patrick.net

I think it's funny when people blame illegal immigrants, democrats, and republicans for "our" my problem(s). The fact of life is that WE-YOU-I are the ones responsible for this life we have. If you want to play the victim-blame game, go right ahead. And then, as DR. Phil would say, "How's that working out for you-lol. The sooner we take R E S P O N S I B I l I T Y, the sooner things will change. And yes, WE do create our own reality. From KLNR The Little Guy

I think we're responsible for our reaction to the garbage "fed" to us, maybe.

For what it's worth, I have been finding the blog portion of this site simply unmanageable for some time now. The ideas are fragmented, and there is much less in the way of evidence-based analysis. I miss the old blog!

This is funny. Anyway, nowhere but up, you actually made an extremely poor investment decision with your assets in 2006 by not selling them at that price. As 17 of the 18 houses you own are rentals, I am sure that you are familiar with price to rent. I am also sure at that time that those houses were seliing for probably 20 times the yearly rent, which means you were returning 5% on your assets before paying insurance, taxes, and maintenance. So you were getting, my guess is, about 2% ROA on an asset with, as it has turned out, a fair amount of risk. The YTM on the 20 year t-bond fluctated between 4.75% and 5.5% in 2006, of which you wouldn't even have been paying CA state income taxes. (at least 9.3% for you) Lets say you depreciate the properties, so you effective tax rate is only 5%. So you were getting about 95% of 2% (1.9%) ROA on your assets in a risky proposition in which you had some amount of work, where you could have gotten 2.5 to 3 times that return on a completely risk free investment. And that is assuming 100% occupancy at the time. If any of your propoerties sits for even one month, your pretax ROA falls about .5%. Good job. Go ahead and gloat all you want. Even now, with home prices down 25% in your area, you should still sell your rental assets. If houses were selling for 20 times the yearly rent then, and they are down 25%, then now they are selling for 15 times the yearly rent. That is a ROA of 6.667% before taxes, maintenance, and insurance. Again lets say those three are 3%, bringing your pretax ROA to 3.667%. You get 95% of that because CA takes a chunk after depreciation, and your ROA is 3.48%. The YTM on the 30 year t-bond is today 4.19%. You are losing .7% for doing all of your landlording work even if you have 100% occupancy all the time. It's a good thing you inherited all those assets because you didn't inherit much else.

ann says

For what it’s worth, I have been finding the blog portion of this site simply unmanageable for some time now. The ideas are fragmented, and there is much less in the way of evidence-based analysis. I miss the old blog!

I agree. The old forum was much more informative and "to the point".

SG, >>Wait, it’s polite for him to say to me: “Are you married and do you have kids? I’m just curious if the passion you have politically has an effect of dampening your relationships or maybe you only show this side of you on this (and possibly other) forums?” I think this was very condescending of cashmonger. Being condescending IS impolite, and even less palatable if the motivation for being condescending is that you have run out of valid arguments.

I don't think a license is necessary to give shots, but deciding which shots to be given and what dosage does (after all, many diabetics inject themselves without issue, but they don't decide that they need to be injected in the first place). The botox thing doesn't bother me so much. If people are dumb enough to inject a deadly poison into their faces then they deserve to suffer ill effects.

Kevin says

I don’t think a license is necessary to give shots, but deciding which shots to be given and what dosage does (after all, many diabetics inject themselves without issue, but they don’t decide that they need to be injected in the first place). The botox thing doesn’t bother me so much. If people are dumb enough to inject a deadly poison into their faces then they deserve to suffer ill effects.

Sure, diabetics give shots. But they're injecting themselves with stuff prescribed by physicians. Drug addicts inject themselves, as do the women on that HCG diet (people inject themselves with fertility drugs and eat 500 calories a day). But if I go to get a shot, I would prefer that it be by someone who has a clue as to how deep to inject, what they're injecting & what to do if there's a problem. Not to mention universal precautions - do they understand them? Botox can be used for medical purposes - I would want a physician or trained personnel such as a nurse administering the shots. And passing along information - I would want someone who understands the issues. Do you want an untrained person passing your symptoms along to the doctor? I know that I don't, and when I need to speak with my doc I fax a note to him/her. Also, there are no requirements as to background checks, so the person injecting you could be a drug addict who's jonesing and can't focus.

