patrick.net

And I admit, rather depressed. I recall the long discussion about Anna Nicole Smith, so why can't we be bothered to commemorate a great American novelist.

Hier ist Amerika. Was kann ich sagen?

It seems that you think very highly of yourself but remember that your self-evaluation is very SUBJECTIVE, especially if it is only based on YOUR set of VALUES and on YOUR PERCEPTIONS of reality…

I think very lowly of myself...

But I do think that it is very important for a person to make value judgments. Everyone can be objective so being overly objective gives no edge.

Peter P,

I don't even plan to breed. Genetically speaking, I'm a total loser.

TOS,

Keep your projections to yourself. If I wanted a psychoanalysis, I would not ask for one from you.

I mean are you REALLY part of the top quartile of the population in terms of wealth?

I am sure astrid's net present value is in the top quartile of the population. Comparing net worth between a house-rich retiree and a young lawyer is like comparing the utility between an old pickup truck and a new prius.\

I don't think very well of myself at all, but I am prone to bouts of hyper-criticalness against others.

I don’t even plan to breed. Genetically speaking, I’m a total loser.

Anyone who can spell "loser" correctly is not a looser.

I don’t think very well of myself at all, but I am prone to bouts of hyper-criticalness against others.

It is perfectly fine to be a hypocrite occasionally.

I aim to save enough to retire early and not so much that I'll have money leftover after I'm dead.

I aim to save enough to retire early and not so much that I’ll have money leftover after I’m dead.

Aim to retire by 40.

Peter P,

If the housing bubble doesn't deflate and restore balance, that may not be possible.

My hometown of Shanghai is an extreme example the wealth imbalance brought on by rapidly escalating property value. Unless my cousins lead exceptionally successful lives, they cannot possibly save as much as their parents currently have in house equity. Eyeing potential marriage partner's family assets is not crass there but very practical.

theotherside

Don't underestimate Astrid as others have done of you.

Well, I said "aim." :) Nothing is guaranteed.

I afraid that imbalances will not go away. The best we can do is to pick the right side of the game.

One can never get rich by earning money. It has always been a growth game and it will always be in the future.

Profit is that which you did not earn.

Don’t underestimate Astrid as others have done of you.

Don't misunderestimate me either.

Peter P,

I would never underestimate a cylon or a cat, nevermind a combination of both (in my mind's eye).

What is a cylon?

I'd be interested to know what astrid does. We've been hearing a lot about the between-jobs boyfriend. :o Most culinary types I know are either total techies (seems likely given the penchant for Firefly) or consummate hippies.

But maybe I'll be shocked at the answer?

Culinary types?

Nothing shocking.

I'm merely a lowly law librarian. I hadn't corrected a perception here from back in the old days when I still wanted to be a lawyer. I'm going to take the bar but I don't think I'll ever practice.

I’m going to take the bar but I don’t think I’ll ever practice.

Many lawyers do not practice.

I thought most hardcore techies prefer Startrek.

Interesting, and not what I expected. At work I rather enjoy projects with the patent attorneys. Were I more meticulous, I would consider that career path myself.

astrid, you often remind me of my old friend Elaine. Chemical engineer, prolific foodie, acerbic yet observant, first generation Chinese-American. Her perspective from her time in Shanghai and Hong Kong was very different from the typical American.

We'll see about my boyfriend. He's agreeable to some Berkeley summer classes. It's been frustrating because there's a fine line between not pushing him enough and pushing him too far. There's also a fine line between motivating him to fulfill his promise and an academic keeping up with the Joneses.

Cylons are a race of deadly self willed robots from the Battlestar Galactica series.

http://en.wikipedia.org/wiki/Cylon_(Battlestar_Galactica)

Astrid is too smart to be a lawyer*.

*My apologies to all the smart lawyer out there, not the least of which being SFW's husband.

I've been trying to convince Astrid to get an MBA and turn to the dark side. She'd make an outstanding capitalist.

The price reductions in BA are visible only in non-Fortress area. In the Fortress, bidding wars still happen. The supply-demand is definitely in favor of the sellers there. The stories of Tracy and Cupertino are as different as day and night.

The median skews the picture even more in the Fortress.

The job market is really good, and mortgages are still cheap. So people keep buying. In spite of the income levels and rates, I am amazed by the risk taking nature of folks.

So I have a question for Patrick.net bloggers. If you were earning around 200K, had 200K in down payment, would you buy a 1.3M house ? Because someone I know just did. If you run the numbers, they can afford it. NOW. But everything needs to remain just perfect. Almost for next 30 years. That need for perfection worries me. But from my point of view, the worst thing is - this completely messes up financial freedom. You will either need another bubble or have to work till you die.

Couple of years ago, after such stories, I used to shake my head and wonder when is this madness going to end. Now I don't care. Not having a mortgage has done wonders for me. I love my freedom way too much to become a mortgage slave.

http://sfgate.com/cgi-bin/article.cgi?f=/c/a/2007/04/13/HOMES.TMP

pre-spring bounce?

