patrick.net

"The first thing we do, let's kill all the lawyers," a character in a Shakespeare play famously remarks.

I have a different suggestion: Make it realtors.

Here's why: Americans will spend about $1.14 trillion buying 6 million homes this year—both records. Yet the flat commissions paid to the realtors who handle the vast majority of those sales, averaging 5.1 percent, act as an enormous tax on the transaction process, taking wealth from both buyers and sellers in what for both is often the biggest financial transaction of their lives. It's true that selling a house is a complex task. But so is writing a will, and an attorney doesn't ask for 5 percent or 6 percent of your net worth as compensation.

And what do Americans receive in exchange for that commission, which can total up to $24,000 on a $400,000 home? In many cases, not much. A realtor's license can be had after as little as 50 or 60 hours of training (the person who cuts your hair probably has 1,000 hours or more).

But the real knock on realtors is a bit of simple economics that many people don't understand. Whether you're buying or selling, they rarely work in your interest.

etc etc http://www.slate.com/id/2105114/

While I wasn't able to stay awake for the entire "Boomers, finances and why they're screwed" PBS special I caught most of it. In typical fashion (b/c boomers comprise their core viewership) the coming financial debacle (that younger taxpayers will ultimately subsidize) is not boomers fault. It's the government's fault (oh, and Wall Street's!) ERISA Laws enacted back in 1974 have loop holes you could drive a Mack truck through! Well....... duh! While they focused on a major airline, their Chapter 11 filing and it's impact on the rank and file employees like it was breaking news, this tired scenario is hardly new.

Not to get on a soapbox but individuals like myself have shouted from the rooftops for years to implore these very people to establish their OWN retirement accounts! Think the "company plan" is a flimsy joke? Great! Then I think it sucks too! Are you going to open your account now? "Well let's hold off on that for now, I'll see how this new union guy works out". Done. I'm out of it.

Liz Pulliam-Weston covered this very topic (in much better detail) several years ago revealing that over half of all plan participants "cash in" their 401K when they leave their job (presumably to pay for education?) grossly under contribute and can't be bothered to understand the investment selections. Average family retirement savings in 401K's? $29,000. Now there's a path to retirement success!

The reason I firmly believe this issue goes hand in glove with the "bubble" is that this sexy alternative trumps the drudgery of "saving" every time! Talk about a negative self fulfilling prophecy! Take 1% of your income, make your investment selections before "break time", borrow against it every chance you get and cash it in when you leave. Make sure to tell your fellow employees that you've made a sincere attempt at retirement saving "but it just never seemed to work out for you".

If boomers spent a tenth the time analyzing their retirement plan options as they did debating installing a cedar OR redwood handrailing on their deck we wouldn't be here now would we!

I realize that the PBS special centered around DBP's (Defined Benefit Plans) but that only makes it that much dumber. For those that haven't been a participant in a DBP it basically means you're blindly putting your fate (and future) in the hands of company execs.

I also realize there are many "tech" employees that post here so please understand my comments are more directed toward less sophisticated employees. Tech folks are at the other end of the spectrum and if anything they have a tendency to over analyze their options and can tell you there account balance from their Palm Pilot.

On why do airline employees stay on after having their pay and benefits package are regularly reduced? I really can't say. Then again I've never been in an "open" marriage.

Jimbo,

You should update your numbers to include the decades following the "German Economic Miracle" and today. I don't disagree that Germany is a great, resilient, powerful economy. But it is nowhere as flexible or productive as the US economy, and hasn't been for some time now.

I'm perhaps not as pessimistic about Germany's prospects for recovering as Girgl. But I tend to think that EU integration and immigration concerns are the real pivotal points that will determine the outcome. Germany actually isn't shrinking; just the ethnic German population in Germany is shrinking.

I've already written this adaptation of Henry VI. If you want to audition for the role of "Dick the Butcher" you have to wait in line. Don't forget that Dick is also famous for inciting the lynching of a hapless clerk who can "cast acompt." Cade condemns the boy because he can read and write and signs his own name instead of using an X.

Last comment for DS.

DICK
The first thing we do, let's kill all the lawyers.

CADE
Nay, that I mean to do. Is not this a lamentable
thing, that of the skin of an innocent lamb should
be made parchment? that parchment, being scribbled
o'er, should undo a man? Some say the bee stings:
but I say, 'tis the bee's wax; for I did but seal
once to a thing, and I was never mine own man
since. How now! who's there?

Enter some, bringing forward the Clerk of Chatham

SMITH
The clerk of Chatham: he can write and read and
cast accompt.

