patrick.net

Does anyone know how the commodity bull markets have played out in their previous runs ? What's a typical cycle ?

I have only seen the dot com bubble and then the RE bubble. If these ever happen again in my lifetime I have my lessons learned, and know what to do. I don't know much about the commodities, except they are far more volatile and susceptible to non-fundamental driving events like politics.

Higher stock prices and higher house prices are loved by majority of the population. But higher prices for commodities do not seem like a good thing. Are people buying just because of inflation fears, US$ devaluation or the supply-demand equations are really changing to reflect a new reality ?

astrid, I was merely musing on the housing aspect. Women always spend inordinate amount of money and time on their appearances. It is actually the upper who tend not to care about the trappings that you mentioned. The same can be said of men. A lot of men like to spend inordinate amount of money and time on their (new) toys. But the uppers, in the traditional sense, liked to (at least used to) toy with wars, intrigues, and diplomacy.

Linda,

I only did so with the utmost respect for our Gentle Schmoe, who can identify with the plight of the everyman or woman, everywhere, or so a little bird told me... ;)

GC,

Give me your definition of the upper class. Yours seem much more restrictive than any ever accepted by Americans, or even the Chinese!

I don't care. I want housing in America to be like housing in Japan. Unless it's producing rent, it's just a capital eating durable good.

Those who conquerred, robbed, and subsequently ruled. This definition also applies to some who rose to the ranks of the ruling class via the path of money making through plundering but not through industriousness. People who have become rich through hardworking and ingeniousness do not qualify for rulership, for ruling implies violence.

In a tribal society, there are leaders but no ruling class. The so-called class hierarchy (and for that matter, any civilization) is invariably established and maintained through physical and spiritual brutality.

Back in Modesto, I could always tell when a neighborhood was going to seed when the various strip malls (ok, that's a sign in itself) would lose their local "quality"[0] stores and gain manicure parlors in their stead.

To BA: I think the inflation and devaluation. "It's different this time" is always a suspect explanation. Keep in mind that people like Soros and Buffet have been betting against the dollar for some time now. They've lost money doing so, but the current housing trends have been going for longer than many expected. The global economy is largely running on Chinese supply and American demand, demand largely financed via funny-money HELOCs. When the music stops, it's likely all economies will take a hit, but the dollar seems more vulnerable than others.

[0] Things like hobby & crafts suppliers, bookstores, etc.

sorry, ingenuity instead of ingeniousness.

To BA,

you question is hard to answer, because time has changed. Historically dating back to the 1400s when we still had records of pricing, there was already commodity bull cycles and bust cycles. But those cycles took much longer to complete than today, usually 5+ decades. The cause of that was usually population growth.

Similarly, this commodity bull cycle also has something to do with population, not population growth, but incorporation of countries previously not in the capitalist camp. China has always had 1+B population, India too, but they were somehow locked up in a different world not interacting with us, and they used to consume far less. Now with raised expectation of standard of living, these countries will rise to reap their fruit of hard work, and their fair share of raw materials on which we humans survive.

The last commodity bull cycle in the 1970-80s lasted around 18 years. However, you can't use that as a reasonable base because
1) We had far less population in this commodity stake-out game
2) We had far fewer tools for speculation, ETFs not around, far less paper money floating around either
3) Information flowed much slower

So these forces are pulling the commodity market in different directions, which force will win? Only time can tell.

Wolfie AKA Benjammin

Troll be gone!

Wolfie,

look in the mirror man,

is that ALL there is?

I mean,

shouldn't college graduates in the great US of A all make at least $200,000?

How can they respect themselves, slavin' for the man like that?

College graduates from top schools can make 100K after finishing a full year of work i.e.

No, no they fucking don't. I love these fucking asshats. Ok dipshit, what school is a "top" school and what fucking discipline makes that kind of cash 1 year out? Not a fucking one. Consider Cal and Stanford good schools? Know what a BS with honors and a MS from Stanford in Computer Science gets you at Oracle? 80 fucking K. Oh this is with multiple summer internships at Seibel. Go fuck yourself, get your mayo laden cucumber and go get freaky with HaHa. Asshole.

Anyone can make 100K a year, all it takes is a fucking gun and a note. So your prior fucking comment centered around people in their late 20's, now you make ill-informed comments I remember back in the 80’s, making 100K was a big deal. you were what, fucking 6? Seems you were still rubbing shit on yourself and getting a hard-on off Sat morning cartoons, seems it worked for you then, why not go back to it and quit wasting our fucking time with your fucking drivel.

GC,

Well, you can believe whatever you want to believe. History already demonstrated the ruling classes are more fluid than your construction and that the fates of the upper classes are tied to happenings of the lower classes.

Deny the mob classes housing,

dare I say, Marie Antoinette once suggested "cake" as a good substitute for, oh, some good basic qualities of life, like food and shelter....

