patrick.net

SFWoman,

Thanks for the link! The kitchen looks a little small, though it would be pretty nice in a $2M level city home. The interior shots also looks a little generic, but that's easier to fix.

I can see why you'd like it at a 40% discount. It looks to be a very very pretty building and layout.

Skibum,

So true, so true. I (like Mr. Vincent) recall my first mortgage. It was an arduous and lengthy process. We wanted to just chuck it several times. They always seemed to want more documentation. Now it seems they are like getting one of those "flight policies" at the airport.

No offense,
but the 4 mil condo looks like the interior of Macey's Department Store. I suppose beauty is in the eye of the beholder, but that place looks entirely too sterile.

DinOR,

I find plane rides intolerable without a good pair of ear plugs or sound insulating ear buds. If you're forced to fly, try economyplus on United. That tends to be a slightly better self selected group.

nomadtoons2,

Ha, thank you for your independent confirmation about Australia's top soil/ecosystem. From what I've read they have a very fragile eco-system that is failing from a century of rough handling by men. I've been trying to pose the question to DS politely, but I guess he doesn't see a problem yet.

DinOR,
I mentioned this a few threads back, but I'll mention it again - Robt. Frank wrote a book called "Luxury Fever" that you might be interested in reading (if you haven't already). Talks exactly about the "wealth effect" and the spiraling demand for luxury goods by the masses. It's definitely relevant to the bubble, as McMansions are an obvious manifestation.

Astrid,
Luckily bad farming techniques can be reversed. The SE had a MAJOR soil problem due to the topographic layout and hilly environment. Think SF hills, but worse. My grandfather was part of the TVA rural electrification project and also worked with agencies to help farmers with new techniques like countour plowing, crop rotation, and so forth. The area also flooded a lot, thus TVA constructed over 20 hydro-electric dams. 70 years later, the valley is fully restored. I'm sure Australia can do the same.

astrid,

I just think it's a shame that we would want the "Bose Sound Cancelling Devices" everytime we are in a public place. I'm not that old but there was a time when as many deals were done "in the air" as were done on a golf course. You never knew who you would be seated with and even if you didn't get the business it was at the very least a pleasant few hours. Now?

oh, there's huge problems with clearing, desalination, drought and poor soil, absolutely... i'm not a farmer or an ag science graduate, so i don't have any suggestions for them... but much of it is due to harsh environmental conditions on the driest continent on the planet...

one guy set up an absolute oasis on his land when everyone around was in drought, and everyone thought he was nuts for 25 years...

http://www.abc.net.au/austory/content/2006/s1563374.htm

DinOR,
I'd recommend the Shure line of sound insulating ear plugs over Bose. They're cheaper and much smaller

Skibum,

Luxury Fever huh? I will most definitely check that out!

salinity, i mean, not desalination, heh - there was a proposed $2bn desalination plant to supply fresh water to metro sydney here that got knocked back recently, i've got it on the brain...

nomad,

If I understood Australia's situation correctly, they have an extremely fragile system, due to very low soil fertility (billions of years of erosion and leaching) and low percipiatation in most of the continent. It's debateable whether standard agricultural practices can ever be practiced sustainably, without substantial amounts of fertilizer being brought in every year.

there's a guy here, clive hamilton, who talks about 'affluenza', and composed the 'wellbeing manifesto' and runs a non-partisan thinktank called the australia institute. his books also critique the notion of the desirability of constant 'economic growth'. however, i think he borrows much of the ideation from the american condition in particular - the 'success at any cost' ethos is not gererally so bad over here. funnily enough, the left don't really trust him, because he doesn't really recognise the plight of labor, assumes everyone is doing well, etc...

http://www.tai.org.au/About_Us_Files/staff.htm

Why don’t they just raise the price of the tickets, make flying a little more pleasant, and make the companies profitable?

post 9/11 and supply/demand. demand really plummeted and the airlines have been just over broke ever since...

DinOR,

I've advocated on one occasion that every American college student take at least a couple of greyhound busrides when they're young. You get all sorts of behavior on greyhound buses, but most of my fellow travelers accord themselves with a good deal of dignity. Flying is now such a casual experience for most people, they just forget to be considerate to the people within extreme close proximity.

However, it does seem like people at all economic stratas are more rude than they used to be. I live in an upper middle class community and the things that come out of some of the 10 year olds' mouths! I'm no better, I guess, given how much I curse in private.

