patrick.net

Since Congress already approves spending and taxation, a separate debt ceiling that has to be increased periodically creates unneeded uncertainty and will ultimately lead to negative financial outcomes.

If we raise it we're screwed down the line. If we don't raise it were screwed immediately. Congress will always act irresponsibly and kick the can down the road, won't they?

Debt is Bad

egads101 says

kashif313 says

If I buy a house in SoCal: $500,000 with 20% down, 30 year mortgage, 3.5% interest rate vs. 4.5% interest rate, the payment is $1,796.18 vs $2,026.74 or a difference of $230.56 per month. Yet you say mortgage rate increases are not relevant?

If you don't buy a home, and rents increase by 10% for the same type of home over the next say 3 years, a not unlikely scenario, well there goes your $200 a month issue with the mortgage.

I think 5 years from now, a hell of a lot of people are going to have seen enough rent increase, that they are going to look back at the mortgages they could have locked in for life today, last year, the year before, and seriously wonder what the hell was wrong with their thinking, and why they ever listed to the permabear idiots on this site.

Roberta, why did you have to change your screen name?

Just knowing refis are booked as mortgage income by a bank should be enough reason never to take a mortgage. The whole biz is bs. The article says rising mortgage rates are hurting their business, but it also must be really helping their business because who do you think gets all that interest! Are you fin stupid? Banks must be super excited during this period of high prices AND higher interest. Even if it only lasts a couple of months that's probably billions of dollars. It's great to be a bank. People don't even understand how you make money. I don't even understand it.

egads101 says

Well, maybe posters here are more knowledgeable than you? for the past years 65% of all loans have been REFINANCE LOANS.

as rates rise, refinance loans tank;

I agree with others here who think that sounds like a pretty big problem. Thus the layoffs and reduction of mortgage departments by the major banks. Party's over. For now. They might think of another way to throw a party.

We're just off the lowest mortgage rates in American history. 4.5% would have been the lowest mortgage rates in American history two ears ago. Affordability has taken a big hit yet is still better than any time since the index began prior to 2009. Our parents would have KILLED to have these conditions.

--------------------

I'm not certain what kind of rates or terms their mortgage was back in 1987, but I am fairly certain they purchased their first house for 43k. The same house today is valued right around 150k.

I would kill for housing to sell at a 70% discount today, no matter what the interest rates would be. And I'm fairly certain my parents wouldn't kill to trade for todays prices with low rates, instead of yesteryears conditions. But then again, we're all pretty damned smart.

Maybe its just you think your teabagger parents are a bunch of jackasses, so you figure, all around the world same song. Kind of like how you believe the rest of this country real estate should mimic the coastal california land of nonsense. That's just not reality

egads101 says

Losh

Losh has been correct all along.

You are living the dream of a Zillow backed price increase for property that isn't coming true.

Picking select areas of data then making claims it's the same for everyone isn't worth the time you spend.

You're done, and I'm still expanding.

My income is unlimited, and yours is at the whim of the Fed.

I think you and call it crazy are the match up.

Honest Abe says

Can America just spend more than is take in indefinitely, without any consequences?

Absolutely, dependant Americas will be gassed by the Chinese and the Russians after their government checks are cut off by the creditors.

Call it Crazy says

Don't even THINK about including me in his fantasy world....

You joined it by giving him troll bait.

Iwag says

that guy is you roberto!!!

uh oh, don't pull on the curtain, there may be more trolls hiding there.

AverageBear says

Really? Their financials say otherwise. Are you also considering their business OUTSIDE the US? This is where they will find very good growth moving forward.

Rising dividends are par for the course for an established company; increasing dividends are closely correlated with reduced growth.

WMT stock is $5 (~$74) more than it was in 1999 (~$69). That was almost 15 years ago and adjusted for inflation, it's worth far less. To be on par with the 1999 price, WMT needs to be over $95, or the other way around, the current price of $74 was $59 in 1999.

By comparison, COSTCO is trading almost 3x what it was in 1999 in raw dollars, and has almost doubled after adjustments for inflation, during the same ~15 year period (~$50 to $113.00). COSTCO has also greatly increased their dividend from about 7 cents in 2004 to 31 cents today, a rapid increase over a shorter period of time (COSTCO didn't pay regular dividends prior to 2004)

sbh says

For so many Americans there is just no margin for random accident because the value of labor is so low and their ability to manage capital is so poor. So it's both their fault and the fault of a country that has changed from how it used to be.

We're pretty much the only industrialized country in the world where a brush with a terminal disease can make you lose everything you worked for, even if you have insurance.

thunderlips11 says

Really? Their financials say otherwise. Are you also considering their business OUTSIDE the US? This is where they will find very good growth moving forward.

ThunderLips,

The quote you took from me, was refuting the absurd notion that WMT is going down the shitter. It obviously isn't. Sooooo, to compare WMT's 'value' to Costco's value does what exactly? I was simply saying that Walmart is a GREAT company for the long-term investor, and is far from going down the toilet. I honestly don't know much about Costco, but from my very brief research, it seems like a solid company as well.