Oh, I agree with you in general, but I still think that anyone dumb enough to inject poison into their face deserves to suffer the consequences, particularly if they're trying to do it on the cheap.

brutal, but true david1 says

This is funny. Anyway, nowhere but up, you actually made an extremely poor investment decision with your assets in 2006 by not selling them at that price. As 17 of the 18 houses you own are rentals, I am sure that you are familiar with price to rent. I am also sure at that time that those houses were seliing for probably 20 times the yearly rent, which means you were returning 5% on your assets before paying insurance, taxes, and maintenance. So you were getting, my guess is, about 2% ROA on an asset with, as it has turned out, a fair amount of risk. The YTM on the 20 year t-bond fluctated between 4.75% and 5.5% in 2006, of which you wouldn’t even have been paying CA state income taxes. (at least 9.3% for you) Lets say you depreciate the properties, so you effective tax rate is only 5%. So you were getting about 95% of 2% (1.9%) ROA on your assets in a risky proposition in which you had some amount of work, where you could have gotten 2.5 to 3 times that return on a completely risk free investment. And that is assuming 100% occupancy at the time. If any of your propoerties sits for even one month, your pretax ROA falls about .5%. Good job. Go ahead and gloat all you want. Even now, with home prices down 25% in your area, you should still sell your rental assets. If houses were selling for 20 times the yearly rent then, and they are down 25%, then now they are selling for 15 times the yearly rent. That is a ROA of 6.667% before taxes, maintenance, and insurance. Again lets say those three are 3%, bringing your pretax ROA to 3.667%. You get 95% of that because CA takes a chunk after depreciation, and your ROA is 3.48%. The YTM on the 30 year t-bond is today 4.19%. You are losing .7% for doing all of your landlording work even if you have 100% occupancy all the time. It’s a good thing you inherited all those assets because you didn’t inherit much else.

So, I've been dating this guy who can't stand the "trout lips" look so popular in Hollywood. He also loathes the skinny body/huge breast look because it's so artificial. I guess I'm asking you to weigh in on this one. I think that some of them look beautiful if not overdone, but like nice china they're pretty but useless. I have a problem putting something artificial in my body just to make me look better to others. And, of course there are the freaks that overdo: Check out www.awfulplasticsurgery.com; a few extreme cases to search would be Amanda Lepore, Jocelyn Wildenstein (aka the Cat Woman), and Priscilla Presley (too many injections, they solidified in her cheeks and can't be removed). But Paris Hilton is another example of plastic surgery gone wild, she was a mousy-looking, normal person who transformed herself. She had brown hair and a normal body & face pre-surgery. And she obviously has a stylist who tells her how to stand and from which angle to be photgraphed: http://parisfacial.ytmnd.com/ What do you think of the hollywood ideal?

