patrick.net

Has Zillow ever made a profit? I heard they have not yet made one.

Craigslist is my favorite site to avoid the excessive 10% state sales tax. Patrick.net is my favorite site to avoid home purchasing urges.

So, this woman wrote a blog to say that blogs are bullshit? The very definition of irony.

Blogging is just a fad. Remember the 80’s? We used to have CB radios in our cars. 1040 big guy…what’s your 20?

Nah! more like the 70s. But so was crusing on El Camino between Mt View and Santa Clara on Friday/Saturday nites.

Who knows, maybe this interwebs thing will catch on. It might become a replacement for useless professions, like bitter realtors.

Many moons ago a friend of mine was selling Amway and tried to convince me to become one of his minions. This was early 80's, and Amway believed that people would want to shop out of catalogs because going to the mall wasn't any fun...

her picture on her -blog- looks like she has down's syndrome.
which would explain why she sounds retarded.

Letting the agent do the searching for you exclusively is like using a 14.4k internet connection instead of broadband.

Any chance that supply of money are from the responsible people that didn't jump into real estate back then? They just kept saving and saving. Will they stay responsible and not be lured by government?

I had just realized nobody I know that's my age owns a home. They never even considered it. As soon as they got money, they spent it on other luxories such as nice cars, vacations, and such. They can probably afford one now. But they're just not interested at these prices. The government is telling lots of phantom buyers that now is the right time to buy.

Why not print the m1/m2 charts for the last 50 years instead of just 2.
http://en.wikipedia.org/wiki/File:Components_of_the_United_States_money_supply2.svg
Why not also discuss the changes in calculations of M1/M2 that have happened over those 50 years that make a big difference in this chart? Also why use a chart of cumulative growth anyway?

M1 is flat but M2 is on the same line as it has been since 1995 so there is NO big spike, just a continuation of the current rise. The M2 growth rate has actually fallen from 10% to below 2.5% in the last 12 months so there is a sharp slowdown in the growth that isn't reflected in your cumulative chart yet.

Who does hold all this cash? Where is debt in your calculations? How is it that the assets backed by mortgages have dropped over 30% while the liabilities owed have not dropped at all? Increasing the money supply while incurring ever large amounts of debt is also a zero sum game. The miracle of fractional lending once again.

Don't get me wrong.. I'm tempted to buy soon.. But i'm just not in a rush and shouldn't be... My rather unscientific method of following the housing market in areas I'd like to buy is adding favorites on REDFIN and checking in on their prices from month to month... tracking their final sale prices and comparing that to new similar inventory hitting the market in those areas. While homes are selling.. The new inventory that comes in after them aren't selling for a premium over the previously sold inventory. Atleast, nothing significant when factoring in interest rates decreases over the past year.

In fact, condos in some areas are starting to look like good investments after tax deductions as compared to renting. Although HOAS are a nightmare unknown factor. But then again, my commute to work would increase from 5 minutes to 1 hour each way. That's a significant amount of time I could use to make money or spend time with my family, that i'm not willingly to accept unless the place I'm buying really kicks the ass of my current comfortable rental and exponentially elevates my leisure time on weekends.

Though I don't consider myself a Republican, I am admittedly far on the right side of the spectrum. I am far more interested in spending cuts than in my tax rate, because of the way the tax code works. For most Americans, tax cuts and raises amount to a very small change in disposable income (a 5% tax increase, though it sounds huge, is only about 15 dollars a week for the average family once deductions are taken into account; that fifteen dollars would be nice, but can be budgeted around). I will gladly vote for any candidate in any party if they promise a small tax increase coupled with a large spending cut, and I don't consider any part of the budget sacrosanct. I am left without a party that truly represents me, as neither party is serious about cutting spending. If we're not going to address what I consider to be the central problem of government (it spends too much), I would just as soon vote for the candidate that cuts my taxes, hopefully bringing the day of reckoning closer rather than meaninglessly pushing it a few years further down the line. In my dream world, we would cut spending enough to balance the budget on current tax revenues, then pass a constitutional amendment that implements a small tax increase (one or two percent) that goes into effect any time the government is in debt (not deficit, just debt) and remains in effect until the debt is paid off.

