patrick.net

Peter P teaches about food and finances.

Food and finances do not go well...

food and market psychology

Not food-market psychology though... I am emotionally overwhelmed when I see lots of food on display in the market.

I learned a lot from everybody. Thanks!

I like nice boomers. I do not like so much bad boomers. There are no boomers in the middle. Bad outnumbers good 6 to 1.*

*not investment advice.

Being a life-long SoCal JBR surrounded by brilliant investors with their priorities straight has taught me what really matters in life: Things you can buy with fat stacks from your HELOC, cash-out refi or flipped condos. The one with the most toys in the end wins. Period. Get a methusulah loan, NAAVLP, whatever, but just "get in the game" or your life means nothing.

Oh, and btw, I plan on taking it all with me.

I brood about my JBR status to the Loud Family.

It's probably just the temptation to find the next Zadie Smith.

Though I don't really get the appeal of Zadie Smith...I guess that makes me narrow minded...

SQT,

If you do become the next J K Rowling, can I read your books before they're officially out?

I totally missed out on young girls' lit too. I was reading Tom Clancy in high school, for some freakish reason.

SQT,

It doesn't hurt to be optimistic, especially when I'm not the one who'll be suffering writer's blocks :P

Surfer-X is spot on regarding tenants rights. The sad fact is that most renters don't know what their rights are so they never assert them. It is not the landlord's responsibility to inform you of your rights, so no one will help you but yourself.

I (and later we) rented for many years before we became owners, and in three states. The only time we had problems that didn't resolve well was with a large, well organized "mega complex" in suburban Chicago. When these guys maliciously tried to keep our deposit, and I took the letters and small claims route, they pulled some intense legal thing-a-majigger to get the case moved to "big boys court", where it was going to take 4-5 years to get hearing and I'd need a real lawyer to do the filings. They got my $.

In all other cases, certainly thereafter, we always rented from individual, smallish owners. And, never knowingly from a lawyer who actually practiced trial law. I want someone I can take to sc court. I find it's good to rent from folks like engineers, scientists, or pretty much any non-business/non-legal type. Engineers are especially good because they think they know what they're doing even if they don't.

Like X, I had good and bad experiences. The difference is that I _always_ got my deposit back, plus interest in most cases, and usually 100%. We're actually pretty nice renters, fix a lot ourselves, and don't abuse the relationship. But, if the landlord makes the first move to be a jerk, then I quickly demonstrate just how demanding of a renter I can be. This is the case in the McMansion I'm renting now. Started off well, but went bad after the place started falling apart (literally, for a while an actual hole in the beautifully vaulted 30' ceiling clear through to the leaking shingles for a while this rainy season, and ruining a very nice rug we own), he turned into a legendary f#!kface.

I guarantee that a) I'll get 100% of my deposit back out of this place, b) I most likely will get interest at the average prevailing CD-18mo rate for the period, c) there is a very high likelihood that he'll sell the house after our tenure, having learnt that being a casual, a$$hole landlord isn't worth the money (especially given how I negotiated the extension--funny what you can do to people who can't do TVM-math).

Anybody from CBS here? Ready for a good laugh.

http://www0.gsb.columbia.edu/students/organizations/follies/media/EveryBreath.wmv

The difference is that I I didn't mean that to sound like a direct comparison to X's experience. Sorry, it came out wrong.

Owneroccupier,

Very nice! But Bernake never spent any time at Columbia! You'd have to pin the blame on those schools by the Charles River.

Owneroccupier,

Classic. Long live Hubbard. I'm one of those definitely watching Benny boy.

astrid,

Hubbard turned down early contention for the job. That's the connection.

astrid,

you mean Harvard, right? :-)

Owneroccupier,

I'd never say anything bad about your alma mater directly :P

From

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

"Born in Augusta, Georgia (to Philip, a pharmacist, and Edna, a schoolteacher), he graduated from a high school (with 1590 out of 1600 on his SAT) in Dillon, South Carolina in 1971?; from Harvard University (summa cum laude) in 1975; and earned his Ph.D at the Massachusetts Institute of Technology in 1979. He taught at Stanford University from 1979 until 1985, was a visiting professor at New York University and has since then been a tenured professor in the Department of Economics at Princeton University. He chaired that department from 1996 until September 2002, when he went on public service leave. He resigned his position at Princeton July 1, 2005. He has given several important lectures at the London School of Economics on monetary theory and policy and written three textbooks on macroeconomics. In 1997, Bernanke earned his FAA private helicopter license, concluding over four years of weekend flight training."

Anyways, I must be ultra dense, I didn't realize the dancing guy was supposed to be Glenn Hubbard. Duh!

SFWoman,

Let's just blame Princeton. Nobody here from Princeton, right?

When I see HeliBen I see arrogance.

I think I'd better just blame BushCo. They have a habit of ruining good economists...

There is something about MIT that makes me hesitate about sending kids back there again, academically brilliant, but the institute is too intense, competitive at all cost, not a very friendly kind of place. Two took the plunge when I was there, there might be more suicide cases that I was not aware of, but anecdotewise, MIT has a higher suicidal rate than other schools of the same calibre. I am not sure if Randy will be happy there, because most people I know are not.

