patrick.net

a government that is clearly not an ideal one.

hmm, so we trust our own politicians now? are dubya and rice and rumsfeld and wolfowitz and powell and the whole lying conniving gas/oil junta who got in on 2 rigged, undemocratic elections a preferred option? is FEMA an effective institution? how well did they deal with the aftermath of katrina? what about the reading of 'my pet goat' while the WTCs were being attacked, and the general disappearance of the leadership for several days? interesting how little interest for the people is being shown by the so-called 'leadership', hmm. seems more like a kleptocracy to me - loot the coffers for our cronies while we're in power... even if dubya's popularity is at an all-time low, are you convinced that the diebold machines with their 'commercial-in-confidence' code are going to allow a better alternative to be elected next time? 1984, here we come...

under the surface, china is actually a tremendously commercial culture - they are born mercantilists. note that the industrialising south of china, far removed from beijing, is the engine-room of the chinese economy, and taking over the world - at least while labour is cheap. many chinese factory owners, and others, are getting wildly rich from the manufacturing boom. however, they are just culturally different, and starting from a different place and a different set of understandings. remember things only started to get better for people in the 'western world' and people started to develop a sense of 'fair play' once they could accumulate relatively large and stable surpluses and thus gain reasonably assured levels of wellbeing.

The inventory of unsold homes rose to a 6.7-month supply last month. “There are a lot of people who can’t afford to buy at today’s prices,” said John Burns.

Interesting ratchet effect with property prices - people are very loathe to see prices drop, defying a traditional supply/demand economic model... And some of these people bought their houses for chickenfeed prices decades ago, and still want to get top dollar, it's not as tho they bought last year and are going to get a complete soaking if they sell for only 8 times what they originally paid instead of 12.

Juku roboto, it's all making sense now.

The conspiracy ranges beyond Jukubot, I'm afraid. I fear it is in fact a syndicate of Orwellian bots, coordinated and working towards the same goal of undermining Western Democratic Liberal Market Capitalism. [Note I have purposefully interjected an ambiguous usage of the "L" word to test the Turning merits of monitoring Jukubots.]

Could this all be emanating from "The Futurist". Is "The Futurist" itself a mocking title, in grand Orwellian style, which foretells the distortions we can expect in this yet free media of the blogosphere?

I need a drink.

[Note I have purposefully interjected an ambiguous usage of the “L” word to test the Turning merits of monitoring Jukubots.]

Do you think it is goog enough to defeat captcha? If it is, perhaps we can turn it into the ultimate spamming machine.

the Futurist 'article' (read: uninformed and jingoistic opinion piece) on strategic relations between the US and India was just hysterical...

According to the article, everyone who fights the red menace is a 'friend' of the US, and no country is self-interested - they all just want to be allies with the US and do as they're told. India is generally a desperately poor 3rd world country, the US has set up a lot of industry there, of course they're not inimical to the flows of money, and the possibility of leaving to a more affluent life one day. As soon as Indians become sufficiently wealthy, they can't wait to leave the place and get away from the whole mess, they don't hang around...

Australia is actually better positioned geographically than the US to be a strong trading partner and ally with both China and India, including huge migration transfers and business partnerships... You will notice the Australian govt is very loathe to criticise China on anything much, as Australia is poised to be the English-speaking entrepot centre for trading in the whole south Pacific and Indian regions...

@Bap33, just been busy spreading the love down in $anta Barbara, replace the engine in my Tbird, I drive through Montecito and screw at the yuppies, then hit the 3-wheel motion, take a sip of the potion and I'm outa there.

If toast always lands butter-side down, and cats always land on their feet, what happen if you strap toast on the back of a cat and drop it?

why don’t the chinese just take the Apollo moon pictures and paste chinese faces on Neil and the crew

don't give jack white any more ideas... : (
http://www.aulis.com/jackstudies_1.html

Randy H
I thought the 'L' Word was a sexy lesbian show on Sunday evenings. Am I Wrong?