I too see no increase at all, let alone, 18%. The graphs and charts can make any claim they want. I am looking into my market and obviously there is no increase. It has been flat ever since 2008. I'm currently waiting on a short sale. But if I do not get the property, there won't be any hurt feelings. My offer is low enough for me to ignore any signs of a declining market. While I was holding back and not making any offers, it felt like I was the only buyer they are waiting for lol. I felt like I was in a police interrogation room, with 10 people behind the 1 way glass, anticipating for me to go make an offer on a home.

I think refinancing is very easy right now...... at least if it's only to get a lower interest rate, and not using the house as an ATM. A few months ago we re-fied a sf home rental with the same mortgage company that held the original loan (streamlined re-fi) and all we had to do was fax back 2 pages of paper signed, no appraisal and then 2 weeks later a notary came to our home to have us sign the big stack of papers. Very easy and simple.

About 3 weeks ago we re-fied a sf home rental with a second permitted house on the back of the lot for a lower rate and that is with CITI and we're signing those papers this week. Again, no hassles, no fuss.

Rob918,

Easy if you have equity in your home.. AKA if you bought over 7-10 years ago and didn't pull out any equity.. AND didn't lose your job or spouse didn't lose their job, and your credit score is immaculate.

Lots of ifs... Basically the wealthy and frugal can refinance easily. I'd say that's a small percentage of the American population :) haha

Los Angeles Renter says

Easy if you have equity in your home.. AKA if you bought over 7-10 years ago and didn’t pull out any equity.. AND didn’t lose your job or spouse didn’t lose their job, and your credit score is immaculate.
Lots of ifs… Basically the wealthy and frugal can refinance easily. I’d say that’s a small percentage of the American population haha

I get your point and agree, but who would even think about trying to re-fi an underwater property in these challenging economic times? I would venture to guess that there is more to the story in the case of the Santa Monica home owners trying to re-fi than they are letting on. Who knows, there could be dozens of reasons like too many rental units in the complex, underwater, but money is not that tight if one has a job and/or a source of income (Rental, retirement, etc.) some assests and at least a little equity in their home. I guess in some ways it's like my dad used to say when I was a kid in the 60s/70s and we were poor and he would attempt to get a loan for this or that....."The bank only loans money to people that don't need it."

The interest rate to price paid, in terms of TCO, is only valid you plan on staying the thirty years.
If prices drop more, because our policy makers are still playing calamity novice, and your house goes below what you paid. Then not only will you have to wait until the economy starts looking promising, so the Middle class starts buying houses again.
For what you paid now, you may have to wait a while, until the other end of the scale, better houses than yours, that sold for less after you bought. Surpasses what you paid for your house, before you can get your money back.
Either that or the waiting for the 30 year mortgage payoff.

How ever if you are committed, and aren't worried about where prices goes from here, then the interest rates are a great help to get as much house as you can, to offset the near future further losses, and gives you the ability buy up as much as possible.

"a guy who makes $1M as an investor each year is still going to pay the 6.2% on the entire $1M in income - not just on the first $90k of the $100k he pays himself in salary as a director in one of his companies."

Social security is taxed on earned income and is a custodial account. If you garnish earned income for SS without limit, then do you raise the SS payout cap as well? Otherwise, it is another form of income tax. And from what I understand, we already have a federal, most states and even some local that tax based on income already.

"We spent it like a tax, in the general budget, mostly on things that benefited the investor class (such as the burst of Defense spending in the 80s and 2000s, Reagan-era Tax Breaks, many Welfare Programs are administered by JP Morgan for a fee, etc), so we should recoup it like a tax, no?"

No, it is a custodial account between the US Treasury and covered citizens, it is not meant to be an income tax. If I pay tax based on 1M in earned income, the program should reflect an equilvalent payout, anything else is income tax disguised as SS tax.

