patrick.net

Bellingham Bill says

How can people "save" when rents and home prices rise 10% each year?

Since moving to the bay area I have either lived in a roommate situation (up to 6 total) or lived in cheaper, older single family houses in the outskirts of SF (since family), which are definitely less modern and lower quality than the section 8 housing inside the city, but cheaper (!) than a lot of the comparable section 8 in rent. I also plan to semi-retire in my 40s and I will do everything I can to keep my taxes down - I have no qualms admitting that. I also never owned an iPhone although people who make a a third of my salary are always on the latest iPhone. My cell phone carrier is Republic wireless for $20/month (Thanks, Patrick!). I would cut (cable) TV in a heartbeat and I will after I am done convincing the rest of the family. We are on a lame ass cheap-o ATT DSL plan because the wiring in these houses is so old, still good enough for almost anything, definitely for working from home. I have never spent more than 10K on a car (started with one for 1K that I drove for years until the roof came down). I hardly ever buy clothes (I get them as presents mostly), I program on cheap-ass Linux Laptops. never owned a MacBook that wasn't sponsored by work, etc. etc... This is how you "save" ;)

mell says

This is how you "save" ;)

the more we "save", the more the LLs will take it all.

http://research.stlouisfed.org/fred2/series/CUUR0000SEHA

and/or the more we will bid up housing instead.

http://research.stlouisfed.org/fred2/series/SPCS10RSA

I agree it's wasteful to throw $1000 a year away on cell phones (my plan is $80/yr beat that!), but of course that is another market failure since the economic rents there are incredibly high (and the gov should be leasing that spectrum and not selling it like we did -- crony capitalism!)

Bellingham Bill says

the more we "save", the more the LLs will take it all.

http://research.stlouisfed.org/fred2/series/CUUR0000SEHA

and/or the more we will bid up housing instead.

I'd agree with you if you think the consumer sentiment cannot be changed. It's a mentality thing and part of the reason why Japan has not seen massive inflation, the (aging) Japanese bought bonds instead of Mc Mansions. I'd say the price of housing and rents would come down significantly, but I think it will anyways once QE has to stop (rates out of control, confidence crisis and potential for much more massive inflation) and people are forced to live with their parents and grandparents again - but forced may be too harsh here forced, people used to sing praises to the big family, didn't they. Maybe re-learning working together across generations can't hurt ;)

Bellingham Bill says

In the US, the 5% just has to bamboozle 45% of the electorate with bullshit ideology and social issues.

Propaganda...it works!

mell says

y Japan has not seen massive inflation, the (aging) Japanese bought bonds instead of Mc Mansions

I peruse Japan real estate listing weekly, and prices there are still mind-boggingly high.

Japan's lack of inflation has a lot of factors; one, the yen going from 300 to 80 from 1970 to 2010 was a helluva tailwind for lower consumer prices from imports -- imports are deflationary.

Hell, the transfer of Japan from a labor-intensive factory place to whatever they do now (offshore their work to E Asia mostly) is also deflationary.

Japan's so-called savings are mostly evidence of a VERY low national tax rate, nothing more.

http://en.wikipedia.org/wiki/List_of_countries_by_tax_revenue_as_percentage_of_GDP

They got tax cuts in the 1990s and called it savings.

http://en.wikipedia.org/wiki/Ricardian_equivalence

Bellingham Bill says

I peruse Japan real estate listing weekly, and prices there are still mind-boggingly high.

Absolutely,Japan may experience continued deflationary forces, but that doesn't mean it's cheap there. Either way, Abenomics/QE only make things worse.

Bellingham Bill says

Japan's so-called savings are mostly evidence of a VERY low national tax rate, nothing more.

I thought taxes in the US are and have been way too low (at least so some of the resident patnet experts argue), so why doesn't the US have a great savings cushion like Japan has (had, it's dwindling in Japan as well)? This really is an issue of discipline/culture, other countries with higher tax rates have more and bigger savers as well. Things will get worse until there is a return to more savings/capital formation oriented culture and a sound money system.

mell says

Things will get worse until there is a return to more savings/capital formation
oriented culture and a sound money system

That makes me wonder about the welfare culture in japan. Can you just be entitled to other people's money for your bad choices-without facing any consequences?? Can you take money from middle class and rich and then keep blaming them for everything??

