patrick.net

DinOR,

A lot of Gen-X'ers have stories like mine. A lot. And if it's not drugs, it's divorce, infidelity, or just plain selfishness and neglect.

You are one of the few (by birth, anyway) Boomers who understands this. You seem like a good parent. Boomers generally either (a) don't give a care about the kids; or (b) are creepy Stepford carictures of "good" parents (setting up "play dates" and constantly driving junior to "activities")

You seem like an old-school good parent and I really respect you for it.

Joe Schmoe,

Hey thanks! I appreciate that. I somehow instinctively knew that this "be candid with your kids about your own drug use" was a load of garbage. Firstly, this "program" works off the assumption that you (as a parent) used drugs. Bad idea. Secondly (and Surfer X knows this from previous posts) that my old man's "drug lecture" was short and sweet. "If I find out you's guys has been using dope you better pray da cops get to ya' before I do. Because if I catch ya' first, I'll fucking kill ya'". End of lecture. Is it o.k if we go back to playing whiffle ball in the alley now pops? The old man was crazy. Or was he?

Incredible. We've had another long Boomer-focused debate and not one post from Surfer-X so far!

Surfer-X, where are you?

Have mom and pop hardware stores really been driven out of business by the Home Depots of the world? The True Value the Ace Hardware in my neighborhood seem to be doing all right. I always go there first becuase it is much easier to go to the small store when you just want to pick up some nails or have some keys made. You can be in and out in less than five minutes. At Home Depot you have to negotiate the entire warehouse just to find a lousy screw, and if you can't find something right away it is almost impossible to find an orange-aproned salesperson to help, they are always surrounded by five other customers with questions far more complex than yours.

Jon,

"Hi, my name is 'Divorced busted-ass home Statistic. Have we met?"

Damn!

Joe Schmoe Says:
Intersting historical facts:

Google Nguyen Ngoc Loan for more info.

Joe, thank you for defending truth against groundless, emotional, feeling-based accusations from ignorant liberals. These mother fuckers want to enjoy everything without the responsibility of defending their own liberty using their own blood. Sooner or later, the men who will fight will be bred OUT OF the system and the country will crumble. Like the Roman Empire: No one was left to fight the barbarian incursions.

RE: All this intergenerational sniping.

The notions of "Generations" is convenient, easy to get one's brain around, and somehow comforting as a point of identity. That said, the entire concept is of very limited usefulness. People are being born all the time, continuously, without regard for these cultural lines of demarcation.

Culture is extremely dynamic, not static. For example, the average age at which women have their first child has been rising dramatically since WWII. Wouldn't this compress the generations? Or do the generations stay the same and the "generation gap" changes? Isn't the generation gap the thing that started the entire thinking in generational terms in the first place?

Another point is that not all areas of the country are "at the same stage" or "of the same mindset" at any given time. When I grew up in rural Ohio in the 70s-80s it was more akin to the 50s in other places of the country. Not everywhere in the US experienced the notorious 60s equally; in fact our shared vision of the 60s was not the norm geographically, only in particular areas. Of course it affected everyone everywhere, but I assure you there are still parts of rural Ohio that do a pretty good job of denying the 60s ever happened. So, can there even be "Boomers" from these areas? Or, if we define Boomers as a certain age, then does it really mean anything much at all?

Look at how quickly discussions devolve into polarizing partisanship whenever Generational this or that is injected. It's really no different than saying "Everyone from the South is Racist" or "Everyone from CA is a flake". It's quite ridiculous.

Newsfreak,

I know what you mean -- about kids AND ACE Hardware!

JH,

don't be bitter, many immigrant Asian families prop each other onto flood plains at an inflated price tag, literally.

