patrick.net

Pennies haven’t been made of copper (actually bronze) for many years. They presently are a zinc slug which is copper plated. Your government at work.

I was tricked!

Also got prime 100% sesame oil for $14 a gallon, which got divided into clean wine bottles.

$14 a gallon? Is it brown gold or what? :)

www.usmint.gov/about_the_mint/fun_facts/index.cfm?flash=yes&action=fun_facts2

"The alloy remained 95 percent copper and 5 percent zinc until 1982, when the composition was changed to 97.5 percent zinc and 2.5 percent copper (copper-plated zinc). "

Have you ever bought real sesame oil for cooking? It's more like $5 for a tiny bottle in the grocery stores.

It’s more like $5 for a tiny bottle in the grocery stores.

I know... just forgot how "affordable" gasoline is. ;)

Except for the quarter, of course. Renters need it for laundry :)

Some owners too.

Speaking of interest rates - I heard a fun argument yesterday: Bank vs Mortgage Broker.

Person 1: Banks are the best sources to get mortgages. Mortgage Brokers are shady and tack on lots of fees

Person 2: But Mortgage Brokers will actually try to get you a better rate. That's what you're paying them to do. Banks don't give a sh*t.

Person 1: Neither do mortgage brokers. YSP!

Person 2: Does it matter? If you get a crappy interest rate from a bank, you're still paying as much.

Eventually it went into a stalemate. Talk about a no win argument.

Rental scum! Go buy a boomer's house so they can retire comfortably outside the Fortress someplace. ;)

Headset said:
Funny how people can come up with inventive ways to save relatively small amounts on groceries and gas, but never considered big ways to save money

Case in point - the executive admin at my previous job traded in her RAV4 and got a Lincoln Navigaturd. When I asked why, one of her reasons was that she was splitting a Costco membership with her two sisters, so she needed the extra space for groceries. So they _each_ got a bigger SUV. Yeah, all three of them.

sriramgopalan Says:
I heard that US is planning to mint pennies out of some other metals soon.

Plastic pennies? Made in China, of course - so at least they will have some lead... :-)

Its funny when we throw around terms like 7-8 years ago.

As near as I can tell, the last rational year in RE was 1998, 10 years ago. 10. By 1999, WOW, what a difference.

Then, the wheels totally came off the bus in 2003 when Mozilla led the industry the rest of the way into the dumper by killing underwriting.

For those who wish to use my same models, I do this:

Use 1997 as a basis year. Rather than the national long-terms trend of house appreciation tracking to real inflation, I use the Bay Area historic average of 4.5% appreciation per year (over the last 40 years). This allows a projection from 1997 so that prices today can be regressed to the mean over any time span.

If you had asked that Case Schiller would show a San Francisco YOY drop of 10.8% I would not have belived it. But then, San Diego had a 15% drop. This should help bound the speed of the decline with the caveat that things can accelerate or decelerate the regression. Right now the massive monetary deflation (credit crunch) has is acting as an accelaterator. as near as I can tell, the easy money fed is being offset by everyone's inflationary expectatons so that higer mortgage rates are, in fact, modestly accelrating price declines.

Soooo, shave 5% from the summer of 06 to 07, 10% to '08, 10% to '09 and 10% to 2010 and many BA cities will be fully regressed to the mean. This roughly corresponds to 2003 prices in 2010 WITHOUT adjusting the dollars for inflation.

The problem with the "penny wise, pound foolish" crowd is that they really don't commit themselves to a frugal lifestyle.

I've read Jeff Yeager's new book The Ultimate Cheapstake's Road Map to True Riches, and it was a disappointment to me. www.ultimatecheapskate.com I already did all that stuff. Fortunately I didn't spend money on his book: my sister gave me a copy. :)

Jeff really tackles the PWPF problem. His advice: buy a house early and commit to being happy living there. Pay it off ASAP. He's in Maryland so the facts are different for the Bay Aryans.

