patrick.net

I just crossed the Rubycon today: I turned 40. Yikes!

Are there any words of encouragement from those who've
soldiered on before me?

I'm a little nervous about the whole thing. Seems surreal.

Thanks!

_____

Option Dude Says:

'...The old Chinese curse comes to mind, “May you live in interesting times.” '
______

Tough times demand new Chinese proverbs. How's this?

"When you bend over and grab your ankles, may they oil and lube you up very well."

Maybe it's time to start a thread of New Chinese Proverbs for Tough Times.
That would be fun!

SQT -

you realize if we all start posting links Patrick might have to pull the plug on this highly entertaining but fiscally un-lucrative blog?

I pretty much just bookmarked mish and charles hugh smith - they give me plenty of interesting reading as it its...

Micheal,

Happy 40th Birthday. Been there done that...

When you woke up this morning, did you feel different? Did all your hair fall out? Did you suddenly lose your eyesight, sexual function, and are you now incontinent?

My guess is no, at least that was my experience. It' just another day.

My advice.... Live this day as if you will die tomorrow, but plan for tomorrow as if you will live forever.

And that's not just for those turning 40 by the way.

RIC

Michael Holliday-

Happy birthday!

All-
Looks like this "What Now" thread was totally appropriate. More and more of us are running out of patience and feeling shortchanged in general.

Joe Schmoe-
I'm right there with you -- I deferred enjoyment for so long that it became part of my personality. I've never owned a car with air conditioning. Never taken a vacation outside of short 3-4 day trips to places within an 8 hour drive. Always bought the "basic" model of whatever I was buying, be it furniture, clothes, a watch, electronics, etc. It was always save and invest, save and invest. I even exited the stock market before the dotcom crash (even though my portfolio was never tech-heavy in the first place) and waited for the smoke to clear before slowly moving back in. On the surface, it would appear that these were all the right moves. But the New Paradigm kicked my ass and deflated a lifetime of savings into uselessness. I could have paid cash for my (rented) house six years ago with what I have in savings today, but now it's not even enough for a down payment. Things got turned upside down VERY quickly.

HOWEVER, recently I have begun to treat myself, and forced myself to stop scrutinizing every dollar that I spend. "House fund" be damned. I finally decided not to let another year go by without having some fun. I still drive a junker with no air conditioning, but I've consumed a few expensive show tickets and a few nice dinners now -- I finally began to question "what is money for, anyways?" To chase some house that is only going to appreciate faster than I can save up for it? No way. Money is supposed to represent a lot of positive things, and withholding from oneself indefinitely is the surest way to lose sight of that. The last few weeks of threads have made it crystal clear that many of us are starting to get very frustrated. Maybe this single-focus on housing is starting to kill us -- time to diversify a little bit and loosen the purse-strings.

So 2006 isn't going to be a banner year for bubbleheads. 2007 probably won't be a groundbreaker either. As I said before, the ocean liner takes a loooong time to make a u-turn. I think we should admit temporary defeat and dedicate a little time to sushi, prime rib, Bordeaux, trips to Cabo San Lucas, and orchestra seats at the theater. This will clear our heads and return some balance and sanity to our lives.

ric-

"Live this day as if you will die tomorrow, but plan for tomorrow as if you will live forever."

That's our thought for the day.

Ric, Red Whine, thanks for the encouragement.

May your equity grow in perpetuity at the rate of 8-10% year!

LILL,

Mr Lay's demise is a fortuitous event for us all as we will now not need to incur the expense of his incarceration.

It would be justice if his fortune were distributed amongst the employees he stole from to compensate for their lost retirement funds, with payment in relation to the stock they owned at the time of the collapse.

Too bad for his "heirs" as they did nothing but be blood-related to a thief. As for Mr Lay, pine box, a few flowers, and a spot in the debtors graveyard should suffice.