In the US now, I see plenty of "food", I mean, SUPERSIZE ME, Baby!

However, gimme shelter!

Hey, all this shoutin' feels real good!

Deny the mob classes housing,

Tsu, but who is going to fold the burritos for the fucking fuck in the boxster then?

Wanna make some fucking money, bring out a new line of euro-fag glass frames for the BMW/Porsche/Mercedes crowd. make them expensive and make them moronic looking. Walla 1mil.

Marie Antoinette never said that, she got framed. She was very much disliked for her lavish lifestyle, but more sort of used as a scapegoat, particularly by the upper class who badly needed someone to take the blame for all the misery in the country.

America will soon need such a martyr to take all the blames, who will that be?

"America will soon need such a martyr to take all the blames, who will that be?"

Let's go find an Austrian!

ex-Austrian?

Hitler was Austrian.

Owneroccupier,

haha, sorry about that, not bothering to check any "facts" today, just spouting the "common knowledge" the wellspring of all truth that is really worth learning...

Sorry about that...

So is Schwarzy, I think that's who Astrid was referencing.

Owneroccupier is correct, both Schwarzy and Marie Antoniette were ex-Austrians.

The masses don't really need housing. Whole civilizations have thrived in slum/ghetto conditions. The American government has bread and circus pretty well covered, I think we'll be safe...especially if we arm ourselves with Japanese knives :)

Well, I hope the masses hold off for a bit; the polishing work on my Japanese knife is only about 40% complete.

There's something truly bizarre about a society that encourages high birth rates amongst underproductive, physically unhealthy specimen but strongly discourages a large segment of its productive and health specimen from reproducing at replacement levels.

This is almost certainly unsustainable, and it'll be interesting to see how this changes.

tsusiat,

not a problem, I am just regurgitating what I learned from the History channel, if this is not true, please direct your lawsuit that way :-)

Thanks Owneroc.

It's just that I live among the crowd that can talk only about GOOG one day and BRCM the other day. Their idea of diversification is to spread the money between hardware, software, telecomm and storage stocks. Many of them blame the Fed for crashing the dot-com stocks by increasing the interest rates. (Yes, WTF, I don't get it either. But they really believe that.)

If that's not funny enough consider this. Now they are paranoid that Fed is again going to cause a downturn in RE by increasing the rates. And these are people with fairly high IQ. The world is really weird.

So I appreciate all the insight I get here.

Herman,

"While it may seem like everyone in BA makes mad loot, i’d say there are a lot of people squeaking by on much less than 100k/year."

But maybe the partners pay for everybody's mini storage and mayonnaise.

(sorry for the really cheap shot :oops:)

Seems I really started something by talking about IB salaries.

I’m going to say 100-120k pre-mba analyst, maybe 250-300k first/second year post-mba associate, and that may be generous

I'd say that's true for IBs outside of Wall Street. IBs on the Street can make a good bit more at the top firms.

Keep this in mind. A pre-mba analyst, only making $100K, is someone with just an undergrad and a couple years experience. These guys are 25 tops. By 26 they better be in an Ivy MBA program if they want to survive the grinder treadmill. Ok, probably you'll find a 28 year old who made it, but it's rare. By 28 they're mostly out of school, after having spent 2 years grinding their degree (and it's not a boondoggle, despite popular perception), and those who did a good internship are on to being the Post-MBA 1-2 year associates. They only make $300K a year at 28-30 years old.

There are 60 year old CEOs/COOs/CFOs of $300MM companies that these guys are doing a smallish M&A deal for which have never seen $300K a year (which is why they are doing the M&A deal, ironically).

But it is true that they are basically sales, or I should say deal-makers. Most Associates move on to a Corporate Development position with a public corp where they'll pull in about $250K per year plus bonus tied to doing acquisitions or spinouts/spinoffs/carveouts/etc. Oh yea, by this point they're the ripe old age of maybe 34-36, tops, and making a stone's throw as much as the CFO, who has oh about 1x10^20 more liability and responsibility. After all, the M&A guys never were bound by fiduciary responsibility in their IB days; so maybe they just can't empathize.

As for the rest of them -- those who don't make it to the top Corp. Dev. jobs -- take a look at efinancialcareers.com or glocap.com to see how much they "suffer".

It's true that the conveyor for IBs is also breaking down, primarily due to the offshoring of analyst positions. Unfortunately, this will only make the obscene salaries of those already in the pipeline skyrocket same as has happened to operational finance people with BigX experience. But the other side of me sat in NYC listening to professors and Wall Street IBs cry and whine about the evils of "non strategic offshoring" and "labor arbitrage", and how it would destroy the finance industry.

I sat there with my schadenfreude thinking "yea, funny how what comes around goes around" as they sat there smugly running analysts calls praising yet another quarter of "cost cutting" by offshoring a few tens of thousands of jobs in tech and services. I hear the lawyers are feeling the pinch now. It's like an orgy of schadenfreude, or maybe everyone will learn their respective lessons and we'll get back to actually doing some business in this country instead of just shuffling the chairs on the deck.