Is that the Marina District that is under water?
http://sfgate.com/cgi-bin/article.cgi?file=/c/a/2006/03/24/MNG22HTITV1.DTL
(check out the map)

In my business, (fountains and statuary and some REALLY cool stuff if I do say so myself) a lot of mfs. take their manufacturing to China for obvious reasons. There is so much corruption, however,if you're making something that has any appeal whatsoever, it's out the back door and knocked off before you can blink. I'm proud that I manufacture in USA. Today was a pretty bad day with that. I had a deal set up with some Armenians to produce my product and they started"trippin on me" so,...I'm in the drivers seat. No deal for the trippin Armenians. Oh well...onto housing and Chinese....

Linda in LA-LA

Even more cleverly hidden ambiguity. We'll see just how good the Jukubot is.

See Randy! You are even more clever than you thought!

Does anybody know why there are no "HOUSING STORIES"for Fri.???
I do so look forward to them!

sorry
from going out the backdoor
It's Friday...I'm drinking Cotes Du Rhone...

The Economy: Consumer Fatigue
The consumer is finally fatigued.
The surge in housing prices over the last five years has largely been fueled by low mortgage rates, looser lending standards and an increase in speculative real estate investing.

Absolutely. It's a dog-eat-cat world (because we let it be).

lower housing prices could whittle away at consumer confidence and spending.

I'm not so sure about this one - consumer confidence is down right now because young people have a bigger % of their income going into passive bricks and mortar (or frame and weatherboard, depending), thus reducing discretionary spending in retail. In other words, empty land is soaking up their $$$, hurting the retail sector.

Am I the only one that noticed that Linda said backdoor?

hymie Says:
Don’t know how long you have been reading/posting, but for some reason MarinaPrime comes to mind.

Yes. I've been reading for a while. :-)

Wouldn’t the lower real income that most middle income people have been earning the past few years exacerbate this?

I don't know many people doing the house/ATM thing unless they've just about paid off their home, or have gone a considerable way towards it. They often bought it relatively cheaply 20-30 years ago, well before any booms... There are also the 'reverse equity' loans for retirees who draw down from the house ATM in retirement, meaning less of an inheritance, but they can then live comfortably. Who knows, the bank may own the entire house by the time they pass on... But if they bought it for $100K in the 70s, own it free and clear, and it's now valued at $600K, and they borrowed $100K against it, there would have to be a lot of devaluation before they got into trouble...

Estimates of 'lowering real income' are always a little shaky, you have to factor in a lot of variables, e.g. cost of consumer electrical goods has come down dramatically, remember when VCRs were $1,000 with no features? And all the cheap consumer goods we were discussing coming out of China means your dollar actually goes further (although your whole job might go overseas in the process, in the global manufacturing 'race to the bottom'...)

But, clearly, sudden housing booms where young people pay increasingly more in desperation in order to establish ownership, without concomitant rises in pay, which is what has happened, lead to lowered discretionary income after mortgage costs are taken out. ('mortgage' means 'dead wage' in Old English from Norman French, by the way). That boom, in the 'Juglar business cycle' has only been going for 8-10 years, exacerbated by 9/11, liberalised credit and instability in the stock market.

Glaciers and ice sheets on opposite ends of the Earth are melting faster than previously thought and could cause sea levels around the world to rise as much as 13 to 20 feet by the end of the century, scientists are reporting today.

That 120 m2 $3 million dollar hole in Bondi Beach might be underwater soon, then... might lead to some devaluation - talk about buying at the top of the market...

