patrick.net

Brand, I totally with you conceptually but I also like the trend I'm seeing of demanding quality in things. I believe if you are going to invest in a new kitchen you should use stone, and quality materials. I don't have a problem with those sorts of luxuries. It's the people that you describe to a tee that really disgust me. The ones who would actually go into debt making themselves truly poor to try to appear to be living the high life. I also don't understand why they choose their purchases the way they do. I'm telling you, you get much more admiration for putting a nice solar electric system on your house than adding another RV to the local congested street parking problem.

The ones who would actually go into debt making themselves truly poor to try to appear to be living the high life.

Worse yet, they have poor taste. And many of them do not even renovate their bathrooms.

I’m telling you, you get much more admiration for putting a nice solar electric system on your house than adding another RV to the local congested street parking problem.

Solar is cool. Still too expensive per kW though.

If you want to drive an RV across the country; I don't get it personally but I don't judge either, then rent one, but for God sakes don't buy one and park it on the street. I had a neighbor across the street from me in a previous house that did that and it was literally all you could see out the front window.

Very expesnsive, but I bit the bullet, and I think it was a good decision. There is an intangible pride factor to consider in the ROI. My strategy has always been to put money where it does something, anything verses buying toys. Even if my ROI is 6-8% on a solar system, it is much better than the ROI on a boat.

Speedingpullet

In my work life, the class system is alive and well. I am a nurse practitioner and through our previous real estate deals am probably worth more financially than many of the docs I work with.
However, if you don't have an M.D. behind your name, you can never join the top of the very stratified hierarchy. I guess it is a human failing to need to pretend to be better than others.

Danville woman - I hear you about the doctor thing.

I had the misfortune to be made to train 'baby doctors' in the arcane use of medical statistics, back in the day, when I worked at St Thomas' Hospital in London .

Talk about entitled. Maybe it was something to do with them being young....no...I'm being generous.
They were a bunch of snotty teenagers with chips on their shoulders. And, couldn't undersatnd the link between medical practice and researching medical practice, as it wasn't glamourous, like, say, surgery was. I mean, who needs to learn useless stufff like how to take a survey, when you could be saving lives?

Not to say that there aren't nice doctors everywhere- and I'm sure that a few of the ones I taught grew up to be nice people. But as a group, at that age, they were elitist and generally crappy to anyone they considered to be 'beneath' them. Which happened to be me at the time, despite already having my degree and a couple of years work experience, in a field that few of them would be able to do proficiently. Meh.

Interestingly enough, going back to class as it is percived in the UK - all the snotty gits were the sons and daughters of either other doctors, or from well-heeled famlies in the Home Counties - in other words the Upper Middle Class. The very few who seemed to be interested in medical stats (even if they never intended to use it beyond the class), and were polite and considerate to the staff were, to a person, from the Working Class. I guess if you actually have to graft for the opporunity to do what you want to do, you're a lot more sympathetic to the working stiffs around you.

Malcom says: I really got a kick out of Brand’s rant.

Glad to be of use. :)

Here is a fun first hand observation. I went to the Kint Tut exhibition a couple of years ago in LA. I have to say it was impressive for the historical significance. Everything was artful and interesting, but it crossed my mind that this represented the ultimate in wealth back then. Apart from the gold coffin which wasn’t at the show everything I saw seemed easily attainable in our society. Some people’s garages have about the same amount of clutter as King Tut’s tomb.

I think ancient wealth is generally an expression of how many people you had working for you. King Tut's tomb was basically stating that he had tens of thousands of workers at his disposal. In the Egyptian case, they often killed the workers afterwards to serve their king in the afterlife---talk about extravagant spending of resources!

But isn't that what a granite countertop or exotic hardwood floors represent? Laborers quarried the stone from the earth, ships transported it, artisans shaped it. There's no such thing as a beautiful household material that isn't expensive. Peacock feathers, as astrid says.

Harm, a lot of posts so far seem to really question how one measures wealth. People seem to miss some of the little things which was why people in the old days really wanted wealth. Overall even the poorest in our country live in safety, with clean water, and the most abundant food supply in history. ... At the basic level history has to view this period with some praise.

I tend to agree. Technology and industry have made the essentials of life uniquely abundant in the modern United States.

The poorer kids are fatter than the richer kids in this country.

Actually, that's because poor people tend to binge on cheap foods filled with carbohydrates, fat and corn syrup. Cheap food in the U.S. is nothing more than starch and sugar with some flavoring. It's amazing that you can have a 200 lb. fourteen year old who suffers from malnutrition, but that happens very often.

