patrick.net

Gas is at $2.75, so people are not as onery as they were.

I am so jealous. I paid $3.7 the other day.

Did you mention clambakes? :-P

I'm waiting for the first (or maybe the second) coming of the Church of Oprahism.

My apartment complex is 0 miles to a bar. The problem is: I do not drink.

Newsfreak,
If you ate that much shellfish all the time, you'd be dead in 10 years or less due to the huge amount of mercury in your system... either that or you'd set the metal detectors off at the airport.

For some reason I always wanted to have enough $ to endlessly eat clams.
Stuffed clams, steamed clams, corn-on-the-cob, and sand and sea.

I love:

Raw clams (cherrystone and little neck)
Steam clams (in white wine or sake)

Try using clam juice (from steaming clams with wine) to cook seabass or cod.

Besides, I would rather be a mayor of my own town, than start a religion.

Are you serious about starting a religion?

Peter P and newsfreak,

Sorry, it was mostly a futurama joke. In the 31st Century, Oprahism is a major religion. :oops:

Though when I was a teenager, I really did want to start my own cult. Someone once said that I'd make a good cult leader.

doddler,

Oh I don’t know - East Bay Area (Ala & CC counties) are at about X 3 of inventory compared to last year at this time. But I don’t know what the “typical” inventory should be - we haven’t has a “typical” real estate year here since about 1996.

If 1996 is the benchmark, then this typical house-on-house comparison for my old next-door neighbor's home in Redwood City, who bought same time as I did (RWC is a great example because it is not more desirable today, nor have the schools improved):

$ 316K Nominal in 1996
$ 720K Nominal in 2002
$1,099K Nominal in 2005 (March)
$1,189K Nominal in 2005 (Aug) {a flip}
$1,345K Nominal current Zillow estimate

Those deflated figures would be:

$ 370K (1996 in 2006 dollars)
$ 761K (2002 in 2006 dollars)
$1,132K (Q12005 in 2006 dollars)
$1,203K (Q32005 in 2006 dollars)
$1,345K (2006 dollars)

That's only a 264% real-price appreciation. If that's "typical" then I wonder what would qualify as a bubble. 10,000% real return over 10 years? But, you could be right; that's the point of this thread. Anything is possible.

Though when I was a teenager, I really did want to start my own cult. Someone once said that I’d make a good cult leader.

Really? Someone said that to me too! Perhaps we should form a partnership.

"Really? Someone said that to me too! Perhaps we should form a partnership."

Sounds great! I'm working on incorporating MMOG features into the revenue to facilitate communication, revenue collection, and recruitment.

- revenue
+ religion

Freudian (or maybe Smithian) slip :oops:

Economic recessions are a great time for cult-recruiting.

Yeah, what a lousy time to be a young adult in 2006.

Robert,

I don't think any of the Gen-Xers or Millenials on this blog are operating under the mistaken assumption that we have had it "harder" than every other generation in the history of mankind --quite the contrary. We are all well aware that anyone born in the U.S. since WWII automatically has it a lot better than people born before, thanks to modern medical technology, relative peace & prospertity, etc. Any non-elite born today in North America, Europe, Oz, NZ, Japan, etc. automatically has it a lot better than most average people living anywhere else. This is not up for debate.

However, the fact remains that Boomers --in general, there are always exceptions-- have had it far easier economically than any other generation that came before OR after it. Even this isn't really a point of contention, though it may be a source of jealousy/envy for some. This isn't an issue to me. What really irritates me (and others) so much about your typical Boomer is the fact that so many of them either:

(a) Simply ASSUME that later generations enjoy the same advantages/privileges that they took for GRANTED.
"I just don't see why you couldn't go to college for free and buy a house here on a working person's salary --I bought my first place back in 196x for 3X my gross salary as a teacher. Why can't you do the same?"

