patrick.net

Harm,

Yeah, it just seemed like someone "clutching at straws" and after the first *nice* weekend in OR since Sept. I just wasn't up to it. I was curious though what yourself and others thought about Stephen Roach finally turning bullish?

On a different note, my former neighbors I feel are about to put their "dream house" on the market. Now you may ask, "That's funny DinOR, how can you tell they are about to put it on the market?"

Ahem, "Because they have finished their landscaping".

I’m going to say that outside of a narrow spectrum of higher end housing (whose rent is currently ridiculously cheap compared to owning), rent will stay at the rate of wage inflation. Most people rent not by choice, but because they can’t afford to buy. Any rent increase will quickly run into demand inelasticity. Furthermore, the future economic hardship will force a lot of middle class people to rent out converted garages, basements, and bedrooms to make ends meet. That fresh supply may even depress low end housing.

Nomad,

Thank you! If you were going to buy a small car, just go with the one with the best test crash ratings and good handling and good braking. Surviving a crash is good news, but not having a crash in the first place is much better news.

Astrid,
Interestingly enough,I recall watching a thing on ABC news years ago shortly after I bought my tacoma. The clip was of various trucks and how they stood up in crashes.At first it seemed unfair that my tiny truck and the other 2 compacts- a Ford Ranger and Nissan were up against full sized Chevy and Dodge trucks. Well... the front ends of the large trucks caved in on impact, causing massive damage to the dummies. On the other hand, 2 of the smaller trucks- thr ford and toyota did really well, with no damage to the interior of the cab structure.Made me feel better.

nomad,

Yup, that's the dirty little secret about SUVs, they're basically a minivan body strapped to a truck undercarriage. They got size going for them, but many SUVs have poor structural integrity. You add the likelihood of serious crashes and the poor handling, and I don't think they're safer for the average driver and they're certainly quite deadly for everybody else.

Well… the front ends of the large trucks caved in on impact, causing massive damage to the dummies. On the other hand, 2 of the smaller trucks- thr ford and toyota did really well, with no damage to the interior of the cab structure.Made me feel better.

One thing: frontal crash tests is valid for comparison only with vehicles of the same weight and size. If one of those large trucks hit one of those small trucks, the result will be totally different. Be careful!

My advice*: get a LARGE SUV/seden with a good frontal crash test rating.

*Not an advice

I was curious though what yourself and others thought about Stephen Roach finally turning bullish?

Honestly, I don't know much about him, other than him being M.S.'s main financial guru. My impression of him from the few pieces I've read in the past is that he's pretty much a trend follower who carefully hedges his forecasts. He's had some intelligent things to say about global outsourcing/wage arbitrage, but I wouldn't accept his opinions as the word of God.

They got size going for them, but many SUVs have poor structural integrity. You add the likelihood of serious crashes and the poor handling, and I don’t think they’re safer for the average driver and they’re certainly quite deadly for everybody else.

Some SUVs have pretty good structural integrity (as domostrated in offset tests):

http://www.iihs.org/ratings/summary.aspx?class=50

Nomad-

Sort of agree, and sort disagree. My sister-in-law has a 2004 Toyota Tacoma, the same truck you have. I've driven it several times. On the one hand, it is an exceptionally well made car. It is the most practical vehicle I have ever seen and the attention to the little details that make up durability is amazing. For examplle, all of the paint on the lower panels has exceptionally thick orange peel -- but it's on purpose. It is there to prevent stone chips and keep the truck looking good for years to come. There are impressive little details like that everywhere on the truck. When she first got it I thought about getting one myself, I was that impressed.

The thing is, though, the truck has no comfort featuers whatsoever. The ride is much, much harsher than the Blazer it replaced. My Jeep has solid front and rear axles and is not known for its plush ride. However, it is about ten times more "luxurious" than the Tacoma. Those comfort featuers really make a difference.

