patrick.net

Surfer-X,

LOL! If it is any consolation, they only cry between the hours of 2:00 and 5:00 a.m.

The Lil' Schmoes are actually 1/2 Hispanic as well, and Mrs. Schmoe is 1/2 Mexican and 1/2 Nicaraguan.

More importantly, even those of European descent celebrated the rich diversity of foreign cultures by drinking lots of tequila and eating Laurent's quiche.

HARM,

I had read that comment as well and must admit it got me thinking. Provided the entity structuring was sufficiently prepared like an LLC or even a Sub "S" it would be difficult for any regulating body to determine that there had been any wrongdoing. Say for instance we buy (w/full knowledge it's an overpriced sh#tbox) sell the property at a loss to a subsidiary and drive comps down as we go. The question quickly becomes one of "burn rate" where we would have to determine if we had deep enough pockets to weather our self induced downturn before creating the proper backdrop on a road toward profitability?

Think of it this way: You and I are founders of a company we took public. We later decided that we no longer want to be publicly traded and contemplate a "share buy-back" or "share re-purchase" to take the company private. Do we do this when the stock is at the 52 week high? Hell no! We do it at the 52 week low. But what if the stock shows stubborn price persistence? Well...... nothing a few strategic "leaks" couldn't cure! Happens every day! We want the company back (tired of all the SEC Compliance and whiny shareholders) so we set a disaster prone course, shareholders get wind we have a nightmare aquisition underway, bail, stock price drops and we (out of concern for the employees) agree to come out of retirement and take one for the team. Aquisition (or spin off rumor squelched) we resume our profitable ways!

@Surfer-X,
Right back at'cha!

@DinOR,
The question quickly becomes one of “burn rate” where we would have to determine if we had deep enough pockets to weather our self induced downturn before creating the proper backdrop on a road toward profitability?

Yes, you've raised two big potential roadblocks with this approach: (1) having enough people and $$ to eat the costs during the initial buy-in phase (at inflated current-market prices), and (2) making enough low-ball "flips" to have a significant statistical impact on local comps/prices.

On problem #1, obviously, the larger and better funded the pool, the better. Problem #2 can be solved by concentrating on a relatively small city or isolated neighborhood, where the comps can be set by relatively few sales. The deflating bubble would also work in our favor in that sales are already dropping like a rock just about everywhere, which magnifies the impact of each sale that goes through.

HARM,

Good points! Just remember we aren't as much concerned with "scuttling" comps as we are with making money. Comps will be driven down but this is a positive "side effect" not the primary objective. If it creates better entry points for working families so much the better. I know it works b/c I've seen one particular company do it several times over the last decade or so. They're known as "the junk mail kings" in San Antonio.

DinOR,

You and I are founders of a company we took public. We later decided that we no longer want to be publicly traded and contemplate a “share buy-back” or “share re-purchase” to take the company private. …… nothing a few strategic “leaks” couldn’t cure! Happens every day! ... (tired of all the SEC Compliance and whiny shareholders) so we set a disaster prone course,

I'm sure this has happened, and occasionally still happens. A few points of practicality--especially in today's environment--make it unlikely.

* The real moral hazard for managers is that they put the company on a course such that they can keep their jobs and/or exercise golden parachutes. They are seeking to maximize their own position.

* Taking a company private is seldom ever done by the company itself. It usually involves a lot of private equity, often a massive LBO, and lots of new commanders walking into the shop. As such, existing management almost never keep their jobs in such a maneuver (although they may get a nice payout).

* The IB/PE/LBO folks determine the buyback parameters, not the management. In fact, it is the Board that must approve the action.

* The Board is held to fiduciary responsibility to the shareholders and can (and often is) sued in class action if they fail to abide by the Business Judgement Doctrine.

* Anyone making strategic leaks of any type, whether true or not, will almost certainly get investigated under SEC 10b and 14e (and maybe others). The SEC isn't very nice about such violations at present.