Comparing Costco to Walmart I think proves my point. Both are great companies. However, if you want to compare a long-term investment in both, you are still better off investing in Walmart compared to Costco. Costco's current 1.1% dividend yield will never catch up w/ WMT's 2.4%, even with rehtorical insane (read unsustainable) future dividend growth on Costco's part.... This article sheds some light on this...

http://seekingalpha.com/article/1273201-wal-mart-or-costco-for-dividends-a-long-term-look

Thunderlips.. I highlighted the wrong text.... I'm sure you figured that out..

Sheesh, why are people fighting over RE prices?? They are what they are.

Should we personally attack each other over the price of milk in Boise, ID too?

Call it Crazy says

Can only mean one thing... There will be 30% MORE cash buyers...

NO, it means higher real estate prices!

egads101 says

yes, housing has really crashed over the past 2 years,

As you know Bob from reading my blogs I said prices would go up with the 1% drop in interest rates.

It's a bad idea to tie your fortune to a manipulated market place. That's the part you don't like Bob. You said people were stupid not to buy houses in 2011, but you were wrong about that.

egads101 says

Losh

Has always been correct, as you know because you keep bringing back old comments that I've made that turn out to be true, the way they are turning out to be true now.

Tell us again Bob about the 15 houses you bought, that never gets old.

egads101 says

when clearly he is gone. If you weren't a disrespectful low class ass, you wouldn't do that.

Now Bob, we both know that what happened was you were posting comments about me, and during your cyber stalking came across that comment on BloodHound Blog that I made about my gun preferences.

That started another one of your fantasy mind melts where you came up with yet another whopper story.

You're a guy working a jive job. I don't personally care that you are a work a day guy until you attack good decent people who have made excellent choices over your blathering objections.

Get a life Bob.

smaulgld says

NO, it means higher real estate prices!

Wall Street is betting otherwise.. me too..

Call it Crazy says

smaulgld says

Call it Crazy says

Can only mean one thing... There will be 30% MORE cash buyers...

NO, it means higher real estate prices!

Are you crossing over to the dark side??

Absolutely not- just kidding

kmo722 says

smaulgld says

NO, it means higher real estate prices!

Wall Street is betting otherwise.. me too..

Me too-lower prices coming up-read all my threads

egads101 says

here, lets just take a quick look at the recent cases filed against you:

Boom, Bob, I rest my case, you are a cyber stalker.

I have no idea what those cases are Bob, and don't care, it's unimportant Bob, except to you.

We make money. Seattle House Cleaning at Seattle House Cleaning dot com is listed first on our Goggle search. We do no advertising.

Our second site at House Cleaning Seattle dot com is more mobile device friendly.

We do have well paid employees Bob, and we can hire more.

Are you stuck in a rut and living through me? Do you have a fascination for me Bob?

Hey, you're a big time Real Estate agent! Right Bob!, You're doing deals aren't you?

I was just cooking a deal on a body shop while making this comment to you.

What deals have you got? What's your next project Bob? Regale us with your exploits, it never gets old.

egads101 says

selling investment real estate at a loss?

What investment? That was a loss that was getting worse by the day, we bailed, thank God someone took it off our hands.

As you also know it wasn't mine it was in a trust. My point was that my sainted Mother in Law bought that condo for $80K, and when we sold it it was only worth $30K.

She owned it since 1986, and didn't maintain it.

Her Coca Cola stock however is worth millions.

If you weave a fantasy Bob, you should get it right.

egads101 says

like hell you don't!

Now Bob, try to calm down, if you say it's for unpaid bank balances you know the drill.

We offer what is owed to the bank, no interest, no fees. Those that go to court get exactly what we offer up front.

It's legal Bob, which you would know if you had any business background.

The cases get settled Bob, so what's your problem?

I thought you said you had no idea what those cases were.

Freaky said:

"the economy" = "the stock market" + "the housing market", the "economy" would probably tank if the QE stopped. Our economy is "asset based," or so they say. It's not based on the creation of actual goods and services"

Then a bunch of humanity majors buying stuff made in China is a Ponzi Scheme?

AverageBear says

The quote you took from me, was refuting the absurd notion that WMT is going down the shitter. It obviously isn't. Sooooo, to compare WMT's 'value' to Costco's value does what exactly?

Right, I neglected to mention why I compared COSTO to WMT, and not Target or other big box stores. It's because COSTCO pays well above the minimum wage and provides excellent benefits relative to the industry, making it generally one of the best employers for unskilled workers.

Thanks for the dividend comparison article. Pretty good points about the catch up problem. Since I'm a stock price guy, my focus was that WMT, adjusted for inflation, really hasn't moved in more than a decade, even using CPI which I consider to be overweight electronics and underweight (or absent) the main middle class expenses of medical and education. Of course, this fails to take into account a longer history of dividends at a higher rate.