Well guys,

I've been reading this board for over a year now, posting for about 6 months or so. Like many here, I came across this site while searching out information on housing in the midst of a RE transaction (selling, for me). This and other sites helped to convince us to rent for a couple of years before buying again, and I enjoy the conversation on this site in the meantime. The political/religious/philosophical discussions are nice, but at least for me, the most interesting and useful discussions center on housing still, and in particular BA housing. The rants are nice to hear to, mostly because they usually strike a resonant chord with me.

That said, yes, there's a lot of discontent and/or apathy right now on this board, but I do agree that things are changing in the RE scene. Just think back to a year ago - would any realtors admit to a slow market? Would sellers left and right be lowering asking prices? We haven't even begun with ARM resets. Also, no matter what the Fed does, my belief is that mtg rates will go up either way. If the Fed raises rates, variable rates of course go up. If they don't raise rates enough, the bond market will not react favorably, and eventually fixed mtg rates will continue to go up.

Someone a while back proposed that the housing bears risk becoming the "greatest fool" by holding out for a long time, then caving in as the market just starts turning and buying at the start of a long downside. My humble advice is, let's not be that idiot!

Red Whine,

It's interesting, I think half of Gen X locked out of housing has spent the money on travel, entertainment and consumer durables instead... there's a point where there's no point saving a deposit, so you may as well spend whatever you've got on fripperies and wait for the inheritance instead...

Many happy returns of the day, Michael. i haven't hit the big four oh yet, but when it happens i expect the hair to start going in earnest, near blindness, shot libido, probably incontinence and incurable halitosis, so you're probably faring better than that ;)

Thanks Sean!

I am faring a little better than that. Thank G-d...

Happy Birthday, Michael. As a Cancer, do you like big crabs?

http://tinyurl.com/zykw2 - mortgages getting risky: CIBC (Canada)

http://tinyurl.com/jwf8v - Calgary home prices rise 55% in past year

Bubble links with Canadian content. Enjoy!

Comment awaiting moderation? Broken into bite sized pieces:

July 5th, 2006 at 10:01 am
http://tinyurl.com/zykw2 - mortgages getting risky: CIBC (Canada)

Bubble link with Canadian content. Enjoy!

Peter, I gotta say, you have one helluva food obsession. :)

Comment awaiting moderation? Broken into bite sized pieces:

http://tinyurl.com/jwf8v - Calgary home prices rise 55% in past year (Canada)

Bubble link with Canadian content. Enjoy!

Perhaps this explains my relentless urge to BUY, BUY, BUY!

Trust me, the urge is stronger at around 29.5...

I imagine that Surfer-X is one that *bangs the table to be heard*

With a shoe or no shoe...
We will bury you!

LILLL Says:

I’ll just have to remember to step away from falling knives.

Exactly. I think many here come to the blog for confirmation that not buying now is the right thing to do. Hence, when there's an air of discontent and people are disheartened at the slow pace of bubble deflation, this sentiment breeds more discontent in a additive fashion. Besides, true trolls sense uncertainty - otherwise, their posts would get no response.

If you are looking to buy RE in Calfornia, then plan on coming to this blog for updates for at least 3-4 more years. In the meantime, build up your savings. You should be able to get 4.5-5% in a savings or money market account, while my best guess is that homes will be depreciating at a rate of around 10-15%/year for the next few years in some areas. Houses still won't be cheap, but if you have a decent, stable income and fair sized down payment, you should be able to buy something with a manageable mortgage within a few years.

I have an idea for a thread, though... What investment opportunities might we all be missing while waiting for the bubble to burst? Non-dollar denominated bonds? Commodities? Non-USA real estate or stocks? US stocks negatively correlated to the overall market? Anything else? It seems to me that there has to be *some* asset class which will outperform the US dollar over the next few years. Who knows... it may be possible to earn 20-30% on your money while you wait it out, if you are savvy. Or should we all be pursuing a conservative cash preservation strategy? I would love to hear what people are planning on doing with their $ while they wait this thing out...