* Unless your company is small enough to avoid raising the interest of Hedge Funds, your share price will be seriously arbitraged by Merger Arb funds and such. This makes the market efficient, and shines a spotlight on any funny-business. Hedge funds love to raise holy hell when they don't like what management is doing.

SP, Randy H,

Yeah, I don't think I was referring to S+P 500 companies with 38 analysts covering the stock being able to pull this off. When I say it happens everyday it does, just on the "pink sheets" which the NASD, NYSE and the SEC has told us we shouldn't play with anyway. No top tier wirehouse is actively recommending penny stocks to their clients. The point is (and I feel like I just went through a compliance audit so I've lost track myself) that price manipulation to the downside can be effected as well as to the upside.

Randy H,

True, in the post S-O world leaks are becoming more rare and justice is swift and severe (as it should be). However, with smaller OTC issues (where no one really understands the business model anyway) who's to say what is detrimental? I can't tell. Have you ever spoke w/some of those Investor Relations people from a start up? Btw, you're right. I mean anytime a stock swings dramtically the NASD looks at who would benefit from such a move? On of the most clear cut cases I can think of is when a short seller (of an ISP most people hate) couldn't get the market to see things his way there was a leak. Now to my knowledge it was never proven however the NASD censured said individual all the same. Kind of "we can't prove it but we know it was you". He's still in business btw.

Sun cutting 5000 jobs as predicted...

http://tinyurl.com/n3aax

expect to see much much more of this

tinyurl.com/qt7ks

DinOR,

For some reason, my comment didn't post on Ben's blog, but I saw Robert & your comments on the speed of the current correction being unexpectedly rapid vs. previous ones. I must respectfully disagree on this point --at least as far as CA is concerned.

Most cities/counties have yet to even post YoY median price declines (and yes, I know the median can be skewed by better quality homes selling for same price vs. crappy homes a year ago --not to mention outright CAR/NAR data manipulation). Even so, the RE market here has not exactly turned on a dime, and is tracking at roughly the same pace as the last crash (1990-96).

I see no reason --yet-- to expect it will hit bottom any faster than last time. Yes, we have the Internet, and as the saying goes, "garbage in, garbage out". Most people I know who are interested in buying are not aware of this or any other anti-Bubble sites (unless I tell them about it). The Sheeple get the same crap/Realt-whore propaganda from Industry-controlled sites on the Internet that they used to get from newspapers & TV.

Net result: same. I expect the market to hit bottom sometime between 2008-2012, no sooner.

HARM, it might take that long to hit bottom, but I expect big drops by next year anyway.

The Japanese market dropped fast, then languished lower, back in the late 80s early 90s.

Expect the same in the US, this time around.

The drop in the Canadian market should follow around a year later, but not as far. There aren't any interest only/no doc type lenders here, but variable rates are still going to inflict some pain, and my observation of the local MLS shows a steady increase in single family properties from January to the end of May - not what would be expected in a good market for the sellers.

Mind you, they have recently introduced the 30 year mortgage amortization, and zero down options. Last gasp in my opinion.

Looking for significantly lower prices in Victoria by 2008.

Cheers.

*not investment advice*

@tsusiat,

There aren’t any interest only/no doc type lenders here...
...Mind you, they have recently introduced the 30 year mortgage amortization, and zero down options.

Uh, oh. Looks like there's PLENTY of room for Canadians to keep the bubble going with U.S.-style toxic financing. If your central bankers/regulators are anywhere near as corrupt and pro-bubble as ours, Canada RE may have quite a while to go before it finally hits its peak.