DS,

With all due respect. I may not be familiar with Australian ag practices but I do know quite a bit about Chinese agriculture. Desperate people can destroy their ancestoral land even in landscapes with far richer soil and more reliable climates.

Also, Australian lands not farmed are often grazed. Hoofed animals, especially goats and sheep, can be very destructive to top soil unless very carefully managed.

SFWoman,

My guess is that these condos operate like VIP boxes. Their owner very rarely live in them and don't have to deal with the noise on a regular basis.

Or they're deaf already. :P

SFWoman,

I couldn't agree more! This should be frowned on anywhere! You bring up a good point though, we should have minimum standards anytime we are in public (regardless of how pricey or cheap).

I've made this argument until I'm blue in the face. One of my friends grades commercial loans (many of which are for the air carriers) and he keeps insisting that the airlines opened up a can of worms when they made air travel for the masses affordable and now they can't give up the volume unless everybody else did it too! The other thing is that carriers are extremely leveraged. The planes are leased, the ground support equipment is leased, hell even the wheel chocks are leased. Everyone knows your costs! As frustrating as it seems I still believe that aviation is important to America and we need to find ways to reassert our leadership role in this sector. I'm pretty sure though that making flying affordable for every guy in a sleeveless T-shirt isn't the answer.

owneroccupier,

An easier way to get umlauts and accents is to use the Character Map application in the Windows/Accessories menu. It does the alt-codes for you so you don't have to remember all the keystrokes.

There is also an international setting in WinXP, where you can change the default language. Be careful with that one though. It's caused me trouble in the past (it remaps your keyboard).

astrid,

"Flying is now such a casual experience"

Couldn't have said it better myself! Same goes for grocery shopping (which I detest). Not so much for the shopping itself but for the manner in which so many people conduct themselves in a public place. I don't know who to blame but I do know I don't like it. Don't get me wrong here, I'm not some priss but dog gone it people this is not your living room!

Different Sean wrote:

"it’s irrelevant (that the A$ is only worth $0.73 to $1.00 US$), as international exchange rates don’t determine domestic buying power or wage setting."

Exchange rated are very relevant since people that import stuff to Australia don't discount it because people make less. Almost everything in Australia costs more than in the US and almost everyone makes less money. Even products made in Australia cost more. I can buy Australian wine at the Marina Safeway or Plump Jack for less than it costs at any store in Australia (or even the wineries).

> ivy league-quality university courses are almost free here, so students don’t often need loans,
> but they won’t necessarily make as much money on graduation

I got an "ivy league-quality" education here in California that was "almost free" (it was under $2K a year my first couple years) and I made good money after graduation. I have a good friend that went to College of Marin for two years (paying $100 a year + books) and transferred so he has a degree from a good school that cost under $4K total.

SFWoman,

Yes, rabbits were brought in by the original settlers for meat and small game hunting. They're now so bad that the Australian government intentionally bring in rabbit diseases in the hopes of controlling the population.

For anyone interested, here's a link on the subject.

http://www.answers.com/topic/rabbits-in-australia

Didn’t rabbits or hares destroy a bunch of Australian grazing land?

they certainly bred like rabbits... rabbits are originally from the middle east, and are well adapted to the climate in oz and blend in...

The cost of wild rabbits is more than economic: they cause environmental damage which is often irreparable. The loss of vegetation from rabbit grazing threatens the survival of native birds, mammals, and insects that rely on plants for food and shelter. Rabbits have contributed to the extinction of many native plant and animal species.

Wild rabbits compete with livestock for available pasture and kill young trees and shrubs. Their warrens contribute to soil erosion by removing vegetation and disturbing soil.

they were brought into australia in the 1850s as hunting stock on a nobleman's estate. funnily, they somehow got out into a very friendly terrain - for them - and... bred like rabbits...

foxes have also been introduced, also for hunting, not to mention cats and dogs which go feral or just prey on wildlife within suburban and rural areas.

a brilliant case of early (1930s) attempted but failed biological control was the introduction in qld of the 'cane toad', bufo marinus, to attempt to control sugar cane beetles, which failed. cane toads are also known, appropriately, as giant toads and are native to North, Central and South America (it's called a 'spring chicken' in belize). females can weigh 2.5kg and have a length of 26cm. cane toads rapidly spread from their places of introduction, and are still advancing south and west. The cane toad is now a pest, and eats native species out of house and home, and occasionally poisons them when they are eaten by said species. now they have to find something that will slow down the cane toad without screwing some other part of the environment.

nomadtoons,

I’m not disagreeing with you on the ” cash is king” statement, but how would this be helpful in a depression since the dollar could get signifigantly erroded?