Not investment advice, of course.

Happy Birthday, Michael! Not too far from the big 4-0 myself.

LILLL said
I passed the big 40 a few years ago and I quite like being on the other side. …Not much difference, really…except that I have a strong sense of what I have and have not accomplished so far in life.
Perhaps this explains my relentless urge to BUY, BUY, BUY

Ughh... I know you were kidding here, but this expresses the very real (and very warped) guiding principle for millions of shallow Boomer materialists.

RE: Ken Lay's death. I feel a bit cheated, too. Kind of like the day I heard about Pol Pot dying of natural causes --while comfortably living under house arrest. Sadly, there is very little karmic justice in the world.

Sadly, there is very little karmic justice in the world.

Perhaps he will reincarnate into a Maine lobster, torn apart and dipped into drawn butter.

There are two reasons why people in America are poor:
1. They are Lazy
2. They are Stupid

Most poor people are both Lazy and Stupid (so are most people that end up filing BK)…

@FAB,

In the past you've made some well argued points and I have found myself agreeing with many of them. However, the above is neither well argued, statistically defensible, nor even jives with common sense. It's just smug elitism and broad-brush generalizing, nothing more. Not even close to 100% of the poor (a.k.a. working class) lazy & unproductive losers, though certainly a sizeable slice fits this description. Nor are 100% of the ruling elite (and their children/heirs) brilliant workaholic visionaries.

Choosing one's parents wisely is hardly a mark of brilliance, nor is the converse a mark of stupidity.

Choosing one’s parents wisely is hardly a mark of brilliance, nor is the converse a mark of stupidity.

How would you know?

"Sadly, there is very little karmic justice in the world."

"Perhaps he will reincarnate into a Maine lobster, torn apart and dipped into drawn butter."

Guys like Ken Lay always land on their feet -- in this case, were he to be reincarnated into a Maine lobster, torn apart and dipped into drawn butter, his luck would ensure that he was paired with a delicious Kistler "Dutton Ranch" Chardonnay.

FormerAptBroker said:

...Not to give astrid’s mom a hard time (since it sounds like she was not lazy), but it is not smart to have kids when the only income is coming in is from near minimum wage jobs…

Hmmm... FAB first accuses all poor people of being stupid and lazy, and then in the next breath derides them for working (albeit at jobs that FAB smugly considers beneath him). And then (not even knowing the particular details of Astrid's mom's situation) chastizes her for having the temerity to *gasp* reproduce.

Right. Every low income worker out there "chooses" crappy paying jobs because they're simply too "stupid and lazy" to grab the brass ring, the way FAB obviously has --not because that's all that may be available to them at the time. None of should bother starting a family because they're all pond scum and underserving of the privilege of procreation, which should only be reserved for the brilliant elite, such as FAB.

You JBRs,

CitiBank now offers 5% APY on a money market account. Not to be outdone, HSBC is offering 5.05%. No minimums, no lock in period, FDIC insured. (NOT AN INVESTMENT ADVICE)

So do this calculation. Someone living in a recently purchased 1M house, and you having only(!) 100K in savings.

They pay 12K in property taxes per year, which for many dual income BA families hit by AMT are not tax deductible. You on the other hand earn 5K in interest.

Your net worth goes up by 17K every year compared to them. This is without (after tax mortgage - rent) savings. This is without house price depreciating. This is without interest rates increasing.

Happy belated 4th of July !

Every low income worker out there “chooses” crappy paying jobs because they’re simply too “stupid and lazy” to grab the brass ring

In some sense, FAB is right. Poor people have tendencies and mindsets that make it difficult for them to grab opportunities. Why do they have such attributes? Is it Nature or Nurture? I would say Natal!

I feel very "blocked" right now, so I am letting all opportunities pass.

FormerAptBroker Says:

And I can get Health Insurance for as low as $56 a month (with 10 other quotes under $100 a month).