My first choice was actually Caltech, but I was not accepted.

Owneroccupier,

Really? I know some people who went to MIT and they're quite laid back and well adjusted. In fact, I'll go so far as to say they're some of the most well adjusted people I know. It's a bit intense, but pretty cool if you're smart and well grounded.

The fact that Ben Bernanke actively campaigned for his job means:

1) He is not very smart, at least from the big picture perspective. If I were offered such a position, meaning I am competent enough to fill a lot of other positions of similar power and significance, I would have turned it down over a heartbeat. The informal job description of Fed Chairman at this point should be: to assume full responsibility for Greenspan's blunder.

2) He is very political, meaning he will cave in to political pressure during election years. So I do expect him to drop $$$$$$$ from the helicopter just based on his being political.

Perhaps there is a big difference between undergrad and grad programs, but the undergrads I know are not the happiest persons on earth either. It depends on whether they are doing it for themselves or for their parents, you know lots of Asian parents force their kids into engineering.

Owneroccupier,

Yes, the "biology" majors...I've heard the stories.

I guess I'm friends with people who are happy nerds who really wanted to be at MIT.

Top tier tech schools are definitely sink or swim propositions. I heard about a story about the MIT math grad student who wouldn't let her study partner see her (extremely detailed) study schedule...maybe it gets a little out of hand in grad school...

When these guys maliciously tried to keep our deposit, and I took the letters and small claims route, they pulled some intense legal thing-a-majigger to get the case moved to “big boys court”, where it was going to take 4-5 years to get hearing and I’d need a real lawyer to do the filings. They got my $.

I do not want to take people to court. Karma will get them just as quickly. Really.

Peter P,

With karma, you may have to wait several lifetimes, and payback will come in totally unrecognized forms...trust me, small claims court is much more satisfying.

With karma, you may have to wait several lifetimes, and payback will come in totally unrecognized forms…trust me, small claims court is much more satisfying.

How is that satisfying? Sometimes Karma works quickly.

He is very political, meaning he will cave in to political pressure during election years. So I do expect him to drop $$$$$$$ from the helicopter just based on his being political.

Knowing this, being a homedebtor is not that bad after all, right?

I've taken people to court because I don't want the bully to get away with my lunch money. If I let people bully me around, then I need to stand up for myself....not to teach them a lesson...to teach me a lesson. I hate court...nobody wins but the lawyers...but I just can't bring myself to reward unethical behavior.

But Bernanke won't drop money at the debtor level. The impact of inflation works differently on different classes of assets, it is not an 1:1 effect on housing.

If he were to drop $$$$ directly on the street, then our consumable price would be affected right away. Unfortunately he will be dropping $$$ at the institutional level through financial instruments, which means, most Americans with no exposure to these financial instruments won't benefit much. The only way for them to benefit in the last few years was through exposure to RE, but RE has a limit, because it must be supported by the income level, no matter how cheap money is, it has a cost. So borrowing does have a natural limit.

However, some assets may see no end to spike, especially those that has very little to do with consumption. They act as the perfect channel to "drain" the extra liquidity, precious metals being one of them. Anything else that is leaked into the consumption channel will hit a natural ceiling level constrained by people's pay.

Gold!

There will be much political will to stablize oil price. However, governments do not care about gold price any more. It can be of any price.

NOT INVESTMENT ADVICE

That is of course in theory, because in the end all the gold hoarders would like to exchange gold into something that bring them satisfaction, houses, cars, etc. Gold is just a denomination of value, I can't chew on it (or I die of poisoning), I can't sleep on it, so if it is not exchangeable into consumables in the end, it will be worthless.

Originally we hoard money, but as we lost trust in money because our earning speed cannot surpass the printing speed, we start to hoard gold. So gold is just a way of slowing down the pace of inflation in the hoarding process. Once we are done with hoarding and start spending, price will be affected. So whatever we do, hoarding commodities or gold or oil, is just a way of deferring the price hikes into the future. Money printing will come back to bite our ass no matter what.

That is of course in theory, because in the end all the gold hoarders would like to exchange gold into something that bring them satisfaction, houses, cars, etc. Gold is just a denomination of value, I can’t chew on it (or I die of poisoning), I can’t sleep on it, so if it is not exchangeable into consumables in the end, it will be worthless.

Gold has no intrinsic value. But people are irrational. And they see value in gold.

Money printing will come back to bite our ass no matter what.

Then we should borrow as much as we can. The question is: what to buy with the debt.

NOT FINANCIAL ADVICE

Unfortunately, people who are financially smarter than me have already discovered what inflation is in store for us. Gold is already at a 25 year high. Am I not a bit too late to the party ?

I read a news last week, where some commodity Guru was saying there is no bubble in Gold. The contrarian indicator should in such situation mean, very little upside left. I think Gold will move up, but from this point onwards, the gains may not keep up with inflation.