Plastic pennies? Made in China, of course - so at least they will have some lead…

PetroPennies? :)

The problem with the “penny wise, pound foolish” crowd is that they really don’t commit themselves to a frugal lifestyle.

Think Abundance!

One should live an abundant life.

The mint is considering making pennies out of steel or something.

Here is Ron Paul's short speech before the financial services committee about that:

http://www.lewrockwell.com/paul/paul440.html

Peter P said:
(return to frugality) It will hurt corporations and that may in turn harm Americans.

Mostly the middle-class, I think. The Greenspanke (tm) Double-trouble-bubble (tm) mostly sucked in disposable income from the middle-class, who hocked everything they had to get in on it. The collapse will make their investments worthless and will hit their employment and wages very hard.

The real poor started with very little, and will stay that way. The rich started with a lot and end up with a whole lot more. The delta will come from the collective impoverishment of the middle class. So Pain, as defined by actual lifestyle change will be most pronounced in this class.

Anyway, I think the majority of today's problems were rooted in evil policies created in the 1930's.

Duke Says:
the wheels totally came off the bus in 2003 when Mozilla led the industry the rest of the way into the dumper by killing underwriting.

"Mozilo" - the excessively orange debt-peddler

"Mozilla" - the excessively excellent open-source web-browser platform

Some of us are quite fond of Mozilla and contribute to its code, so don't knock its good name. :-)

Mostly the middle-class

The middle-class is an unnatural occurrence in history anyway. But don't worry... I am sure all slaves in the future have iPods. :)

Some of us are quite fond of Mozilla and contribute to its code, so don’t knock its good name.

Some perspective...

I consider myself a die-hard Microsoft supporter. I have been using Internet Explorer since version 1.0.

I am typing this message from a Firefox window.

I don't buy the argument that corporations somehow need consumers to spend like to be able to survive.

If consumers become frugal, companies that make actually useful products and provide actually useful services will continue to thrive.

Others don't deserve to surive! Creative destruction, baby!

Can anyone please explain the moderation rules here? I did not use any foul language in a previous post, yet it goes to moderation.

DennisN :

From where I come in India there is a non-profit organization (Graahak Sangh - meaning Group Buyers) that does similar to what you have done. They buy bulk, high quality stuff, and distribute it in smaller portions. The cost savings were substantial.

Duke says: This roughly corresponds to 2003 prices in 2010 WITHOUT adjusting the dollars for inflation.
Futures trading for the SF Case/Shiller Home Price Index from CME :
Nov. 08: 158.40
Nov. 012: 153.40

Historic Index Nov. 03: 153.36

The market seems to agree with you (although it appears to be showing a VERY rough ride the next 6 months). I imagine core Fortress regions will more likely follow the gradual trajectory you laid out over the next couple of years while less desireable ones will hit the bottom quicker. I still have not seen a huge inventory boost in the $1 million-$250k range that I would expect in my region. Will be interesting to see what happens during the summer. At any rate, even if inventory isn't ballooning, there are enough REOs to make life interesting.

More than one link in a post will trigger moderation.

And Mozilla begat Netscape, and Netscape begat Firefox. Sounds very Old Testament to me.

If consumers become frugal, companies that make actually useful products and provide actually useful services will continue to thrive.

But that economy cannot support enough "subprime" companies, which are required to support the employment base.

It all boils down to the fact that human civilization is a farce.

thenuttyneutron :

I am not sure about all the rules but words like soc1ali1sm can also get you in moderation. Hence I spell like sh1t (pun intended).

Summer? What am I thinking? The Silent Spring is coming...

I am not sure about all the rules but words like soc1ali1sm can also get you in moderation.

I am not fan of socialism but Patrick does not moderate base on ideology.

The problem with "socialism" is that it contains the name of a male potency drug.

>It all boils down to the fact that human civilization is a farce.

Ha. Not much can be done about that too.

In fact, we could adopt Advaita and just argue that everything material is an illusion anyway!

Peter P, how did you manage to put the forbidden word in there and not get moderated?