CADE
O monstrous!

SMITH
We took him setting of boys' copies.

CADE
Here's a villain!

SMITH
Has a book in his pocket with red letters in't.

CADE
Nay, then, he is a conjurer.

DICK
Nay, he can make obligations, and write court-hand.

CADE
I am sorry for't: the man is a proper man, of mine
honour; unless I find him guilty, he shall not die.
Come hither, sirrah, I must examine thee: what is thy name?

Clerk
Emmanuel.

DICK
They use to write it on the top of letters: 'twill
go hard with you.

CADE
Let me alone. Dost thou use to write thy name? or
hast thou a mark to thyself, like an honest
plain-dealing man?

CLERK
Sir, I thank God, I have been so well brought up
that I can write my name.

ALL
He hath confessed: away with him! he's a villain
and a traitor.

CADE
Away with him, I say! hang him with his pen and
ink-horn about his neck.

Exit one with the Clerk

SQT,

I'm not too sure how much blogs influence anything but I definitely see their value. Nothing happens inside a vacuum and sadly that is what the American work place has become. You can't say anything regarding religion, politics, company policy, the company's stock, dating/marriage, cars, housing bubbles (OMG) or baseball. Other than that you are free to talk amongst yourselves!

I didn't intend to get nearly as long winded regarding 401K's (and boomers) but it is a complicated subject and I feel it is equally crippling to this country right now as the HB! It's the other side of the Debt = Wealth equation and every bit as perverted. One thing the PBS special was right about though, as far as boomers illusions of having a "comfortable" retirement (for most it is too late already).

***SERIOUS QUESTION***

Could I get a few opinions on the following:

I saw some decent looking double-wide mobile homes for $795 a month
fee, (I believe to rent the land they sit on) and a purchase price of about $159,000-180,000. They looked like a decent TEMPORARY alternative to high-priced BA housing.

Looks like ANY retention of value/equity over rent (even for a mobile home) would be preferred to just dumping it into the black hole of renting an apartment.

In otherwords, beside the stigma of becoming "trailer trash," isn't owning a trailer--a nice one--better than renting an apartment?

Any pros and cons welcome.

P.S. what about RENTING a mobile home? Looks better than an apartment. Maybe more cost effective, too.
Thanks!

Michael Holliday,

I must have seen the same link for "351 BA Price Reductions" posted here! C/L said something like 175K and it's a home! "Up scale mobile home park". Well I can't possibly see what could be up scale about a MHP but whatever. I have a buddy that handles all of the REPO's here in OR,WA and CA for one lender. He's always bugging me to talk to my clients about "putting a deal together" so he can move volume. Usually we're talking about 15-35K per unit. They are mostly 1997 and newer and he will deliver. How a mobile home in the BA becomes worth a 175K is beyond me. If you want I'll get you his web address.

Oh,

Btw, I see absolutely no "stigma" to owning a manufactured home (especially if it's paid for) but then again I live in Oregon. Before Bend, OR became a "hot property" that's mostly what people lived in. Some still do. Trailers don't become "trash" until you start slapping up McMansions next to them! Then the trailers gotta go.

Mr. Vincent,

The good news just a keeps on comin'! I will agree, the DIY platform is already pressuring the 6% comm. and realtors are starting to feel the pinch.

WWII,

There certainly are right ways and wrong ways to buy a mfr. home. I think you're right! Bought new, the depreciation is steep. Purchased used or repo'd they can represent a value. The space rent Michael spoke of was $750 a month, pretty spendy. Then I guess it depends on what that covers. When you total up your water and sewer, garbage, utilities, common area maint. and taxes it might not be that bad a deal (of course depending on where you live). If you picked up a repo and paid it cash this would be your only expense.

George,

"IT" will always be yours! Yes you may now take full credit, and a victory lap. The "scenario" you describe above is exactly what the banks approach was to offering securities investments. The only difference you neglected to mention is that with all of the volume the banks will pump through the system "sales" will be assumed so they will be very low paid salary employees with nominal incentive packages so if they "sell" 1 mil for the month they will get an additional $250 that month!

Kind of sad,
But I can recall a time that I was really glad the stock market was doing well. Now I almost hope for a recession to possibly bring housing mania to a halt.

George''
Well, you said that you didn't want it to be called 'the summer of Goerge', right????

