patrick.net

tts says

If we get the sort of large and rapid inflation that I think is possible than the future you describe is well over a decade away at best, mean while the nation ends up turning into a 3rd world country. Some parts of it already aren’t too far away from that you know, but generally they’re in areas that most don’t think about like the Ozarks or the fly over states.

The Ozarks? How about East LA. Or Oakland.

It's not going to happen, but I think it wouldn't take nearly that long if it did. The world moves pretty fast these days...

tatupu70 says

It’s not going to happen, but I think it wouldn’t take nearly that long if it did. The world moves pretty fast these days…

It would take a long time because the gov. would do everything they could to slow it down in order to prevent really crazy stuff like mass rioting or starvation from occurring, but everything has its price.

It took germany a long time to incorporate all of their blue collar workers, and they were living next door to them.

China/India and other communist countries might have given up all but the communist name, but they are still integrating all those people into their society, which in turn we need to compete with. Even china slows down the number allowed to join the blue collar ranks. We still are incorporating all of those workers, and will be for at least another decade.

There is nothing we can do "here" that others can't do. We don't have some super human gene that others don't have. It's a global world, a global economy. When those countries push up their standards, we'll be pushed up as well. The US has had a head start on many countries, and thus really just considers itself better. In actuality, it's most likely many of this centuries policies and wars that helped it. Communism really hurt many countries economically. World war 1&2 decimated Europe. They had to recover completely before they could start building new and improving technologies. The US on the other hand, didn't get blown up. Was selling en mass to Europe while Europe rebuilt. The US had a massive lead onn the rest of the world, but that lead is closing, not because others are doing better than us, but because they're learning from us how to do it. It's natural. We built up processes that sped us up 10% a year lets say. We got so far ahead of every one else that we were just cruising. Now that they are starting the build up process, they're looking at the US and saying "Ah! that is a good corporate idea.." and jumping 30-50% a year, they might still be 500% slower than us, but instead of requiring 50 years to get to where we are today, they will require only 10-15. Eventually they will only be shortly behind the US. At which point they will have to create their own ideas to push productivity, or live off our ideas. At that point we'll all be on nearly equal footings.

Power is far better than Wealth. I would far rather be as popular as Paris Hilton with $0, then be no one, with 5M in the bank.
Not only could I earn way more than a person with 5M could ever earn, I would be able to get into places and talk to people I could never do with just pure money. People don't trade power for money. If you think some dimwit in another country is going to buy up our rich peoples assets to save those rich peoples asses, so they can get a kickback, and lose their jobs in the process, you're insane. Someone who could "save" a rich person, is either going to use it on their direct families, OR keep the power. They aren't going to risk it for a small kickback from a rich person. If a person sits at the top of a country, they aren't going to risk their country to save some rich persons bank account. If they were that great of friends, they would be living in THAT country, not the US, and they wouldn't have a need for money.

Your ideas that people could hide this kind of activity are absurd. Your talking about a conspiracy that spans thousands upon thousands of people in the US, having contacts en mass with others who would willingly sacrifice their wealth or their position of power to save these rich idiots. If the president can't hide a simple blow job, there's no way thousands can conspire in your described methods.

pkennedy says

Even china slows down the number allowed to join the blue collar ranks. We still are incorporating all of those workers, and will be for at least another decade.

They're slowing down some changes in their economy/society because they can't count on the growth being there from external sources. So they can't expand or modify their economy too much more and they can't shrink it without having the people beat their dear leaders to death in the street.

pkennedy says

When those countries push up their standards, we’ll be pushed up as well.

Not necessarily. When the US was rocketing ahead during the post WWII era and all the way into the 70's, 80's, and 90's South America, Asia, and Africa were still mired in grinding poverty. Much of those areas are still that way today. Just because one part of the world improves doesn't mean that wealth or tech will get spread to the rest of it. If anything countries tend to try and horde it by keeping as much wealth as possible in their borders.

pkennedy says

Now that they are starting the build up process, they’re looking at the US and saying “Ah! that is a good corporate idea..” and jumping 30-50% a year, they might still be 500% slower than us, but instead of requiring 50 years to get to where we are today, they will require only 10-15.