I wouldn't mind having a Tacoma if I used it for running errands, and it is obviously an excellent work truck if the standard configurations suit you, but I sure wouldn't want to commute in one every day. Sometimes it is worth paying more for a little extra luxury. Would I pay 7-8 times as much in order to get the S550? No, no way. But I'd pay more, sometimes it is worth a little extra.

Would I pay 7-8 times as much in order to get the S550? No, no way. But I’d pay more, sometimes it is worth a little extra.

Try the Toyota Avalon. I am under the impression that the 30K - 40K segment offers the best value. Buy used and get a big discount, of course.

@Garth Farkley,

Wow --Patrick.net's the #2 bubble blog cited on that Wikipedia Bubble article (after Ben's blog). Looks like we're on the map, folks.

Peter P,

The new Volvo SUV is quite nice, but it's like $50K! I can get an new S2000 and a new Jeep for that much. And if I had that sort of dough, I would!

The new Volvo SUV is quite nice, but it’s like $50K! I can get an new S2000 and a new Jeep for that much. And if I had that sort of dough, I would!

I would only lease a Volvo. It does not seem to have Toyota-like reliability.

But Volvo saved my life...

I heard about all the parts shifting for Volvos and Saabs. It's too bad because their exteriors are now very appealing. On the other hand, so many middle age posers have bought them, so I really don't want to be included in that group.

Given a choice, I really prefer Honda/Acura and Mazdas and Suburus. I really like their handling and their styling. As for reliability, my mom got a lemon Corolla so I've never quite forgiven Toyota for selling it.

I heard about all the parts shifting for Volvos and Saabs. It’s too bad because their exteriors are now very appealing. On the other hand, so many middle age posers have bought them, so I really don’t want to be included in that group.

I lease a Saab. Since nobody wants to buy them, the financing cost is next to nothing after all the rebates and incentives. PLUS you have the assurance that it can be disposed of after 3 years no matter what has happened to it.

Harm,

True, true. He has been quite an outspoken bear when it wasn't exactly popular to do so and he has a candor you won't get from most chief economists. It will be interesting to hear what he has to say. Speaking of "careful hedges" how about a few of these gems from folks that don't consider themselves flippers:

Oh we bought into this neighborhood "long term", but if someone did make us a really nice offer.......

We really needed the extra/our/the space (followed in short order w/a For Sale sign) and we really didn't need all of that extra/our/the space so we're putting it on the market (for 30% more than we paid 11 months ago) but no, we're not flippers.

When we bought this place we were thinking about having children/more children but now with the economy and the gas prices and all we just decided we didn't need a 3 story home for 2/3 people. We're selling b/c we're reevaluating our lives. But flippers? You've known us for all of 11 months so you know us better than that!

With Joe's new job we just wanted to move closer to work. But lady, he works at the same place! Well, I know but with all of the extra job responsibilities and all and hey I don't have to justify any of this to you! We had a shot to cash in so we did, but we're not like those crazy flippers you see on TV shows.

With Joe's new job we just wanted to move farther from work. But lady, he works at the same place! Well, I know but with all of the extra job responsibilities we just wanted a little privacy during our "down time". The fact that we'll pocket 150/500K tax free did not influence our decision.

With Joe's new job, oh for crissakes lady it's at the same off ramp!

How many times have all of us had to endure these kinds of conversations over the last five or so years. They're all flippers. Actually I take that back. I have more respect for someone that takes a risk and actually does a little work. To tell you the truth I don't know what they are.

Joe,

The IS300 is kind of an awkward car. Try the Acura TL or the Infiniti G series. those are nicer all around for not much more. The problem with the Acura is that it's also a front wheel drive, which BMW drivers will completely diss. But the G series (essentially the luxury version of 350Z) has rear wheel drive and looks very very nice.

The IS300 is kind of an awkward car.

The new IS looks pretty nice. But it is way too small. Rear-drive is quite important. Get a nice, used GS300 with side curtain airbag.

Peter P = Toyota Century

astrid = Acura NSX (hey, when's the new one coming out?)

Any questions?

