patrick.net

Michael Holliday,

Thanks for the rec. That album has been in my Amazon wish list for years, but I never got around to purchasing it. Though for the housing collapse, I’d recommend some Mogwai and Explosions in the Sky.

FAB,

“After the war Berkley was tough by the east shore freeway and prime in Claremont, nothing has changed. Dublin was a sleepy cow town (not a yuppie village with chain stores and cul de sacks) and I can’t think of any San Jose areas that have changed much…”

Your definition of prime is quite restrictive. The lesser parts of Berkley, all of Dublin and SJ may not have changed much physically, but their asking prices have really jumped up. Nowadays, if you buy there you may still be neighbors to semi-literate manual laborers who bought 20 years ago, but you better come with two professional level salaries to pay for it. In time, if the gentrification trend continues, I think more and more professionals would move in and fewer day laborers would remain. The physical transformation of neighborhoods will take a bit longer than one cycle of RE price run up.

Detroit is pretty much the prime candidate for prime to less prime. CEO/highly paid executive homes there are losing value because the whole Detroit area is hollowing out. I’m not too familiar with the Midwest outside of Detroit, but I know that much of Manhattan cycled in and out of prime: it used to be that the Upper East Side was the only truly prime residential area in NYC, but now much of lower and midtown Manhattan has caught up to the Upper East Side in price.

I can’t take credit for the power of prayer antecdote. That goes to SQT. But you’re absolutely right, the Catholics have a much more extensive prayer management system than the Protestants.

ajh and SFWoman,

I know United has an EconomyPlus section that offers a bit more space at the front of the cabin. I believe it’s around $50 per trip. They also have an EconomyPlus upgrade for free program if you fly enough miles with them each year.

I think the point of business and first class pricing wasn’t about space or service offered but to price segregate the riff raffs from the busy executives. A major selling point of business class was (I say was because mileage upgrades altered the equation) so you won’t sit next to crying kids or chubby vacationers or the insane old lady showing you pictures of her 37 cats.

Owning vs. Renting

I pay just under $3K a month to rent my place in Presidio Heights.

I could buy a condo similar to my place in the area (2 br 1 ba with a deep garage where I can park my car & SUV) for about $1.25mm.

Total cost to rent is $36K a year

Renting the a million $ to “buy” a place would cost $76K (6.5% 30 yr am).
Property Tax $15K a year
Loss of a return on $250K in Cash down payment $35K a year (based on my average annual return on hedge fund cash since 1999).
Typical HOA dues for a Presidio Heights condo that include Insurance $6K a year
Maintenance and Repairs $1K a year.

Total cost to buy is $133K a year (just under $100K more than renting) assuming that values do not go down (if we have even a 5% drop in values over the next few years the total cost to “buy” will increase by ~$60K to just more than $150K more than the cost to rent).

“astrid ‘pontificates;’”

Yes, but do I get a pope-mobile?

I think the point of business and first class pricing wasn’t about space or service offered but to price segregate the riff raffs from the busy executives. A major selling point of business class was (I say was because mileage upgrades altered the equation) so you won’t sit next to crying kids or chubby vacationers or the insane old lady showing you pictures of her 37 cats.

Really? My friend told me that there are crying kids and other aggressive behavior in (domestic) first class now. And who says business executives are necessarily not chubby?

Rich people do not fly commercial anymore. I predict the demise of domestic first class. Fractional jet ownership and charters will make private jet travel "affordable" even to the not-exactly-wealthy.

Peter P,

Airlines are retrenching from overuse of mileage upgrades. I looked into upgrading with frequent flyer miles and I couldn't stomach the conditions. I've never flown anything but coach though. I find earplugs and sleep deprivation to be more effective towards aggressive nearby passengers. (Though once an asshole decided to lecture me on too much carry-on luggage while the plane was loading. I let the flight attendant tear into him.)

The very rich will always have the option of fractional ownership or whole ownership, but I suspect many of the wannabe rich people who are currently using the options will go back to commercial aviation quite soon.

" * Wife makes $9500/mo as a registered nurse"

I didn't realize nurses were being paid so well. Is she a nurse practioner?

SFWoman Says:

I am a very WASPy blond with two blond kids and the world’s WASPiest name. Apparently that sets off bells at the United and American ticket desks.

Maybe they're on the lookout for the Brahmin sect of al Qaeda.

astrid Says:

I didn’t realize nurses were being paid so well. Is she a nurse practioner?

It's called UNIONS. RN's will go on strike early and often. Senior RN's, not necessarily NP's, will make that range of pay, particularly if they work in the OR, ICU, or ER. Plus, they strike to have 40hr work weeks and work an extra 40 hours per week to get paid overtime.

Of course, the vast majority of RN's are fabulous (on an individual basis), but there is a bit too much labor movement, union-y stuff in that profession, imo.

Peter P Says:

> Rich people do not fly commercial anymore.

“Rich People” still fly first class, it is only really “F’ing Rich People” that own jets (even fractional ownership).

> I predict the demise of domestic first class.