Its the other way around. Very little is done here that isn't done elsewhere better, faster, cheaper. They've been ahead of us at adapting new ideas and implementing them for at least the last 8 years or so, maybe longer. The main problem is our government and banking system is dysfunctional and our country has large political divides that will greatly slow if not stop any sort of progressive policies. We're basically shooting ourselves in the foot over and over again and throwing our money at the same time. You can't do that sort of thing for long with serious consequences you know, and you sure can't improve the economy or country like that.

pkennedy says

At which point they will have to create their own ideas to push productivity, or live off our ideas.

They're already doing this. Quite a bit of medical and drug R&D is done over seas you know, most of the new battery tech is being made in China and S. Korea, as are many of the newer plastics and such.

pkennedy says

Power is far better than Wealth. I would far rather be as popular as Paris Hilton with $0, then be no one, with 5M in the bank.

They're interchangable, and with enough money you can buy all the popularity you want, Paris Hilton is the perfect example of that. There is nothing special about her at all other than the rich family she came from.

pkennedy says

People don’t trade power for money.

Just what do you think bribes are? That is a power trade for money. What do you think a paid assasination is? That is definitely a power trade for money. Same thing goes for stock manipulation or lobbying or offering congress men/women positions on the very companies they were regulating when they were office, that is all due to money. Power is money/money is power and always has been throughout human history.

pkennedy says

If you think some dimwit in another country is going to buy up our rich peoples assets to save those rich peoples asses, so they can get a kickback, and lose their jobs in the process, you’re insane.

You do realize exactly that has already happened right? During the crash so many foreigners bought "AAA" debt and invested in the banks which lied about how well they were doing. The foreigners lost their shirts, even worse than the Japanese did in the 80's. The thing is they've run out of foreign suckers, they've all been burned, so now they're selling the toxic debt to our government and municipalities. Who cares if they lose their jobs if they've become rich in the process anyways? They're rich, they can go buy a mansion in some foreign country and live it up however they want or go off and start a venture elsewhere.

pkennedy says

They aren’t going to risk it for a small kickback from a rich person.K/p>

Small? These people will get bribed for millions or even tens of millions. Lots of people would do most anything for that sort of money.

pkennedy says

Your ideas that people could hide this kind of activity are absurd. Your talking about a conspiracy that spans thousands upon thousands of people in the US, having contacts en mass with others who would willingly sacrifice their wealth or their position of power to save these rich idiots. If the president can’t hide a simple blow job, there’s no way thousands can conspire in your described methods.

The banking system is already pretty anonymous, and there is no conspiracy required for any of this. No NWO or anything like that is being suggested by me. Its just business as usual, billions get moved around the world every hour if not minute, what I'm talking about is hardly anything special. Bear in mind they need only keep the info. from public eyes before things fall a part. After that happens they don't care. Look what happened in Argentina, all the wealthy moved their cash out of the country before it blew up and then brought it back in and bought up most everything for little at all. No one had a clue what had happened until months later, and of course people were angry, but nothing could be done since these people were already out of the country and had too much influence in the gov. for any action to be taken against them. It was all over but for the crying.

As a northern virginian, all the opinions above up to now seem like a thing of other world to me.

Thanks to the last year's brutal snow storm that devistated the area. there're no homes in the market. Now I am seeing new listings are popping up everywhere and the asking prices are... well... that made me chuckle.

For example... At the end of 2009, the owner handed this propety to mortage compay on 289K. The company sold it to this guy on 350K at Jan 2010. Then the guy is selling it at 470K. Now it's under contract. 120K profit in two month is fantastic if it goes thru. 470K is about the peak price for the home in 2007.

Another property has been sitting there for more than 400 days. I have no idea why I never saw the property during that days in any website though, it recently popped up relisted at 40K increased price.

Another and another... chuckle after chuckle.

It looks like they're trying to get the full advantage of spring market before obama credit expires.