If our welfare was extremely stingy and people had to worry about food and shelter-offshoring would never happen. There would be riots in the streets and they would chase after corrupt politiicans with pitchforks and torches. I would think that is probably what the founders intended when they thought of the 2nd amendment. Not a battle of gun rights, but to have the people in power and the politicians remember their place as public servants.

lostand confused says

If our welfare was extremely stingy and people had to worry about food and shelter-offshoring would never happen. There would be riots in the streets and they would chase after corrupt politicians with pitchforks and torches. I would think that is probably what the founders intended when they thought of the 2nd amendment. Not a battle of gun rights, but to have the people in power and the politicians remember their place as public servants.

You might be right. But we have homeland security now, and what I perceive as a trend toward what is nearly a dictatorship. If and when a time comes that the government needs to clamp down because of riots protesting the loss of opportunity among a growing lower class, I doubt the uprising would succeed. By then big brother and it's corporate allies in big media will be even more dominant than they are now.

Also, you seem to imply that welfare in the US is generous. Is that true?

Bellingham Bill says

The reason we don't have any savings is the rent rises.

I mentioned before that my rent is roughly equivalent to the maximum subsidy for section 8 housing. Decent rentals still exists, not necessarily in the inner city though. I would agree mostly with you on health care as this is the most "forced" cost on the consumer, most simply have to have some form of a health care plan (at least a catastrophical w/ high deductible). But housing is not as forced of an expense. People will have to go back to living with their (extended) family, having kids share their bedrooms (I was completely surprised that most women here expect one bedroom per kid) etc., going back to the roots and more frugal living is what will eventually put a cap on housing, even with all the speculation and distortion. We will figure out that too many lived well beyond their means for the past couple of generations.

Another way of looking at it: The healthcare (sickcare) industry is preying on the sickest 1% or 5% while mostly failing to keep the rest of the population from becoming new prey eventually.

Housing only goes up, haven't we all capitulated on that by now?

Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha-Ha!

I would love to have the list of people who will donate to the DNC in the next two years. Those people are whachu call a "Mullet" and as you know a Mullet will bite anything.
A list of fools who are easily parted with their money is worth Millions. That would be the worlds best lead call list.

article makes no sense.
this is how insurance works.
you go 10 years and never 'make a claim' then bam you got a huge loss/payout.

im sure auto and fire insurance would be more skewed - like maybe only .05% of the insured get 95% of the payout from fire insurance. duh-doi.

PockyClipsNow says

article makes no sense.

this is how insurance works.

The article does make sense, the issue is you misunderstood what "insurance" means in the medical context. You're thinking of "insurance" in the context of fires and car wrecks, i.e. unusual events. At the behest of PhRMA and AMA among others, medical insurance has become largely about chronic conditions advertised on TV, such as Prozac deficiency, restless leg syndrome, etc. If you want to try to liken it to fire insurance, imagine if everyone were required to buy fire insurance at the same premium as pyromaniacs, in an environment where arson is legal, and every policy must also cover maintenance (leaking roofs, basement sewer issues), feng shui dragons, ghosts in the walls, and annual redecorating because radioactive granite countertops are a human right.

This explains constant bombing of my e-mail account with requests to donate sums as small as $3.

Call it Crazy says

There's another budget crisis in Washington, and it's unfolding inside the Democratic party. The Democratic National Committee remains so deeply in the hole from spending in the last election that it is struggling to pay its own vendors.

Of course the DNC is broke.

Billionaires know which party best represents their interests. Hint: it's not the DNC.

Well, even if the DNC might be broke, it doesn't really matter since...

A: Obama got re-elected

B: All of the money the GOP and their fake grass roots astroturf political movements, as well as the billionaires that have fought to have Obamacare de-funded hasn't done diddly-squat. They still lost. Haw Haw!

C: Money isn't going to change the fact that like it or not, the world changes, and so too does the US and its demographics that increasingly don't favor the current GOP.

CaptainShuddup says

would love to have the list of people who will donate to the DNC in the next two years. Those people are whachu call a "Mullet" and as you know a Mullet will bite anything.

A list of fools who are easily parted with their money is worth Millions. That would be the worlds best lead call list.

Funny, I always pictured you with a mullet...

Captain Shuddup sounds a lot like Uncle Eddie from National Lampoon's "Vacation" series.

Say hey! This was in the Wall Street Journal on March 30, 1999. Note "... how much it will buy."

Holy cow/interesting/compelling ...!

And where is it up to date??? Right here ... see the first chart shown in this thread.
Recent Dow day is Monday, September 30, 2013 __ Level is 96.6

WOW! It is hideous that this is hidden! Is there any such "Homes, Inflation Adjusted"? Yes indeed, go here:
http://patrick.net/?p=1219038&c=999083#comment-999083

sbh says

New Renter says

Funny, I always pictured you with a mullet...

