By SQT15 follow 2006 Jul 3, 8:01am 2 links 11,414 views 202 comments
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If there's one thing Patrick.net readers seem to agree on, is the current level of discontent. Threads seldom seem to stay on housing anymore while politics and religion become staple topics.
So what now? Have we reached a general level of irritability that we may not recover from? Or are we just bored?
If you think we can find our way back to housing, what topics have we missed?
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"Live this day as if you will die tomorrow, but plan for tomorrow as if you will live forever."
That's our thought for the day.
Ric, Red Whine, thanks for the encouragement.
May your equity grow in perpetuity at the rate of 8-10% year!
Mr Lay's demise is a fortuitous event for us all as we will now not need to incur the expense of his incarceration.
It would be justice if his fortune were distributed amongst the employees he stole from to compensate for their lost retirement funds, with payment in relation to the stock they owned at the time of the collapse.
Too bad for his "heirs" as they did nothing but be blood-related to a thief. As for Mr Lay, pine box, a few flowers, and a spot in the debtors graveyard should suffice.
I've been reading this board for over a year now, posting for about 6 months or so. Like many here, I came across this site while searching out information on housing in the midst of a RE transaction (selling, for me). This and other sites helped to convince us to rent for a couple of years before buying again, and I enjoy the conversation on this site in the meantime. The political/religious/philosophical discussions are nice, but at least for me, the most interesting and useful discussions center on housing still, and in particular BA housing. The rants are nice to hear to, mostly because they usually strike a resonant chord with me.
That said, yes, there's a lot of discontent and/or apathy right now on this board, but I do agree that things are changing in the RE scene. Just think back to a year ago - would any realtors admit to a slow market? Would sellers left and right be lowering asking prices? We haven't even begun with ARM resets. Also, no matter what the Fed does, my belief is that mtg rates will go up either way. If the Fed raises rates, variable rates of course go up. If they don't raise rates enough, the bond market will not react favorably, and eventually fixed mtg rates will continue to go up.
Someone a while back proposed that the housing bears risk becoming the "greatest fool" by holding out for a long time, then caving in as the market just starts turning and buying at the start of a long downside. My humble advice is, let's not be that idiot!
It's interesting, I think half of Gen X locked out of housing has spent the money on travel, entertainment and consumer durables instead... there's a point where there's no point saving a deposit, so you may as well spend whatever you've got on fripperies and wait for the inheritance instead...
Many happy returns of the day, Michael. i haven't hit the big four oh yet, but when it happens i expect the hair to start going in earnest, near blindness, shot libido, probably incontinence and incurable halitosis, so you're probably faring better than that ;)
I am faring a little better than that. Thank G-d...
Happy Birthday, Michael. As a Cancer, do you like big crabs?
http://tinyurl.com/zykw2 - mortgages getting risky: CIBC (Canada)
http://tinyurl.com/jwf8v - Calgary home prices rise 55% in past year
Bubble links with Canadian content. Enjoy!
Comment awaiting moderation? Broken into bite sized pieces:
July 5th, 2006 at 10:01 am
http://tinyurl.com/zykw2 - mortgages getting risky: CIBC (Canada)
Bubble link with Canadian content. Enjoy!
Peter, I gotta say, you have one helluva food obsession. :)
http://tinyurl.com/jwf8v - Calgary home prices rise 55% in past year (Canada)
Perhaps this explains my relentless urge to BUY, BUY, BUY!
Trust me, the urge is stronger at around 29.5...
I imagine that Surfer-X is one that *bangs the table to be heard*
With a shoe or no shoe...
We will bury you!
I’ll just have to remember to step away from falling knives.
Exactly. I think many here come to the blog for confirmation that not buying now is the right thing to do. Hence, when there's an air of discontent and people are disheartened at the slow pace of bubble deflation, this sentiment breeds more discontent in a additive fashion. Besides, true trolls sense uncertainty - otherwise, their posts would get no response.
If you are looking to buy RE in Calfornia, then plan on coming to this blog for updates for at least 3-4 more years. In the meantime, build up your savings. You should be able to get 4.5-5% in a savings or money market account, while my best guess is that homes will be depreciating at a rate of around 10-15%/year for the next few years in some areas. Houses still won't be cheap, but if you have a decent, stable income and fair sized down payment, you should be able to buy something with a manageable mortgage within a few years.
I have an idea for a thread, though... What investment opportunities might we all be missing while waiting for the bubble to burst? Non-dollar denominated bonds? Commodities? Non-USA real estate or stocks? US stocks negatively correlated to the overall market? Anything else? It seems to me that there has to be *some* asset class which will outperform the US dollar over the next few years. Who knows... it may be possible to earn 20-30% on your money while you wait it out, if you are savvy. Or should we all be pursuing a conservative cash preservation strategy? I would love to hear what people are planning on doing with their $ while they wait this thing out...
Not investment advice, of course.
Happy Birthday, Michael! Not too far from the big 4-0 myself.