Old Peter Lynch mentioned that he often chose companies based on the observations of his wife and her friends. One major reason I am bearish on WMT is because many people I meet loathe the messy chaos that is Walmart, and prefer Target and other shops, even if it means driving more or spending a few bucks more. I really do think WMT is the retailer of last resort for many folks, and given competition WMT will suffer unless they change their ways.

Brief aside, a store I never understood floundering was Sears Essentials. I found their stores bright, clean, with name-brand products like Kenmore and Craftsman Tools, and their prices were good (not spectacular) and the staff helpful and plentiful (try tracking down a Walmart Associate). Yet always empty, go figure. They didn't seem to market much beyond a weekly flier in the newspaper, though.

I wonder if employee turnover and squeezing is a decent Long Term strategy. Walton himself had no problem paying and keeping employees over the long haul, it was the "Professional Management" that took over after his death that began the labor squeezing. If memory serves, I remember that many long-term employees were fired in the mid 90s as a cost-cutting measure and replaced with people making half as much. I also recall the Home Depot CEO trying to win customers back after a round of severe employee squeezing that left stores with a skeleton crew that was overwhelmed by demand. And of course, Circuit City, which was managed by Moron Bean Counters:

"Hey Boss, let's fire all the best performing sales people to save a few bucks this quarter and pay ourselves bigger bonuses."
"Herpa Derp, sounds like a thinking outside the box strategy! They're only HS graduates and College dropouts, easily replaced."
"Hey, all our best salespeople are now at Best Buy and Tiger Direct while our sales are plummeting! And, why can't we find any great salespeople?!"

FortWayne says

That watch is correct at least twice a day.

IT's got you beat.

egads101 says

Call it Crazy says

You still forgot to call him an idiot and a nitwit!!

It's ok, I have you to satisfy that basic need...

I'm gonna be honest here, Roberta:

That was funny.

DON'T SHOP AT WALLY WORLD!

egads101 says

with wage inflation too

Hahaha! Good one.

Entitlemented says

Then a bunch of humanity majors buying stuff made in China is a Ponzi Scheme?

I don't understand what you mean.

Bigsby says

so it matters not what you think.

except to you who continually cares what i think liar

Bigsby says

I thought you said you had no idea what those cases were.

Why would I, and why would I care?

The debt settlements are all the same, if that's what these lawsuits are for.

Maybe Bob can tell us.

David Losh says

Bigsby says

I thought you said you had no idea what those cases were.

Why would I, and why would I care?

The debt settlements are all the same, if that's what these lawsuits are for.

Maybe Bob can tell us.

Why would you know what cases were brought against you? Why would you care? Really?

Iwag says

Bigsby says

so it matters not what you think.

except to you who continually cares what i think liar

As you are so honest, how old were you when you 'bought' the Victorian?

Bigsby says

Why would you know what cases were brought against you? Why would you care? Really?

Yes, really, why would I care?

What's so hard to figure out?

One of the great things about the United States, I've heard you're not from here, is the rule of bankruptcy.

While many, many of my counter parts bankrupted LLCs we chose to pay our debts, even to the banksters.

Everybody is getting paid, but in Bob's mind we maybe should have had those LLCs, bankrupted them, and moved on.

So what's the problem here? We pay, and we're wrong, people who don't pay are smarter than me. Hmmm...

thomaswong.1986 says

kashif313 says

If I buy a house in SoCal: $500,000 with 20% down, 30 year mortgage,

why pay $500K if you can buy cheaper $250-300K and bank the savings.

Why pay $250k if you could pay $100k? Maybe you can get the seller to give you money in addition to the house.

David Losh says

Bigsby says

Why would you know what cases were brought against you? Why would you care? Really?

Yes, really, why would I care?

What's so hard to figure out?

One of the great things about the United States, I've heard you're not from here, is the rule of bankruptcy.

While many, many of my counter parts bankrupted LLCs we chose to pay our debts, even to the banksters.

Everybody is getting paid, but in Bob's mind we maybe should have had those LLCs, bankrupted them, and moved on.

So what's the problem here? We pay, and we're wrong, people who don't pay are smarter than me. Hmmm...

There is no problem, but you did say you didn't know what Rob was talking about, which would appear not to be the case.

>>>I think 5 years from now, a hell of a lot of people are going to have seen enough rent increase, that they are going to look back at the mortgages they could have locked in for life today, last year, the year before, and seriously wonder what the hell was wrong with their thinking, and why they ever listed to the permabear idiots on this site.

This is not true. My rents have not changed over the last 4 years. What makes you believe that they will over the next 5 years? Also if my rent is 30% cheaper than a comparable mortgage, why would I buy? In fact, my rent was cheaper than a comparable mortgage even when the market crashed. I save more by renting - why is that a problem with anyone.

If you choose to pursue a different strategy than me and make more money while doing so, good for you. My piece of mind lies in renting. I may buy when my price range is met based on my calculations. You may not agree with my criteria - that's fine. I dont agree with your analysis..you go your way I'll go mine...nothing wrong with that.