Domestic first class may go away, but it will be due to other airlines going to the (profitable) Southwest model of a single class not because everyone is flying around the US in GVs…

SFWoman,

That really sucks. The current air traffic safety scheme is incredibly idiotic. Somebody at homeland security apparently thought that the humiliating experience of lining up to having large African American women paw through you will increase national safety. I've had (inadvertantly brought on) Swiss Army knives go through airport security more than once, and anyone with real hand to hand combat training can kill with their hands.

I’ve never flown anything but coach though. I find earplugs and sleep deprivation to be more effective towards aggressive nearby passengers.

I just take two Benadryl pills and get unconscious.

The current air traffic safety scheme is incredibly idiotic.

They should just hire some psychic to see if the passengers have malicious intentions.

FormerAptBroker Says:

“Rich People” still fly first class, it is only really “F’ing Rich People” that own jets (even fractional ownership).

I don't know about that - have you seen the ads in the WSJ for "affordable" private jets? Not just for the "F'ing Rich" anymore! Your sad-sack "merely rich" sucker can fly one of those:

http://travel.news.yahoo.com/b/b_correa/b_correa8840

Maybe the FB can just refi your McMansion to buy a share of one of these - I'm sure properties will continue to appreciate to that level!

SFWoman Says:

Wow! We can pay mortgages with credit cards? That’s why everyone else gets those upgrades!

Those must be the "other people" whaddup must be talking about!

He thinks the new wave will be these little $2 million jets with people getting licences and flying themselves.

He is right. Those VLJ (very light jets) will open a whole new page in aviation history. Some of them costs little over 1M and can go 300+ knots.

Air-taxi will become a keyword.

I asked my husband about doing that. I went to flight school in the early eighties (for high school credit!), I’d go back and work up to jet certification. He said there’s no way he’d fly with me. Oh well, I tried.

Don't you need instructment rating as well? It would suck if you have a nice jet but you cannot fly at night.

FAB,

Great breakdown. I've always suspected the further up the scale you work the more profound the disparities!

I think Peter P once said that most "rents" in up-scale areas would "just about cover the taxes and HOA's"?

Have pikers put bona fide landlords in a bind here? They were so eager to get a foot on the first rung of the "property ladder" they couldn't be bothered with anything resembling a business plan?

Maybe the FB can just refi your McMansion to buy a share of one of these - I’m sure properties will continue to appreciate to that level!

Not even that. One can charter light jets (without any ownership) at a cost that is not much more than first-class if there are multiple passengers.

I’m sure properties will continue to appreciate to that level!

I heard planes appreciate though. ;)

Just for the record, I'd like to say that for the most part light civil aviation is at best a nuisance. IMCO.

I have been around aviation most of my life. In fact I've done everything you can with an airplane except fly. Unlike Headset* with an unreal amount of training I believe that being able to afford flight lessons and truly being made from the right cut of cloth are two totally different things.

It's hard to pick up a paper without there being some kind of civilian A/C accident. With simulators we can put rookies through scenarios that would be unsafe/unwise in an actual A/C. This will in time reduce mishaps but at present I'd have to say the idea of someone that only recently got started in aviation commanding a multi-engine jet frankly scares me.

SFWoman Says:

> I asked my husband about doing that. I went to flight
> school in the early eighties (for high school credit!),
> I’d go back and work up to jet certification. He said
> there’s no way he’d fly with me. Oh well, I tried.

Flying is easy in nice weather when everything is going well (I started flying out of San Carlos as a High School student and got my instrument rating in college).

I have not flown in over 20 years since I realized that I will never have the hours necessary to feel good in real bad weather or deal with a mechanical failure.

After JFK Jr. died a friend called me and said that while he was watching the news as they looked for JFKs plane he thought of the discussion we had years ago and decided to join me as a “former pilot”.

The retired UCD professor I was just talking to at a wedding mentioned that he stopped flying a few years back after one of his fly fishing buddies died. http://tinyurl.com/nk9jx

I hope these $1M jets will not proliferate. We have enough noise pollution as it is. The last thing we need is more noise pollution (and air pollution) so some rich people can save themselves a couple hours and show off to their friends.

FAB said:

Owning vs. Renting

Total cost to buy is $133K a year (just under $100K more than renting) assuming that values do not go down (if we have even a 5% drop in values over the next few years the total cost to “buy” will increase by ~$60K to just more than $150K more than the cost to rent).

Running these numbers:

Nominal cost of ownership (total burdened holding costs) in year 1 are $83,012. The amount changes per year, increasing slightly, due to reduced value of tax shield, even considering inflation and salary-increase @ inflation rate.

Nominal rent ownership total cost in year 1 is $36,000.

The ownersihp holding cost to rent ratio is 2.31 in year 1, but sinks to 2.03 by year 7.

The alternative cash flow difference in year 0 is $47,012, assuming the median hedge fund rate. At best, perhaps $60Kish for an insane, but riskier, fund.

