patrick.net

@ Kurt,

www.itulip.com has a video on the homepage about Monsanto (owns more than 50% of the feed companies and reminds me of Soylent Green!)

Paul

In the south bay there are several "Barbeques Galore" stores, who sell mostly Australian design gas barbeques. Check them out. I have a 3-burner "classic turbo" which I purchased in 1991 - and it's still going strong. Plus they stock parts for all their old models. I compare their products to fancy-pants ranges like Wolf and Viking.

Their smaller units (like the 3 burner turbo) give you lots of cooking power in a small footprint.

feed = seed ?

Is it AGI and thus the 6x is explained, or is something else going on?
Not AGI, but money income, where:
AGI Bureau of Economic Analysis, AGI and money income are nearly equal (difference of $1-2k), but personal income is a lot more (nearly $8k per capita), so all is explained. At least in my universe...

northernvirginiarenter,

Driving by a soup line in downtown Chicago on a regular basis, my observation is that the line is about twice the length of a 2 years back.

Here is the info-

http://www.catholiccharities.net/about/administration/

The votes in PA are about 2/3 counted, and Ru Paul is in strong second place behind McCain.

McCain 300,676 72% 0
Paul 66,538 16% 0
Huckabee 50,097 12% 0

Oh yeah, some lady is up about 7% on that guy.

Ron Paul, Ron Paul, Ron Paul!!!!!

Oh, gosh, I'm sorry. I get names confused.

ptiemann Says:

> Anyone who thinks being free of debt to be the
> only right thing should listen to a business partner
> of mine. This guy has between $500k and $600k
> on credit cards at 0% or 1%. He told me last month
> that in 2007 he made over $50k from that alone.

Then HeadSet Says:

> So your buddy has not only found a way to pay only
> 0% or 1% beyond a teaser rate on credit cards, but a
> way to avoid the typical minimum payments, transfer
> fees, and credit limits. Not only that, he has can take
> that money and make a consistent low risk 10% return.

It sounds like ptiemann has a “business partner” that is full of sh*t… If it was possible to get anywhere near a half million at 1% hedge funds would be doing it (and saving a lot of money on expensive parties to raise money)…

Randy H Says:

> It’s been almost 2 years since I really dove deep on
> these data sets…

It has been even longer since I dug deep in to the census date…

> There is no way raw-gross-income supported people buying
> at 6x income for the past 40 years, not even in this gilded
> area. As much as the realtors would love to plug that into
> their economic drug pushing.

Most of the historic price to income data around 3x is “total household gross income” to “home price”. The number will get higher if you use “household AGI”. I have seen people look at the median home price divided by the median “individual” income and the number is a lot higher and it will be real high if you take the “per capita” ratio the number is even higher since about half of the people in America make almost no income…

KurtS,

I am just talking about most recent price movements which is primarily driven by USD depreciation than speculation.

If the Saudis are already admitting not adding capacity (for whatever reason they choose to disclose), there is NO speculation. Peak oil is real and it is already here. Unless all the oil consumed in transportation can be cut very substantially, we will continue to see oil breaking $150, 180, or even reaching $200.

I won't call it a speculation before you see the cover of all business magazines touting oil as the sure bet / can't lose investment of the year.

EBGuy
thanks! I think :-)

That *income* will have to be AGI, not gross.

Banks lent on gross income. I just checked with a retired neighbor who used to work for US bank. He said there was no way ever before this bubble that people could buy at 6x of their household income.

Interest rate aside, which made mortgage payment impossible, most banks had to carry the mortgage on their balance sheet in the 80s. ABS came out in mid-80s and was not gaining momentum until early 90s, so in the 80s the secondary mortgage market was non-existent, meaning there were no investor fools to offload to. When they had to carry their own loans, they tended to act much more conservatively. The rule of thumb was, one could borrow up to 4x of the household income on the house. Assuming 20% down, that would be a housing price at 5x household income.

The only possibility was higher dp. But there were fewer immigrants from overseas in the 80s, and interstate immigrants usually came from a state with lower housing cost, so it would be difficult to save that much dp particularly in a highly inflationary environment.

AGI or money income, whichever is fine, just not gross.

EBGuy

Thanks for the crack work. Money-income makes sense. I wasn't really aware of how that measure worked until now.

