patrick.net

DinOR,

Well, yeah, what was supposed to be a deterrent to starting war against small faraway countries might end up being additional suffering for said country.

All attempts at humor aside, I suppose the Philippines is a little different because they have traditionally been thankful that we overturned the Japanese occupation of WW2. Perhaps more similar to Kuwait than to Iraq?

justme, war is a necessary evil in the human world.

Some wars are better managed than others (e.g. The Falklands War). But not all wars are the same. We should let history judge them.

[comment deleted by moderator]

well nobody is talking about 100% metaphysical certainty, nor am i say new guys should be disqualified. However, he is a special kind of new guy: unless I am wrong we have never before had someone so "green" (and I don't mean that in the Al Gore sense) become #1. Even Bush II had two terms as Gov.

You concede his short voting record but say it's good enough for you. To be honest, I look through his voting record and I can't fairly see any pattern - of course that could be because it's short, or more likely because I'm not skilled in reading voting records.

To me he is a gigantic question mark. I honestly have no idea what he would try to do if elected. Except I'm pretty sure he would give nice speeches.

ExSVR,

Warning: racist insults like that can subject you to moderation. Keep that stuff to yourself, thank you.

Here's another bit of financial fallout from the impending/underway recession: Sharper Image files for BK. I guess once the money gets tight, FB's pull back on purchasing $2000 massage chairs and $50 nose hair clippers...

Serious question: how do you guys hedge your GLD positions? GLD has no options and XAU does not track well with the metal.

DInOR
your post at 12:53pm was channeling Mish from globaleconomicanalysis:

"People want change, closure, and healing. Neither McCain or Hillary can provide that."

Maybe your theory is IT after all. I wonder if Obama can possibly provide any of that though.....(well he will provide some sort of change for sure, so 1 out of 3 is in the bag)

Maybe they'll have a firesale and I can pick up those nose clippers for a couple of bucks!

Peter P,

I'm no fan of starting wars and then "let history judge them". Having the war judged unjust LATER is no consolation for all who died. I want a opredisdent that will judge and weigh war carefully before starting them.

I want two of those ion air purifiers!

Peter P,

I looked at GLD and XAU after you mentioned them. but I'm not into gold or precious metals. Wouldn't mind hearing how to short it, though. Could become handy soon.

Apparently I can't type president. Maybe I have to go military style and start calling him POTUS.

Wouldn’t mind hearing how to short it, though.

Shorting gold? Isn't it like shorting homes in 2003? :)

Disclaimer: I hold GLD

Not investment advice.

@justme,

Oh I realize you didn't intend it in ALL seriousness! The truth is that things weren't always so smooth between us. Not long after the fall of the Spanish Fleet at Manila Bay there was a rather hasty rebellion and ongoing skirmishes for years.

After WWII the majority of the $'s for rebuilding went to Japan (more bad feelings) so just b/c we're both primarily Christian and english-speaking let's not be fooled. It's been a rough road. So yeah, it's been about a hundred years and we're STILL working on our relationship!

BayAreaIdiot,

Thanks, I only wish! Actually Dick Morris www.dickmorris.com probably has the best read on this. He's been incredibly accurate (with the exception) of declaring Hillary the next Pres. to wake people TFU!

I will say although I'll likely be voting McCain (because of my slavish devotion to the staus quo... :( and my nature to be assured that we're kicking @ss "somewhere") I could certainly live w/ Obama as POTUS than HC any day! Besides (and here's a little tidbit in his favor) the guy's a White Sox Fan! We'd have THAT in common!

@Harm

I do see the issues on the Second Amendment and see that Barrack only has made 3 votes. The vote for the Firearm Confiscation Prohibition Amendment did surprise me. This was a big thing that angered me after the Katrina/N.O. screwup.

In practice, this law will not be enforced in the courts. It will be enforced when civilians give the same treatment to the cops as they do to the looters. This vote by Clinton seals the deal for me. I will vote for the devil over her.

DinOR
and my nature to be assured that we’re kicking @ss “somewhere

in the end, that might be the deciding factor for me too. But it's still too soon (for me) to dismiss the possibility of voting Dem.

DinOR,
I really like that "Condi vs. Hillary" book that Dick Morris wrote.

@justme-

Pretty sure you were joking but if not here is the information on shorting. GLD is an easy to borrow ETF so your broker should have no problem letting you short (just like a stock). Go ahead and sell short all you want - it will be that much more for the rest of us to buy.

