patrick.net

# hugel Says:
re: the biggest no-brainer in the history of mankind.

wondering what it was referring to: the loan or the borrower?

Nominate this for "Best of Patrick.net"

SP

StevenB,
Board-certified psychiatry? That was so unexpected. I tend to think of many people attracted to that field as wanting to learn how to identify certain conditions, (envy, entitlement) understand their conseqences, then learn how to get past them to a more heathy existence. It sounds like you are learning how to identify conditions but you accept them in yourself, and that is just really interesting to me. As not-a-physchiatrist I can't say what that all means. However, as an armchair economist I can say that people may need your services more then ever (assuming you help them not only identify their pain but get past it?) but they will not be able to afford it. As Maslow would say, until food, clothing, shelter and safety needs are met people will not be heading down a lot of other paths towards self actualization. Sessions on the couch are a pretty easy choice for elimination when eviction and hunger are in play.
I sincerely wish you the best of luck on 'joining the ranks of the priveleged' - especially since you of all people must know it does not come from fancy homes and, presumably, thess then 3 year old cell phones and mp3 players.

StevenB,

I think seeing and wanting nice things is fine, but if you find yourself becoming bitter or disparaging of what you have it's time to re-evaluate yourself. I have two friends with young children who have suddenly developed life threatening illnesses, They'd give their big houses and everything they have to have healthy kids. Always try to keep perspective on what's important and what actually makes you happy. A hint- a few of my friends in those big houses are miserable, and a few are so financially strapped they have trouble sleeping.

OO,

I believe the correct term is 'dollarette'.

SFWoman,

Dollarette, that;s a good one. Same taste, less filling?

"wanting nice things is fine"

I must have fallen head first into the *SP "not wanting to trade my dollarettes for YOUR cr@p mode"? But then how did BMW's #'s turn out so sweet? Last hurrah?

DinOR,
BMW's numbers look good only if they don't do their own financing. :)

StevenB Says:

> Is it wrong for me to WANT a massive downturn,
> a prolonged recession during which people can’t
> make payments on their debt, cut back on discretionary
> spending, fear for their jobs and struggle to hang on to
> their dwindling assets?

It is wrong to want bad things to happen to others (but I think that most of us struggle with this and it would hard NOT to be happy if some people (like the “my neg am loan helped me by big rims and a loud stereo guy”) went BK…

> For the past 5-10 years, I’ve lived on extremely modest
> means, I haven’t been able to buy a house in this ridiculous
> market, but instead I’ve learned to enjoy the simple things

If you look around you will see that the really happy people focus on the simple things. It took me a long time to figure this out and as a poor kid growing up around rich kids I was always focused on getting new stuff and would by new stuff just because a new product came out. Now I only get something new if I really “need” it…

P.S. There was an interesting quote in the NY Times recently that said “Bling is for wannabes. Suits are for funerals”…

I don't follow the company (so I don't have a dog in the fight) but it just seemed that their sales were strong across the board. Bimmers, motorcycles and even Rolls were strong.

"but I think that most of us struggle with this"

Yes we do. I'm not sure HOW.. to feel about this?

www.housingdoom.com

First post is "Preview of Housing Armageddon"

(All those little gavels represent foreclosures in a trendy neighborhood in PHX) The HOME of big rims and loud stereos!

OO :

Fleckenstein at MSN coined another great term. He is proposing to rename USD to "xera".

Thanks to the suggestion put forth by a reader of my daily column, I have come up with the new name for our currency. Henceforth, it shall be called the xera. That's a combination of Xerox, for the piece of Xerox paper that it is; lira, which in the past was one of the world's chronically weak currencies; and, most importantly, the fact that it sounds like zero. That is ultimately where the xera is headed.

DinOR - It's been strange coming back here to N. AZ where I started my small biz (which I eventually tanked) and seeing how much this place up here just does not change. Used books are still a dime or a quarter, and the Coffee Gram is still in all of the restaurants. The Coffee Gram is a sort of classified ads thingie (with a few jokes and quips and a lame cartoon) that's the size of a placemat, great for reading while you wait for your food and then slopping said food on. The one thing I notice are TONS of rent-to-own schemes. Those were very rare in the late 90s.

Rent-to-own is huge out here, maybe because the property owner can make a living from selling the place over and over as various hopeful rent-to-owners fail, or maybe because a lot of property owners out here are flippers and desperate.

"I like country with more stuff than people...Canada"

That's part of the problem, imho. In the past few years, investors have come in and overprojected/overbuilt everything. There is a plentitude of houses, condos, strip malls, that can't be accounted by the local population. I just wonder how long these companies (many American) will throw their money into the wind and affect Canada's upbeat employment figures?

ex-sunnyvale renter,

If you get a chance check out www.independentamerica.net. I was watching IFC and they had a couple (two journalists) that set out on a road trip with an agenda. No super highways, No chain stores!

In search of "mom and pop America" they only ate at local diners and stayed at ind. owned hotels. Their findings were startling, in "some" cases WMT could actually be GOOD for some communities, yet devastating for others! There was also a message of hope as they talked w/ bus. owners that found ways to combat Corp. America.

Given we've discussed these issues before I think most here would find it interesting.

There is a plentitude of houses, condos, strip malls, that can’t be accounted by the local population.

When dust settles, it may be prudent to move there. :)

For now, I think CAD is a rather nice oil-proxy.