Does anyone out there know what happened to "America's Overvalued Real Estate" blog? I just checked it and the old site (with hilarious examples of insanely overpriced crap) was replaced with a commercial real estate site: http://overvalued.blogspot.com/

:?: Hmmm... the conspiracist in me wonders what's going on here. 8O

SP,

Yeah, I didn't mean to get side tracked with a discussion about SEC reporting requirements and if people only knew just how much the cost of compliance really was I wonder if we'd all be as gung ho. The original observation was addressing a leveling of the playing field b/c perma-bulls have their well oiled machine in place wouldn't it be great to have a mechanism (legal) to bring SOME balance to the equation? Maybe the "if I play badly enough they'll want to trade me" wasn't the best way to go about it but think about it. The "flipper revolution" really was grass roots. It wasn't until way late in the game that guys like "Condoflipper.com" arrived on the scene. Wouldn't it be great to have some on-line equivalent to Don Lapre telling people how to make millions from "their tiny one bedroom rented apartment" by driving RE prices down?

This is a couple months old, did everybody already watch this? Not too doom and gloom, maybe he fears for his life.

http://video.google.com/videoplay?docid=-2640239019877885520

Fyi: Just in case anyone was under the illusion that "Boomtime" was a normal poster, I checked his IP --it matches "CuriousCat" and "WoopAss".

How many times do we get to see that same old Marina overpriced listing as evidence that the boom is still on?

I've got an inside angle on some WebVan stock too. Here's an analyst report: http://news.morningstar.com/article/article.asp?id=847

Oh, shit! I just bought an a$$load of Webvan stock based on the advice of my good friend and financial advisor, Boomtime. Does that mean I better lube up?

LILLL you are OOTWDDGPB. Oh, that's an acronym for Out of This World Drop Dead Gorgeous Plus Brains. Thanks for making this thread so easy to look at.

Harm,

The possibilities are endless.

Let's start our own production company and make lots of hahas on this.

Why does this subject cause me to feel euphoria? Maybe because I'm right.

Mike a.k.a/Sage,

I love it! We should be in talks w/CBS next week at the latest. I'm visualizing a valuable franchise that can be tailored to each boom gone bust market.

America's Most Wanted (mortgage broker)

FB Miami

Instead of a tired re-hash of "Fantasy Island" I'm picturing "Fantasy Mortgage Island" where obviously unqualified FB's get to live way beyond their means (for a time of course) as we get intimate with their reckless spending habits and general mayhem! Now the catch (and comedic relief) comes in that our FB's of the week "aren't in on the joke". Our audience at home will be periodically reminded with an on screen "countdown to eviction!". Now wouldn't that just be hysterical? Laugh tracks provided from select audio clips from Surfer X's various parties would be a nice touch.

Ha Ha Says in Resonse to:

"HaHa… are you interviewing? One of my teams just told me about an engineer they interviewed who wants 1 haha + 5k!"

"I recently accepted a management position — I am not looking.
My compensation package exceeds 165K."

So the new value of the "Ha" is pegged at $165K/2 = $82.5k

Total Compensation Breakdown:

A. Salary $82K per year.
B. 401K matched contribution $6K.
C. Free parking spot $1K per month x 12 months = $12K.
D. Free corporate gym membership $200 month X 12 months = $2,400.
E. Lunch card for free buffets in snack shack $15 per day X 48 work
weeks X 5 days per week = 240 days X $15 = $3,600 per year.
F. Company pension $15K per year.
G. Free phone unlimited phone service in office cubicle $75.00 per month
$75 X 12 months = $900 per year.
H. Unlimited Bic Pens and .05mm lead lead pencils = $50 per year.
I. Potty pass = $25 per month X 12 months = $300 per year.
J. Site license share for use Microsoft Office 2000 = $500 per year.
K. Option to purchase shares at par value = $14,800.
J. American Airlines/Disneyland corporate vacation discount travel
vacation package $690.00.
K. Unlimited coffee and Celestial Seasoning tea and bagels in break room
$250 per year.
L. Free cubicle name plate $10.
M. Medical insurance $8K per year.
N. Dental insurance $4K per year.
O. Tuition assistance for approved accounting classes $5K per year.
P. Shared secretary expenses for engineering team support $3K per year.
Q. Profit sharing plan at goal $4,500.
R. Cubicle with a view of South San Jose Foothills $2K per year.