Boy, FAB, you were really on a roll with that broad brush set to "smug" weren't you? As someone who personally went without health insurance for seven years (very much against my will) I can say first-hand that affordability is the #1 reason why people do not carry. Granted, this was back in the early-mid 90s and there was no such thing as ehealthinsurance.com back then. Even so, my situation was hardly unique.

I was a college grad who, in 1991, found myself competing for jobs during one of the worst --if not the worst-- recessions to hit this country since WW2. I had little paid job experience (I had worked lots off odd jobs before & during college, but nothing to put on a professional resume), tons of student loans and no money. I took whatever was available to me at the time to survive, period. None of these early jobs provided health insurance, vacation, sick pay or any of the fringe benefits Boomers smugly take for granted as their "birthright". Most were low-pay hourly contract or PT positions, because that's all that was being offered --and I was lucky to get that. I worked as a hotel van driver/bellman, limo driver, warehouse stocker, data entry clerk, you name it. Many of my peers simply went home to mom & dad and didn't work at all for a long time. Such is life.

As to that $56/month "insurance" policy --yeah, sure. I bet that buys you a LOT of health coverage :lol:. Actually, 60 Minutes recently did a story about a couple that bought one of those deceptively low-rate policies, and ended up facing bankruptcy due to all the stuff it DIDN'T cover. I wouldn't bet your life on getting such a policy to pay up when you really need it.

I would prefer catastrophic health insurance, but all partners at my husband’s firm are required to have the same policy.

Catastrophic health insurance would be very suitable for us. I have seen my doctor about twice in the last 6 years. In each time, he told me to go home and have chicken soup. My cats could have told me the same.

I worry mostly about accidents and medical emergencies.

My cats could have told me the same.

My cat usually tells me to have sushi.

and can easily afford the $5000 or $10,000 deductible

To me, an outlay of 5K - 10K will sting but when I need catastrophic coverage, these amounts will be of secondary concern.

Peter P Says:

"Happy Birthday, Michael. As a Cancer, do you like big crabs?"

King Crabs are pretty tasty.

Thanks everyone for the collective wisdom on 40. Yeah, I'm treating it like the new 30. I agree.

With people living longer, it's definitely at least the new 35.

Thanks everyone for the collective wisdom on 40. Yeah, I’m treating it like the new 30. I agree.

Senor Holiday, I had a blast in my 20's, the 30's pretty much sucked ass, so I'm thinking the 40's will rock, 50's suck, and 60's rock.

I was just implying that the catastrophic works best when the deductible won’t mean you end up living in your car after paying it.

Of course. I think a deductible of about 2% - 5% AGI will make sense.

Ultimately I think it is pretty hard to change out of the socioeconomic stratum into which one is born.

It is all in the stars.

She has been called to interviews, where people have asked her how she can put in the long hours required when she has a small child (Yes I know the question is illegal, but that’s beside the point).

She could just say that she sleeps very little (7 hours is little compared to 10) and she is willing to work long hours (38 hours is quite long... it is all relative).

Of course, people with more money make similar choices, and many get into debt, it’s just that they often have a larger financial cushion (higher paying jobs).

Ultimately I think it is pretty hard to change out of the socioeconomic stratum into which one is born.

Well said. I am not an apologist for poor people who make stupid financial decisions and then attempt to shift the consequences for those decisions onto other people. But to make the blanket statement that "all poor people are lazy and stupid" is patently false and inherently elitist.

Sadly, the "by your bootstraps" self-reliance/hard-work ethos that used to be rewarded and helped to created the middle class in decades past is simply not working as well today. Many studies are showing that socio-economic mobility is just not working as well as it used to --or working only in one direction: down. Class stratification in the U.S. seems to be getting more and more rigid by the day. I hope this trend can eventually be reversed, but the current signs are not encouraging.

SQT, can you fix my italics above? (the 2nd & 3rd paragraphs should also be italicized) Thanks.

New thread: The “I really miss ‘America’s Overvalued Real Estate’” thread