Or,
(b) Understand this isn't so, but just don't give a shit.
"No way I'm gonna let some "affordable" housing complex block MY view of the Bay! No more new developments in my town --ever! And NO WAY anyone's gonna try to take away my $2/hour illegal housekeeper/gardener/nanny. I don't have to worry about MY job getting cut/outsourced! I got mine, so F--- you, man! (takes bong hit)

What's mainly driving anti-Boomer sentiment isn't so much class envy as it is the smug, arrogant condescension and self-righteous hypocrisy constantly shown BY Boomers towards later generations.

Astrid, there's this nice guy named Elron here to see you. Mumbled something about his "turf".

Requiem,

I feel Scientology's pricing model is getting a little outdated. I'm looking for a different pricing model to make it affordable for a wider audience.

"Forget about the price, let's talk about what payments you can afford"?

Sooner or later, the fabled flower of real estate will wilt.

Just like it's progenitors, the wilted flower children Boomers of the '60s & '70s, as they scrape the last bit of resin from their Gerry Garcia 50th Anniversary bongs for one last hoorah!

Everything must die, my friends!

"its" rather.

Here is the key. US stock market must NOT crash, and I think it won't.

All other RE crashes happen *as* the stock market crashes, causing more collapse of confidence or margin call on specuvestors as they spread their money across different assets.

That's why I think the big guys here will do everything possible to make sure that our stock market *looks* fine. You will continue to see up and down 10 points each day for many years to come, until inflation catches up.

OO,

What can the big guys do to keep the stock market afloat? More corporate subsidies? More cheap credit? More cheap consumer goods?

It seems to me that the big boys are already doing everything they can to keep up experience and they've been doing it since the dot.com bust. I don't think they have the leverage to keep the stock market looking fine for the next 5 or 10 years.

-experience
+ appearance

:oops:

SP,

You can call it anything you like, as long as Peter P is fine with it. :)

Oh my bad, I took the Church of Multiple Ophrasm for the Church of Multiple Or...sm, my fault.

astrid,

all I am saying is, if you have a printing press and you want to support the stock market nominally, you can certainly do so.

Has anyone realized that DOW has long been a down curve for the last 5 years since the dotcom bust if you adjust the index for inflation? You never see that reported, the mindless reporters only talk about breaking new "high". If we hover up and down between the 11,000-12,000 band for the next 10 years, plus you can even kick out a few failures and bring in only the winners to the index, how indicative do you think this "index" is?

What if we were wrong? When was the last time economic fundamentals ceased to be fundamentals? Has there been a fundamental that has been kicked out of the fundamental list? If so, which one was it?

The question is: fundamental for what people?

OO,

I am giving the Wall Street guys a bit more (maybe unwarranted, I've never met anyone who works for a mutual fund or hedge fund) credit. If they see a consistent policy of dollar devaluation, they will go abroad and chase higher real yields, in which case, the stock market may still tank in the short term.

Illusions and manipulations can last years. Of course the truth will come out, the question is, will it come out fast enough for our limited lifetime? Taking 10-20 years off from history is nothing, but this 10-20 years may coincide with the best and most productive time of our life.

athena,

while there's no free lunch, I can assure you that there's free ice cream. I forgot whether it is Ben&Jerry's or Baskin Robbins that does it every 5 years on a particular day.

Is it really free? Well, you need to line up for half an hour to get in.

OO,

That's a scary thought. And very true. My parents' generation lost the best years of their lives amidst Mao's craziness.

SP,

Actually, it's a 50/50 deal btwn me and Peter P. We're going to co-develop a cult based on our cult leader aptitude. It's also Peter P's thread, so what he deems appropriate is what stays. I'll take your in-SIN-nuendos under consideration, but I think I will probably take my cult (if I actually develop this hypothetical cult) in a slightly different and child friendly direction.

When Virgin Atlantic first got into the DC market, they were giving away flights for the first 200 people who showed up.

Opportunity cost is a real killer on free lunches.

The closest I can think of is the internet and TV. I still have to pay for access fee, DVR, and firewalls, but the amount of entertainment and education one gets in return is really amazing.

Also, air is still free. Breath deeply before it's all gone.

Free lunch? Where? I’m hungry! I want a free lunch! I also want a free ride!