SFWoman is asking who are buying these flood plain properties. Plenty of recent Chinese immigrants who got money from their parents as downpayment. Nature works out in a magical way, doesn't it? Foster City, Redwood Shores, with all the glimmering new buildings and relatively new housing subdivisions, are immigrant magnets. Most new comers from other continents are not aware of the flooding, landslide or earthquake risks inherent in this area, and I can pretty confidently tell you 90% of them buy a property without checking out the topology map, although most of them are armed with an advanced degree in science studies. Ironic, isn't it?

Specific floodplain disclosure? Nil, zip, zilch, nada. There are some generic boiler plate disclosure about this and that, I wonder if anyone has the patience to go through them in detail.

To be fair to the buyers, they don't have the legal knowledge to decipher the convoluted "disclosure" or intimate geological knowledge to understand which area is flood prone. Nor should they, that is the job of the realty agents!

LILLL,

My two cents? Let the guy with the Hummer slide. Right now he's your client. If he says RE will go up forever, then it will (as long as his check clears). This kind of gets back to what we were talking about several threads back as to why guys like me never seem to have much of a political opinion. Why? B/c they are luxuries we can ill afford. Besides, what's to be gained? Now if Mr. Bigshot in his Hummer bounces a check to you, well then feel free to give him both barrels! Rather, I think you should be working him for referrals!

You know Mr. H2 I'm pretty discriminating with whom I do business with and I've gotta say that the caliber of work you and crew do really shows off my pieces in the best possible light! As a matter of fact I'm adding capacity as we speak so if there are builders that are in your league I'd love to be able to show them! Can you think of a few firms that deliver the same quality of product you do? I mean, you don't have to scramble through your palm pilot this minute just when you think of it.

But you have to follow through with a TIME! Otherwise it's just pleasant conversation. If he didn't say no it must be a yes, right? "Would it be alright if we touch base on....... Tuesday?" "Great!" Don't necessarily ask Mr. H2 out of the gate. Practice on some of your smaller clients first til you get the hang of it. My 2 cents.

He is a property manager and works for his Dad. His dad is totally ripping him off as he only makes 40K a year! Yes, 40K! We both agree that he should be making double or even triple that amount.

Not necessarily. Of course I don't know the specifics of his particular situation, but many property managers get free rent & utilities in lieu of full market-rate salary, which naturally sweetens the deal considerably.

Sorry guys, need to go OT. (I came to this country only 10 years ago, so I don't have much clue about the boomers issue.)

Isn't the increase in money supply the primary reason for inflation ? So Fed is supposedly fighting the inflation they themselves created. I think they will raise interest rates, and keep this .25 at a time policy intact. It's politically very safe strategy. They give all these warnings to make sure markets are prepared for it.

In the background, they will keep the money supply growing. That way there will be enough liquidity to keep the assets inflated, and prevent depression.

So they will try to have their cake and eat it too. Fed will be PERCEIVED as strong and willing to keep the inflation in check, there by protecteing the USD. It's a tightrope walk. Although, longer term, this does not sound like viable, as it cannot continue forever. But who cares about long term ? The next Fed boss, the next administration will worry about that. Let's first get through the next quarter, the next year and the next election.

@To BA Or Not To BA,

Yes, yes, yes, yes, yes, yes, yes... and maybe... yes!

We had serveral threads on this very subject back in April. You may want to look these up in the Archives:

ZIRP, Global Imbalances, and Home Prices
Inflation and Interest Rates (and the dollar)
The Global Property Boom: Danger and Delusion
Housing Bubble Pre-Flight Checklist

Foster City, Redwood Shores, with all the glimmering new buildings and relatively new housing subdivisions, are immigrant magnets.

Redwood Shores? I just do not know why they have so many powerlines there. I will NOT live under powerlines for free.

My biggest complaint about some boomers including my father is that they need to tune into reality with regards to how interesting / difficult things have become. I think trying to make it today is considerably more difficult that in times past.

What do you mean by "making it"? There are always next lives. Don't worry.

Forgive my straying from the topic at hand. I am compelled by the muse to recite some housing bubble Haikus in joie de vivre and merriment:

$900K Nervous Breakdown:

God, I’m losing it.
I’m Broke. Ha, ha! You call that
Piece of shit a house?