As a rule of thumb:

Inflation erodes cash purchasing power, meaning you want real assets or inflation protected investments during inflation, not savings accounts or cash in a safe.

Deflation increases cash purchasing power, meaning you want savings accounts and cash in a safe.

During the Great Depression people desired to actually hold their cash physically (Granny hid it under the mattress), because of bank failures. During Japan's deflation, most people just left their cash in the bank, they didn't take it out and hide it.

Japan actually experienced a period of negative *real* interest rates during their deflation. That is, the nominal rate (posted rate) was effectively 0%, but the bank charges some fees, mainly the cost of protecting and storing your money. So, cash was perceived as being so valuable that people were actually willing to *pay* to give someone else their money. This is a rare and extraordinary event, and somewhat unlikely to happen in the US system.

Finally, during inflation it is very good to have debts if (a) you can service the payments, (b) the rates are fixed, (c) there is no funky amortization trickery. When you have a long-term, or even shorter-term, fixed rate debts during inflation you can always earn a guaranteed, risk-free rate of return by paying and prepaying the debt, thereby exploiting the inflation to the cost of the lender.

During deflation the above is reversed. The lender is exploiting the deflation against you, because rates are falling but you are paying back your debt in ever stronger dollars (but not getting the value of that strength, you're giving it all back to the lender). This is why Depression Era folks hate debt and inflation era folks love it.

Anyway, getting back to those "guilty pleasures" I have to be honest here. I would hate to see them do away with flaky NAAVLP altogether b/c one of my secret guilty pleasures has been to wait for the crash, swoop in and pick up a swanky (formerly overpriced) McMansion with a pool and do the whole thing on some kind of IO payment, then commence to neglect it entirely! Wouldn't that be fun? While your neighbor that bought at the height of the market struggling with ever higher payments looks on in horror as you invite Surfer X and his "buds" over to "break in" your blender? You know, the tupperware "Texas Tumbler" sized glasses? Not sure I'll ever actually do it but just the thought has kept me going.

SFwoman,
All said and done.. It's still a condo. I don't know- I'm a bit old fashioned, but the idea of paying to own a part of a building seems like fake ownership for some reason.I wouldn't feel like I owned it all to myself. Even at a million bucks, this is signifigant dough. Guess I am yet to be on a level where my value structure has aquired metropolitan penchants and taste, but that's ok. The idea of people paying 500k for a view of the NASCAR track is quite ubsurd. Then again... NASCAR is HUGE in parts of the country. I got so sick and tired of seeing all the NASCAR stickers everywhere back there. Imagine if all the "No war in Iraq!" stickers on the bumpers in Berkeley turned into "Dale Earnhart is No 1!" stickers. That's what it is like.. only 50% worse! Believe it or not, in Japan, US NASCAR is immensly popular- so popular that there is actually a Nascar track there. I have to say that I admire the NASCAR marketing machine. It is the most sucessful marketing campaign in US history. It is soon to eclipse basketball. Product placement is everywhere, and they fully understand their target audience. I got so sick of it. The only good thing about it was that every weekend there was a race, the freeways were abandoned because everyone stayed home to watch the race, effectivly erradicating the weekend rush.

"While your neighbor that bought at the height of the market struggling with ever higher payments looks on in horror as you invite Surfer X and his “buds” over to “break in” your blender? You know, the tupperware “Texas Tumbler” sized glasses?"

Can I join in? I'll help you build a BBQ pit or a smokehouse for extra rusticity points.

nomad,

I never got the point of NASCAR myself. You watch the cars, usually at a great distance from your vantage point, go round and round the track at really high speeds. I've been told by my Chinese family (who are big F1 fans) that they follow it for the car crashes.

DS,

Import 100 million Chinese from the poorest part of China. They'll eat up all those pesky rodents in no time.

But they might be hard to eradicate afterwards...

HARM HARM HARM, it's a$$ pounding.

You are a very bad man.