Health Care Reform Is More Corporate Welfare By Ron Paul Published 09/19/09 Last Wednesday the nation was riveted to the President's speech on healthcare reform before Congress. While the President's concern for the uninsured is no doubt sincere, his plan amounts to a magnanimous gift to the health insurance industry, despite any implications to the contrary. For decades the insurance industry has been lobbying for mandated coverage for everyone. Imagine if the cell phone industry or the cable TV industry received such a gift from government? If government were to fine individuals simply for not buying a corporation's product, it would be an incredible and completely unfair boon to that industry, at the expense of freedom and the free market. Yet this is what the current healthcare reform plans intend to do for the very powerful health insurance industry. The stipulation that pre-existing conditions would have to be covered seems a small price to pay for increasing their client pool to 100% of the American people. A big red flag, however, is that they would also have immunity from lawsuits, should they fail to actually cover what they are supposedly required to cover, so these requirements on them are probably meaningless. Mandates on all citizens to be customers of theirs, however, are enforceable with fines and taxes. Insurance providers seem to have successfully equated health insurance with health care but this is a relatively new concept. There were doctors and medicine long before there was health insurance. Health insurance is not a bad thing, but it is not the only conceivable way to get health care. Instead, we seem to still rely on the creativity and competence of politicians to solve problems, which always somehow seem to be tied in with which lobby is the strongest in Washington. It is sad to think of the many creative, free market solutions that government prohibits with all its interference. What if instead of joining a health insurance plan, you could buy a membership directly from a hospital or doctor? What if a doctor wanted to have a cash-only practice, or make house calls, or determine his or her own patient load, or otherwise practice medicine outside the constraints of the current bureaucratic system? Alternative healthcare delivery models will be at an even stronger competitive disadvantage if families are forced to buy into the insurance model. And yet, the reforms are sold to us as increasing competition. What if just once Washington got out of the way and allowed the ingenuity of the American people to come up with a whole spectrum of alternatives to our broken system? Then the free market, not lobbyists and politicians, would decide which models work and which did not. Unfortunately, the most broken aspect of our system is that Washington sees the need to act on every problem in society, rather than staying out of the way, or getting out of the way. The only tools the government has are force and favors. These are tools that many unscrupulous and lazy corporations would like to wield to their own advantage, rather than simply providing a better product that people will willingly buy. It seems the health insurance industry will get more of those advantages very soon. ++++++++++++++++++++++++++++++++++++++++++++ Ron Paul tells it like it is. I tried to post this as a new thread but for some reason it doesn't show up? Maybe it didn't meet with the censorship committee approval. Anyway I thought everyone should have a chance to read it before they force us all to drink the KOOLADE. The original link is: http://www.campaignforliberty.com/article.php?view=218

Funny, the left feels the same way!

BobK says

From what I’ve seen, the left has taken over the forum. I’m afraid that one day it will dominate to the point where dissent is punished.

I've been a naughty, naughty girl and need to be punished...

On your left behind?

What does this have to do with huge, artificial boobies?

I think more objectivity is in order? On other blogs some think I am "conservative" no Am radio or tinfoil hats here---some think I am a communist---they are too controlling. I am neither. I started out as radical in the 1960's and have known many communists, anarchists, Wobblies, and Social Workers Party comrades, so I have walked the walk and talked the talk. Unfortunately, many self-described progressive liberals are not in the inner circle meetings, where there is more honest discussion of the real goals (no political posturing). Our country faces a problem if we buy into : sloganeering, worship of ANY charismatic leader, and the typical "supposedly" political side taking. The differences between the two major parties are really minor. Look at how the Real estate industry got their hooks into ALL presidential administrations since the middle the 1930's! We, the people, have been lied to by both parties. We, the people, are not the enemy ---ALL of us are being subjugated by a very few, very powerful organizations. These organizations get their power from us, the little people, who they consistently cheat. I am not complaining about our political parties, just about who OWNS THEM. If we can have a "conservative" or "liberal" clean house on political contributions. that would be a start. Its been 8 months, and I have seen NONE OF THE PROMISED HOUSE CLEANING. The only CHANGEs I have seen are BILLIONS more tax money for the investment bankers/political contributors, who will do well no matter who they put in office. Do they fear the Likes of Bush/Cheney? NO! Obama? No! I am very polite---but objective facts must be discussed in an open forum. Sloganeering and "side taking" separates us from our government. Divide and Conquer against us. There were news media perp walks with the Bush/Cheney. Madoff is getting kisses on the cheek. I knew it. No others have been indicted----billions of dollars of theft. You can't say I am liberal or conservative, but the law is the law---and it is NOT being enforced. Why? Does Goldmann-Sachs have too much control? I am still waiting for CHANGE, but see the Patriot Act which our President voted AGAINST, will be renamed and fully supported. Change does not mean change the name of the law....and business as usual. Thats how we got in this Real estate mess.

On your left behind?

Spankyou very much for that humorous response.

investor90 says

There were news media perp walks with the Bush/Cheney. Madoff is getting kisses on the cheek. I knew it. No others have been indicted—-billions of dollars of theft. You can’t say I am liberal or conservative, but the law is the law—and it is NOT being enforced. Why? Does Goldmann-Sachs have too much control?