I was really hoping to get FAB's response to "ptiemann". I've had a few debates with Peter T on Zillow. He seems a reasonable enough fellow, but lately he's been making some unsupportable statements that don't hold up well to quantitative analysis. And then there's his new blog that Alpine linked earlier above. Upon reading it I immediately thought of FAB and how he'd be able to call bullshit on half that stuff.

FormerAptBroker tried to think and nothin' happened:

>denriddy Says:
>
>> That’s what it is today, in this world, with the
>> organized criminal activity (considered “business
>> as usual”) known as “fractional banking.”
>
>Do these criminals fly around in black helicopters?

I ain't their travel agent.

In an early period, they rode around in head baskets. Maybe you should look into one.

Peter T

Thanks for the explanation. Unless moderation rules have changed since I've been active, posting more than 1 link will trap you in mod, as will a number of verboten words, mostly spammy things or troll hot words.

I don't disagree that Patrick has bias, by definition, to the articles he selects. As you said, that is the purpose. He's not going to try to be "fair and balanced" and post 50% NAR approved ads. It's up to the intelligent reader to seek out and edit their own info.

But Patrick's blog has always been unique. A lot of deep, contemplative conversation has gone on here over the years. Zillow, as a perfect contrary example, everything degrades to cheap one liners and cutesy clever pictures, along with a who bunch of emotionally needy cat lovers.

I do appreciate your willingness to respond thoughtfully to debates, even if I disagree with you time to time (though more of late, I will admit).

ptiemann Says:

> I thought it would be interesting to start collecting
> articles with a positive spin, there are not many at this
> point, and those that are may have some issues.

All you need to do is link to Realtor ® newsletters and web sites since they (almost) always have a positive spin (I recently saw one that said it was a good time to buy in Modesto)…

What is interesting about this site is that people ask questions and if someone can’t back things up they just go away (we have not heard much from Marina Prime in a while)…

pt,

all I have to say is, your ushousingrecovery will take about a decade to get to where patrick.net is today.

Real estate has very long cycles. The last BA bust lasted from 1990 to 1997. That was a localized California bubble with no intertwined global financial issues, no peak oil, no tanking USD, no looming food issues etc. the list goes on and on.

With all the intervention going on as of now, I'd be happy if we are out of the woods by 2015. Unfortunately I don't think we will be that lucky.

@ Paul

Monsanto may be the most *evil* company on the planet. It is shameful our country allows this to company to exist. Shameful.

The system is broken.

OO,

I'm too tired to do the easy math at the moment, but you might be able off the top of your head.

What does the current value of the US stock market look like through the eyes of a strong currency investor? Current Real Estate market?

We are USD down about 50% off the Euro past couple years, right?

Is the reality that the US stock market has *crashed* in value already if you are a foreign investor?

What a mess.

Paul-

Food bank demands are at all time highs and climbing in the washington dc area, while donations are declining drastically due to rising food costs. Food bank managers are calling it a crisis of the first order.

There are a rapidly growing class of hungry families about, even as Dennis happily stuffs himself with potatoes in Idaho.

And it goes without saying what is happening to poor overseas.

@BAP

I hear you on california, I suppose if one is having to buy things which are skyrocketing is cost (energy, select foodstuffs, meds, ect) one is ok on a fixed income. However, inflation is absolutely killing anyone those who must spend a very high percentage of income on those things rising in value.

My parents for instance. I know the rise in cost of gas, food, utils, meds is killling their budget. Unfortunately that budget is tight, and sensitive to price rises. They are certainly not alone.

But when I try to get out of debt people tell me it's a stupid thing to do...

If I'd only listened to Uncle Ric I could have enjoyed that magic 8% return in the market recently.

Sorry, here's the link.

Ptiemann :

Thanks for a lot of clarifications. It is perfectly possible to disagree without turning nasty.

Eventually, housing will recover. So your blog will become relevant. There are advantages of owning and as long as you present logical arguments and not mindless drivel like a Realtor, it will even be a good advice.

I am not sure about the tone and the association though. The whole taunting attitude of Mr. Alpine might turn off a lot of people who prefer sound arguments. This "renters are losers", "see there are bidding wars" etc is SO 2003-4 ! I will be surprised if even a single blogger here takes such comments seriously now. It's just boring. Hardly adds any value to the discussion.

Good luck with the project.

NVR,

Compared to 2 years ago, USD index (weighted against a basket of currencies) has declined from 90 to 71.4, about 20% decline.

Dow advanced from 11300 to 12700, which is about 12% gain. So the stock market is in a slight decline if we measure it in Euro terms, but not that big of a decline, YET.