The same happening in your area?

seaside says

It looks like they’re trying to get the full advantage of spring market before obama credit expires.
The same happening in your area?

Yes, very much so. Things on my favorite list on Redfin are going pending and selling like mad, both in the Sac foothills and here in the East Bay (west and central Contra Costa). It's picked up A LOT in the last 2-3 weeks.

This "tax credit" thing is a load of BS.

People who were going to buy, by and large, buy anyway. The number who bought only BECAUSE there was a tax credit, you've going to have a hard time making the case the measly amount that it represents is what pushed them over the brink.

Sales are DOWN
Mortgage rates starting to creep UP
BofA announcing principal forgiveness just to keep underwater hamsters on the treadmill
Fed will soon stop buying MBS, there's a bigger factor than your tax credit

Vicente says

This “tax credit” thing is a load of BS.
People who were going to buy, by and large, buy anyway. The number who bought only BECAUSE there was a tax credit, you’ve going to have a hard time making the case the measly amount that it represents is what pushed them over the brink.

Well, what it is doing is pulling sales forward. If you were planning to buy anyway, you might decide to buy sooner because of the tax credit. And let's also not forget that in most of the country, $8k could represent 5% of the purchase price. That's a pretty decent chunk. But I agree that it's not going to change anyone's mind about buying.

I've been making offers, all cash mind you, on foreclosures in San Francisco~~~and I've been outbid every time. Anecdotal, I know, but it's frustrating as I'd like to be able to buy an investment property there and keep it as a place for future retirement. I'd like to think that prices will go lower, but there are lots of cash buyers out there who have been waiting for prices to fall. I don't think I need to rush into buying, but part of me is beginning to fear that the best time to have bought might have been early last year. I realize that there are bargains to be had in the outlying areas, but I want to be in the heart of the city so that I can maximize my rent potential, should I decide to rent it out.

WillyWanker says

I want to be in the heart of the city so that I can maximize my rent potential, should I decide to rent it out.

To maximize your rent potential, you want the highest percent return on your investment, not the maximum rent! That generally means avoiding the heart of the city, where rents are high, but percent returns are among the lowest in the whole Bay Area.

But there are a few good reasons to buy in central SF if you already live there:

It's easier to manage a rental near your than farther away.
You may want to live in it, where you would not actually want to live in Vallejo.

She has been right about a lot of stuff!

My first post after reading PAtrick.net for nearly 5 years...

Has anyone read this article?

http://www.fool.com/investing/general/2010/03/30/housing-24-hours-from-the-next-leg-down.aspx

When the Fed stops buying MBS (in 24hours) this will have an effect on interest rates and housing prices.
The questions are how soon will housing prices be affected?... and to what degree?...

cheers.

AiJ, thanks for posting that. Good article. My feeling is that moderate interest rate increases without an accompanying wage increase will result in a decrease in house prices. However, if interest rates rise dramatically, triggering fears of runaway inflation, house prices will likely rise as people flee to hard assets (I will be one of those people).

I don't think we'll see prices drop until this Fall (unless the stock market tanks sooner) as the Spring/Summer buying season will cause sellers that can hold out for bubble prices. Also as long as the market holds or rises people feel "rich" and won't want to discount.

Stagflation will be the endgame.

Anything that unfolds this year will likely be a continuation or variation on the various rope-a-dope schemes we've seen this year and last. Get people in houses and keep the money supply moving. Bernanke has already stated that the Fed will simply start buying up MBSs again if housing sales begin to seriously contract (correct).

Austinhousingbubble says

Stagflation will be the endgame.
Anything that unfolds this year will likely be a continuation or variation on the various rope-a-dope schemes we’ve seen this year and last. Get people in houses and keep the money supply moving. Bernanke has already stated that the Fed will simply start buying up MBSs again if housing sales begin to seriously contract (correct).

Agree, I think this game would never end. Fed will just double down and by another $3T of MBS, because nobody else would. If they let it go, interest rate would definitely go up by 1.5-2%, which would cause the housing sale to go down rapidly(already its down for the last two months). I think they wouldnt let anything happen until this election.