patrick.net

OT.

A few threads back a troll came here and claimed that there was a development in South San Jose for 900K or so, 5B3BA. So I got all confused and thought he meant a development in Gilroy. So I apologize here for the confusion, it is in fact in South San Jose.

Today I drove by this development on 101, it turned out that this place is right next to the interexchange of 85/101. I was literally shocked when I saw the development, because I have never seen anything so CLOSE to a major freeway (3 lanes each way). It is practically within 50 feet of the freeway with NO sound barrier walls, NO elevation, and if you know that part of the landscape well, it is on the east side of the freeway among the bald mounds with absolute NO vegetation. Of course one should not forget the multiple power lines presiding right over the development.

Now just south of it within 1/4 mile, there is this very major power station taking up acres and acres of land in east Coyote, and the power station sits comfortably within the vision of the future residents of this development.

Let's forget the price issue for a while. I am not sure if I will live there even if the developer PAYS me 900K.

6. Scientists discover that bad investment judgment was a dominant gene. To prevent its threat, all specuvestors were forceably sterilized.

hmm, alternatively, there will be a cultural revolution, and all realtors, landlords, gurus and lenders will be demonised and held up in show trials, to be executed as traitors, without mercy or exception. The landlords' assets will be distributed to the next generation. Future generations of realtors and lenders will lose parts of their anatomy if they are caught in usury or telling pork pies about property. (Landlords and gurus will have been abolished.) Parents will take their children along to the executions to teach them a moral lesson and give them a sound whipping when they get home to reinforce it. There will be no more drugs or poverty. Meds will be free.

Whatever to come, as long as it happens fast and we can all fast forward to the next few chapters, it is ideal.

Iran is no threat to the US nor does it harbor any relations with Al qaeda. Its all propoganda by the Govt to keep the people from thinking too much about Iraq now that that poor country is headed for a civil war.

I will be looking forward to the day when China dumps the US dollars which will be followed by other countries.

Or Tammy-Faye Bakker’s contribution to Theology.

hmm, she is exceptionally well regarded for her contributions to cosmetology as well... What a polymath! TFB for prez...

RP,

not next to the exit, if you are going south on 101, just past the 85 merging point to your left. You can't possibly miss it, it sticks out like a sore thumb. I am not sure the address is in South San Jose or Coyote, but who cares after all.

Phil,

china won't dump US dollars. It cannot afford to, as long as the government is in control. However, China may spin out of control when situation over there rapidly deteriorates due to a sharp divide between rich and poor caused by bad social policies and rampant corruption, plus slowing job growth due to overseas protectionist pressure. The reason why China has to sustain the breakneck growth is because if it doesn't grow at least 7% a year, it cannot generate enough jobs to absorb all the idle labor force churned out by the shrinking arable land and state-owned enterprise, and social stability may be at stake.

So I never question the intent of China to support USD, I question their ability.

I forgot to mention, I want this bubble to blow up while Bush is office. He needs to eat his own shit.

"Inflation for all it’s terrible consequences is far better than deflation and depression." - Randy H.

But deflation does not mean depression (historically, some of our most prosperous times were during periods of deflation). We want to reward people's thrift, not punish them for it. America, now more than ever needs to save more and spend less. It's the fear of inflation that is causing another bubble in the commodities market.

I agree Iran is not a physical threat to the US, but it is ruled by people who are ideologically anti-US and it has the potential to cause an economic threat by disrupting oil supplies through the Gulf of Hormuz.

so what. bad luck.

actually, oz could do quite well selling uranium to the iranians... i'm all for unfettered free markets. level playing field. free trade. all that kind of thing...

i think you should just let the market sort everything out - to actually refuse to sell to a willing customer would be teleological interference with 'the invisible hand' and the neoclassicals will tell you that's bad...

ps Says:

"I agree Iran is not a physical threat to the US, but it...has the potential to cause an economic threat by disrupting oil supplies through the Gulf of Hormuz.

Gulf of Hormuz?

You mean Gulf of Hormel Chili, right?

Owneroccupier:

I'm originally from S. San Jose. I know where you're talking about.
Unfricken' believable they'd build so close to that power station.
There's better areas as you go south.

This thing can't end good.