Does anyone remember when we had mandatory government athletic tests back in the 1980s? I think that was a good idea. All kids should be held to a minimum level of fitness, except if they truly have physical problems. Soda and snacks should be banned from school vending machines; parents should have the option to make their kids eat a healthy school lunch instead of the usual starch-laden garbage.

TOS: I genuinely believe that Americans are in debt up to their eyeballs because they can't understand the math. If it were up to me, frugality would be taught in every school. Students would be taught to value knowledge and happiness over possessions.

TOS

Even smart people who can understand math quite well get inflation wrong. Practical economics should be taught in every US high school. In fact, I think they should bring back home economics in the strictest sense of the word. HomEc always had a shade of budgeting, checkbook balancing and such in it, but it was overshadowed by cooking, cleaning and baby raising (not that those things aren't important).

I'd foresee an entire, mandatory class dedicated to the following rough curriculum:

* Basics: how to balance your checkbook, etc.

* Modern basics: how to balance your checkbook using online banking, etc.

* Credit cards: how they work; how they can bite you; how they can help you.

* Credit scores: what they are; why you care; how to build and maintain one.

* Debt: how much does debt cost you; when and how to pay it off.

* Budgeting: running your life and a household; figuring out how to plan through various scenarios like buying a new home, having a baby, losing a job.
- *Inflation* introduced naturally here, not as theory, but how much you have to plan now to pay for things later.

* Insurance: how it works; how much minimum should you buy.

* Scams: how to spot, smell, and avoid financial scams.

* Advanced Topics (only to be taught if time, and to those requiring extra challenges):
- Buying a home: how, when, why.
- Investing for retirement: how, when (always now), why.
- Non-retirement investing: saving for kids college, other stuff.

NOTE:

I would _not_ allow nerds, eggheads, and AP track overachievers to "test out" or skip this course. A big part of the problem is *smart* people who make *dumb* personal financial decisions.

Actually, that’s because poor people tend to binge on cheap foods filled with carbohydrates, fat and corn syrup. Cheap food in the U.S. is nothing more than starch and sugar with some flavoring. It’s amazing that you can have a 200 lb. fourteen year old who suffers from malnutrition, but that happens very often.

The NYTimes has a great piece on this problem today.

http://www.nytimes.com/2007/04/22/magazine/22wwlnlede.t.html?ei=5070&em=&en=aff0b2f4c26eec6c&ex=1177387200&pagewanted=all

Basically, poor people are fat because of the way your tax dollars are spent. Woot!

If you want to drive an RV across the country; I don’t get it personally but I don’t judge either, then rent one, but for God sakes don’t buy one and park it on the street. I had a neighbor across the street from me in a previous house that did that and it was literally all you could see out the front window.

Aren't there laws here that no vehicle can be parked on the street for more than 48 hours without moving or something?

Of course, that's how NeighborWars(TM) start.

Corn syrup is one of the worst modern inventions. The same with processed soy and bleached wheat. It's just empty calories. No vitamins, no beneficial acids, no nothing. In the name of supporting farmers, we have turned the lower class into a blubbery hunk of voluntary foie gras.

But if that author thinks the U.S. is going to overturn any part of the farm bill, he is grossly optimistic. The lobby of companies like Coke and Procter & Gamble is massively more powerful than a bunch of "hippies" who want cheap fresh produce.

TOS,

No, I wish!

Oh wait, I don't wish!

:)

Very humbly yours,

astrid

Brand says:

"we have turned the lower class into a blubbery hunk of voluntary foie gras."

You've seen through Peter P's diabolical scheme! Be careful and don't fly on small planes.

Hurry and buy this one now, its value is going to go up tomorrow april 23rd!

Man this could really be a fun topic, but I'm not seeing a consensus on what a poor person in this country is. Could it be that rather than polarizing, it is in fact the middle class which is growing to encompass different levels of wealth? I know in my life I don't see everyone else's lifestyle but I don't really see a clear have and have not barrier dividing two specific groups. I see the very bottom of society (homeless kids, drug addicts, single parents) as being a very small group of have nots. Then I see pretty much a pareto distribution of different levels of wealth, and faux wealth.

I think the comments from some of our midwest friends are telling. It is really hard to call a millionaire struggling to pay the bills in Laguna, CA poor when there is a poor family in the mountains in N Carolina who have nothing but have a higher net worth than the CA guy.