BTW, one of my uncles drives a Toyota Crown, on which the Toyota Century is based. It's very Avalonish, but the parking assist is pretty nifty for city drivers.

BTW, one of my uncles drives a Toyota Crown, on which the Toyota Century is based. It’s very Avalonish, but the parking assist is pretty nifty for city drivers.

I like the Crown I saw in Japan. I love fender mirrors - no blind spots. I want to see more fender-mirrors in new cars. Why install mirrors on doors anyway?

DinOR,

I have no problem with flippers. It's the macro economic consequences of their actions that worries me.

Why install mirrors on doors anyway?

So you can tie a tuna to the fenders.

Joe.... the Taurus? Seriously, the Taurus is a masterpiece of mechanical stupidity. I came from a family of Ford people. My uncle sold them, and most people in my family still drive them. But the Taurus is seriously the worst american car made in large qauntities. The main reason the fact that the car blows head gaskets with predicted reliability, usually at around 80-100k. The reason? Ford uses tons of disimiliar metals in the engine coolant passages. Electrogalvenic corrosion does the rest, and since about 90% of all car owners never change the coolant frequently enough, the caustic corrosive mixture that results in the coolant eats away at the joints between the head and block. I go to Pick your part and Dorris auto supply all the time, and the guys there like to point out "Taurus lane", where EVERY single one of them sits with an engine compartment full of foamy, white residue leftover from a blown head gasket. These things are ticking time bombs. In your defense, however, given the choice between a Toyota Camry and Buick Lucerne, I'd pick the Lucerne, Very nice car for not a lot of money. Besides- everyone in the BA drives Volvos and Hondas. It'd be nice to be original.

nomad,

That's for the info about the Taurus. My boyfriend has a ZX2 based on the Taurus. I bet he doesn't change his coolant regularly.

The fool! He should have gotten a Mazda Protege.

"Why install mirrors on doors anyway?

So you can tie a tuna to the fenders. "

Don't forget to save a spot for dry aging Kobe beef!

Okay, maybe not a Taurus. I just didn't know what the new counterpart to my old Buick Century is called. And I don't like the Impala, I probably would pay an extra $10k for the Camary just to avoid driving a butt-ugly car like the Impala.

Peter P-

If you trade after 3 years, yeah, and maybe after 5. But if you keep the car longer than that, I don't know that the lesser depreciation is worth it, never having run the numbers. It's got to be a minimal difference, though, no?

Astrid.. watch out for that thing to one day just suddenly overheat. I swear, if you don't change the coolant at the reccomended 40k intervals, those things will self destruct. On the other hand, the people I know who actually did take care of them had them forever, as in 200K+ miles.

I have had two fords, a Contour SVT that blew a motor during the warranty period and a Escape XLT that once it was past its original warranty period had all the idiot lights on the dash come on. I'll never buy another Amerikan car, well strike that, I'll never buy an Amerikan car that is less than 40 years old. My '63 Tbird is a marvel.

Most Hondas sold in the US are made in the US. Makes one wonder if non-UAW plants are really that much better. I mean, Jonny Lunchbucket is Jonny Lunchbucket. I just don't see the average Amerikan factory worker really caring all that much about the quality of the product they make. Besides, even if Mr/Miss/Mrs Lunchbucket does care about quality, the Amerikan upper management only cares about this quarters results. Either way youre screwed.

If you trade after 3 years, yeah, and maybe after 5. But if you keep the car longer than that, I don’t know that the lesser depreciation is worth it, never having run the numbers. It’s got to be a minimal difference, though, no?