XAU is diffrent as it is an index of gold stocks - not a tradeable ETF. For that you might look at GDX.

Not investment advise.

advise = advice

XAU is diffrent as it is an index of gold stocks - not a tradeable ETF. For that you might look at GDX.

XAU has index options, though they seem to be not as liquid as GDX options.

Why doesn't GLD have options??? :(

Not investment advice

"The Next Slum? Turning America's McMansions into tomorrows tenements"

Interesting article in the Atlantic positing a new exodus from the burbs into the town. Nice points on reflection of an attitude change in TV and Hollywood I had not considered, and a vivid, disturbingly dark painting of the "new slums". A rather shocking vision actually, changed my viewpoint of what the landscape might look like in a few years.

http://www.theatlantic.com/doc/200803/subprime

DinOR Says:
February 20th, 2008 at 10:38 am
Malcom,
"With escalating housing costs most of my retired buddies have been driven inland. Temecula, Murrieta etc. I lived in Imperial Beach and still check prices there from time to time. That aside it just seems SD has this legacy of corruption (Duke Cunningham and a number of mayors?)"

Encinitas is one of my favorite areas. Duke was a real disappointment for me since he was a childhood hero of mine. Roger Hedgecock is a weeney who has a radio talk show. The smoke was still clearing from his time in office when I moved here in 90. I've actually been on his now off the air TV show before I knew his past. My favorite scandal is probably the city council people who were bribed to change nudey bar laws. Too bad your friends are out in Riverside, that is a real pit. I hope they didn't buy houses there, we have friends who just announced they are walking away from a house that they are now 200K under water.

NEW YORK (Reuters) - A rapidly deteriorating U.S. economy will cause home prices to drop by 20 percent peak-to-trough, a leading economist said on Wednesday.

Mark Zandi, chief economist and co-founder of Moody's Economy.com, said he also expects a recession in the first half of this year.

Zandi, speaking at the Reuters Housing Summit in New York, said this is a "significant" change from the Moody's Economy.com outlook published in December, which called for a 13 percent drop.

He expects home sales to hit bottom this spring, housing starts to reach a nadir this summer, and house prices to trough in the spring of 2009.

Malcolm said:
Someone buying today will have a smaller tax bill than someone buying the same house 2 years ago. It doesn’t just go one way, although those people can appeal and have their taxes lowered to today’s rates they still were paying more than someone buying now.

When the price of a car goes up is it fair that the person buying the car later pays more sales tax and higher registration fees? Just curious about your opinion, I’m not trying make a point.