The final outcome analysis, for a 7 year holding period:

PV of Ownership costs $66,030
PV of reinvestment (hedge fund of delta returns): $368,146
PV of net holding costs: $302,116

Implications:

Home purchased in year 0 for $1,250,000 with $250,000 down, utilizing stated parameters:

Must increase by $86.62% over 7 years to break even against renting.
9.32% implied annual return. (IRR of 19.47%)

I hope these $1M jets will not proliferate. We have enough noise pollution as it is. The last thing we need is more noise pollution (and air pollution) so some rich people can save themselves a couple hours and show off to their friends.

Those newer bizjets are actually surprisingly quiet. (I used to live very close to the flight path of SJC)

We should ban older jets like older DCs and first-gen 737s instead.

I for one would love to see a return of "the dirigible" lighter than air ship! I just can't understand why they aren't being used for more than advertising?

I had thought the latest "sea change" in av. power plants was the German diesel turbo-prop. I guess they finally got the power to weight ratios dialed in. Yeah, I know sounds freaky to me too! (A diesel engine in airplane?).

While not fully proven this would be more practical for "weekend pilots". FOD (Foreign Object Damage) is as serious as a heart attack with a "suck and blow" power plant. Bird strikes are common and most civilian airfields are not adequately manned to eliminate foreign objects on the taxi-ways etc.

You guys might be interested in this particular breakdown of Craig's List's strictly platonic section. (Yeah, I read Gawker, you gotta problem with that?)

http://gawker.com/news/craigslist/craigslists-strictly-platonic-the-breakdown-201336.php

A diesel engine in airplane?

Huh? 8-O What's next? Steam?

What if you don’t fly the plane? What if you just taxi around the runway now and then, and then park it and live in it at the airport?

I told my pilot friend: you can live in a plane but you cannot fly your house.

He told me a small plane has less space than a honda civic inside.

Homebuilder confidence numbers from the NAHB out for this month:

http://www.nahb.org/news_details.aspx?newsID=3276

"Builder Confidence Slips Further in September

September 18, 2006 - Reflecting increasing builder concerns about conditions in the market for new single-family homes, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) declined for an eighth consecutive month to a level of 30 in September. This amounted to a three-point drop from an upwardly revised 33 reading in August, and is the lowest level the index has reached since February of 1991."

As I recall, 1991 was not a good year for housing.

I just had to go to the ER this weekend because I stepped on a rusty screw, luckily I had a good nurse.

Hope you are feeling better now.

This should be added to the Peter P “Book of Hours and/or Days.”

I cannot take credit. This came from Ben Jone's blog a while ago:, although it was about cars.

newsfreak Says:

As an uninsured person, I turned down the X-ray and surgery, I took the least invasive approach–a tetanus shot and antibiotics. I hope it was the right move, but I have already waited too long and gone too soon in the past, and paid out of pocket enough times to just want a simple solution, if there is such a thing in modern medicine.

The general ankle injury teaching is basically, if you can bear weight on it without difficulty, it is not likely fractured, and therefore X-ray is not needed.

*Not medical advice*

They x-rayed my daughter's foot after she stepped on something in the park and found a chip/shard of glass or plastic still embedded - the x-ray showed it up.

Claire Says:

They x-rayed my daughter’s foot after she stepped on something in the park and found a chip/shard of glass or plastic still embedded - the x-ray showed it up.

newsfreak, maybe you can find a magnet at home and put it next to your ankle. If it sticks, there's something in there that shouldn't be.

Seriously, if you're still limping after several days, it might be worth the x-ray.

*not medical advice*

newsfreak Says:

They said usually a little tiny piece of rubber gets in there from the sole of the shoe. So I will not know until the antibiotics wear off.

Oh - didn't realize you were wearing shoes at the time.

Robert C,

Well.......agreed. When I went through Avionics School in the service we were working on "mock-ups" of 1950's vacuum tube technology! Then we spent about 6 months discussing transistors (welcome to 1970) and semi's were only in the last few instructional blocks that preceeded our intro to Inertial Navigation Sys.

Some things though really don't need that much updating. I mean how many ways can you make a pitot tube? A stall warning indicator? A drag chute? I was always interested in technology that made the launch and recovery of aircraft less labor intensive (but it never seemed to be a priority with the Navy). The guy that invented the "air bleed door" which eliminated the necessity of starting EACH ENGINE independently wasn't all bad. Dragging a 6" dia. reinforced air cart hose w/ a 40 lb. coupling in 115 degree heat was never one of my favorite things.

I've noticed a couple of things. The Fed is meeting this Wednesday, and the MSM are barely peeping about it. Could it be we're at the ho-hum, the Fed will pause again phase? Second, DQ usually has the previous month's numbers out by now. Why the delay? Perhaps more time is needed to fudge-er-crunch the numbers?

newsfreak,

I was out working on my boat one time and stepped on a rusty nail so long I really was surprised it didn't come out the top of my foot! I hadn't gotten a shot for at least ten years so I had to use my left foot for the brake AND the gas to get down to the clinic. Ouch!

skibum,

What's funny is that homebuilder confidence should have been at today's level in late 2004! Did anyone else read the article regarding Washington Mutual and their loan portfolio? I glossed over it and saw it mentioned on a number of financial sites. Is there more to this than meets the eye?