Many men were ignored by girls in their youth and try to avenge such a gross "injustice" by being successful and then display their success.

A lot of men try very hard to appear to be "the material" to prospective mates who invariably have a secret motive -- that is, to gain financial security through marriage.

Many a man secretly wants to be ruled. That's why they marry the women they marry.

Modern marriage is an institution of oppression and slavery, for, without the burden of satisfying a nagging wife's wish and the mouths of the incompetent children -- who have to go through extensive, rigorous schooling in order to "succeed" in life -- why should men work on things that are alien to their nature?

A satisfied man, one who every girl fancies, never feels the want to succeed, except for honor.

Let us acknowledge the reality that those who strive to be rich without a clearly spellt-out and readily-approvable reason -- i.e., how he should use the money in an aesthetic and aristocratic manner -- deserves not a single salt of admiration.

Why do you want to be rich? I have my own wishes. But I will not tell you what they are and where they are, for I know many of my compatriots will immediately want to ape me.

GC,

Well, let's find a dating agency with those ideas in mind and see how it works out. I think a darkly clad mistress with leather and whips will be more popular.

Scott - i think that amount was the total bonus pool divided by # of employees. As it actually played out, a large % went to the partners, MDs, prop traders and other BSDs

Exactly… my post was a response to Randy’s “median vs average income” post… hence why I posted the average # for G.S… just reaffirming his post…

Exactly and exactly. I think the thrust of the FT article was that it's not just the very very very top 0.1% who skew things, but it is massive wage growth in the top 5%. Lots of 28 year olds earning $300K+ a year is "a skewing of things" in my book.

Randy, I understand but do not sympathesize wth your indignation. Those 28 year olds who earn $300+K a year, they have different upbringings from their peers. Ability is very small determinant of one's earning potential. Someone would go so far as to say that upbringing (read, breeding) is everything.

I see the "magnetic field" getting very nagative for the IB guys whose salary seemingly has attracted a lot of unfriendly attention... Negative Chi is forming, fortune destiny turning...Darkness ahead...

surfer-x Says:

In reply to: "College graduates from top schools can make 100K after finishing a full year of work i.e."

No, no they fucking don’t. I love these fucking asshats. Ok dipshit, what school is a “top” school and what fucking discipline makes that kind of cash 1 year out? Not a fucking one. Consider Cal and Stanford good schools? Know what a BS with honors and a MS from Stanford in Computer Science gets you at Oracle? 80 fucking K. Oh this is with multiple summer internships at Seibel. Go fuck yourself...

_____

Thanks for the vicarious catharsis! I feel the indignation.

Nobody's buying the propaganda any more...

Guys, regarding IB jobs: you have to have certain personality, in addition to proper upbringing, in order to survive in the IB industry. You must have a cold, unsentimental mind. You must have an innate, strong desire to WIN. In grad school, I shared an office with a guy whose name has a III in it. He told me that he was a cold man. (He's a very decent man.) He did very, very well in the hedge-fund industry.

GentleCheetah Says:

> Many men were ignored by girls in their youth
> and try to avenge such a gross “injustice” by
> being successful and then display their success.

Almost all men want to be successful (even the good looking high school freshman who had sophomore and junior girls taking them home after school to have sex before their parents came home)...

> Many a man secretly wants to be ruled.
> That’s why they marry the women they marry.

Not many men want to be ruled (sure there are a few guys who pay women to tie them up and beat them, but there are probably more gay guys out there)...

> A satisfied man, one who every girl fancies,
> never feels the want to succeed, except for honor.

Most men want to succeed and win all the time (even in trivial things that don't involve honor)...

FAB, I don't want to argue. We just presented different views. Note that you and I may have dfferent definition fo the word "success."

Man likes to win, that is for sure.

To "succeed," that is a quintessential trait of a striving middle class, for better or worse.

I don't think a king has a strong desire to "succeed."

PS -

are you implying those who earn $120 k a year are not "wealthy"?

What planet are you from?

If the median household income in the Bay area is around $80,000, how do people earning $40,000 per year more than the median fall into a class of "frugal", non luxury living citizens.

I don't doubt that at Patrick.net, such people would be poorly paid members of one of the lower classes, but in most parts of America or the world, for that matter, earning $120 thousand per year would be considered "doing well".

Yeah, I want to earn $120,000 per year so I can spend $6000 per year on FOOD and $2400 per year on clothes, as per your example.

Right on, I'm livin' the good life now!! That sounds like a reciope for good times!

BTW, no offense, but your example illustrates how out of whack housing and even rental prices are when you consider it "frugal" or necessary to spend $5 dollars on shelter for every $1 spent on food.

OUCH!