Whatever the treasury does to move money between SS fund and general fund is irrelavant.

SF ace says

No, it is a custodial account between the US Treasury and covered citizens, it is not meant to be an income tax. If I pay tax based on 1M in earned income, the program should reflect an equilvalent payout, anything else is income tax disguised as SS tax.
Whatever the treasury does to move money between SS fund and general fund is irrelavant.

It is already a payroll tax. From Wiki

Confusion, or misrepresentation of the nature of Social Security has often muddied debate over the program. The payroll taxes collected for Social Security are neither simply "taxes" nor do they create "retirement accounts" analogous to investment accounts such as IRAs. Social Security is an insurance program funded through payroll taxes.

Social Security should really be a part of your retirement package, not all of it. Based on that mentality, Social Security is also a large net, that will help people cope with large and massive shifts in the economy, regardless of the economy. When things are going strong, people can easily rely on stocks, savings, bonds, etc. If you were retiring in 2006, you could have had your world turned upside down! Social Security should be there to just help keep the basics flowing for you in the even things go nuts.

That being said, it's obviously going to become more expensive in some decades and less expensive in other decades for the average tax payer. We're entering a time when they're about to explode, but correcting the issue only requires a minor modification, something like 1-2% extra taxed. 1-2% isn't dooms day.

and what's a domestic payroll tax for? Social security, Medicare and unemployment insurance. The employer portion is an indirect taxation to the employee as well. If I get taxed at 1M base and my SS benefit is the same as the person with the 100K base (In context to Thunder's scenerio), in substance, it is an income tax.

"I think the top 1% pay an average of 18% on their income. Compare this with a working stiff making $150,000 a year who will pay over 50%."

"Mr Buffett said that he was taxed at 17.7 per cent on the $46 million he made last year, without trying to avoid paying higher taxes, while his secretary, who earned $60,000, was taxed at 30 per cent."

That's little misleading as Buffet earned book income, not tax income. Most of the 46 million are unrealized and deferred later. As with most ultra-rich people, they play the defferal game. There is no special treatment for state tax. In California alone, if you have a capital gain of 1M, you will be subject to 15% federal and 9.8% state rate at the minimum.

Capital income, dividends, interest are earned with after tax income and/or taxed already at the entity level. Effectively, the same income are being taxed twice, three or even ten times already. Most countries don't even attempt to tax the same income twice.

with regards to social security, wasn't the program a reflection of the promise that what you pay will be reflected to what you get upon retirement? So if input does not match equal output, it sounds like a broken contract and in substance an income tax.

There is no organic recovery. The addition of literally trillions of dollars in credit and stimulus has not proven sufficient.

The situation is dire, the situation has deteriorated markedly from even seven weeks ago (Fed's own words), and they are now openly stating that they will print.

This would NOT happen if the economy were "stable" or "improving." It is a clear sign that things continue to deteriorate.

The Titanic is going down, folks.

If you think inflation or hyperinflation is now "guaranteed" by today's actions you're a rube. No such thing is likely at all. In fact, an open admission of deterioriation, which is what today's actions signify/represent, may help to speed up the deflationary forces already present in the economy.

Insanity is doing the same thing (QE in this case) over and over and expecting a different result. QE #1 did not work.

What do you suppose this second round of banal QE is going to do?

schmitz_kris says

Insanity is doing the same thing (QE in this case) over and over and expecting a different result. QE #1 did not work.

Are you kidding? Of course it did. We've gone from -7.9% GDP to +3% GDP. It just wasn't enough to finish the job and that's why the economy is on the brink of turning back toward possible deflation. More is needed and that's why the FED is acting again.

Government deficit spending allowed the rise in GDP. That is not an organic recovery. It is taking larger and larger and larger doses of debt to bring even trivial rises in gross domestic product.

This is a sign the real economy is dying.