I passed the big 40 a few years ago and I quite like being on the other side. …Not much difference, really…except that I have a strong sense of what I have and have not accomplished so far in life.
Perhaps this explains my relentless urge to BUY, BUY, BUY
Ughh... I know you were kidding here, but this expresses the very real (and very warped) guiding principle for millions of shallow Boomer materialists.
RE: Ken Lay's death. I feel a bit cheated, too. Kind of like the day I heard about Pol Pot dying of natural causes --while comfortably living under house arrest. Sadly, there is very little karmic justice in the world.
Sadly, there is very little karmic justice in the world.
Perhaps he will reincarnate into a Maine lobster, torn apart and dipped into drawn butter.
There are two reasons why people in America are poor:
1. They are Lazy
2. They are Stupid
Most poor people are both Lazy and Stupid (so are most people that end up filing BK)…
In the past you've made some well argued points and I have found myself agreeing with many of them. However, the above is neither well argued, statistically defensible, nor even jives with common sense. It's just smug elitism and broad-brush generalizing, nothing more. Not even close to 100% of the poor (a.k.a. working class) lazy & unproductive losers, though certainly a sizeable slice fits this description. Nor are 100% of the ruling elite (and their children/heirs) brilliant workaholic visionaries.
Choosing one's parents wisely is hardly a mark of brilliance, nor is the converse a mark of stupidity.
Choosing one’s parents wisely is hardly a mark of brilliance, nor is the converse a mark of stupidity.
How would you know?
"Sadly, there is very little karmic justice in the world."
"Perhaps he will reincarnate into a Maine lobster, torn apart and dipped into drawn butter."
Guys like Ken Lay always land on their feet -- in this case, were he to be reincarnated into a Maine lobster, torn apart and dipped into drawn butter, his luck would ensure that he was paired with a delicious Kistler "Dutton Ranch" Chardonnay.
Working at McDonalds or as a stock clerk (or having a paper route or hauling golf clubs) NEVER paid enough to raise a family. We just seem to have more stupid people today trying to do it…
...Not to give astrid’s mom a hard time (since it sounds like she was not lazy), but it is not smart to have kids when the only income is coming in is from near minimum wage jobs…
Hmmm... FAB first accuses all poor people of being stupid and lazy, and then in the next breath derides them for working (albeit at jobs that FAB smugly considers beneath him). And then (not even knowing the particular details of Astrid's mom's situation) chastizes her for having the temerity to *gasp* reproduce.
Right. Every low income worker out there "chooses" crappy paying jobs because they're simply too "stupid and lazy" to grab the brass ring, the way FAB obviously has --not because that's all that may be available to them at the time. None of should bother starting a family because they're all pond scum and underserving of the privilege of procreation, which should only be reserved for the brilliant elite, such as FAB.
CitiBank now offers 5% APY on a money market account. Not to be outdone, HSBC is offering 5.05%. No minimums, no lock in period, FDIC insured. (NOT AN INVESTMENT ADVICE)
So do this calculation. Someone living in a recently purchased 1M house, and you having only(!) 100K in savings.
They pay 12K in property taxes per year, which for many dual income BA families hit by AMT are not tax deductible. You on the other hand earn 5K in interest.
Your net worth goes up by 17K every year compared to them. This is without (after tax mortgage - rent) savings. This is without house price depreciating. This is without interest rates increasing.
Happy belated 4th of July !
Every low income worker out there “chooses” crappy paying jobs because they’re simply too “stupid and lazy” to grab the brass ring
In some sense, FAB is right. Poor people have tendencies and mindsets that make it difficult for them to grab opportunities. Why do they have such attributes? Is it Nature or Nurture? I would say Natal!
I feel very "blocked" right now, so I am letting all opportunities pass.
> It is stupid not to have health insurance (I don’t think that
> even Different Sean can argue that it is “Smart” to be
Then Different Sean Says:
> maybe they couldn’t afford it?
I just filled out a form at:
And I can get Health Insurance for as low as $56 a month (with 10 other quotes under $100 a month).
Boy, FAB, you were really on a roll with that broad brush set to "smug" weren't you? As someone who personally went without health insurance for seven years (very much against my will) I can say first-hand that affordability is the #1 reason why people do not carry. Granted, this was back in the early-mid 90s and there was no such thing as ehealthinsurance.com back then. Even so, my situation was hardly unique.
I was a college grad who, in 1991, found myself competing for jobs during one of the worst --if not the worst-- recessions to hit this country since WW2. I had little paid job experience (I had worked lots off odd jobs before & during college, but nothing to put on a professional resume), tons of student loans and no money. I took whatever was available to me at the time to survive, period. None of these early jobs provided health insurance, vacation, sick pay or any of the fringe benefits Boomers smugly take for granted as their "birthright". Most were low-pay hourly contract or PT positions, because that's all that was being offered --and I was lucky to get that. I worked as a hotel van driver/bellman, limo driver, warehouse stocker, data entry clerk, you name it. Many of my peers simply went home to mom & dad and didn't work at all for a long time. Such is life.