$900K-Mortgage Trailer Trash:

One house, three kids, two
jobs, wife left, repo’d Hummer,
no equity…Shit!

The Devil is My Realtor:

Sold my soul; bought a
house. My plastic soul looks good
in a McMansion.

Sassy Realtor Lookin’ for a Mate:

Fat temptress; brass balls.
Tall. Looks great bra-less. Lost her
ass in real estate.

TBAONTBA,

Definitely read the threads HARM pointed out.

The answer is not necessarily yes yes yes, though it probably is yes.

There are two main theories:

- Monetary Theory
- Keynesian (or rather neokeynseian) Theory.

Monetary theory has been growing in popularity since the stagflation of the 70s (which wasn't just in the US but in every industrial western country). Monetary theory states what you said: inflation simply equals increases in the aggregate money supply.

I happen to think Monetary theory is an oversimplification and is fundamentally flawed. Most popular Monetarists are, by the way, people who are heavily vested in seeing a return of a commodity based currency, like a gold-standard. The remainder are usually people who think fiat currency is a bad thing -- some for good, logical reasons, others for completely inane conspiracy paranoia.

Neo-Keynesian Theory is probably more accurate. It is a more complicated model that involves aggregate supply, aggregate demand and the money supply. This model accomodates the existence of "normal inflation", which is the biggest shortcoming of the Monetary theory. If there is real GDP growth then there must be some inflation, or else there will be structural deflation, which prevents GDP growth. Keynesian theory allows for this, and also does a lot to explain the differences between short-term temporary shocks and long-term equilibrium.

But there's a problem with Keynes; it doesn't explain unemployment properly. Under Keynesian theory stagflation cannot occur. But it did. Thus the return of Monetary Theory after the 70s.

There are a few other theories, none of which really have held up too well. The most notorious is Supply-Side economics, which was pretty heavily discredited after the 80s but still has some true believes. In this model money supply increases are not directly responsible for any inflation, only aggregate supply & demand.

The problem is, supply side theory seems to have worked very well to end the Stagflation of the late 70s early 80s, when the Fed first tightened to kill "lack of confidence" sources of inflation, then flooded liquidity. Both Monetary and Keynesian theory would predict this should cause more inflation, but it in fact was followed by a long period of the lowest inflation in 30 years.

LILLL,

Negotiating salaries is kind of alien to me b/c I've usually worked on a commission only basis? My advice though to your friend (take w/many grains of salt) is simply to threaten to walk, and mean it! From what you describe they are well qualified to work for the competition. I don't want to get involved in their family issues but an abusive relationship is an abusive relationship! Life's too short.

I should have mentioned, those involved in the foreign currency exchange business (or hedge funds investing in that market) would argue the Supply Side economics is not only correct, but irrefutable. They use international floating currency rates as empirical evidence, which is reasonably convincing.

John Haverty Says:

> I’m not saying “all boomers,” but the sum total of them creates
> an interesting effect.
> I didn’t ask for charity or a grant, just a bit of leverage with the
> intention of being paid back with interest.
> I’m glad your are encouraging and have helped out those under
> your wing, it is a healthy we to promulgate one’s genes.
> My biggest complaint about some boomers including my father
> is that they need to tune into reality with regards to how interesting
> difficult things have become. I think trying to make it today is
> considerably more difficult that in times past.

My parents have not given me a penny since I started working at 14 (I bought all my own clothes in HS) and still seem to think that if I didn’t “waste all that time in school” I would be living on the Peninsula in a big house with a wife and kids…

After I turned 40 (and they were pushing 70) I think that it finally sunk in that “regular people like them that never went to college” were not able to buy $5mm homes on the Peninsula with one salary anymore…

A couple years ago they offered to give me a house in Burlingame and pay for private school if I ever have kids, but I would rather die without ever having kids than take a penny from my parents after working my ass off for 30 years without getting a penny from them…

Peter P. wrote:

> I will NOT live under powerlines for free.