More Republicans Satisfied With Sex Lives Than Democrats

naah, not possible - or did they take bill clinton's data out as an outlier first?

look at the difference in the people who showed up to the democrat vs the republican conventions - the republicans were all wearing blue blazers and couldn't dance... sad gits...

tho, on a serious note, a recent survey showed the working poor have a worse sex life than avg because they have less time and energy after working multiple, exhausting, menial, manual jobs... that's nothing for the reps to be proud of... 'we have a better sex life because we're slackers who've worked out how to get others to do the hard work for us, and become slick, useless corporate lawyers instead'

wait a sec, republicans could be more satisfied with their sex lives even if they have no sex at all, by that measure! they might prefer to sit around counting their money, and whipping people... a democrat could be having 18 times more sex, and yet be less satisfied... besides, they have to crosstab political party by gender, earnings, etc to get meaningful results - the survey points out reps are more likely to be men, so it's skewed straight away. plus they need to do a few t-tests to prove significant difference...

to keep the new designs from going out the backdoor.

Linda, Your incisive post, brilliant in its conception and daring in its studied opacity, leaves me almost speechless save for a "you must be HOT!" I wonder if SFWoman, even with her army of mitochondrial nanobots, is any match for you now.

hmm, yes, there was a consonant shift from 'w' to 'g' in French (e.g. warranty to guarantee, war and guerre), and it was explained to me that it was 'dead' money from wages that a feudal tenant owed to the lord to kepe the house, but:

The great jurist Sir Edward Coke, who lived from 1552 to 1634, has explained why the term mortgage comes from the Old French words mort, “dead,” and gage, “pledge.” It seemed to him that it had to do with the doubtfulness of whether or not the mortgagor will pay the debt. If the mortgagor does not, then the land pledged to the mortgagee as security for the debt “is taken from him for ever, and so dead to him upon condition, &c. And if he doth pay the money, then the pledge is dead as to the [mortgagee].”

Or something. Whole thing's a bit of a mess, really...

http://en.wikipedia.org/wiki/Mortgage#History

because back in the day if you could not pay your land loan they would kill you.

P.S. they wouldn't actually kill you. they 'conveyed' the land to you (hence the concept of conveyance), and you had to pay a fixed amount back whether you could afford to or not and was not conditional on how much the land had produced. i think that was why it was a 'dead' pledge, rather than a variable one. or something. if you couldn't meet the repayment, they could just kick you off the land and resume it, as the lender was still the absolute owner in that day until the mortgage was fully paid off.

Increasingly the courts of equity began to protect the borrower's interests, so that a borrower came to have an absolute right to insist on reconveyance on redemption. This right of the borrower is known as the "equity of redemption". Mortgage lending has now been reformed so that title is passed to the mortgagor, and the bank is simply lending with the property as security. good old common law...

yes, Latin -> Old French -> Norman French -> English. The Romans went through Gaul and got as far as Scotland, in fact... But a 'mortgage' is a feudal concept...

and fired: The v. sense of "sack, dismiss" is first recorded 1885 in American English, probably from a play on the two meanings of 'discharge': "to dismiss from a position," and "to fire a gun".

There's so many disputed etymologies and alternative explanations tho, there's whole websites devoted to it...

I'd like patrick to lash out and start a proper threaded set of forums with a chat room etc so we can indulge all our hobbies - don't know if you can get that sort of capability for free...

Troll-b-gone please.

SFWoman,

I probably know the person that you had tea with (your friend's friend). I know many Chinese IB/VC/Hedge fund types etc. ethnically Chinese, which I am, and knowing people from the same circle.

This guy is fine, at least he sends his kids to American School in Shanghai, there are numerous examples of Chinese officials or businessmen coming to the US to drop babies only to bring them back to be brought up in the commie system going through the local brainwash programs. See, the thing is, most Chinese covet the American lifestyle and wealth, but sneer at our system. They believe that America's wealth is built on economic and military colonialism on third world countries (partial truth), alone. So they believe as long as China smartens up (meaning knowing how to play the international games of deceit), and militarize itself to the teeth going forward, then China can rise up to challenege America. For some reasons, lots of these elite kids have an obsession to "conquer the world", because that is a part of the chauvinistic culture. Worse still, when they come out, and become upset by the language and cultural barrier, they naturally seek comfort in excuses like racial discrimination, and become even more obsessed with the idea of "beating America". It is a love-hate relationship, they love America for what it stands for, but hate America for not being the ones controlling America and stepping on top of the world.