Total Ha Ha one-year, big pimpin', Silicon Valley employment compensation package = $165K or $82.5K per "Ha."

Michael Holliday,

Freakin hilarious! I remember back in the day when I told my old boss (not that I have a new one) that I was thinking about going independent and he dredged up many of the ridiculous "benefits" you mention here. I'll go one better though. Many of the "benefits" I provide myself are of my choosing (not what they got a "deal" on) and become for the most part tax deductible. Please to keep your stale bagels and ex-stripper receptionist.

Michael,

That was worth a Ha Ha Ha all by itself. Whenever talk of compensation moves beyond salaries, it always gets iffy. I like your valuations too - not too excessive, just really hilarious.

newsfreak!

Just the person I want to see! My boyfriend and I are going to the Colorado Plateau for 2 weeks.

HARM Says:
Does anyone out there know what happened to “America’s Overvalued Real Estate” blog? I just checked it and the old site (with hilarious examples of insanely overpriced crap) was replaced with a commercial real estate site: http://overvalued.blogspot.com/

athena Says:
Harm… it was hijacked.

how does a blogspot get hijacked??? 8O

and how do you get it back? are google blogspots hackable by just anyone?

Actually, I had another great idea to lower the development costs of these masterpiece homes. Instead of having to outfit them with expensive fake appliances, why not just have applied giant stickers with interior photos attached to the windows? The dramatic effect would be houses that look like they have beautiful interiors, when in fact they’re just hollow shells. Saves the trouble of having batteries at all.

sounds like my old model railway village setup. i spent hours on that thing (from 12-14 yoa i should add) :cry:

all electric points, and electric lighting in the hollow houses...

DS,

Domain names can be hi-jacked, but I'm not aware of blogspot or typepad blogs being hi-jack-able. Someone could try to take capitalism2.org from me, for example, if they could convince my registrar that they are me and wish to transfer it to someone else. This kind of attack used to work a lot better in the past, but now there are protections available (which most domain owners use, including me).

Blogspot or Typepad names are privately administered, so there is a central authority to appeal to if someone somehow steals your blog address. I don't know how this could be spoofed without the victim simply complaining and getting their blog back.

More likely, they sold or traded it.

Someone can always break in and change the whole thing. But, unless it's a dead-blog, the owner will notice and take action.

If you want advice for securing your blog or domains, feel free to email me.

SP,

Damn, you got this drill down cold!

(liners included)

(Are you ready for Y3K?)

Man that's COLD! Oh btw, someone mentioned they were at a certain social function where layoffs at a certain tech company were in the works? Now if I could just remember..........

DinOr & Astrid:

Regarding Ha Ha's compensation, the stuff employers try to pull is friggen' off the hook, and sometimes downright zany!

Nice additions to the itemized list of "freebies" at prestigious worksites.

*unlurks*

Ah, finally catching up to some of the more recent threads..too much travel. I was still reading last week's threads copy-pasted into my memory stick at work today.

Linda looks about as pretty as I've imagined her. I've seen Surfer-X's mug shot on that other URL provided on an earlier thread. Hard to think he can be so profane with the trolls (but he is). I always thought HARM was a much older guy, but guess not! (or he just looks young). I'm going to have to call for a blog party the next time I go to Cali...(fortunately? for all of you that probably won't be for another few years, by which time maybe we'll have to disband Patrick.net because the bubble will have completely burst and we'll have exhausted our schadenfreude). I'm sufficiently clueless about California cities that I'm wondering why Astrid isn't in the photo because I can't remember what California city she's from.

I'd invite you to the Great White North for a blog party but that would require to much travel for all. And Tsusiat is on the other end of the country!

*relurks!*