost for the institution, not themselves."

Fewlesh, Peter P,

We most certainly can have another dead pool thread, but shouldn't we wait for the verdict on the first one (when Dataquick releases the June 2006 numbers)? I'm thinking late July/early August.

You know, all of these boomer generalizations are crap. There are plenty of us that are just living our lives and going to work each day and trying to make ends meet just like everybody else. A little more of a civil tone would be greatly appreciated.

I was going to comment, but @HARM But please take a hard look at other boomers around you. Are the criticisms you read here really all that far off the mark?

I truly enjoy when the boomers out there get offended when we lift the lid off of the boomer whore orgies. Odd that us X'rs and Y don't mind when you spew venom about us, because I know you aren't talking about me or my friends. What's the matter boomer? Don't like the comments because they hit a little close to home? I bet at least half of your friends and siblings fit the typical boomer mold, amazingly selfish, living in grandiose visions of your common drug hazed youth. Why the hell do you think all the car companies are remaking musclecars? Why are there so many "classic rock" stations? Why because 60 is the new 30. No, no it's not, it's just embarrassing. Bad boomer, no orgy for you. And remember just because you got high in Berkeley in the early 70's doesn't mean you participated in Dr. Kings freedom marches. I'll use a bit more civil tone when the boomer hoard quits sucking the well dry. Sure Gen-X is contributing to the greed, but come on halfbaked how can a generation with less than half the numbers of the boomer hoard influence much? Whether you like or not your generation is defined by self-centeredness, greed and a desire to forever be a stoned 20 year old. You can't help it, you were marketed to since you were a coon-skin cap wearing snot nosed pre joint rollin moron. Get over yourself, buy a Dodge Magnum, Viper, or a 500hp Corvette and suck that freaking well dry, why not you and the hoard deserve it. Come on, look at how hard it was dismantling all the work your parents did. Shit why build companies when you can make more money for yourself by sending everything overseas. Sure as hell isn't the 35 year olds that are doing this. I can go on and on, Enron, MCI, Tyco, ahhh yeah, ice statues pissing vodka for a trophy wife, Gen X? Not a chance, just another aging boomer pushing the hair over the bald spot and trying real hard to convince himself he has still got it going on.

Didn’t they just buy peoplesoft or sap or some other company? It probably took this long to figure out who the duplicates are so they can lay them off.

They probably knew who are the duplicates of their possible Indian counterparts long ago.

So now I’m a troll. Thanks a lot. You can really dish it out but you can’t take any form of criticism at all.

I say that you are not. A troll lives under a bridge and is usually sushi-loving.

But it’s really too bad, because if you met me in person I’m sure this discussion would be a lot more civil.

If I remember correctly, Surfer-X is 73% more civil in person.

But it’s really too bad, because if you met me in person I’m sure this discussion would be a lot more civil.

Huh? I'm sorry, was there any profanity directed at you or the boomer hoard in general in my comments?

When they have the 'Stones play 3 songs at the stuper bowl, which they were paid over 2mil for, I get offened. Why is it again that we continuly have boomer music shoved down our throats? Come on, they in their 60's, but they are still rockin! I can't wait until they are in wheelchairs and you suckers will still plunk down 300 bucks to see them. Here's an idea, listen to something new, and give others a chance to listen to music that matters to them.

"I hope I die before I get old."
P. Townsend

"You already are. "
Surfer-X

Bay Area Homeowner,

I don't think you're a troll, either, but I do think you're taking the Boomer rants a little too personally. Like Surfer-X pointed out (undiplomatically --hey it's 'X', what did you expect?) ;-). If it doesn't apply to you, then why the sensitivity?

Boomer columnists & media talking heads constantly attack my generation all the time --we're all a bunch of lazy, bitter, whining slackers, remember? Does this describe some Gen-Xers I know? Sure, but I don't assume it applies to me personally.

How to spot a boomer? Throw a bag of weed and a freedom rock cd on the ground. The ones that dive on it like a live grenade are boomers.

I don't think you're a troll either, and I enjoy your comments, why is it that you feel compelled to defend your boomer breatheren? I don't feel compelled to defend my slacker counterparts, shit I'd be a slacker if the situation permitted it.

Actually, if I remember correctly he was telling us how he had a somewhat physical encounter with a boomer in Pacific Beach in San Diego. The boomer wouldn’t step aside for the surfer, thus hogging space that rightfully belongs to the surfer. This was too much to bear considering that boomers have been consuming so much and leaving so little for the surfer.

You have good memory. I remember that too. I do not know whether that was a joke.

Now, do we have a sushi bet or not?

The boomer wouldn’t step aside for the surfer, thus hogging space that rightfully belongs to the surfer. This was too much to bear considering that boomers have been consuming so much and leaving so little for the surfer.

Actually jackass, as the cigar smoking boomer approached I moved over half-way, which wasn't good enough for the boomer, so as boomer approached I dipped shoulder and spun boomer around. Remember, I gave my half but boomer wanted the entire sidewalk.