During 911, the Chinese websites were swamped, I repeat, swamped with cheering sound and anti-American slogans, like America deserves this and much more. Now, I don't like Bush's admin, and I think he has personally squandered most of the sympathy we had right after the tragic accident. I can understanad why an Arab will hate us 3 years after the Iraq war, but cheering right after 911? People who could manage to go online from China, especially back then, were still a fairly educated and financially better-off crowd, and almost all of them desire to become America citizens if given the chance, but they still harbor this kind of jealousy-inspired-hatred towards us, I personally find it alarming and sad.

Now back to the business environment in China, which I did have the pleasure to experience through my own personal dealings and friend's word of mouth. Among our two debtors, Japan and China, I trust Japan much more than China, and China's USD savings will surpass Japan this year. The reason is not because China tries to screw us, it won't because the communist government is probably the most fundamentalist capitalist government you will ever see, and its only interest in the country is to stay in power, and let its party members profit personally, so Chinese government has no incentive to screw us. The issue, however, is, how long can Chinese government stay in power?? How long can it distorts basics of economics and keep hoarding greenbacks, essentially subsidizing our consumption? It obviously cannot go on forever, for us, the price to pay is a lowered standard of living, for them, the price to pay is social stability.

The business environment there can be summarized in one phrase, think Gang of New York. It is corrupt for sure, but the government is also perfectly intertwined with mafia acitivities. Recently, a Chinese billionaire was executed along with his 2 brothers for some phony accusations, 10 minutes after the verdict was reached. Of course he was not killed for what they said he did, instead, he was long known within the circle to be the money-laundry guy for quite a few very high-level officials. When he grew to know too much, he simply needed to be taken out, along with his brothers who knew these affairs. Things like this happen on all levels, it is surely a lawless society with almost no moral values. The lack of moral value and the strikingly widening gap between the rich and the poor will be the biggest unsettling factor for China going forward. Well, if it hasn't hoarded so much USD, that won't concern us, because industries are already starting to flee China to be relocated to Vietnam and India for lower costs. The reason why China's stability should concern us is, what will happen to our exchange rate?

We all know USD is over-valued given our situation. But nobody, even including the haters of America, would like to see it collapse, that will create too big of a ripple effect across all sectors, all countries. So what the world is hoping for is an orderly, gradual adjustment in the medium to long term for USD to depreciate, so the impact can be absorbed over time. For that, we are counting on China to remain stable for a few more years.

Schmend,

that article is such a bullshit. If anything, Asians are discriminated against in school admission, we are never the part of the Affirmative Action program, it only includes Latinos, Blacks, because Asians are way over represented in schools. I remember a few years back the UC system even put a cap on how many Asians they can accept, or else the campus will be full of Asians, not that it was not already the case.

Senor the HARM, please delete the troll. There are blogs out there for it.

Shmend,

there won't be any civil revolt in China led by Muslim faction, that is just entirely absurd. The Muslim population in China accounts for less than 0.2%. I don't know what kind weird articles you are reading, it cannot be further away from truth. Religion was never an issue in China, and never will be, because it is predominantly ONE people, the Han race, one religion - money.

I don't know about your accusations about other races, but if affirmative action was taken away, rest assured that most prestigious US college campuses will be flooded with Asians based on fair competition alone. As an Asian, I am all for abolishing affirmative action, because that can only benefit us. Especially in the Silicon Valley, it is soooooo hard NOT to hire an Asian employee, just based on the quality and quantity of job applicants alone, you will have overwhelmed your AA quota by far.

My obseravation is, recently (note beyond 2000), the American government is acting a lot alike the Chinese government. Not that I am accusing that our government is the same, no, but the Bush admin seems to be emulating a lot from the Chinese.