Even products made in Australia cost more. I can buy Australian wine at the Marina Safeway or Plump Jack for less than it costs at any store in Australia (or even the wineries).

erm, that sounds a bit odd to me. freight across the pacific isn't free. an AUD$16 RRP bottle of wine would be US$12 + freight. my g/f actually audits exporters for the australian trade commission, the only benefit exporters get are a favourable exchange rate internationally. unless giant multinationals deliberately siphon off most of the stock to sell overseas under exclusive agreements...

i thought everyone had to pay $10K a year in tuition fees to attend US colleges - the kids who come here on semester swaps surely do...

DS,

FAB speak of the good ole days, before whippersnappers like me, hate to rent, and nomadtoons2 came along.

I had a friend from high school who was English and ended up going to Cambridge. She came back with complaints of Blair's plans to raise Oxbridge tuition, and got laughed out by everyone else.

California tuitions are still quite affordable for in-state students. However, with room and board, the total amount would be close to $20K a year.

room and board here would be $5,000–7,500 a year if you didn't live at home, and tuition has gone up lately... depending on the course, could be $3,000-$4,000 a year, and even that is enough to make students think twice and stay away in droves...

Just to follow up on my previous post,

Perhaps I didn't read carefully enough nomadtoon's real question. If it is a worry about what to do (hold cash or not) during USD exchange rate deflation during a depression question:

As the USD weakens versus other currencies, which happens as interest rates go down, a number of things happen. Within the US itself, everything I said in the previous post holds. The macro things that happen between countries are a bit different, and not all of them affect your decision to hold USD cash as a person living and buying/saving in the US.

Inflation is negative (deflation), which will eventually force interest rates down. As rates go down, the USD is less desired by foreign investors. (Insert all kinds of reserve currency debate here). As the USD goes down, we become worse importers because buying foreign goods is more expensive, and we become better exporters because foreigners can buy our goods cheaper. This should reverse net-exports and narrow the trade deficit, or cause a trade surplus. The offsetting cost is in capital flows. We get less foreign investment in the USD.

For you, this means that you will do better holding dollars as cash, not travelling abroad, and buying domestic made products. The big wildcard is related to how businesses, which are largely global in nature, will react to this. They may be unable to shift production back to the US (or unwilling), and they may exploit the deflation by refusing to lower prices enough. They could then arbitrage the situation by "stealing" your newly found purchasing power and transferring that to other countries. There are also lots of complications caused by all the countries that peg to the USD to manipulate our import tastes. They can prolong the agony too by refusing to allow their currencies to rise compared to the USD.

Randy,
Thanks for the info. All of my savings, except for a small IRA and 2 mututal funds is old-fashioned cash. As in it sits in a bank. With all indicators of a recession, I've thought:" Oh crap. everything I have is in US dollars." We'll see how it plays out. As long as food is still easily affordable and rent is still within reason, I'll count myself of. All I can say is that this questionable future is making me tighten down. No new trucks, fancy gadgets, or other expensive things for awhile.

DS,

As for wine and higher valued products, the majority of the cost doesn't come from shipping but from the mark ups at every stage of distribution chain. Because Americans have greater purchasing power and have presumably built a more efficient distribution system, the producers and the middlemen are able to make money charging comparatively lower overall mark ups to the final US consumer.

Oh, and keep in mind that Depression and deflation are not the same thing. Deflation is just negative Inflation, an economic thing. Depression is a socio-political-economic thing which happens to be caused by deflation (historically), but could theoretically be caused by other factors too. I believe the definition of a Depression is just a very long, severe, sustained Recession.

That's why econ books always say deflationary-depression, so that we know it is a deflationary period accompanied by sustained negative GDP growth. The "socio-political" part comes in because Depressions are so severe that they disrupt the orderly functioning of society itself. Massive unemployment, a breakdown of financial institutions, political unrest, and usually salvation through warfare are the hallmarks of Depression.

Let's not cheer for that to occur.

As for wine and higher valued products, the majority of the cost doesn’t come from shipping but from the mark ups at every stage of distribution chain.

er, yes, but domestically it goes from vineyard to warehouse to stores. to get to america, it goes from vineyard to warehouse to port to ship to port to warehouse to stores. there's a markup in the distribution chain for you, unless the shippers, wharfies and truckies all work for free, and running a ship costs nothing... not to mention customs and excise fees, insurance, breakages, etc. Obviously internationally $12US buys $16AUS, so there may be a perception it is cheaper just by the numbers. note also that the AUD was 54c US for a while there, which was a boom time for exporters. now it's crept up to about 72c. (The AUD used to buy US$1.20 once, when it was pegged to the GBP - and I remember it too.)