patrick.net

So - HSBC have been stupid and are now tightening their lending standards, how many others will, and what will the knock-on effect be (how big do you think) for all those people banking on re-fi'ing their ARM resets this year?

SP

Someone needs to tell them sell and rent in a good school district - got to be less than owning a house and paying for private school - however, will they be able to sell (easily)?

SP,

(From previous threads and recurring themes)

This is exactly why MAX MID (TM) doesn't work for most people (even though I take it the place you describe is less than prestigious). This is a hangover from the 80's that just refuses to die! Sadly all too often this is how it ends up. :(

“But he has two kids, so the daycare expenses will eat up most of what she earns. And he will need to buy a new car if she starts working.

Tries to get wife back to work (after three years at home). Does the math Income minus Taxes minus daycare expenses minus new car. Oh shit. And that is IF she gets a job.”

This seems to be an extremely common mindset in the U.S. and I just don't understand it. They've actually done the math and two incomes is basically a wash financially vs. one with mom-at-home. And to do it they're going to have to pawn off your kids on some daycare, and they'll both be much more stressed due to less flexibility, less face time together as a family, more scheduling conflicts, less time for errands & chores, more meals out, etc.

If your overall quality of life and ability to parent is WORSE OFF with two incomes, then why do it?? I just don't get it. Must be some especially virulent strain of mental accounting/affluenza I've (luckily) never been infected with.

Two-income works only if you are a DINK.

Daycare costs are substantial.

“buy a home, otherwise your hair will go gray”

The statement "if you do not buy a house you will grow old and die" is TRUE though.

You know, in the end, nothing matters but your own well being.

But what is well-being? Is it the same as being well-fed?

What is a happy life?

What is happiness?

Dang,

I'm late to the party... someone mentioned curry and I wasn't reading!

The spread of curry came about because of the spread of Buddhism throughout Asia. The monks from India brought curry to China, Vietnam and Thailand, the monks from China brought curry to Korea and Japan. Japanese and Korean curry is very similar as are Vietnamese and Thai. I do agree that Chinese curry is weak.

Really, cultures are spread by the availability of information. Even as recent as the mid 90s, Europeans dressed very differently than folks in Australia, the US or Asia. With the proliferation of the internet, information became so readily available that everyone started to dress the same. And its a damn shame if you ask me. Youth tend to dress like urban hip-hoppers. 30-40 somethings all BR and Gapped out, Boomer nerds all dress like the parents from the OC. And you'll find this in Germany, France, Japan and other "modernized" countries.

Scratch that last comment, I thought GC wrote "My average income is not enough to support two people to live a happy life".

Never mind :-), sorry GC!

Hmm, I would think Japanese curry is closer to Indian curry than Chinese curry.

People in their 20’s want a lot of things. There are two causes for this phenomenon.

I like things because I have Taurus rising.

Claire :

This NEW and HSBC is a big news. I feel like jumping with joy.

Mortgage banksters are like terrorists - if one goes away, some other comes on as a replacement. But it's hard to replace NEW and HSBC. They are in top 5 subprime lenders.

Now HSBC is "readjusting" its lending practices. And guess what will happen to the endless liquidity stream that was flowing to NEW ? For them, the liquidity can vanish in a blink.

NEW will suffer as more bond holders demand them to repurchase it back. And they will not find new idiots. There will be shareholder lawsuits and I won't be surprised if they go down under in a year or so.

Both of them will have a noticeable effect on subprime lending. The credit bubble deflation is now picking up speed. More and more analysts are going to be "surprised".

StuckinBA:

It's still like watching paint dry though - But HSBC is a big name and will hopefully start making Wall Street (and maybe some investors) sit up and notice how things are going. I wonder how many other big banks are taking a look at their books - would it be better to declare any losses or write downs now (i.e try and price in the news) or to wait for a while?

I am proposing a new housing bubble term: JBO
Jealous Bitter Owner

HelloKitty,

Not bad --personally, I'm more partial to JBH (Jealous Bitter Homedebtor) or JBL (Jealous Bitter Loanowner), as they don't really "own" anything except a monstrous loan.

"like watching paint dry"

Claire, dear, this is as much fun as you can have with your clothes on!

"Somebody" had a short position on NEW and pocketed 28% today!

These guys have not only enabled the bubble in a BIG way but they also carved out a really great living while many of us in technology, airlines etc. have been struggling to put our work lives back on track. Not only that, they were so smug and attributed the horse shoe inserted in their anus to "skills".

"I say..... they bought their tickets, let 'em crash"!

DinOr,

You do realize that I was being sarcastic, don't you? There is nothing that is going to stop house prices from falling. However, you have these idiots who are going to start class action suits and I'm sure they will get something for being "scamed" so to speak; with so many people in that same boat, you can only expect more lawsuits in the not so distant future.

To pay out these FB's, this will most certainly push more lenders to go bankrupt as a result and with all the more MBS's failing with lenders that are no longer around to buy them back, who do you think will be stuck paying the bill?

Just a thought.

carlorossi Says:

"...The point I want to make is that the BA real estate market has a life of its own. I wish it would not be that way because I would rather own than rent. I am waiting for the market to finally go lower but my hair is already turning grey. A 2200 square ft house next door, on a busy street, just went for over $1.5 mill..."
_____

I grew up in SJ but am in Phoenix now.

There was always a premium to live in the Bay Area.

But it's so far out of whack and has been climbing for so many years,
that we think it'll always be the status quo forever and that prices are nearly impervious to major corrections.