Fabricated truth, corrupt government officials, brainwashing programs, promoting GDP growth at all costs (like Dol "tampering with" core CPI numbers, letting housing bubble go outta hand), the widening gap between the haves and havenots (the homewoners vs. renters) etc.. Of course we can't blame everything on this admin, because it also inherits problems from the past. But the acuteness of problems and cover-ups, and the division of the nation are all getting more and more noticeable.

It is like the American government is trying to learn from the Chinese admin on how to deceive its people.

Yeah. Life is too short to get locked into a mortgage....especially at the prices at the peak of the bubble.

Rather wait till prices correct.

"Americans believe they can get rich by spending someone else’s money. They believe that foreign countries actually want to be invaded and taken over. They believe they can run up debt forever and that their debt-laden houses are as good as money in the bank."

"That is what makes the study of contemporary economics so entertaining. We sit at our telescopes and laugh like a divorce lawyer looking at photos of rich man in flagrante delicto, we know there is money to be made." - Empire of Debt, a New York Times Bestseller

If one wants to live the life now, spend about $2,500-3,500 renting a $1M- $1.5M home is certainly living it up. There are plenty of rentals like that, in a great school district, nicely remodeled, some even with amazing view.

The house would sell for $1.5M in the current market, PITI + property tax + insurance, you go figure. But all you need to pay is $3,500 a month while the landlord bites the negative cashflow. Morever, if you have a great credit record, you can even negotiate it down, because renters with good record have all jumped on the housing bubble bandwagon so they are hard to come by. The landlord would rather take a $300-500 haircut on rent than leaving their biggest investment in life to careless hands.

Even if you have 10Hahas in cash, put it in the bank, 5% gives you $75K pretax every year, more than enough to rent a nice home while it depreciates. When you grow tired of the home, just pack and leave for another.

Spring is a good season for a fall.

THUD!

Owneroccupier Says:
March 23rd, 2006 at 11:50 pm
Unlike the US, ALL land is owned by the state and you can only lease it for 50 years (commercial and retail) and 70 years (residential). How does the government obtain occupied land in the center of the city for re-development? Well, pretty much whenever and whatever the government wants, the resident need to hand over, sometimes receiving very little compensation.

Fair enough, although, interestingly, the US govt has the right of eminent domain - the state grants you freehold use of your land, which can be revoked, and further obligates you to pay various taxes on it, etc, under threat of seizure or forfeiture, I suppose... There's a hierarchy of title, with allodial title being the highest level of (sovereign or govt) ownership, free of taxes, etc, and fee simple being the 'owner-occupier' level of freehold...

http://en.wikipedia.org/wiki/Eminent_domain & Allodial_title & Fee_simple

Owneroccupier Says:

"Especially in the Silicon Valley, it is soooooo hard NOT to hire an Asian employee, just based on the quality and quantity of job applicants alone, you will have overwhelmed your AA quota by far."

Before you settle in on the superiority of the Asian student, not so fast cowboy.

I went to school in Cali and I think some Asian students are overrated.

I saw a lot of networking, notes floating around from prior semesters, cherry picking professors, student giving friends heads up about what was coming up on tests, etc.

They had the system down to almost a racket.

A lot of them couldn't write worth a shit either and relied on others.

Just my observation.

You can go back to your Asian supremacism now.

I/O ARM Beautiful mansion in the daytime that at night literally starts to ‘eat’ its new buyers after they move in and the financial difficulties start arising one after the other. Lots of feelings of the uncanny, and some outright frights.

Sounds more like an advertising executive's idea for a discount mortgage lender's campaign, doesn't it? 30 second commercial... they have a 'tame the mortgage monster' ad here...

Ha Ha Says:
March 25th, 2006 at 5:04 pm
http://www.jsonline.com/story/index.aspx?id=410329
New derivatives can hedge against falling housing prices
By JOHN SPENCE

There’s your answer, Peter P - how to make money in a falling market by the attempted management of uncertainty and risk…

On the management of risk, has anyone read The Politics of Uncertainty? by Peter Marris - political economy… definitely not a read for technocrats looking to design new instruments tho…