Charge who with what criminal charges, can you quote what laws were broken or not enforced ? Last I heard, Madoff is behind bars. elliemae says

I am still waiting for CHANGE, but see the Patriot Act which our President voted AGAINST, will be renamed and fully supported.

Patriot Act seemed to have worked, and worked well. Wonder how many are aware 3 people were caught from what may be a terrorist act on US soil. Stay tune for more details to be public. Good job VP Cheney!

Elvis???
I thought you'd left the building!

Or shall I call you "Sarah?"

http://www.bloomberg.com/apps/news?pid=20601080&sid=aDptsOIuwheU
Sept. 23 (Bloomberg) -- Former Republican vice-presidential candidate Sarah Palin used her first trip to Asia to attack the Federal Reserve for creating asset bubbles and encouraging excessive risk-taking that hurt working-class Americans.
“How can we think that setting up the Fed as monitor of systemic risk in the financial sector will result in meaningful reform,” she said. “The words ‘fox’ and ‘henhouse’ come to mind.”

I like the idea of gold and silver money, but if you read a bit, you see they had plenty of bubbles and busts in the 1800's with gold and silver as well, because of debt.

A debt is a promise to pay, and you can promise to pay gold and silver just as well as promising to pay paper money. And those promises can cascade on each other, building up massive promises in a bubble and then all dissolve in a bust.

But at least gold and silver don't have much inflation.

Our money isn't on paper at all anymore -- it's digital. We do business by trading credits.

The odds of going back to commodity trading is about as likely as going back to a barter system.

But at least gold and silver don’t have much inflation.

How about the Coinage act of 1873?

Another problem with precious metals is that counterfeiting is trivial, especially with modern technology.

1. Create a mold of an appropriate coin (can be done trivially in your back yard)
2. Cut gold coins in half (or less, if you're good).
3. Create a disk of steel or some other cheap metal
4. Plate the steel with the remaining gold.

Very few people would know the difference, and tracing it back to the source would be damned near impossible. Coin counterfeiting was a very widespread practice before the shift to paper currency.

Another problem with precious metals is that they have intrinsic value. Gold is used in electrical components and silver has natural anti-microbial properties that make it useful for many applications. Using useful materials for currency puts arbitrary limits on these things.

Why not use iron, copper, aluminum, or lead instead of silver and gold? Why not use precious stones?

There are certainly many faults with fiat currency, but there are many faults with commodity-backed currency as well. Arguing for something different for differences sake is pretty lame.

Not all precious stones are safe. De Beer's currency is being counterfited in labs to my delight. I would love to get my hands on one of these flawless diamonds the size of my fist. I would find many cool things to do with it besides try to use it as money.

I agree - mostly.
As Patrick said, there were plenty of booms/busts when we were on a gold standard. It's part of the business cycle of capitalism. Like all cycles there is a lesson to be learned. Busts should wipe out the imprudent and remind all of the dangers of too much risk. They are tough but fair.

One of the arguments for forming the Fed, after the panic of 1907, was to smooth out these cycles with an accordion like currency (Senator Root in 1913 argued it would become only expansive). It's sound in theory but like communism, fails in implementation. The problem in my mind is they don't address the booms then rush in and backstop the busts on the citizens dime using emergency and fear as the justification.

Kevin,
As to credits, we were on a gold backed currency until 1971 and credit existed then. There is no reason credits can't be set to a certain troy ounce. A central bankers job should be to assure that the currency under his care is exchangeable into gold at the lawfully stipulated rate. That's it. Now they have become central managers and are capriciously improvising a monetary solution to a credit crisis they fostered.

Gold is used in electrical components but, it's a trivial amount. It's anti-corrosive so sees use in harsh environments but is a fairly poor electrical conductor. Silver is the best electrical conductor but its price has (mostly) excluded it from being used as an industrial metal. We could use iron, copper, aluminum, or lead as backing but they are used in industry. Copper and Nickel have, until recently, been used as money in pennies and nickels. Gold is the traditional money precisely because it a commodity that does not have much practical use.