Then John Haverty Says:

> Agreed. I don’t even really want to live next to a
> transformer, let alone high tension wires.

I have never read any credible study that shows a problem related to living near power lines (or using a microwave or cell phone)...

Randy H,

Could you enlighten me on the connection between Supply Side econ and the FOREX market? Thanks a lot in advance.

The problem is, supply side theory seems to have worked very well to end the Stagflation of the late 70s early 80s, when the Fed first tightened to kill “lack of confidence” sources of inflation, then flooded liquidity. Both Monetary and Keynesian theory would predict this should cause more inflation, but it in fact was followed by a long period of the lowest inflation in 30 years.

One would counter that it was a long period of lowest consumer price inflation and highest asset price inflation.

I have never read any credible study that shows a problem related to living near power lines (or using a microwave or cell phone)…

So? I can feel the presence of the energy. Science is of limited use sometimes.

Agreed. I dont even really want to live next to a transformer, let alone high tension wires.

Transformer is a definite no no. I do not even like wires or cables. They should be underground.

Nikkei 225 Index Plunges 3.05 Percent

Randy,

Thanks for the information. I need to read "Economics for Dummies" or some such book first.

HARM,

I remember those threads. I will scan them again. Thanks.

Bombay BSE is also down close to 4%. It has been dropping like stone in Pacific Ocean. It has gone down from 12700 to 9700 in last month.

The melt-down is worldwide. I would request the thread masters to start a thread to discuss this. Stock markets are a good leading indicators. Let's speculate what this means for us.

LILLL,

I had personally been hoping to invest in Vanguard's Precious Metals and Mining Fund (VGPMX), but sadly they closed it to new investors just as I had saved the money and made up my mind to pull the trigger. :-( I'm hoping they will re-open soon, as VG's emphasis is on SIMPLE for retail/dummy investors (like me) and they tend to be conservative.

If you're interested in foreign denominated CDs, I'd exercise great caution and spend some time edumacating yourself online (and re-reading our previous investment threads). Everbank.com was one of the frequently recommended sites, as I recall.

IAACIWICTI-NIA
(I Am A Complete Idiot When It Comes To Investing - Not Investment Advice)

To BA Or Not To BA Said:
The melt-down is worldwide. I would request the thread masters to start a thread to discuss this. Stock markets are a good leading indicators. Let’s speculate what this means for us.

John Haverty Said:
June 3rd Economist:
Australia, Austria, Belgium, Britain, Canada, Denmark, France CAC 40, France SBF 250, , Germany, Italy, Japan/Nikkei, Japan/Topix, Netherlands, Spain, Sweden, Dow, S&P, NASDAQ, FTSEuroFirst 200, FTSE Euro 100 and the World/MCSI are all off 2006 highs in this issue by about 5% or so. Interestingly the world bond market by Citigroup is not off highs.

Germany is looking ok, they have a good trade surplus and lots of indicators look on the up and up. Merkel isn’t hurting things either. It should go up, it wore a heavy albatross for many years.

I agree that this sounds like a fine thread topic, but as I personally don't have enough general world finance knowledge or source links for the topic (and you gentlemen do), I nominate that one of the following start this new thread:

To BA Or Not To BA
John Haverty

All you need to become a thread author is to:
1. Self-register http://patrick.net/wp/wp-register.php
2. Let me (or Patrick, Randy H, Peter P or SQT) know that you want authoring rights.

Once you have the rights, starting a thread is easy-peasy, lemon squeezy.

Germany is looking ok, they have a good trade surplus and lots of indicators look on the up and up. Merkel isn’t hurting things either. It should go up, it wore a heavy albatross for many years.