How about some free debt?

@Lefantome, you Sir have been upgraded to a patron margarita at my pathetic rental any time you are in $anta barbara, turn right by the homeless village, go past 34 migrant construction workers (try yelling "hey pendeho out the window, it means "hello" in mexican) turn left by the open sewer and we're on the left by the pig trough.

athena,

I'm a fundamental-ist also. But, the problem is that sometimes the utility value of waiting out fundamental correction is less than the utility value of exploiting near-term technicals.

Just because fundamentals are way out of whack, like with housing, doesn't mean an eminent sharp correction will follow. There is a reasonable chance of a slow reversion--a soft landing. In such a scenario both those "in" and "out" may come out about the same on paper, in purely quantitative financial terms. In fact, the outs may be a bit better off. But, weighing in the utility value of pretending debt=wealth for years may put the ins ahead.

This is kind of a classic collision between macroeconomic and microeconomic realities.

Put it like this: I don't clean my plate and eat only what I'm hungry for. I do this because I have no want for food, because I don't want to get fat, and because I don't want to teach my son that he has to eat when he doesn't want to. My grandparents, who lived through the Depression, always thought us grandchildren wasteful, and begging for disaster. My grandmother gained economic utility with extra body weight, I do not. Someday, maybe the music will stop on the modern economy, and those with big round bellies will be happier than those without. That doesn't change my micro utility from eating for pleasure and exercising for pleasure. Macro forces sometimes reveal the fundamentals that cause people to necessarily eat and exercise to survive. Even if one believes this will be true again someday, it's probably not advisable to start eating like the Depression is on today, even if failing to do so is wasteful and irresponsible.

I'm a fundamental-ist also.

I hear you... market fundamentalist. :)

But, the problem is that sometimes the utility value of waiting out fundamental correction is less than the utility value of exploiting near-term technicals.

Very true. Randy, I am actually quite surpised that you sold your primary residence last year. It was a good financial move. But would you do that again?

Randy,

However, your grandparents' behavior is backwards looking and gives a suboptimal result. Similarly, people who bought RE in 2003-6 are backwards looking and still seeking bubble era results.

Ultimately, everyone here is primarily concerned about their microeconomic outcomes, though individual utility functions may not be equivalent to purchasing power.

I thought you weren't a market fundamentalist though. At least not a full blown market fundamentalist.

newsfreak,

BTW, I ran into this explanation for the origin of Amerika. I had no idea that it ran back to 1927.

http://en.wikipedia.org/wiki/Alternative_political_spelling#.22K.22_replacing_.22C.22

SP,

The same thesis - tightening by BOJ - was mentioned by Jubak in his latest article on MSN investor. It was kind of chilling, but it made sense.

That's my argument against soft landing as well. On purely economic fundamentals, like price to rent ratio etc - one can argue about a plateau. But there are these externalities which no one talks about on this blog. When and how much liquidity crunch will happen depends on whims of foreign investors. And the butterfly effect can be devastating.

I don't believe in gloom and doom theories. But this bubble simply cannot end well. Economic fundamentals do not support it. But that's not all. Too many vested interests will try too much of their "tweaking" with completely unintended consequences. No one, NO ONE, knows what would be the effect of ARM resets.

In the end it will all seem like a drunkard's random walk. You cannot predict the next step, but the direction is pretty much obvious.

Peter P,

Very true. Randy, I am actually quite surpised that you sold your primary residence last year. It was a good financial move. But would you do that again?

I would. But my decision was not financial or economic in nature; it was a lifestyle/life situation choice. My wife took an executive job in the North Bay which would have required she stay up there in an apartment 3-4 days a week or suffer 3+ hours per day of commuting. My situation is uber flexible, and I want her to be able to maximize time with our son, so we moved close to her work.

The decision to rent and not roll right into another home was the financial part. But it was really just an opportunistic decision, not a strategic one.

The decision to rent and not roll right into another home was the financial part. But it was really just an opportunistic decision, not a strategic one.

I see. And it might not be prudent to get a second home (condo?) in North Valley.