You are correct about the counterfeiting. Quarters and Dimes are ridged on the edges because when they were smooth (and silver) people would shave slivers off the edges.

Coins of pure gold or silver would be a known weight, making it very easy to use a machine to check their purity. Gold and silver are elements so looking up the density is easy. Gold in particular is good for coins, because nothing else is as dense. Lead is lighter, actually.

So if there's any doubt, you can just weigh and measure a gold coin and know that it's pure. I don't care if pure gold is soft. It will last long enough for many uses.

Silver's purity is harder to check, but there are also cheap ways of checking it. And it is more volatile, with demand rising and falling, and more being found all the time.

One thing I hate about metal coins is that they are given dollar amounts totally without reason except for politics. Gold and silver coins should simply be weights of that amount of the metal, not "dollars" or any other politically defined currency. Once you do that, you defeat the purpose of having gold to begin with, because you can define a dollar as an ever-decreasing amount of gold.

>>Patriot Act seemed to have worked I have not seen any reports that a specific provision of the Patriot Act was instrumental in apprehending the suspects.

Well, I'm not part of the a.m. radio crowd, but it shouldn't matter if I were. I am disappointed in the apparent justification for your leaving. I wish that you would reconsider based on your own consideration. It is unfair to make the association that being part of the a.m. radio crowd, or being conservative, entails incivility. You do this. I agree that incivility can be a good reason to move on, yet you seem to allow your political bias (which can be viewed by some as just as unsavory as you view others) to have undue influence. By adding your own gratuitous political barbs (all you had to do was complain about incivility, irrespective of politics) you employ the same political intolerance that you condemn--albeit with a little more civility, thank you. And, goodbye.

"I have not seen any reports that a specific provision of the Patriot Act was instrumental in apprehending the suspects" Of course 'you' didn't. I don't think 'you' ever will.

thomas.wong87 says

“I have not seen any reports that a specific provision of the Patriot Act was instrumental in apprehending the suspects” Of course ‘you’ didn’t. I don’t think ‘you’ ever will.

So why don't 'you' fill us in. Awaiting with baited breath.

The politicians can still create millions out of thin air just by issuing promises that taxpayers will pay gold in the future.

The gold isn't really there, but if people believe they can get it later, that belief can be used as money.

'You' are right! lets scrap the Patriot Act invite 'them' over for a beer on the patio and watch some good old fashion Football game. Throw some steaks, chicken, corn on the grill and talk over our differences.. Hey Osama! how you like your steak... well done or bloody raw ! LOL!

"So why don’t ‘you’ fill us in." And who is 'us' ? 'You' speak for the rest of 'us'.

Thomaswrong say: "elliemae says I am still waiting for CHANGE, but see the Patriot Act which our President voted AGAINST, will be renamed and fully supported. Patriot Act seemed to have worked, and worked well. Wonder how many are aware 3 people were caught from what may be a terrorist act on US soil. Stay tune for more details to be public. Good job VP Cheney!" Elliemay no say it. It was someone else. Although I believe that Presidents Bush & Cheney were the absolute worst we've ever had (and resent that peopel attribute the capturing of such criminals as mentioned above to bush & cheney - they didn't arrest 'em) , I've never weighed in on the patriot act.

The left vs right thing is a wedge argument. Just like Intelligent Design, it goes nowhere, but simply wants you to pick a side. Just respond once, however ridiculous the argument, and WHOA, WE HAVE A DEBATE!!!!!! EVOLUTION IS IN CRISIS!!! That's were we are with health care. If you have a vested interest in the status quo, then stupid debate over death squad panels and rusty scalpels in 3rd world countries is great stuff. But the important thing is everybody has to pick a side. Apparently, someone still has to the opportunity to choose the right side of a very, very naughty girl.

BobK says

From what I’ve seen, the left has taken over the forum. I’m afraid that one day it will dominate to the point where dissent is punished.