Paul-

Thanks for that itulip video link. http://www.itulip.com/

Just finished watching, about 1 hour long fyi. A must watch in my opinion, good job explaining what Monsanto's master plan is. It will be an eye opener for many here.

I just don't understand US policy in some regards. So short sighted. It would seem our government *allows* itself to act as proxy to this large multinational to the detriment of the human race, including American citizens. Meanwhile, our national intelligence establishment is asleep at the wheel. They *think* their priority is supporting US business interests overseas without question.

I take issue with this point of view. Monsanto is a threat to our country, our citizens. Yet the intelligence community looks the other way. Are they not suppose to be protecting us? If a large multinational subverts the political process to such a degree, the state to such a degree, to its own interests, and if those interests are not aligned with those of the average US citizen, should not the intelligence community deem Monsanto a threat to the united states?

What is the United States interests relative to Monsanto?

The intelligence community should take these guys down, using all methods at their disposal.

Brent,

it is not wrong to carry a big debt today if you can lock down a 30-year rate of 5% denominated in USD.

Forget about the 10 reasons you posted. There's only one reason, this is the best way to take advantage of the falling dollar.

OO,

Thanks, not as bad as I might have guessed. Still, if most foreign investors in US equities have come out flat or worse over 2 years thats not real solid risk reward.

Yet indeed.

With food and energy inflation set to spiral out of control, would it make sense of the average Joe Smoe to take out a new credit card at teaser 0% rising to 15% and fill his basement with Costco non perishable foodstuffs as an inflation hedge? Say spend $10K on groceries now?

Micro USD hedge in food seems to make sense also.

If folks figure this out we could see some serious hoarding and buying, weimar republic style.

Hot off the presses....

Mortgage applications PLUNGE last week.....

U.S. mortgage applications plunged last week, largely reflecting a drop in demand for home refinancing loans as interest rates surged, an industry group said Wednesday.

Last week's drop in demand may indicate what is in store for the hard-hit sector this spring, which traditionally is the peak of the home-buying season.

MarinaPrime was a she. From the best I recall she did a short stint as an investment banker; probably a junior analyst. She bailed out early and became a realtor. It seems she enjoyed the very tail of the boom, but was too late to really cash in. She also posted under other aliases.

There's a good chance that MP is actually one in the same of a much larger number of aliases than even that. Her writing style is eerily similar to that poster on Zillow who kept appearing claiming she was an Ivy educated, JD+MBA+CPA and only 28 and already a mother of 2. She'd also post under other supposedly highly credible personas, but always disappeared when bullshit was called. Just like MP. She also had that same "neener neener neener" annoying quality, which I only ever heard out of MarinaPrime and her aliases.

If she makes a mysterious return to Patrick then we'll know for sure. Maybe Patrick can unban her logons, if they ended up on the list. I'm nostalgic for that one Marina condo listing she kept posting over and over as evidence...

Ahh, the good old days where you couldn't spit on this blog without hitting a troll. Boy, I miss them.

For ptiemann, an indicator that your blog will have become relevant: when trolls post to your site claiming the housing crash is still going strong! (ie, your very own version of MP)

OO-

Good point, but how; MERKX, Gold, AUD? The only thing that doesn't involve some level of risk is eliminating the -3.5% guaranteed return on a mortgage, true? I suppose one could play the spread between treasuries and a mortgage and come out ahead, but at a few $100K it doesn't seem worth the hassle.

Does anyone have a link to a good commercial real estate crash site? A friend in LA bought 5 expensive commercial properties at the end of 2006 in highly-leveraged fashion, and I'm wondering if he's got a bankruptcy in his near future.

I didn't ban MarinaIsPrime, but I don't see her login in the userlist anymore. Maybe someone else with admin privs did.

> I don’t even know why Patrick still collects such links.

Even though there is a lot of very good news to choose from lately (called "bad news" by homedebtors) I think it's important to keep filtering out the NAR because they will keep destroying lives with their spin as long as they can.

northernvirginiarenter Says:

The system is broken.

Could not agree more. What a ruthless gang of thugs. Oh, wait, they're ruthless thugs with lots of money and political influence. I guess that makes Monsanto execs "entrepeneurs" and "patriots" (cue the pro-corporate apologists).

http://www.vanityfair.com/politics/features/2008/05/monsanto200805?printable=true¤tPage=all

Justice Thomas once was house-counsel for Monsanto, as detailed in his autobiography.