DS,

Since John Howard's government also support American actions in Iraq, what country's flag do young Australians place on their backpack when they go abroad?

Phil,

We're just screwed generation wise. On the bright side, my boyfriend luuuuvs his DV-R. I guess the ability to do 30 second skips thru the Apprentice make up for all the economic injustice perpetrated against us.

My fantasy scenario would have to include the end of the global fiat money system that caused this all prior asset bubbles.

Can someone give me some wordpress privileges. I probably won't start threads or regulate, but I'd like to correct some of my more aggregious grammar/spelling errors in future posts.

Michael Holliday,

More unfrickenbelievable is this developement is almost sold out! Must be some out-of-state investors, I can't quite figure why any buyers from here will even bother with such a power-station view lot.

South of Coyote is actually quite nice, Anderson Reservoir has an overflow and we drove to see the waterfall. It's quite comforting to see lots of orchards and farmland down south still remaining untouched, thanks to the visionary Williamson Act.

Exactly - the wisdom just radiates from every particle of your being.

isn't this a metaphor for the RE market tho? when i suggest the govt should actively control land prices, everyone says there will be blood on the streets, the govt is incompetent and corrupt, etc. when it comes to dealing with alleged threats overseas, the US govt is a paragon of virtue and competence, it's totally in control, all smart guys. pull out all the stops, spend billions on weapons and wages, no problem. you can interfere all you want with overseas countries when we don't like 'em, just don't interfere with deranged markets at home...

what country’s flag do young Australians place on their backpack when they go abroad?

canadian.

no, i dunno, don't think they're patriotic enough to plaster flags all over the place, that's a sign of insecurity and low breeding over here... (these days, sticking a US flag to a backpack would be like painting a target on it!) i think the canadians only stick flags on their packs because they're worried someone will overhear their accents and assume the worst... besides, australia only committed a few hundred troops, you would have to choose to backpack thru syria or something to get into trouble with an oz flag. best bet is not to bother with sticking on flags too much and try to blend in with the locals, less likely to attract any attention that way...

Re: disrupting oil supplies through the Gulf of Hormuz.
Different Sean shares these pearls of wisdom: so what. bad luck.
Indeed.
PS

if you don't like the iranians, maybe you should be boycotting all oil purchases from them... if you refuse to buy their oil, they won't have any money to buy WMD with...

frank,

My fantasy scenario would have to include the end of the global fiat money system that caused this all prior asset bubbles.

This contradicts your inflation versus deflation stand. Commodity money systems suffer from intrinsic inflationary pressures which cannot be controlled through monetary means.

Not only that, but fiat money has always been the natural evolution of interdependent economic systems. Sometimes even farmers needed horseshoes in the winter, and they didn't really want to carry around large amounts of gold (or certificates equivalent to such). Contractual forward IOUs of grain for horseshoes were fiat money because the government imposed the validity of such contracts.

The culprit of all this is MBS.

When a bank initiates a loan, it should always be mindful of the risk because it will be left holding the bag when the loan goes into default. MBS removes the risk-aversive incentive from the loan initiator and passes that entirely onto the relatively ignorant MBS buyer. How does a MBS buyer decide whether the loan's rating is really reflective of the underlying risk? Historical data, the ibanks looks at the historical default rate, the credit rating of loan applicants and determine whether this loan is safe or not. In the last few years alone, even some subprime loans can be repackaged as "safe" loans and passed onto the market.

The separation of incentives for loan intitiation and loan management is the main culprit behind fraudulent lending behaviors. If I am not going to be held responsible for the loans I initiated, and I get more commission on initiating more loans, what will be the logical behavior?

If lending is loose, then we will have a runaway RE boom. Fed and MBS both have same share of blame in this game.

Let's keep separate issues separate:
US likes IRANIAN OIL
US does not like IRAN

ah, i think i'm beginning to understand now...

hey, i have some antique back-issues of 'Boys Own Adventure Annual' from 1911 if you need a primer on how to do colonial conquest of the savages and whirling dervishes properly... if i put them on e-bay, i might get a record bid from a user called 'dubya'...

ps,

stop with the sarcasm already

:P

The Ha Ha: A Novel

Owing to a head injury he suffered 16 days into his Vietnam tour, Howard Kapostash, the narrator of King's graceful, measured debut novel, can neither speak, write nor read.

how does he narrate the book then? thought waves? :|

I have said this before and I am not afraid of repeating it: You are a genius.

thank you :oops:

that's what my mom used to tell me too...