10 comments and you feel threatened by the evil left? Coming after you with their free health care and safe working conditions. Fair taxation and accountability for corporations who ship good jobs to our competition. Shaking like a leaf, no doubt. Where's the Great Right Hope? South Carolina? Alaska?

jl444 says

Well, I’m not part of the a.m. radio crowd, but it shouldn’t matter if I were. I am disappointed in the apparent justification for your leaving. I wish that you would reconsider based on your own consideration. It is unfair to make the association that being part of the a.m. radio crowd, or being conservative, entails incivility. You do this. I agree that incivility can be a good reason to move on, yet you seem to allow your political bias (which can be viewed by some as just as unsavory as you view others) to have undue influence. By adding your own gratuitous political barbs (all you had to do was complain about incivility, irrespective of politics) you employ the same political intolerance that you condemn–albeit with a little more civility, thank you. And, goodbye.

A most excellant post. @Ellie, you are correct when you say Bush and Cheney did not arrest anyone. But, if you take that position, isn't it impossible to blame Bush for going to Arabia and killing people for oil? (or pick any one of the other popular attacks on the war). Bush, while he was entirely too free (notice I do not use the "L" word) with spending, was a great President for security of this land, in my opinion.

elvis says

When our country had HONEST politicians

No such thing has ever existed in any country ever. Don't believe the myth of the altruistic founding fathers.

I still don't see how gold is not just some arbitrary definition of value or how it's any better than fiat currency. How many houses is a kilogram of gold worth?

You need a unit like "dollars" because otherwise you just have a barter system, and if you look at any economy that still uses a barter system today you'll see that economic output is anemic. People need to have some reasonable level of confidence that they can exchange goods and services for some reasonably fixed value and get back an equal amount of goods and services by exchanging those credits.

It's simply not practical to carry around physical gold no matter what you do -- it will still be digital transactions, and those transactions will be arbitrary barter (this house costs 12 kilograms of gold) or some defined unit (1 dollar is 1/1000th of an ounce of gold).

On the matter of "sound" currency, I think you underestimate the value of confidence. Consumer confidence has always been the largest component of any economy. "Value" of physical goods is arbitrary. Gold has little inherent value other than scarcity and corrosion resistance. The "valuable" things are the products that we purchase -- food, clothing, housing, etc.

It's highly unlikely that private citizens would even be allowed to possess gold if it was the backing of our currency due to relatively cheap counterfeiting. Scales aren't that accurate, and those that are are way too expensive for personal or small business use.

All of the current problems with our financial system would still exist even if we were on a gold standard. Some small and arbitrary benefits would be:

1. Government purchases would be financed through taxes rather than debt (probably a net positive)
2. Inflation would be more tightly controlled. This is a wash. Inflation is not bad in and of itself -- it really depends on whether you're a debtor or a lender. Inflation or deflation are only an issue when they become extreme. Inflation is still quite possible even with a gold standard -- supply and demand have a bigger overall impact.

We'd also have plenty of bad things:
1. Savings would sit idle rather than being invested, reducing economic activity
2. Counterfeiting of gold-backed notes becomes an infinitely more lucrative activity.

We'd still have fraud, we'd still have unchecked credit (the real "monetary supply"), and we'd still have corrupt politicians.

staynumz says

Yes, I have noticed how all these jobs have come back to the states since your buddies took control. Cap and tax will surely invite millions of jobs back to the states.

Our industry has some of the cheapest prices for energy in the world. That's not the problem. Cap and tax is an idea supported BY industry, because it makes another market out of nothing. Wanna pollute? Just turn up the dial.

thomas.wong87 says

“So why don’t ‘you’ fill us in.” And who is ‘us’ ? ‘You’ speak for the rest of ‘us’.

Ok fill ME in. How exactly was it that the patriot act made it possible to arrest these people and why was it impossible under existing laws pre patriot act. I I I I I I am waiting with baited breath.

Re Patriot Act: Frightening violation of civil liberties, passed by a panicked Congress only a short time after 9/11, and most of them didn't bother to read it! Watch Michael Moore's documentary. We are governed by ill-informed idiots (who are put into office by equally ill-informed idiots). Fear lives! Fear, fear, fear, fear. Be afraid. Be very afraid for the future of your country. It isl destroying itself from within, WITH YOUR HELP.