To much reality for you? Why don't you go back to belittling your employees? If you are going to quote asshole, quote correctly.

But the Us vs. Them stuff just gets to me, sorry.

Didn't the boomers invent this? I don't think all boomers are bad, nothing is always anything. And my comments aren't directed personally at you, they are directed towards "the machine" which as far as I can determine is currently being operated by the +50 crowd, ie boomers.

My current favs are death cab and jack johnson.

On boomers and sidewalks.

As you stroll down a sidewalk and someone approaches common courtesy dictates that you move to one side, and the person approaching you should do the same. Each of you pass with no contact and go about your merry way. This however breaks down if the person approaching isn't aware you exist and is accustomed to pissing on the help. Here's what polite society calls for in such situations, give your half, when you determine that pisser-on-er is going to in fact make contact with you, slightly dip shoulder and as contact is made (mind you, you have already been polite, now it is time to defend yourself), straighten out legs and spin pisser-on-er around. It helps if you are 6'2" 190, but if not the abruptness of the leg straightening can more that make up for any size differential.*

Note: not investment advice.

Here's a classic anti Gen-X/Y rant by smug, arrogant (boomer?) columnist, Daniel Gross over at Slate:

http://www.slate.com/id/2134007/?nav=tap3
The It-Sucks-To-Be-Me Generation
Twenty-somethings who can't stop whining about how the economy is screwing them.

Basically, the upshot: all you Gen-X/Yers are a bunch of whiny children. How come you're not all rich and comfortable like me? It's easy, you know, I did it so it *must* be that easy for everyone. Stop being so jealous! Now, where's that bong...?

Hey again Davis Renter,
Well as far as Red State Blue state business, I think the whole concept was a fabrication of the press in order to try and shake up the results of the last election. As far as the bare basics of where similiar minded and politically oriented tend to live, I think the real diffrence here is between urban and rural areas. There are a surprisingly large number of what you might call more liberally minded areas in the southern US. Such areas include Nashville, Memphis, Raleigh, Chappel Hill, Knoxville, Asheville, and Atlanta, and Franklin. I can go on, but you get the drift.I remember taking trips to Asheville and seeing the hippies on the street corners. To me that was pretty far out.They live up in the mountains too. Very much like Humbolt County here.
As far as religion, well religion is everywhere too.Go to Oakland and sometimes the streets are clogged with hispanic immigrants going to Mass. People back home don't try and make you believe as they do. There are more churches, but as a liberally minded person, I would expect that to be perfectly ok.Nobody is going to make a blatent statement about your lack of or adoration of a particular religion unless of course you get into a debate about it. My dad always told me that a wise person talks about everything except 2 things: religion and politics.
I can think of many places in California that reek of what one might define as redneckland, namely Redding. I grew up in the middle of nowhere, and boy.. Redding is about as hick to me as you can get. People cruin' in big honkin' trucks up and down the strip with nothing to do except hang out at In N' Out. I am always reminded that CA turns into stripmall-anywhere USA in about 5-10 minutes outside of SF. Perhaps that's why property costs so much inside the cities because the majority of the state looks like crap.

"I am always reminded that CA turns into stripmall-anywhere USA in about 5-10 minutes outside of SF."

So true...

"Perhaps that’s why property costs so much inside the cities because the majority of the state looks like crap."

Have you seen prices out in San Joaquin, Stanislaus, Fresno counties lately? They are absolutely ridiculous for those areas that do, frankly "look like crap" as you eloquently point out. Not only that but the local economies of those places in NO WAY warrant those kinds of prices. It is speculator, investment property HELL out in the valley.

Face,
Yes, He has a few points:

And so, here we are again. Now, today's twentysomething authors are clearly onto something. College is more expensive today in real terms. There's been a shift in student aid—more loans and fewer grants. The Baby Boomers, closer to retirement, are sucking up more dollars in benefits. There's more income volatility and job insecurity than there used to be.

But then he jumps off the deep-end with non-sequiturs like this:

Draut argues that "with the possible exception of having a larger array of entertainment and other goods to purchase, members of Generation X appear to be worse off by every measure" than prior generations. Huh? How about the Internet and Starbucks coffee and Lipitor and not having to worry so much about AIDS or crime or Mutual Assured Destruction or getting drafted into the Army and getting sent to Vietnam?

"Huh?" indeed....
Yes, now we have Lipitor, the Internet and Starbucks. Big deal --I'd trade any of those (except maybe the Internet) for a speculation-free housing market any day. And BTW, Boomers can't really take credit for the Internet --it was an outgrowth of post-WWII DARPA research.

"Not having to worry" about AIDS anymore? Who the hell does he think he's kidding? HIS was the generation that invented "free love" and didn't have anything deadly to worry about. Mine is the one where casual sex=death sentence. Sure, you can take an endless cocktail of drugs and survive a long time if you're insured and live in a wealthy western country. Sorry poor people & Third-Worlders!

No, we don't have to worry about Vietnam. Instead, we have a constant stream of shithole Third-world countries to fight for various reasons (got nukes, want nukes, got oil, want to annihilate us for naughty cartoons, etc.). Come to think of it, I doubt Daniel himself had much to worry about --wasn't the draft over by early 1970s?