On trailer parks...
Yes I do have some knowledge on this since one of my best friends family is property mgr for over 70 "mobile home parks' in Cali.
It is big business a can be quite profitable.
The parks vary greatly.
There is one in Sacto that is more like a gated community than a traile park. My friend has a spare unit he keeps vacant for all of us to use anytime. It is about ten steps from the sand in Newport Beach.
Mobile home parks consist mostly of senior citizen, hispanics and lower income families.
They usually have a clubhouse, pool, often exercise room, etc.
Many have high standards of cleanliness and will evict the weird, drunken,crazy cat man with 100 cats living under his trailer.
(Not meant to be you Surfer-X ;))

Blog party! Newport Beach!

O/T
What this about $800mil just to investigate FNM errors???
Does anybody really think they can be trusted accounting for $800 mil when they bungled $11 bil??? They should be prosecuted to the fullest extent!
I mean, WTF?

Speaking of house trailers,
I think it would actually be cool to renovate and live in a 1950's all-alluminum trailer. There was one near us where I grew up and the insides were all cherry colored wood paneling, a decent kitchen, and a round porthole looking window on the door. The fact that they're all allumimum on the outside means they usually hold up for decades with little maintaining. It'd go great with my 55' Mercury. Maybe have a little matching workshop in the back.

Here it is!
http://www.nomadtoons.com/monterey.html

WW2
Wow...it's a beauty.

@SP,

I checked, but there are no comments stuck in moderation. As we discovered in the previous thread, certain strings or words are red-flagged as spam by WordPress, which results in instant deletion. One of these is "ci-al-is", which unfortunately also results in benign words like "so-ci-al-ist" triggering the auto-deletion.

LILLL Says:

Blog party! Newport Beach!

Seriously?

HARM
Unfortunately no. The Newport Beach trailer is not a place I can throw a party...blog or no....
How about we all crash X's rental?
Do we have enough S.Cali people for a blog party?
I'm game!

X is in the Santa Barbara area, which is fine by me, but of course he has to give the OK first ;-). If I had enough room, I'd volunteer, but unfortunately I don't, being a jealous bitter apartment dweller and all.

Hey X
Can we all party at your house?
I think you've invited us all over for tequila at one time or another.
It'll be BYOT
Bring your own tequila.
Or we can meet at a restaraunt somewhere in between.
Since X's attendance would be mandatory...perhaps someplace loud...so we don't get thrown out...though I hear he's 37% less offensive in person ;)
Any suggestions?

BTW, I asked the owner where the ‘yelling, fighting, car-door slamming freaks’ who rented the place went. He said they moved out to… wait for it… Tennessee.

Ughhh... nice to know CA is exporting it's "finest" to (currently) Bubble-free states. Gee, I wonder why other states have such a low opinion of us?

-he's
+you're

HARM
Are there many of us that live down here?
You and X. I think Joe Schmoe does.
Anyone else?

I know on Ben's blog there are plenty....
but I'm not sure about this blog.

@LILLL,

I'd have to plod through the old biography threads to know for sure, but I believe us "Southerners" are in the minority here. (No surprise really, given the blog's name.) It'll take a while, but I'll try to see if the tally's high enough to plan something.

Another interesting mystery - the tenants left behind a garage full of plastic grocery bags. Just grocery bags stuffed inside other grocery bags. I have no idea what they were doing.

You can always recycle them into lawn furniture, I guess. Besides, I heard a rumor that they're not making any more plastic grocery bags.

SoCal blog party? I'm in.

@SFResident,

I replaced your long URL with a Tinyurl because it was skewing the page --I'd highly recommend using it. It's free & very simple to use.

Hey X
Can we all party at your house?
I think you’ve invited us all over for tequila at one time or another.
It’ll be BYOT
Bring your own tequila.
Or we can meet at a restaraunt somewhere in between.
Since X’s attendance would be mandatory…perhaps someplace loud…so we don’t get thrown out…though I hear he’s 37% less offensive in person
Any suggestions?

Absofuckinglootly. Just let me know when.

My pathetic rental is prime partying. Great backyard, cool neighbors, when?

I'll be in San Diegho this weekend but next weekend is always game, memorial day. It's an A- list holiday though.

Who could attend? I live in $anta Barbara, on the Eastside man (pronounced maaaine).

X,

Thanks! We shall speak offline, after I gather more names & information. Stay tuned.

Oracle mentioned,

Anybody notice that the NYSE collars had to be activated 2 hours into trading today? People are really spooked. We very well could have had a complete market crash today if the collars were not activated.

Forgive my ignorance. What are these collars ? How does one find out if the collars have been activated ?

Thanks in advance.