As to that $56/month "insurance" policy --yeah, sure. I bet that buys you a LOT of health coverage :lol:. Actually, 60 Minutes recently did a story about a couple that bought one of those deceptively low-rate policies, and ended up facing bankruptcy due to all the stuff it DIDN'T cover. I wouldn't bet your life on getting such a policy to pay up when you really need it.
I would prefer catastrophic health insurance, but all partners at my husband’s firm are required to have the same policy.
Catastrophic health insurance would be very suitable for us. I have seen my doctor about twice in the last 6 years. In each time, he told me to go home and have chicken soup. My cats could have told me the same.
I worry mostly about accidents and medical emergencies.
My cats could have told me the same.
My cat usually tells me to have sushi.
and can easily afford the $5000 or $10,000 deductible
To me, an outlay of 5K - 10K will sting but when I need catastrophic coverage, these amounts will be of secondary concern.
Peter P Says:
"Happy Birthday, Michael. As a Cancer, do you like big crabs?"
King Crabs are pretty tasty.
Thanks everyone for the collective wisdom on 40. Yeah, I'm treating it like the new 30. I agree.
With people living longer, it's definitely at least the new 35.
Thanks everyone for the collective wisdom on 40. Yeah, I’m treating it like the new 30. I agree.
Senor Holiday, I had a blast in my 20's, the 30's pretty much sucked ass, so I'm thinking the 40's will rock, 50's suck, and 60's rock.
I was just implying that the catastrophic works best when the deductible won’t mean you end up living in your car after paying it.
Of course. I think a deductible of about 2% - 5% AGI will make sense.
Ultimately I think it is pretty hard to change out of the socioeconomic stratum into which one is born.
It is all in the stars.
She has been called to interviews, where people have asked her how she can put in the long hours required when she has a small child (Yes I know the question is illegal, but that’s beside the point).
She could just say that she sleeps very little (7 hours is little compared to 10) and she is willing to work long hours (38 hours is quite long... it is all relative).
Of course, people with more money make similar choices, and many get into debt, it’s just that they often have a larger financial cushion (higher paying jobs).
As a corollary to “It takes money to make money”….it takes money to stay out of financial hot water longer.
Ultimately I think it is pretty hard to change out of the socioeconomic stratum into which one is born.
Well said. I am not an apologist for poor people who make stupid financial decisions and then attempt to shift the consequences for those decisions onto other people. But to make the blanket statement that "all poor people are lazy and stupid" is patently false and inherently elitist.
Sadly, the "by your bootstraps" self-reliance/hard-work ethos that used to be rewarded and helped to created the middle class in decades past is simply not working as well today. Many studies are showing that socio-economic mobility is just not working as well as it used to --or working only in one direction: down. Class stratification in the U.S. seems to be getting more and more rigid by the day. I hope this trend can eventually be reversed, but the current signs are not encouraging.
SQT, can you fix my italics above? (the 2nd & 3rd paragraphs should also be italicized) Thanks.
New thread: The “I really miss ‘America’s Overvalued Real Estate’” thread
I hope this trend can eventually be reversed, but the current signs are not encouraging.
HARM, it will not reverse. Class stratification is just a natural thing.
I feel your pain --really. Every day I remain here, I must remind myself of all those lovely SoCal "intangibles", like completely unaffordable housing, somewhat less unaffordable sub-standard rentals, perma-gridlock traffic, some of the worst overcrowding in the nation, miserably hot & smoggy summers, mediocre salaries, 10 million uninvited "guests" shrilly demanding their "rights' to my tax money, voting rights, subsidized education, housing, etc. etc.
Eventually something will have to go, and that "something" will probably be me. :-)
not forgetting the 'baby bribe' of $4000 a baby from the oz govt, ajh... a last ditch attempt to 'populate or perish', which is not working too well as a strategy...
property councils always worry about population going down too, they love immigration, etc, because it's more renters for their members to exploit and get rich from. they worry about declining population.
She has been unable to get a job after she took a break to start a family. She has been called to interviews, where people have asked her how she can put in the long hours required when she has a small child (Yes I know the question is illegal, but that’s beside the point).
once again, dysfunctions of the market, and modern life. women are now having kids in their late 30s, 40s and even 50s, well into the danger zone for problems. how easily people are brainwashed and denatured into the modest and humble requirements of capitalism!
I'm with SFWoman, there's many flavors of poor, and having been "poor" for much of my life, I'm in no position to look down on the poor, any of them. I haven't walked in their shoes, I don't know what motivates their decisions. However, I am interested in ending subsidies to the poor, especially the subsidies that encourage them to stay poor and ignorant.
As I understand it, the OZ baby bribe is partially motivated by racism. The center right government wants the whites to breed to resist the brown hordes from the north.
It is pretty incredible though, OZ has good schools, high living standards, and a good job situation. And the government still need to bribe its citizens to have kids.
I think a lot of the American middle class would be more open to having kids, if they had what your government gives Aussies.