I recently helped a charity build a house for a homeless family outside of Tijuana, Mexico. Even that shanty town had satelite dishes on many structures. They had water trucks driving around filling individual home water tubs, but you saw people walking around with cell phones. If it had been a town with sanitation on a beach one could almost relish the simplicity of the lifestyle.

TOS

I think you'll find that most people refinance "incorrectly" for the purposes of your theory. Most people refinance at the mercy of their broker/bank. They say "lower my payment". The broker/bank does this to the debtor's expectations by reamortizing their loan. Every single elder member of my family at some point in the past 20 years has refinanced at least once only to push out their payments/reduce their equity.

Sorry. You're not going to be able to back into rational behavior with your house-inflation-hedging theory.

Houses are good hedges of inflation, historically -- if by "historically" you mean the period 1960s to present. Historically meaning historically, housing is not a particularly spectacular hedge of inflation.

Great quote just on some CNBC infomercial. It's not a buyers' market, it's not a sellers' market, now it's an in between market. Now is the time to buy (big applause). OMG!

- perhaps CREDIT is actually the root of all evil because it allows people to trade their futures in order to have stuff today, which in the case of real estate is artificially inflating prices where most of the gain is actually going to the credit companies.

FWIW, there are places where you can't get credit: muslim countries.

Because Islam forbids interesting payments - both on the paying and receiving side, they don't really lend money in a few of the muslim countries. Needless to say, starting a business or buying a house is pretty darn hard without it. They've come up with some interesting solutions to sidestep this though...

My observations on probable causes of mess we are in today

joint filing tax enacted in 1948--to try and keep single wage earners working while putting mom,who had left home during the war effort, back in the home to be a homemaker.

The government I believe liked the idea of a "Leave it to Beaver" household in those days, only 59 years ago with Dad going to work paying taxes and Mom staying inside the home raising the kids while cleaning and cooking waiting patiently for pop to come home. Honey I'm Home !!

If mom went out and took a 30k yr job 50% of what she made went to taxes,soc.sec,and medicaid.
another 5k went to day care , transportation ,clothes to work in, drycleaning , outside meals etc. resulting in mom busting her arse for only a 2k bottem line annual additional income for the home.
Would the family benefit if mom stayed home while Dad either got a raise or an additional job for 2k a year ?

WTF happened to where we are now with over 80% of moms with children at home working outside the home ?
Are today's Dad's the problem not providing the bacon nor spiritual back bone to keep mom home satisfied to where she can be content raising the children while cooking and cleaning ?

I don't know I am asking a question .

American Express and Bankamericard (visa) are only 59 years old and that I believe is when buying things, other than gas, you couldn't afford started.

Television was only in 1 million homes in 1948 do you think that most things people want is where they happened to see them ? think commercials

1-women leaving the home to work
2-television as an advertising medium
3-credit cards to buy what you can't afford today(life takes visa)

what about the kids of parents from that era ?
I will call them FK's

Be careful and don’t fly on small planes.

Astrid, what is wrong with small planes?

WTF happened to where we are now with over 80% of moms with children at home working outside the home ?
Are today’s Dad’s the problem not providing the bacon nor spiritual back bone to keep mom home satisfied to where she can be content raising the children while cooking and cleaning ?

Actually it's pretty easy to answer - this is a classic Tipping Point problem. Like standing ovations, traffic, self segregation and etc, it's all a matter of critical mass.

Actually I am reading a few books on 1920-40s to get some investment ideas when the hard time hits. What I found out was, 1920s was an era with abundant credit advances. You'd see newspaper ads for buying sewing machines, ovens, radios, etc. at a certain monthly payment. The "only $9.99 a month" slogan had been popular since back then. Although there was no credit card, and no FICO scores, credit was readily available for all sorts of consumption items, including mail-order houses.

The rest was history.

Malcolm Says:
[re: solar electric panels]
Very expesnsive, but I bit the bullet, and I think it was a good decision.

Malcolm, congratulations. I am researching the same myself for my home, and would appreciate any details you could share about your experience and contacts.

BTW, my employer is putting up solar panels over one of the parking lots. I got some info from that project, but it is on a huge scale and isn't quite applicable to a 3KW home-installation.

Since this is way off-topic, we can discuss off-line (unless others are interested as well).

SP

Since this is way off-topic, we can discuss off-line (unless others are interested as well).

Is there such a concept as "way off-topic" here?

SP,

actually I am interested in sharing the solar panel info as well.