Also, in the USA GDP is 66% spending, not production, so that portion should be removed from the statistics if you want to be honest.

robertoaribas says

taputu, you are delusional if you think all economic problems can be fixed by monetary action. Furthermore, things that can’t work forever, don’t work forever. How much debt the US can handle before it seriously impacts the economy is an open question, but two things are clear: 1. infinite debt isn’t possible, and 2. wherever the cliff is, whether very close, or somewhat further away, we are driving towards it very fast.

Of course they can't. But if the problem is recession then government spending is usually effective.

Yes, infinite debt isn't possible. Yes, government is spending more than it is taking in right now. A decade of incompetence has left us with bad options and worse options. We need to get through this crisis and then work on the debt.

Bernanke has been dead wrong about everything since this all began.

He's ON VIDEO:

http://www.youtube.com/watch?v=HQ79Pt2GNJo

The first comment in the thread below the Youtube video sums things up quite nicely:

Bernanke must be a plant; it's the only way to to explain this buffoon

The "GREAT economist speaks:

2005 - no housing bubble

2007- car industry "OK"

2008 - Few small banks may fail (3 wks before Lehman)

2008 - Unemployment will not hit 10% (currently 17%)

2008 - The Fed will not monetize the debt.

2008 - Freddie/Fannie adequately capitalized

2008 - Sub-prime problem contained

It's uncanny - the guy's forecasts have a near 100% failure rate. Man of the Year? LOL

Yes the interest rates are down but look at the net effect:

Savings yield no interest because banks can borrow at zero and loan to the federal goverment at 3%. Now that really sounds sustainable.

Well the FED all but confirmed interest rates will be staying low an going even lower possibly over the next year... Historically interest
Rates have never dropped or increased more than 1% in a year... So plenty of time to observe this mess from the sidelines.

Dollar is already HIGHER this morning than it was yesterday at this time (BEFORE the QE announcement was made).

Few realize that QE also has the potential to be deflationary (read my post above), as it is a sign of weakness / grasping at straws.

We shall see what the next few months bring.

No jobs. No recovery. Simple economics. Don't have to be too complicated analysis!

schmitz_kris says

“In fact, an open admission of deterioriation, which is what today’s actions signify/represent, may help to speed up the deflationary forces already present in the economy.”

Don't pull a muscle patting yourself on the back there kris. What you're missing is that you're wrong. The deflationary forces were already there. The FED announcement is simply stating the obvious. The important part is that they are trying to combat these forces.

From Reuters:

Stocks Drop, Treasuries Rally on Growth Concern

ON GROWTH CONCERN

From whom? Uh, gee, duh,....uh....

Any glance at flow of funds and the reaction in Asian markets last night show the Fed's announcement yesterday exhibited influence.

Who are you? You are making yourself look foolish on the forum, and then nobody is going to put any stock into what you have to say in the future.

schmitz_kris says

Who are you? You are making yourself look foolish on the forum, and then nobody is going to put any stock into what you have to say in the future.

Thanks for your concern. I'm not too worried.

Again--not sure you are thinking this through. Yes, the FED announcement probably did cause some reaction today. You know why--because people assume the FED has more info than they do and if the FED is worried, probably they should be too. So, in effect, information was made public sooner than it would have without the announcement. But, the information would have made it out there eventually. The announcement didn't cause the economy to slow down. It didn't cause unemployment.

Do you see the difference?

What are you talking about? Who said anything about the announcement per se causing jobs to be lost or the economy to slow down (as if that could be measured over the course of 12 hours?!?!)

I love you, man, but GEEZ!

LOL.

Just another buying opportunity ultimately

schmitz_kris says

What are you talking about? Who said anything about the announcement per se causing jobs to be lost or the economy to slow down (as if that could be measured over the course of 12 hours?!?!)
I love you, man, but GEEZ!

My lord--you have to be the same person as gameisrigged. It's impossible to have a discussion with you because you argue in circles. What exactly are you trying to say then??

I am not gameisrigged, and I am not arguing in any circles.

Go back and read my original post from yesterday.

It was clear as day - "may help to accelerate DEFLATIONARY FORCES..."

Now, look at EVERYTHING today - it's an ocean of red against the USD.

Why do you think I even posted my original thread today in the first place?