I think Japan is a good example of the slow grind downward that may transpire. Hopefully, it'll be faster than Japan so that people don't have to agonize for as long.

I think this baby is going way down. The fundamentals just aren't around anymore to support these high-flying prices.

Gravity and financial physics will ultimately prevail.

Believe it!

DD
You are not alone! I just don't rise to the bait - statistically speaking it is impossible for everyone in the BA to be earning over 100K even. I am also someone that was born too late to cash in on the housing market, however, I think there will be an opportunity in the future (maybe even 10-20 years away), we just need to keep an eye out and recognize it when we see it and be in a financial postion to take it (i.e try to save some cash).

allah,

Yes of course. I just thought it was so convenient for these couples to say "we did it for our kids"! Rally? There wasn't any possible way for you to tighten your belt? No? None?

It's just such an "easy out" for these people. I can't believe the judge ruled so quickly? Don't these things take forever to play out? I mean they're going to get back the fees, int. and all their payments and live in their borrowed home for free for what? 3 Years? Sign me up!

Huh? Are you suggesting something less than ethical on this nice thread?

DD,

Did you look at my post above regarding salaries mentioned in the fortune survey ? I talked about technical salaries - but their report has non-tech salaries as well.

Do not get a distorted picture from what FaceReality says. Every company has CxO executives. Looking at their salaries is like looking at the QB salaries and saying everyone in NFL makes multi-million $ salaries. Even tech jobs have a food chain. The peons at the lower end do not make anywhere near the average.

The salary myth is the most annoying thing about BA. Salaries are high, but not astronomically high. Everyone is so obsessed about what the person in next cubicle is making. When the proverbial tide goes out, we will all see who is swimming with what swimsuit.

Claire :

We are just at the top of the 2nd innings. At the top of 1st, the sales started going down and the median went "flat". At the bottom of 1st, MSM smelled something funny and REIC started calling for a turnaround.

It's a slow game. Nothing we can do about it.

How can people think that prices AND demand will go up forever, and not only that they are the same line?

This is not the first bubble, and won't be the last.

Maybe the right time to buy was 10 years ago, but 10 years ago I was in junior high school! My friends in their late 20s/early 30s have left CA in droves to have access to more affordable homes in other parts of the country.

This is where gen X, Y and Z are going to be in trouble. Or else they will cause the whole market to unwind simply because no-one will be left to buy at current market prices and the Ponzi scheme collapses. Of course, this is the sheer beauty of unfettered capitalist markets -- they are self-correcting and always right, even though they inflict a lot of anxiety and pain on a lot of people as it happens, in both directions. You've got to take the bad with the bad, you know...

Here's an interesting article.

How about a JBFB then?

Does anyone have that original quote handy about Hondas and tent cities? google doesn't throw it up, altho it appears regularly on blogs, presumably by the same poster. I actually want to use it in something... it appears one or twice on patrick.net, but it's a little difficult searching the archives...

this?

Everybody who doesn't buy now will be priced out forever. Anybody who does buy will be rewarded with a lifetime of riches, as their property will continue its 25% yearly price increase.

This asset bubble is different from all of the others - it will never slow down or pop. The gains are permanent.

Top of the 2nd inning? I hope Andy Pettitte is pitching.

Also, I will not live in a Honda.

Thank you. This time I will save it to the desktop as tent cities.txt ;) Simple but beautiful...

> And his wifey is thinking about sending kid number
> one to some high-pressure school that costs $12K
> per year. Oh double shit.

It seems like the cost of good Bay Area schools is increasing by about $1K a year. Less than 10 years ago good SF grammar schools like Town, Burke, Cathedral and Hamlin were all well under $10K a year and now I’m pretty sure that all are over $20K a year (a friend who grew up in Pacific Heights just told me that they are planning to move to Marin this summer since Cathedral and Hamlin just pushed past the $20K per kid mark). If the ~$1K a year increases continue the parents of two kids will pay over $400K in tuition before the kids start High School…

But if a rich googler wants to just GIVE me money for nothing in return, I’ll gladly take it

The WSJ was reporting that the Office Admin at YouTube got at least $1mil from the buyout.

GC,

Huh. Don't you work at the grand ole motherload itself?

lunarpark Says:
Top of the 2nd inning? I hope Andy Pettitte is pitching.
innings... bowling...

Also, I will not live in a Honda.
Actually, I like the styling of the new Mazdas over most others. I think I would prefer a Mazda 3 to a BMW 3. Altho a bit cramped to live in...

DS :

Pitching is right. No cricket here :-( (Ironically, the thread post does mention cricket, but that's a different one.)

I don't know about Mazda 3, but our Mazda 6 has traction issues in wet weather.

I’m not worried about buying a house right now, I’m OK renting and saving some money, but the cost of the BA is still astronomical. Even the cheap food here is more expensive than in SoCal (where I’m originally from).

That's because the food here is special. They're not making any more.

It's one of the things that kills me about the Bay Area - when natives say "Well, aside from Housing, it's not that expensive here." WTF! That's like saying "Aside from the end-stage cancer, I'm pretty healthy."

If you want to save on food, you'll have to go somewhere that's not special...

http://www.burbed.com/2006/11/23/how-to-save-20-on-your-groceries-for-thanksgiving/

Thank you. This time I will save it to the desktop as tent cities.txt ;) Simple but beautiful…

You're welcome, however there are several different versions of it so we really don't know what the original is.

“But he has two kids, so the daycare expenses will eat up most of what she earns.”

I thought google was buying up an old Mountain View school to turn it into free daycare...