patrick.net

ZIRP = zero-interest rate policy (this is an actual term)
HIRP = high-interest rate policy (we made this up)
LIRP = low-interest rate policy (ditto)
NIRP = no-interest rate policy (not to be confused with ZIRP; NIRP means the Fed doesn't set rates at all)

And before I forget, related actual terms not be confused with our banter:

IRP = interest rate parity
CIRP = covered interest rate parity

These have to do with international currency exchange. IRP is the mathematical theory that differentials in interest rates determine equilibrium currency exchange rates.

@Randy,

Don't forget these :

MIRP = Mentally Inadequate Real estate Professional
PIRP = Person In Repossesion Process (ie, FB)
DIRP = Desperate Interest Rate Plunge (what Ben Bernanke will be doing when the recesssion hits full stride
GIRP = Greenspan Is a Real Pu$$y

tannenbaum,

Warren B. has always felt that by maintaining a higher stock price you tend to attract a better class of investor. People that stay with you long term and collectively carry clout in the market. We've all heard his comments regarding CEO pay, options expensing, dervitives etc.

Does anyone give a rip what Sergey and Brin think? I don't know. I know I don't. They're still basically an IPO. If this keeps them from falling prey to the daytraders perhaps so much the better. But I do agree stock "price" is primarily psychological.

Anonymous Fake Newbie:

You're entirely too focused on the carrying costs of real estates. Don't you get it? It doesn't matter! High real estate prices are good for everyone! Even if they don't know it or appreciate it now. The REIC based economy has replaced the old economy and even the new economy! It's the new new economy where we no longer need to commute, work or produce anything of value! Flipping houses to each other is lucrative enough to carry the entire economy going forward. You just need to decide where you want to fit in? At the top making BIG FAT STACKS living off the fat of the MEW or down at Home Despot trying to figure out how you can pilfer enough lumber out the back door to put together your chicken coop one board at a time! It's really up to you.

I don't think one earthquake will collapse the prices, esp. if much of BA infrastructure survives with little damage. But a series of quakes will get people thinking. Liquifaction and associated insurance costs should shake some reality into landfill construction.

The Katrina analogy is false - New Orleans pre-Katrina was about as poor and black. Basically, making New Orleans a brown field pumped with insurance and taxpayer money was worth much more than the Katrina New Orleans.

BA is already infamously expensive and overgentrified, so I don't see that happening. However, any quake that takes down a lot of the low rise sketchy housing would do wonders for city planning.

Someone pointed this out earlier, but it bears emphasizing:

Disasters produce positive economic benefit after the initial economic shock, so long as there is rebuilding. Disasters and wars are ironically the only way in which obsolete capital infrastructure is ever effectively replaced. Much of the better designed highway, bridge, aquifer, communications and emergency response systems in the Bay Area are the direct result of earthquakes.

"Disasters produce positive economic benefit..."

If this were true we could really magnify our wealth as a nation by destroying everything in the entire country so we can rebuild it.

While it is true that disasters PROMPT us to make restoration investments, the disaster actually comsumes wealth and capital. The rebuilding of the disaster area is done with resources that otherwise would be used to build something else. We lose that something else when we rebuild what was lost.

The fallacy of a disaster being good is known among economists as the fallacy of things unseen or as "The Parable of the Broken Window." We see the rebuilding but we do not see what was not done with the resources diverted to the rebuilding.

http://en.wikipedia.org/wiki/Broken_window_fallacy