StuckinBA,

I won't buy now, the reason? Watch the dollar. USD just breached 1.35 with Euro, lost ground against all major currencies. What does that mean? Whatever cash I have today, if exchanged into an anti-dollar position, I come back in 5 years, I will be buying a much bigger home and better location.

Over the last 5 years, USD depreciated over 50% against Euro, and it is far from being over. I expect CAD, AUD to be at least reaching par with us if not more. Euro is just representing the first wave of currencies to appreciate against us, at some point, the Asian currencies will have to start moving too. Did BA average $200K household become $300K household over the last 5 years? The answer is obviously NO.

That means, the market may have a softer crash due to the currency movement, but the value of BA homes expressed in other currencies or other assets is bound to go down.

For someone with a big chunk of cash, the best strategy is to sit in anti-dollar asset and wait for dollar to crash, then buy the cheap assets expressed in dollar terms. USD is worth a lot more today than in the future, why should I pour my valuable $200K USD@2007 down the drain? I will commit to spend my $200K USD@2011 instead.

Anyone who can spell “loser” correctly is not a looser.

Anyone who gives birth to a kid is certainly looser.

As for 'In the Fortress' more houses are falling into my search criteria (Sub 1mill, 3+ bed) in MV and PA as the time wears on. This may be because of the bounce in listings. It'll be interesting to see how it holds up into the summer and fall.

OO,

Oh yes ... I was just reading at Bloomberg. Nikkei is down over 200 points, Yen is up and USD is at 2 year low.

I am very uncomfortable in putting cash into other currencies. I do have some in MERKX and GLD, but only 5% in all. I was looking at FXA due to the yield. But nothing else. I wish Vanguard had an international bond index fund ;-)

SP :

What investment options do you suggest ? (Not investment advice etc.) But apart from foreign bonds and ETFs (like FXA, FXC) I am not aware of direct currency plays. I did not like those specific currency CDs - forgot which bank was doing it. So I am leaning towards using ETFs like FXA and FXC.

TIA

StuckinBA,

I would recommend GIM (mutual fund version is Templeton Gloabl Income fund), widely spread across a basket of currencies, low management fee (0.8%), actively managed but 0 leverage, current distribution about 5.xx%. I have had it for over 3 years, and have seen the manager actively migrating across different geographical regions to maximize the gain in NAV. This is probably one of the most pure play non-USD high quality sovereign bond funds.

I got it as ETF long time ago, but won't recommend going ETF now, because it is a closed-end fund that is currently going for 6% premium. I never buy any closed-end fund at premium. You can buy the mutual fund at its NAV.

not investment advice.

Anyhow, I’m a little surprised that no one said anything, nice or otherwise, about Kurt Vonnegut.

Human beings will be happier - not when they cure cancer or get to Mars or eliminate racial prejudice or flush Lake Erie but when they find ways to inhabit primitive communities again. That's my utopia.
Kurt Vonnegut

Thought you would appreciate that one DS.

Vonnegut is one of my favorite authors too, but my favorite novel of his is Hocus Pocus, which makes me kind of an oddball.

I would buy this house if it were $1.2M:

http://tinyurl.com/2tuuxp

Unfortunately, it is not.

I would not dump every last penny I owned into a house and hope that everything worked out, no. I would want at least a six month reserve, after the downpayment. Before my daughter was born, I might have been willing to take the risk, as long as I had a plan to rebuild my reserve afterward.

the myth of 'hard work' getting you ahead is only for the working poor being exploited on minimum wages... the rest of us are leading a leisure life, where the higher up you are, the less work you have to do.

astrid, maybe your BF should become a MB. if you can't beat 'em, join 'em :twisted:

So I have a question for Patrick.net bloggers. If you were earning around 200K, had 200K in down payment, would you buy a 1.3M house ? Because someone I know just did. If you run the numbers, they can afford it

The can't afford it even if there is no housing bubble.

Doesn't PITI come out to be about 50% of the combined income? Will it be beef or chicken flavored ramen for dinner tonight?

Thank you all for you kind words for me and for Kurt Vonnegut :)

DS,

Thanks but no thanks. The mortgage brokerage business is collapsing in the US and current business practices are very unsavory. I would rather my boyfriend became a fry cook or a professional gambler than be either a MB or join the military.

No offense to former and current military folks. I have great respect for military people, but the current leadership resemble the British leadership for the Crimean War.

hmm, I wonder if MB is really crashing. And is there such a thing as a reputable, blue chip MB? Apart from expansion/contraction in MB jobs due to the boom/bust cycle, you would find there is always scope to write loans to folks -- even in a downmarket, people are still buying houses, just paying a bit less than last year. Same for RE agents, the gordon gecko days are over, but houses are still going to be sold...