Russian-American M.A.D. No, we don't have that anymore, but nuclear proliferation has actually gotten worse since the Cold War in the sense that even small, unstable countries are more likely to have them. This makes the odds of a terrorist obtaining one --and using it-- that much more likely.

We are supposed to buy into an enterprise that layed our parents off, layed our friends off, and then layed us off. I find that most of these slackers are productive, but not necessarily in the way that the ‘dominant powers’ want them to be.

Why do you hate Amerika?*

*Been laid off in the early 90's (aerospace), and the mid 90's (semicon capital equip). Most of my friends have been laid off at least once. The key is to avoid debt like the plague so you can travel on the unemployment money.

May I assume you suggest that aging people purchase a Dodge Magnum because it can double as their hearse when they die?

Your keen insight infers an encyclopedic knowledge of boomerdom.

May I assume you suggest that aging people purchase a Dodge Magnum because it can double as their hearse when they die?

Your keen insight infers an encyclopedic knowledge of boomerdom. Whoops, nope, sorry, I was mistaken, couldn't double as a Hearse, as the boomers are never going to die.

Boomers are the last generation to get pensions. The big corporations are freezing the gen-x and gen-y out in the cold.

"Some people make it happen with RE investment…"

It's WAY too late in the game for Joe Schmo investor to start purchasing negative cash flow properties. There are now so many cooks in the kitchen they will (are?) trip(ping) over each other to get the hell out.

Mutual Assured Destruction

I love MAD. It means peace. Only through the peaceful threat of annihilation can we achieve peace.

AIDS

Can anyone here guess the probability of infection though a single known sexual exposure to HIV.

Russian-American M.A.D. No, we don’t have that anymore, but nuclear proliferation has actually gotten worse since the Cold War in the sense that even small, unstable countries are more likely to have them. This makes the odds of a terrorist obtaining one –and using it– that much more likely.

Exactly. The chance of a nuclear even has gone up since the end of the Cold War.

It is still possible to make money in RE.

It is still possible to win a lottery.

You can’t really estimate the risk of HIV infection from a single exposure because of the number of variables. Amount of and pathogenicity of virus the infected person is shedding, exact method of exposure, intactness of exposed epithelial tissue, other infectious (particularly ulcerous) diseases, being circumsized or not, even such things as epithelial exposure to detergents before the exposure to the virus can increase the risk of exposure.

Good answer. :)

Are you a medical professional?

Also, with MAD or not, the world has not become safer. How many people were killed by MAD ever? How many people were killed by drunk drivers last month?

This is a false analogy. Lottery is pure luck with a very remote chance of success. RE is a business. There’s an element of luck in business (like in everything else), but it’s only one of many factors (and typically not the dominant one).

Successful business people like yourself with always over-emphasize on their own merit.

When you are winning, it is because of you. When you are losing, it must be bad luck!

It is all about expected value. We maintain that buying negative-cashflow properties at this point of the cycle will bring a negative expected return.

The lottery analogy is not inappropriate.

Moreover, only a statement can be true or false. My analogy as a statement is true. :)

On the boomer vs X gen issue: I’ve seen some pretty egregious behavior all around. I’ve ammended my philosophy to SAS “selfish asshats suck”.

I'll buy that for a dollar!

Well, people like to think that they have much control over their own lives. I know, it is just a comforting thought.

FACE

SOMETHING WICKED THIS WAY COMES...

Fed Focus
Paul McCulley
Managing Director PIMCO
February 7, 2006
mcculley@pimco.com

“…When the cyclical turn comes, it will be a wicked turn, our guts say, as conventional policy gives way to unconventional property market weakness….”

Paul also mentioned something about reflexivity.

Perhaps this life lesson in reflexivity is a freebie that comes with my purchase of The Alchemy of Finance. :)

As far as the Dodge Magnum goes…nah.

Why would anyone possibly want a Dodge Magnum?

What if I buy a negative-cashflow property in an up-and-coming area, invest in major improvements (such as tear down and rebuild), and sell?

The market discounts more information than you think. Up-and-coming areas are especially overvalued already.

I know many people who have been doing this successfully for years - long before this bubble and even during downturns.

The keywords are "long before this bubble". Hindsight is always 20/15.

Let’s take the example which I described before of the church in SF that was turned into a 14-unit condo development during 2003-2005.

How much would that church be going for if the developer is buying it today? I bet the market would already have discounted a large portion of the expected profits.

Land prices are very highly geared. The smart thing to do is to buy land when the market is not discounting high expected appreciation and the competition for land is not feverish.

I was a molecular biologist doing tropical medicine stuff. I know nothing about real estate other than that it is soooo overpriced in San Francisco at the moment.

No wonder. :)

That’s why “major improvement of the property” is a key element of the strategy.

You still have to make more profit than what the market has already discounted.

True enough, but there are such opportunities out there, even now.

I do not disagree. But I think the risk/reward is not favorable.