My understanding is, you cannot store the excess on site (understandably for safety reason). So the current solution is to hook up to the grid and sell the excess to PG&E, get net supply from PG&E at night to negate out the credit you accumulate during the day.

The big downside is, when PG&E is down, although you have solar panels installed at your own home, you are shut down as well. Anyone who knows otherwise please comment.

skellington Says:
This is a fun topic, just thought I’d try to add some information without intentionally representing a specific political ideology.
[rest of post deleted for brevity]

I think Mr. Skellington's ("May I call you Jack?") most excellent post should be required reading for every American, to be read daily until they can demonstrate that they understood it. :-)

SP

eburbed Says:
FWIW, there are places where you can’t get credit: muslim countries. Because Islam forbids interesting payments - both on the paying and receiving side, they don’t really lend money in a few of the muslim countries.

In fundamental theory, both usury and trading in financial risk are verboten in Islam because they are equated with exploitation and gambling respectively. However, having lived for a short time in a couple of islamic nations, I can assure you that even under the sharia, credit is abundantly available in "other" forms.

The most common pattern is that if a product costs $100, the seller agrees to sell it to the buyer for a 'profit' of $20, with the buyer paying back in 12 installments of $10 each. This is effectively the same as paying $20 in interest. There are many variations of this basic theme, where the $20 is either treated as 'profit' to the lender, or a 'gift' from the borrower - thereby skirting the koranic prohibition of riba i.e. interest. I actually used to get hibbah or a 'gift' from the bank where I kept my money.

The other interesting thing was that my friends who earned thousands of USD in interest from their accounts in foreign banks, used to make a biennial trip to their local maulvi (priest), who would instruct them what percentage of this unislamic earnings they should donate as zakkahto the poor in order to absolve themselves of guilt.

(Not any kind of advice, and my apologies if I have oversimplified or misrepresented some of these concepts.)

SP

Overall even the poorest in our country live in safety, with clean water, and the most abundant food supply in history.

This is false. The poorest certainly do not live in safety, they live in the most dangerous neighborhoods. The actual murder rates in poor neighborhoods are very high, approaching Baghdad levels.

The food supply statement is false as well. There are certainly many Americans going to bed hungry tonight. I know I often did not get enough to eat growing up, especially during the years that my Mom was single. Things have not changed much since then, they have actually gotten worse.

I will grant you the water part though.

Nothing new for Patricker's, but good to see coverage of this in the MSM.
(found at Ben's)
SP

http://www.dailybulletin.com/search/ci_5725309
Calculation flaw may hide market decline
Why is it that the market can feel like it's dropping - with homes for sale for longer stretches and the number of sold homes down significantly - yet published prices either remain the same or continue climbing?

At least one veteran observer says it might be a fatal flaw in the way we measure housing prices.

More MSM coverage of the bust.
SP

This time from SFGate.Com
http://tinyurl.com/32kwh2
Why we shouldn't be bailing out subprime lenders or borrowers
Dumb: Buying a house you can't afford with no down payment and a loan whose monthly payments will explode in a few years.

Dumbest: Bailing out dumb and dumber, especially with taxpayer money.

Someone wrote:

> The poorer kids are fatter than the richer
> kids in this country.

Then Brand Says:

> Actually, that’s because poor people tend to binge
> on cheap foods filled with carbohydrates, fat and
> corn syrup.

The main reason that “poorer kids are fatter” is that poorer "parents" are fatter. If a rich fit trial attorney marries a tall thin ex model their kids will never get as fat as the kids of a poor fat truck driver who marries big fat chubbo (even if the rich kids eat twice as much junk food)…

Do you wonder why many programmers are fat?

Hey, I resemble that remark. (Altogether too closely, in fact.) :(

Very few genetic makeups can weather a continual barrage of Twinkies without ill effects. And since the effects take place about reproduction has already occurred, I fear humanity will not adapt properly...not that it matters, I think we'll be doomed/saved/changed a lot sooner than that.

I'm lucky that I find all don't like soda and find Hostess products to be absolutely disgusting. But can't resist the siren calls of fresh bread dipped in olive oil...

Brand,

Corn syrup is also the result of a ridiculous market distortion. It is only used in the US by the large food manufacturers because of the artificially high price of US sugar.

Wow, I'm incredibly incoherent this morning

SP, you can email any solar questions to me at Malcolm.Shaw@cox.net. My system is a 4.5KW system comprised of 27 Kyocera panels.