Not investment advice

DinOR - Looks like a DVD I'd have to buy, can't do that right now, but it sounds like a NEAT idea - if I'd had the spare money and time to get a video camera, I wanted to do videos of weird places and people etc that I see around, in sunnyvale and santa cruz, all over the place really, and put 'em on YouTube. You know, kinda like Huell Howser but funnier and more weird stuff.

ex-sunnyvale renter,

Oh I'm not hawking for them (besides you can see it for FREE on IFC!) They talked with bus. owners on successful tactics they'd employed to stay competitive with "Big Box" and won!

They also drove through towns where there was no one left to talk TO!

If town (A) gets a Box and people from (C) have to drive through (B) to get there....! Well then town A + B win and town C eventually ceases to exist. Really, it's a study that seems in it's infancy, and hardly an exact science. I hope in time we can have a more complete study to confront Big Box with and say (with relative certainty) this is what the impacts will be! Then use that as a starting point for planning?

RE: big box vs. small business

Whoever wins... that's what the market wants.

Was in Vancouver this weekend, chasing skirts. Canadian girls are fitter (though not as pretty). At the border, I didn't see a single US plate; basically, the Canadians coming back with busloads of merchandises. On the way back, I was the only one entering US. The hotel clerk told me that Vancouver economy was suffering. Cheap dollars are good for US.

Cheap dollars are good for US.

Expensive loonies are good for Alberta.

Canadians coming back with busloads of merchandises

How should we capitalize on that?

GC, perhaps the Canadians are going to buy up Seattle condos next.

It's OK with me. I don't intend to own anything when I die. It's not necessary that I must own a house or condo, although having a good place to stay without the worry of being kicked out would be nice. My building is under a contract to sell. Those assholes. If they convert it into condos, I'll have to look for a new place to live.

I may end up f'king sell everything and go to live in a different country.

I may end up f’king sell everything and go to live in a different country.

Like... Canada? :)

Or Australia?

A lot of people panic when the dollar plummets against other currencies. But the truth is this has happened before. America (without Canada) is still the best place in the world with Australia and Newzeeland come second.

When will it break the 1 CAD = 1.5 USD level?

Perhaps Loonie is the new Euro. :)

My choice is based on women.

A lot of people panic when the dollar plummets against other currencies.

We can only react.

I'd say some select parts of America are among the best places in the world. There are many parts of America that are either armpits or sh*tholes that you can't pay me enough to live there, e.g. Detroit, Pittsburgh, New Orleans, etc.

Cheap dollars are great for Americans as many now have to reexamine their consumption-based life and look for something more meaningful.

I predict that Church is a growth sector.

I predict that Church is a growth sector.

Do you know of a good way to start a for-profit religion? :)

Peter P,

Start off by being a hack sci-fi writer.

Start off by being a hack sci-fi writer.

Ok. I think UFO will save us all. :)

By UFO, do you mean Unleveraged Financial Openess?

I have a buddy in El Mirage. I'll give him a call and see what's up. He lives in that very neighborhood on DinOr's link. He said it was bad, but I had no idea.

sfbubblebuyer Says:
November 7th, 2007 at 5:09 pm
"Peter P,
Start off by being a hack sci-fi writer."

Aren't they on strike?

The horror show of the MEW mess has some coverage in the NYT:

http://www.nytimes.com/2007/11/08/business/08borrow.html?pagewanted=1&_r=1&hp&adxnnlx=1194499379-3dZS2rVE2YZe/n2Ylc/RAg

Nothing much new to us, but they have a nifty chart tracking MEW state by state. It's ugly.

EBGuy Says:

> Do you think there are a lot of “old school” TICs out
> there sharing a mortgage? I would imagine most
> people these days have the new fangled “fractionalized
> TIC loans”.

About 90% of the TICs in San Francisco are sharing a mortgage (and praying that they will be one of the few lucky ones allowed to go condo each year).

If the value of a TIC drops and one of the investors walks away the others have to either take over his payments while they sell his unit at a loss or all walk away ruining all their credit.

Even with the new individual TIC loans you mar still be on the hook for maintenance and taxes if your fellow TICs don’t pay…

GallopingCheetah Says:

> Was in Vancouver this weekend, chasing skirts.
> Canadian girls are fitter (though not as pretty).

Fitter and not as pretty as… Seattle girls?

Almost anyone is fitter than Portland girls who seem to on average weigh about the same as a typically NCAA linebacker (who are on average about a foot taller)…

'fit' means 'pretty' in UK ;)

A 'board-certified psychiatrist' should already be making good money, as they are a qualifed doctor already. Psychiatry is a specia1isation following from completing a medical degree.

Speaking about having more stuff than people, the Treasury here just 'discovered' they suddenly have a $109 billion surplus, derived in large part from mining revenues to the govt, to do with iron ore and China mostly, I suspect. This estimate is up from the previous mere $17 bn surplus supposed to be in the coffers. This is about $5,000 for every citizen in the country, or $10,000 for every taxpayer. Unemployment is also low, causing less strain on the govt budget.

The first thing both parties did was offer tax cuts to the tune of $30 bn+ over the next couple of years due to an impending election.

However, the predictable flow-on effects of such a handout are a major spending spree followed by the Reserve pushing interest rates up even higher, so your tax cut would quickly be absorbed if you were a mortgagor.