I too picture him with a mullet, a wife-beater t-shirt, a handfull of viocdin and a six-pack of PBR, all in the pervading smell of propane, day old burritos and endless piles of slim-jim wrappers.

Not that there's anything wrong with that...

Obama's been talking to the GOP via media all weekend long, not just the 10 minute PR stunt Russia and TheIran are getting....
What's you point?

egads101 says

Over the weekend, Obama had phone conversations with the presidents of Russia, and Iran... But not with the leaders of the GOP.

Live up to the responsibilities of the office?

Um, they are elected officials doing the bidding of their constituents. Id say they're doing exactly what they were put into office to do, and that's save us from the ppaca nightmare

No, they were put in office to repeal ppaca, you moron.

Call it Crazy says

So? How is this a surprise? All the bankrupt cities were run by democrats, it only seems logical that the DNC should be in the same shape.

I wouldn't call the RNC a shining example of fiscal responsibility. The Republican "borrow and spend" is much less responsible than the Democrat "tax and spend." It's the Republicans who go on spending sprees (i.e. unnecessary wars) while cutting taxes for the top 0.1% of the population.

Sall right all that any party has to do is call a good all fundraiser to appeal to the ego of the troopers bro...its not much different than a newlywed couple fundraising for their honeymoon!

dublin hillz says

Sall right all that any party has to do is call a good all fundraiser to appeal to the ego of the troopers bro..

I'm not sure how asking for $3 donation appeals to somebody's ego. ;)

APOCALYPSEFUCK is Comptroller says

All bank examiners must be sacrificed in public and all bank regulations must be suspended in order for normal housing valuations to mature. Like, there is no reason why a house in San Bernadino should not cost at least as much as the GDP of Finland.

GDP of Finland? must be a teardown...

This is one indication that stupid Dems are as stupid as stupid Reps & "You can't fix Stupid."

APOCALYPSEFUCK is Comptroller says

If the medical industry can't rape America like the financial crimes industry does, can equality of opportunity have any meaning at all?

Now that's some Funny shit. Damn these laughing tears.
I still be loving me some Mr. Comptroller.

John Bailo says

Medical science cannot cure:

Cancer

Diabetes

Major limb loss

Hepatitis

Obesity

AIDS

Heart Attacks

Leukemia

Most congenital diseases or birth defects

Many debilitating spinal injuries

Severe mental illness

The question is why do we pay them so much?!

"Ain't no money in a cure...they're still mad about all the money they lost on polio!" -- Chris Rock

Call it Crazy says

Half Of US Population Accounts For Only 2.9% Of Healthcare Spending

I can't believe such a headline would actually shock anyone. Are you surprised that only 2.9% of the population is hospitalized at any given moment?

Congress and Obama will wait for stocks to go down another couple percent, then they will cover their short positions and announce an agreement.

Never attribute to stupidity that which is adequately explained by malice.

They're giving red-meat to the dogs. That's politics.

Remember we've got a whole army of mind-numbed Foxbots and Rushbots doing whatever their master(s) tell them to do.

Thinking critically is hard. We want to be told The Truth (tm).

freak80 says

Foxbots/Rushbots will do what they're told to do: vote Republican.

Those shitbags were going to anyway, regardless whatever Fox or the drug addict said. The die-hard 30% of republican voters won't ever get past the skin tone of Obama, and are just as radical and dangerous as when they win.

Ther's no cure for it, and ironically those kind of morons are so radical that even their own kids vote the opposite of them.

They're their own worst and biggest enemy.

Call it Crazy says

What??? Is hospitalization the only place medical costs are incurred??

There you go again...

Missing the *whole point* of an argument by obsessing over details.

Of course hospitalization isn't the *only* source of high medical costs.

I was simply pointing out the following: it's pretty obvious that only a small fraction of the population will be in need of expensive medical care at any given moment. I used hospitalization as an obvious example.

freak80 says

Call it Crazy says

Half Of US Population Accounts For Only 2.9% Of Healthcare Spending

I can't believe such a headline would actually shock anyone. Are you surprised that only 2.9% of the population is hospitalized at any given moment?

You seem to have misread the statistic. It doesn't say how much 3% of the population spend, but coincidentally, hospitals and nursing homes do account for 50% of the spending.

The whole population already knows health insurance and obamacare isn't worth a shit. That's why the healthcare industry created the mandatory tax. It's to keep their gravy train running.

upisdown says

those kind of morons are so radical that even their own kids vote the opposite of them.

I know. My father is a Foxbot.

He's also a far-right Christian zealot. I don't think that's a coincidence.