patrick.net

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.

"Almost anyone is fitter than Portland girls"

Amen to that brother. Yet I'm not sure the "linebacker" analogy holds? I've went up against a few of these guys on the field and trust me they're all muscle. After years of working downtown I'd say they're more... lumpy? In any event PDX is the only place I know where girls get on meth and actually GAIN weight!

Art auctions are falling short. What is going on? People can’t afford 30 Million for a piece of... never mind.

Big Ben
http://www.msnbc.msn.com/id/21688234/

To me, Schumer kinda stole this article. I am not sure if this is bad or incomplete reporting or if Schumer is an idiot. In an article in which the general rule of monetary policy was stated as "lower rates when in recession" and "raise rates if there is inflation", Schumer is quoted as saying, "I think a recession is likely."

Um, yikes. I hope this does not mean that the chairmen of the joint economic committee is advocating for more rate cuts. I mean sheesh, the dollar is already tanking. Can you imagine the effect of more rate cuts? The simple truth is that we have seen this before. We are *in* a reincarnation of Carter's stagflation and the remedy is the same. We are just going to have to raise rates, possibly (and probably) ridiculously so. World economic output will go down (Global recession) and the best we here can hope for is to minimize our losses as there is just no way to 'short the world.' In fact, watching the gyrations of the hedging models would be hilarious if I could only divorce myself from the reality that a lot of people are losing a ton of money.
Where to park money? Health. Swiss franc. Companies that will get governemnt contracts when massive US infrastrucutre spending is announced. Ah, the good old FDR days.
By the way, war spending is off the table as we simply do not have the military size needed to go into Iran. So the cynics who say "war your way out of recession" will have to wait a few years at the very least.

LOL yeah "fit" means well, physically fit, in the UK.

American girls are judged like prize hogs, by the lb.

Big'n'lumpy is how I like my oatmeal but unfortunately it's a good way to describe Pacific Northwest Amurrikun gurls.

By the way, stay away from real-estate for a while. Until the regulation dust settles and some very probable tax code changes are made there is just no way to correctly price this asset class. Or rather, be sure to price in something like (2-3 years from now):

1. 35% price reduction (given fewer buyers with 20% down, 35% gross pay, new appraisal methods, and credit wirthiness mandated by new FICO model.
2. 10% for 30 year fixed loans and 2 points
3. Maximum mortgage interest rate deduction limited to something like $250k
4. Modification of 500K capital gains deduction

I would say that the NAR and the Financials lobbies are going to be pretty impotent for a while as this mess will be laid at their feet.