Pooling together for bulk purchase is very popular in China. It ranges from travel to diapers, from buying townhome /apartment from developers (no kidding!) to going to a concert.

It is ad hoc kind of group. People with the same intention of purchase meet each other on forum and form bulk purchase group right there to negotiate a better price.

The only disappointment so far is, I haven't seen exploding inventory yet. It seems like all the FBs are holding back for the spring (dead cat) bounce. Officially, when does spring season start for home transaction?

Now Mozilo knew the mortgage industry, and she bore him a child. ;)

"socialism"

Peter P, how did you manage to put the forbidden word in there and not get moderated?

He invoked the holy name of libertarianism: Saint Paul.

I am always baffled by the "optimisitic" attitude of the Wall Street. How come with CIT poised to go down, UBS about to explode and many more to come, the market is back to happy days again?

Am I not getting the right news feeds?

The unemployment claim is surging, and yet the financial index is up 6+%, I must be a very pessimistic person, too dark to live in this merry-go-around world.

OO
I think the FB are just not under enough pressure yet. Resets have been moderated by the low LIBOR and congress is talking massive bailout - they have already aided with "dont 1099 me bro". Even Bernanke is saying, "Cram down". Of course they are hanging on.

The only thing worse then buying a $1,000,000 McMansion is actually paying for yours when your neighbor gets to renegitate theirs for $600,000.

The timing and degree of price capitulation seems to now depend directly on the government.

OK, now I am scared, we are collapsing. He's been so accurate in being the "signal".

Behold: The End of the End Is Nigh

By Jim Cramer
RealMoney.com Columnist
3/20/2008 3:01 PM EDT
Click here for more stories by Jim Cramer Try Jim Cramer's Action Alerts PLUS

If we can get to the end of March, we will be able to get out of a lot of this credit crunch. The Fed is going to allow you to take your bad stuff and return it for cash. The Fed is just borrowing them, but they can borrow them for a long time.

This is the plan to forestall the apocalypse, to take the four ailing horsemen of the pending financial apocalypse -- Citigroup (C - commentary - Cramer's Take), Merrill (MER - commentary - Cramer's Take), UBS (UBS - commentary - Cramer's Take) and Washington Mutual (WM - commentary - Cramer's Take) -- and make it so they don't get sent to the glue factory. This facility will also allow Bank of America (BAC - commentary - Cramer's Take) and Wachovia (WB - commentary - Cramer's Take), which are swimming in this bad paper -- AAA real estate paper in particular -- to catch their breath. These both need it, as you see the WB dividend yield and you recognize that Bank of America is going to own some real bad paper when the Countrywide (CFC - commentary - Cramer's Take) deal closes.

I want to be very clear, the moment the Treasury Department stopped being laissez-faire, the moment that it was no longer in a "let them eat cake" mode -- which is what happened when Bear (BSC - commentary - Cramer's Take) failed -- the world changed. We then saw the Treasury end the chokehold it had on Fannie Mae (FNM - commentary - Cramer's Take). If the Fed wants to ensure a bull market in financials, all it has to do is issue $200 billion in yearlong paper, that's what the Street is desperate for, and bid for Fannie Mae mortgage bonds. Then I would predict we would begin to clean up the housing overhang, as it would be easier to get mortgage money more cheaply.

We are getting close to a resolution; we do need to prevent the four horsemen of the financial apocalypse from going lame.

That's the all-clear signal for the end of the bear market.

At the time of publication, Cramer had no positions in the stocks mentioned.

OO :

You never heard of short covering rallies ? ;-) The margin calls hit the short sellers as well. Or those long-short guys who not have to book the profit to answer Mr. Margin.

Logic has no chance in this market on a short term basis. I am using these rallies to accumulate ultra-shorts.

NIA

@SP thanks for the deleveraging definition. Indeed I already did this in 05-06 when I sold my 4 crapshacks in Los Angeles and now happily rent while sitting on a pile of depreciating dollars.