True. It costs more to insure a Camry too.

astrid,

It's just that I've grown so tired of the total lack of commitment to the community and the casual manner so many of these "non-flippers" have treated this whole issue with. You and I may be concerned about the consequences but the only thing they see is *the money*. And with the "hedging". It would have been refreshing just once to have a nice young couple move in next store, make friends and them have them tell you in no uncertain terms that have they have no intention whatsoever to reside here a day past the 2 year mark, do as little maint. or improvements as is possible and to profit as much as they can and that they couldn't care less who buys the place as long as it's a "really nice" offer. I'm just asking the folks here to be aware of this b/c it insults our intelligence to have to listen to all of these "qualified statements".

nomadtoons2,

Had a Taurus for several years as an "extra" car. Spent more time laid up b/c of defective head gaskets than it was driven. Finally had to put $199.99 liquid gasket fix and as soon as it ran without leaving a plume of steam spewing out of the exhuast pipe I traded it in before it broke down again. True story. My wife had to actually follow me to the dealership.

Find the full report on the statements attributed to Lereah at Michael Shedlock’s post dated 4/27/06:
http://globaleconomicanalysis.blogspot.com/2006/04/new-gold-standard.html

Shedlock quotes a letter from a Florida real estate agent named Mike Morgan. Morgan’s info is here:
http://www.treasure-coast.us/HomePage
Morgan Florida 941 SE Central Parkway Stuart, FL 34994
Phone: 888-227-5217 Cell: 772-260-5448 Fax: 772-288-1971 E-mail: Mike@MorganFlorida.com

If Lereah is quoted correctly it should be confirmed and reported because it will make headlines. Maybe George can dig around a bit. Here are some excerpts from Morgan’s letter:

Hello everyone,

…“middle of 2007 when you start to pick up again. I see Florida picking up in 2007. But there are particular markets that will not. It depends on inventory levels.”

Morgan himself notes: I have warned my investor clients for more than a year that this was coming…. Many agents blast me for being so negative and “single handedly bringing down the market.” I take great pride in how I have conducted my business. Unfortunately, I will still take quite a bit of heat, as I recommend to my clients to rent for 6-12 months and then buy . . . unless there is some overpowering reason for them to buy now. That’s certainly not what my fellow Brokers want to hear, but my duty is to my clients. As a licensed professional, I must adhere to our Code of Ethics. I do what is best for my clients, not my fellow Brokers.

Can we add Mike Morgan to Surfer-X's list of honest, qualified Realtors along with bigfoot and the Easter Bunny? Oh, yeah, and George.

I'm assuming George d/n= MM.

Hey, I stopped by that house near 375 Hawthorne where the veterans live and chatted with 3 of them sitting on the porch.

It's a halfway house for mentally ill veterans, not necessarily alcoholics.

Just wanted to clear that up.

Patrick

It’s a halfway house for mentally ill veterans, not necessarily alcoholics.

Hmmm, I guess that negates the possiblity of playing "orange crush" by REM on 10 (but this one goes to 11).

HARM,

No, no, your conclusion is reasonable. It's just that a lot of people take it too far. My buddy Ed just bought a 4Runner after trading in his Jeep. He, too, swore that he would "never buy a domestic piece of crap again," etc. Except that in 100,000 miles, he had no problems with his Jeep other than a broken fuel gauge that was replaced under warranty in a couple of hours! The car was perefectly reliable! He's not anti-American, he's a Naval officer, but he too has fallen for the mystique that American=crap, Japanese=superior.

My sister-in-law was the same way. She drove '85 her Blazer for 275,000 miles! The last 50,000 were problematic, but up until then everything was fine! But she too described it as "crap," etc.

There was a qualtiy differnece at one time. Some people, like you, had bad expereinces and have every reason to be frustrated. But after that, it took on a life of its own and was exxagerated to ridiculous proportions.

And have you noticed that no one ever complains about Japanese cars? Am I to believe that none of them ever have a single problem? Well, when you drive past the dealer the garage bays are always full so that can't be true. But no one is ever willing to say that their Toyota/Honda/Nissan was "crap," even though some are. It's a psychological thing.

I'd like to interrupt this all car all the time love-in to declare Benjammin a troll!

Yup, he's a troll. Perhaps we can all move the gold paved BA and lunch with it.

Hmmm, I'm taking bets on how long before the new troll posts the same old tired MLS listings from SF. Come troll you know you want to.