PS,

same thing happened to me before. Don't put immediately after another sign.

Don't put the larger than or smaller than sign after another sign. Better still, don't put these signs in your message.

Returning,

Stagflation for that period is likely. I agree with that. After that, however, couldn’t we have a recovery? That would put us in about 2013. Couldn’t the economy pick up at that point riding a wave of nanotech and biotech companies? If housing prices fell about 5% per year for much of that time (in bubble areas), wouldn’t this debt bubble be greatly reduced if not eliminated? Why does it have to take 20 years to wipe out the excess of the last 25? Couldn’t it be done in less?

I'm purposefully holding my optimism for later threads. We don't disagree that much. I am bullish on the long-term prospects for the Bay Area (and other areas, and the national economy as a whole).

also, if the ASCII code total of your post equals the first 5 digits of e to the power pi it won't go on either... just a wordpress thing...

The perfect economic storm is very near. It will soon be time to pay the piper. As the pressures from all sides are upon us to repay all our debts, and America has been brought to her knees, there will be only one solution.

An act of congress will pass a blanket bankruptcy bill, forgiving all
Americans of all of their debt.

A new currency will be established. Our new mantra will be: Save money for a rainy day.

Returning,

I agree. However, if the BA continues to be unaffordable with a soft landing scenario, the high RE prices in the BA will drive away the young research scientists/engineers in these emerging (and therefore not yet high paying) fields. The synergy that worked for computers may be lost for the future.

A soft landing scenario may ironically hurt the BA and Boston's long term prospects the worst of all.

Hey Randy,

Not sure how a commodity backed currency would intrinsically inflate. For example, one monetarist argument against a gold-backed currency is that there isn't enough gold to accomodate today's global commerce. Silly argument to be sure but it does make a point that gold cannot be created out of thin-air like today's fiat monies can.

Contractual IOUs are just fine because they carry a cost for risk/time (and ultimately settle in gold-backed dollars). Therefore you don't treat these IOUs exactly like money. You prefer dollars to IOUs, but the decision to accept IOUs instead is yours to make. This is very different than what we have in today's fiat system where you have no say and often no knowledge of the future value of the medium that you must accept - the fiat dollar.

LOL and thanks for sharing.

Re: disrupting oil supplies through the Gulf of Hormuz.

wait a sec, iran makes all its money from exporting oil and gas reserves to the west.

but you think it's going to disrupt shipping of oil supplies thru the gulf of hormuz with nuclear weapons? i don't think it takes a nuke to do damage to a shipping vessel. i think the irradiated solids might just wash back up onto their own shores also... besides which, that would be a useless act of aggression which would immediately precipitate reprisals...they could do it with conventional weapons now if they had a mind to...

further, the US and the west is spiriting increasing amounts of oil and gas away through pipelines to other friendly ports, with the routes conveniently skirting tortuously around dodgy countries...

This is very different than what we have in today’s fiat system where you have no say and often no knowledge of the future value of the medium that you must accept - the fiat dollar.

You have no idea what the future value of a commodity backed currency will be either...but some do introducing enormous moral hazard. Gold reserves are discovered, decisions to tap known reserves are made, gold consumption rates are measured, and forward looking orders for future consumption are tendered.

Inflation occurs because things like "petrodollars" when based on a commodity-backed currency cause inflation based upon fluctuations in the other side of the equation. In a liquid, interconnected, global financial market non-fiat currency would be disastrous. That is unless you want resource consumers to bear all the inflation from resource extractors.

iran makes all its money from exporting oil and gas reserves to the west.

sorry, make that west and east...

frank,

Contractual IOUs for what? Are you proposing a barter system?

(by the way)...

I study a similar economic abstraction that occurs in "virtual economies" with "virtual assets" in MMOGs and VWs (massively multiplayer online games and virtual worlds).

"You have no idea what the future value of a commodity backed currency will be either…but some do introducing enormous moral hazard"

Okay, I get it now.