"The Economist", which I read religiously, has no shortage of in depth articles detailing the deep, structural problems with the German economy. Two of the many problems include chronic consumer lack of confidence which permanently dampens domestic demand and an enormous reliance on export trade which is highly exposed to further rises in the EUR. And then there's always the Hartz Vier reforms and the 20% unemployment in Berlin and Neu Laender.

But hey, that's down from 21% in 2005. Germany is looking OK. They just keep on building more Wolkenkratzere, even if there's no one to lease them but the gov't itself.

John Haverty Says:

Inflation Haiku:

The numbers are cooked
Inflation ravages all
The greenback is dead

_____

Sweetness! Music to my ears...

That was some beautiful art.

LiLLL,

Do you think I should buy my next CD in euros? Or is it too late for that?

You can certainly do that. You are fighting two forces that want to counteract the benefit you get from earning EUR interest:

1) Transaction costs. You'll pay slightly higher costs to open, close, xfer the acct.
2) Forward interest rates as related to covered interest rate parity (CIRP) and your exposure to spot-rate risk.

What that means more simply is that the guys who set the exchange rates aren't stupid. They don't just let you open accounts in one currency with another currency and then reap the profits in your home currency. They set the forward exchange rates based on ensuring that no-one can arbitrage interest rate differences. In fact, you won't find any ability to ever take advantage of earning higher rates in another currency (except in unstable emerging markets) without also bearing the full load of day-to-day spot market risk. To make your EUR CD work and be worth the risk you also have to buy some smaller portion of euros forward coinciding with the period when you want to exchange back to dollars, and that probably eats up your advantage unless there is a huge, _unexpected_ correction.

If you intend to keep a EUR account for a long time, then you are better off to just actually open a physical account in Europe and let that stock of money go forward separate from your USDs. This is what a lot of folks who travel to Europe alot do, especially those with some source of EUR denominated income.

I should also note that the US Gov't is quite tax unfriendly when it comes to earning any foreign income that isn't taxed locally. Even when you don't owe any additional US taxes, you have to pay a decent tax accountant because Turbotax won't handle this stuff. The folks I referred to above with EUR accounts also tend to have set up businesses to help them shelter taxes.

SFWoman,

I'm probably the last person to buy into cell phone induced cancer etc. (even though I don't have one) but my objection centers around the "appearance" of power lines. My wife and I looked at a home in the country and wondered why it was taking so long to sell. We finally got curious enough to get out of the car and low and behold your "view" of the valley was almost completely obscured by MAJOR power transmission lines! (Heavily treed area, wouldn't notice at a casual glance). I guess it's a form of nimbyism b/c everyone needs power I just don't want to wake up Sunday morning and find a hot air balloon's gondola dangling in my backyard.

George,

Are we to take it that unless you are serious about selling (and can at least come up with $500 bucks) kindly do not waste Mr. Morgan's time?

George,

Before I close out my short position on $, I have to ask myself, why is it that BB is so eager to show he's not bashful about raising rates. Rosenberg (over at Merrill) says a June rate hike "is already in the bag" to borrow from our bullish Orange County friend. I'll give it a few more days and re-evaluate. Btw, shorting the S+P 500 is going quite well though thank you.

George,

Btw, talk about an "illiquid investment!" Not only can I not get out of my flipper home at what I owe (never mind what I think it's worth) I can't even get a realtor to list it unless I come up with cash on the barrelhead?

George,

Agreed! In fact had his mentor done 50 bps. hikes instead of 1/4 point hikes maybe people would've thought they were half way serious about putting an end to the insanity! In the past the general rule of thumb was that it takes about 9 months (3 qtrs.) for a hike (or reduction) to be felt. But back to the original question, how is it that consumers and realtors consider a 30 yr. FRM under 7% punitive? I think that for DL to plead with BB tells us that real estate is in real trouble. If we've created a market scenario that can't sustain itself with 7% money we've got problems! One of traders on the "Merc" yesterday said that now the "real" debate on the cost of money begins. Was he wrong?