An interesting observation, our taxes go up a max of 2% per year. For the last 10 years it seems that inflation has been published at about 2%. It is interesting that property taxes for someone like me who bought in 2000 do seem very low which sort of shows how misleading the government figures are.

~~~~~~~~~~~~~~~~~~~~
Yes, I agree, the inflation numbers are cooked. No way it has been 2%.

The car analogy does not work for me, quite, because sales tax and initial registration of a car would be more analogous to a transfer tax on a house. Transfer taxes and sales taxes are one-time events and do not concern me.

Prop 13 concerns me because it keeps on going--even into subsequent generations--and because I view property taxes as yearly fees for basic community needs eg. schools and roads and firefighters and ambulances. If I bought a house in 1985, and you bought a house in 2005, I will pay a fraction of what you pay every single year forever, as will my child, though we will all have the same access to services. It does not matter if I make more money than you, I get this gift from the state simply because I bought before you and did not move. Hey, maybe they can do that with income tax, too--if I work for the same company for years, shouldn't I be taxed only on the amount I made the first year I worked, plus, say, 2% a year? That would be really nice. Let's do that. Then the people who insist on graduating college after I did, or who insist on changing jobs--well, they can pay most of the taxes, no? It'll work out fine. At some point, it ceases to make sense. Especially given that we are running seriously short on state funds, despite the fact that sales tax and income tax are on the high side here in Cali. I reckon there must be rampant mismanagement, but this property tax piece does not sit well with me.

Rant: This is the 7th straight year my community has seen major cuts in funding for public schools. Given that the PTA is already paying for the music teachers and front office staff, and that parents act as art docents and assistant teachers, and the teachers don't make much money at all, I honestly don't see what more can be cut, and I really feel for communities that lack the private resources to make the public schools work. But heaven forbid healthy employed people who were clever enough to buy their houses in the 80's or 90's should be asked to pay market rate property taxes so that all the kids can be literate and we can have firefighters available when the hills are burning. Yes, I am cranky about this.

Paul,

Thx for advice. I'm not suggesting shorting gold, I'm just saying it may become profitable in not too long. And I think gold will exhibit much less "stickyness on the way down" than real estate has been showing.

Eliza,

What you said. I'm all for getting rid of prop13, and reducing the property tax rate while we're at it. One of my favorite causes -- and I am repeating myself.

Every percentage point the house prices decline, is 1 point more I am in favor of prop 13.

Hopefully I can maybe, possibly buy near the 'bottom' and then in 10 years brag to young people and newcomers, and those who move or upgrade thier home how low low my tax rate is. oh how sweet it could possibly, maybe, be to be p13 rich! *mentally rolling money while cackling*

Housing in CA is now a fookin casino game. And weve done it to ourselves....passing selfish laws that only screw the other guy....p13,nimby measures,rent control, endless tax breaks for REICestate, just like the curse of Indian casinos which are predatory on the weak minded (why not take money from them?)

----"Auction is the best way to correct housing oversupply."

is there really an oversupply of housing in the bay area?

wasn't there really an undersupply driving prices up (along with overexuberant demand, of course), which is partially improved as a result of increased building the last few years.

I would agree that auction is a wonderful way to set prices both in settings of oversupply and undersupply.

If houses are sold by auction, at least there is a relatively simple way to assess whether the competing bids are for real or not. Of course,there also must be an ironclad rule that the reserve price must be published information, if there is any at all.

NVR,

Thanks for the article. That's what was so quizzical about this latest round of unabated sprawl? Why? Even here in PDX the trend has been toward an urban lifestyle for at least the last ten years.

A friend explained that Moreno Valley (N and E of SD) was spawned during the last boom and quickly degenerated into "Thug Haven" in the 80's. I think it's the place where car-jacking was born?

DennisN,

I'll have to read that. Polling (like stock picking) is often said to be "more an art than a science" but Dick takes a lot of the mystery out of it for us non-politicos.

The reason I found the Tamarack story interesting was that there are several companies touting fairly substantial spin-offs and you find yourself wondering just who it is that will be able to finance them to get the deal done? Speaking of which MSFT is said to have an announcement (?) in about 2 hours. What... could it be?

Eliza Says:
February 20th, 2008 at 11:26 pm
"The car analogy does not work for me, quite, because sales tax and initial registration of a car would be more analogous to a transfer tax on a house. Transfer taxes and sales taxes are one-time events and do not concern me. "

Yes, but the registration is an ongoing thing based on the original purchase price of the car and adjusted each year. I'm just gauging the principle of the thing on a different example.

"if I work for the same company for years, shouldn’t I be taxed only on the amount I made the first year I worked, plus, say, 2% a year?"

Forget the tax rate, you're on to one of my problems with these entrenched boomers in these corporations who produce less, require more, and somehow have made themselves a protected class. They basically are doing a prop 13 but on the salary side.

"Rant: This is the 7th straight year my community has seen major cuts in funding for public schools."

This is where we disagree. For some reason schools keep needing more and more money, and they keep cutting and adding new bonds etc. Yes maybe 2% is low but owners are not paying less, they are paying more and more in real money each year. The fact that schools are still suffering even during the boom when revenues should have been gowing through the roof (lots of houses were sold, and even resold causing 2 to 10 fold increases in assessments) is proof positive that it is not an income problem, they simply won't spend the money properly. Using your own stat 7th straight year, that is basically describing the bubble period. Were they not cutting before the bubble when assessed values were much lower?

DennisN,

If you're near a TV tune in to CNBC, I guess they're ready to reveal Steffi and Andre's involvement in Tamarack shortly.

I’m not suggesting shorting gold, I’m just saying it may become profitable in not too long. And I think gold will exhibit much less “stickyness on the way down” than real estate has been showing.

"Not too long" can mean 1 month or 15 years.

The rise of gold has been relatively mild.

Rhodium was trading below $450/oz in 2003. It now costs over $8000/oz. Yes. More than 17 times.

BTW, Randy H is the resident expert on housing price stickiness.

RE: schools

School voucher is the answer. I have yet to see a rational argument against it.

I would also like to see more tax incentives for home schooling.

Jeff Bezos just unloaded 1.8M+ shares at $70+.

Time to buy puts on AMZN.

Who is Jeff Bezos?